Exhibit 10.1

EXECUTION VERSION

 

 

Anything herein to the contrary notwithstanding, the liens and security
interests granted to Blue Torch Finance, LLC, as secured party, pursuant to the
terms of this Agreement, the exercise of any right or remedy by Blue Torch
Finance, LLC, as secured party, hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of the date hereof, by and between Thirty Two,
LLC, as Working Capital Priority Lender, and Blue Torch Finance LLC, as Aircraft
Priority Agent, as the same may be amended, modified, supplemented, extended or
restated from time to time (the “Intercreditor Agreement”). In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this
Agreement, the terms of the Intercreditor Agreement shall govern and control.

LOAN AGREEMENT

dated as of March 13, 2019

among

PHI, INC.,

as Borrower,

and the other GUARANTORS from time to time party hereto,

the LENDERS from time to time party hereto,

Blue Torch Finance LLC,

as Administrative Agent,

and

Blue Torch Finance LLC,

as Collateral Agent,

 

 

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TABLE OF CONTENTS

 

         Page(s)  

ARTICLE I DEFINITIONS

     1  

Section 1.01

 

Defined Terms

     1  

Section 1.02

 

Other Interpretive Provisions

     31  

Section 1.03

 

Accounting Terms and Principles

     32  

Section 1.04

 

Rounding

     32  

Section 1.05

 

References to Agreements, Laws, etc.

     32  

Section 1.06

 

Times of Day

     32  

Section 1.07

 

Timing of Payment or Performance

     33  

Section 1.08

 

Corporate Terminology

     33  

Section 1.09

 

Independence of Provisions

     33  

Section 1.10

 

Certain Definitions

     33  

ARTICLE II AMOUNT AND TERMS OF CREDIT FACILITIES

     33  

Section 2.01

 

Term Loans

     33  

Section 2.02

 

Disbursement of Funds

     33  

Section 2.03

 

Payment of Loans; Notes

     34  

Section 2.04

 

Pro Rata Making of Term Loans

     35  

Section 2.05

 

Interest

     35  

Section 2.06

 

Increased Costs, Illegality, etc.

     36  

Section 2.07

 

Compensation

     37  

Section 2.08

 

Change of Lending Office

     37  

Section 2.09

 

Conversion and Continuation Elections

     38  

Section 2.10

 

Tax Treatment

     38  

ARTICLE III ORIGINAL ISSUE DISCOUNT, FEES, AND COMMITMENT TERMINATIONS

     39  

Section 3.01

 

Funding Fee

     39  

Section 3.02

 

Fee Letter

     39  

Section 3.03

 

Termination of Commitments

     39  

ARTICLE IV PAYMENTS

     40  

Section 4.01

 

Voluntary Prepayments

     40  

Section 4.02

 

Mandatory Prepayments

     40  

 

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TABLE OF CONTENTS

(continued)

 

         Page(s)  

Section 4.03

 

Payment of Obligations; Method and Place of Payment

     43  

Section 4.04

 

Taxes

     43  

Section 4.05

 

Right to Decline Payments

     46  

Section 4.06

 

Computations of Interest and Fees

     47  

ARTICLE V CONDITIONS PRECEDENT TO TERM LOANS

     47  

Section 5.01

 

Conditions Precedent to the Signing of the Loan Agreement

     47  

Section 5.02

 

Conditions Precedent to the Funding Date

     52  

ARTICLE VI [RESERVED]

     53  

ARTICLE VII REPRESENTATIONS AND WARRANTIES

     53  

Section 7.01

 

Status

     53  

Section 7.02

 

Power and Authority; Execution and Delivery

     53  

Section 7.03

 

Enforceability

     54  

Section 7.04

 

No Violation

     54  

Section 7.05

 

Approvals, Consents, etc.

     54  

Section 7.06

 

Use of Proceeds; Regulations T, U and X

     54  

Section 7.07

 

Investment Company Act; etc.

     54  

Section 7.08

 

Litigation, Labor Controversies, etc.

     55  

Section 7.09

 

Capitalization; Subsidiaries

     55  

Section 7.10

 

Accuracy of Information

     55  

Section 7.11

 

Financial Condition; Financial Statements

     56  

Section 7.12

 

Tax Returns and Payments

     56  

Section 7.13

 

Compliance with ERISA

     56  

Section 7.14

 

Intellectual Property; Licenses, etc.

     57  

Section 7.15

 

Ownership of Properties; Title; Real Property; Leases

     57  

Section 7.16

 

Environmental Matters

     58  

Section 7.17

 

[Reserved]

     58  

Section 7.18

 

[Reserved]

     58  

Section 7.19

 

Security Documents; Perfection

     58  

Section 7.20

 

Compliance with Laws and Permits; Authorizations

     59  

Section 7.21

 

[Reserved]

     59  

Section 7.22

 

Contractual or Other Restrictions

     59  

 

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TABLE OF CONTENTS

(continued)

 

         Page(s)  

Section 7.23

 

No Brokers

     59  

Section 7.24

 

Insurance

     59  

Section 7.25

 

Evidence of Other Indebtedness; Subordinated Debt

     59  

Section 7.26

 

Certain Collateral

     60  

Section 7.27

 

Principal Business

     60  

Section 7.28

 

Absence of any Undisclosed Liabilities

     60  

Section 7.29

 

Certificates of Airworthiness

     60  

Section 7.30

 

Anti-Terrorism Laws; the Patriot Act

     60  

Section 7.31

 

Economic Sanctions/OFAC

     60  

Section 7.32

 

Foreign Corrupt Practices Act

     61  

Section 7.33

 

Disclosed Subleases

     61  

Section 7.34

 

Affiliate Transactions

     61  

Section 7.35

 

Collective Bargaining Agreements

     61  

Section 7.36

 

Aircraft Interests

     61  

Section 7.37

 

Aircraft Operator

     62  

ARTICLE VIII AFFIRMATIVE COVENANTS

     62  

Section 8.01

 

Financial Information, Reports, Certificates and Other Information

     62  

Section 8.02

 

Books, Records and Inspections

     66  

Section 8.03

 

Maintenance of Insurance

     66  

Section 8.04

 

Payment of Taxes and Liabilities

     67  

Section 8.05

 

Maintenance of Existence; Compliance with Laws, etc.

     67  

Section 8.06

 

Environmental Compliance

     67  

Section 8.07

 

ERISA

     68  

Section 8.08

 

Maintenance of Properties

     70  

Section 8.09

 

End of Fiscal Years; Fiscal Quarters

     70  

Section 8.10

 

Additional Collateral, Guarantors and Grantors

     70  

Section 8.11

 

[Reserved]

     70  

Section 8.12

 

Use of Proceeds

     70  

Section 8.13

 

Mortgages; Landlord Agreements

     70  

Section 8.14

 

[Reserved]

     71  

Section 8.15

 

Further Assurances

     71  

Section 8.16

 

Lender Meetings

     72  

Section 8.17

 

[Reserved]

     72  

 

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TABLE OF CONTENTS

(continued)

 

         Page(s)  

Section 8.18

 

Payment of Obligations

     72  

Section 8.19

 

Intellectual Property; Licenses, etc.

     72  

Section 8.20

 

Security Interests; Perfection, etc.

     72  

Section 8.21

 

Material Contracts

     72  

Section 8.22

 

Liens and Possession

     73  

Section 8.23

 

Operation and Maintenance

     74  

Section 8.24

 

Compliance

     76  

Section 8.25

 

Quiet Enjoyment

     77  

Section 8.26

 

Aircraft Collateral Schedule

     77  

Section 8.27

 

Post-Closing Obligations

     77  

ARTICLE IX NEGATIVE COVENANTS

     78  

Section 9.01

 

Limitation on Indebtedness

     78  

Section 9.02

 

Limitation on Liens

     80  

Section 9.03

 

Consolidation, Merger, etc.

     81  

Section 9.04

 

Permitted Dispositions

     81  

Section 9.05

 

Investments

     82  

Section 9.06

 

Restricted Payments

     83  

Section 9.07

 

Payments and of Indebtedness; Cancellation of Indebtedness

     83  

Section 9.08

 

Modification of Certain Agreements

     83  

Section 9.09

 

Sale and Leaseback

     84  

Section 9.10

 

Transactions with Affiliates

     84  

Section 9.11

 

Restrictive Agreements, etc.

     84  

Section 9.12

 

Changes in Name, Form, Business and Fiscal Year

     84  

Section 9.13

 

Financial Covenants

     85  

Section 9.14

 

Loan Party Indebtedness Subordination

     86  

Section 9.15

 

Location of Aircraft

     86  

Section 9.16

 

Economic Sanctions/OFAC

     86  

Section 9.17

 

Anti-Terrorism Laws; Foreign Corrupt Practices Act

     86  

Section 9.18

 

Use of Proceeds

     86  

Section 9.19

 

Acquisitions and Foreign Subsidiaries

     86  

Section 9.20

 

Stay, Extension or Usury Laws

     86  

 

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TABLE OF CONTENTS

(continued)

 

         Page(s)  

ARTICLE X EVENTS OF DEFAULT

     87  

Section 10.01

 

Listing of Events of Default

     87  

Section 10.02

 

Remedies Upon Event of Default

     89  

ARTICLE XI THE AGENTS

     90  

Section 11.01

 

Appointments

     90  

Section 11.02

 

Delegation of Duties

     92  

Section 11.03

 

Exculpatory Provisions

     92  

Section 11.04

 

Reliance by Agents

     92  

Section 11.05

 

Notice of Default

     93  

Section 11.06

 

Non-Reliance on Agents and Other Lenders

     93  

Section 11.07

 

Indemnification by Lenders

     93  

Section 11.08

 

Agents in their Individual Capacities

     94  

Section 11.09

 

Successor Agents

     94  

Section 11.10

 

Agents Generally

     94  

Section 11.11

 

Restrictions on Actions by Secured Parties; Sharing of Payments

     94  

Section 11.12

 

Agency for Perfection

     95  

Section 11.13

 

Credit Bid

     95  

Section 11.14

 

One Lender Sufficient

     96  

ARTICLE XII MISCELLANEOUS

     96  

Section 12.01

 

Amendments and Waivers

     96  

Section 12.02

 

Notices and Other Communications

     97  

Section 12.03

 

No Waiver; Cumulative Remedies

     100  

Section 12.04

 

Survival of Representations and Warranties

     100  

Section 12.05

 

Payment of Expenses and Taxes; Indemnification

     100  

Section 12.06

 

Successors and Assigns; Participations and Assignments

     101  

Section 12.07

 

Replacements of Lenders under Certain Circumstances

     105  

Section 12.08

 

Securitization

     106  

Section 12.09

 

Adjustments; Set-Off

     106  

Section 12.10

 

Effectiveness of Facsimile Documents and Signatures

     107  

Section 12.11

 

Counterparts

     107  

Section 12.12

 

Severability

     107  

Section 12.13

 

Integration

     107  

 

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TABLE OF CONTENTS

(continued)

 

         Page(s)  

Section 12.14

 

GOVERNING LAW

     107  

Section 12.15

 

Waiver of Certain Rights

     108  

Section 12.16

 

Acknowledgments

     108  

Section 12.17

 

[Reserved]

     108  

Section 12.18

 

Confidentiality

     108  

Section 12.19

 

Press Releases, etc.

     109  

Section 12.20

 

Releases of Guaranties and Liens

     110  

Section 12.21

 

USA Patriot Act

     110  

Section 12.22

 

No Fiduciary Duty

     110  

Section 12.23

 

Reliance on Certificates

     110  

Section 12.24

 

No Waiver

     111  

Section 12.25

 

The Borrower as the Loan Parties’ Representative

     111  

Section 12.26

 

Intercreditor Agreements

     111  

Section 12.27

 

Acknowledgement and Consent to Bail-in of EEA Financial Institutions

     111  

Section 12.28

 

Funding Losses

     112  

Section 12.29

 

PPSA

     113  

Section 12.30

 

Cape Town Convention

     113  

ARTICLE XIII JURISDICTION; VENUE, SERVICE OF PROCESS; JURY TRIAL WAIVER

     114  

Section 13.01

 

JURISDICTION

     114  

Section 13.02

 

VENUE

     115  

Section 13.03

 

SERVICE OF PROCESS

     115  

Section 13.04

 

JURY TRIAL WAIVER

     115  

Section 13.05

  NO LIMIT OF CERTAIN RIGHTS      115  

 

vi

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SCHEDULES

Schedule 1.01

  

Term Loan Commitments

Schedule 1.02

  

Excluded Subsidiaries

Schedule 7.08

  

Litigation

Schedule 7.09

  

Capitalization and Subsidiaries

Schedule 7.15

  

Real Property

Schedule 7.19

  

Security Filings and Filing Offices

Schedule 7.23

  

Brokers

Schedule 7.24

  

Insurance

Schedule 7.25

  

Existing Indebtedness

Schedule 7.33

  

Disclosed Subleases

Schedule 7.34

  

Transactions with Affiliates

Schedule 7.35

  

Collective Bargaining Agreements

Schedule 8.03

  

Aircraft Insurances

Schedule 8.26

  

Aircraft Collateral Schedule

Schedule 9.02

  

Liens

Schedule 9.05

  

Investments

EXHIBITS

Exhibit A

  

Form of Term Loan Note

Exhibit B

  

Form of Guaranty and Security Agreement

Exhibit D

  

Form of Compliance Certificate

Exhibit D

  

Form of Perfection Certificate

Exhibit E

  

Form of Assignment and Acceptance

Exhibit F

  

Form of Notice of Conversion/Continuation

Exhibit G

  

Form of Notice of Borrowing

Exhibit H

  

Forms of U.S. Tax Compliance Certificates

 

vii

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LOAN AGREEMENT

LOAN AGREEMENT dated as of March 13, 2019 among PHI, INC., a Louisiana
corporation (the “Borrower”), the Subsidiaries of the Borrower that are
Guarantors or become Guarantors hereunder pursuant to Section 8.10 hereof, the
Lenders from time to time party hereto, and Blue Torch Finance LLC, a Delaware
limited liability company, as administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, the
“Administrative Agent”) and as collateral agent for the Secured Parties (in such
capacity, together with its successors and assigns in such capacity, the
“Collateral Agent”).

Introductory Statement

WHEREAS, the Borrower has requested that the Lenders extend term loans to the
Borrower on the Closing Date in the aggregate principal amount of $70,000,000 in
order to meet anticipated liquidity needs in connection with the maturity of its
$500,000,000 aggregate principal amount of senior notes due March 15, 2019 (the
“Existing Senior Notes”);

WHEREAS, the Lenders desire to extend such term loans to the Borrower, the
Administrative Agent desires to act as administrative agent for the Lenders, and
the Collateral Agent desires to act as collateral agent for the Secured Parties,
in each case on and subject to the terms and conditions of this Loan Agreement;

WHEREAS, the Borrower and certain of its Affiliates anticipate filing voluntary
petitions with the Bankruptcy Court initiating the Chapter 11 Cases promptly
following the date of this Loan Agreement; and

WHEREAS, the proceeds of the Loans will be used to, among other things, fund the
working capital, liquidity requirements and general corporate purposes of the
Loan Parties during the pendency of the Chapter 11 Cases.

NOW, THEREFORE, in consideration of the premises and the agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, and intending
to be legally bound, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01    DEFINED TERMS. As used herein, the following terms have the
meanings specified in this Section 1.01 unless the context otherwise requires:

“Account Control Agreement” means, with respect to a deposit account established
to hold Net Casualty Proceeds pursuant to Section 4.02(a)(iii), an account
control agreement in form and substance reasonably satisfactory to the
Collateral Agent, executed and delivered by the Loan Party owning such account,
the Collateral Agent, and the applicable depositary bank or securities
intermediary, as applicable, which account control agreement provides the
Collateral Agent with, among other things, “control” over such account (as
defined in, and for purposes of, the UCC) and the cash or investment property
therein, as applicable.

“Accounts” means “Accounts”, as such term is defined in the UCC as in effect on
the date hereof.

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“Additional Insureds” has the meaning set forth in Schedule 8.03 of this Loan
Agreement.

“Administrative Agent” has the meaning set forth in the preamble to this Loan
Agreement.

“Affiliate” means, with respect to any Person, (i) any other Person that
directly, or indirectly (through one or more intermediaries or otherwise),
Controls or is Controlled by or is under common Control with such Person, and
(ii) such Person’s officers, directors and other Persons functioning in
substantially similar roles. The term “Control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power,
by contract or otherwise; provided that, for purposes of this definition, any
Person which owns directly or indirectly ten percent (10%) or more of the
Capital Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person, or ten percent (10%) or more of
the Capital Stock of a Person (other than as a limited partner of such Person)
shall be deemed an Affiliate of such Person. The terms “Controlling” and
“Controlled” have meanings correlative thereto. Notwithstanding anything herein
to the contrary, neither Agent nor any Lender shall be deemed an Affiliate of
any Loan Party solely by virtue of the transactions contemplated by this Loan
Agreement and the other Loan Documents.

“Agent” means each of the Administrative Agent and Collateral Agent, and
“Agents” means, collectively, the Administrative Agent and Collateral Agent.

“Aircraft” means (i) a rotorcraft that, for its horizontal motion, depends
principally on its engine-driven rotors or (ii) an engine-driven fixed-wing
aircraft heavier than air that is supported in flight by the dynamic reaction of
the air against its wings, in each case to the extent such rotorcraft and
aircraft are described in the Aircraft Collateral Schedule.

“Aircraft Collateral Mortgage” means the (a) chattel mortgages which conveys or
evidences a Lien in favor of the Collateral Agent, for the benefit of the
Lenders, on the Aircraft and/or Spare Engines, Spare Parts and Spare Parts
Locations of the Loan Parties, as amended, modified or restated from time to
time, (b) security agreements or other encumbrances filed against the Aircraft,
Spare Engines, spare parts and other engines, and Spare Parts Locations in each
case belonging to any of the Loan Parties.

“Aircraft Collateral Schedule” means Schedule 8.26 to this Loan Agreement as
updated from time to time.

“Aircraft Documents” means all technical data, manuals, logs, records, computer
data media and other materials and documents and other repositories of
information in whatever form kept, or required to be kept, with respect to an
Aircraft or any part thereof whether in compliance with any applicable Law, any
regulation of the Aviation Authority, this Loan Agreement, or otherwise.

“Aircraft Insurances” means insurances and reinsurances in respect of an
Aircraft described in and complying with the requirements of Section 8.03 and
Schedule 8.03 (which requirements may be amended from time to time by Lenders,
acting reasonably).

“Aircraft Insurers” means the insurers and reinsurers, if any, providing the
Aircraft Insurances.

“Aircraft Protocol” means the Protocol to the Cape Town Convention on Matters
Specific to Aircraft Equipment.

“Airframe” means each Aircraft (excluding the APUs, Engines or any other engines
from time to time installed thereon) and all Parts installed therein or thereon
and all substituted, renewed and

 

2

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replacement Parts, at any particular time installed in or on the Airframe in
accordance with the terms of this Loan Agreement, including Parts which having
been removed from the Airframe which remain the property of the Owner. For
clarity, an auxiliary power unit, if applicable, shall be considered to be part
of the Airframe for purpose of this definition.

“Airworthiness Directive” means an airworthiness directive or airworthiness
notice (or the equivalent) issued by the Aviation Authority.

“Anti-Terrorism Laws” has the meaning given to such term in Section 7.30.

“Applicable Laws” means, as to any Person, any Laws applicable to, or otherwise
binding upon, such Person or any of its property, products, business, assets or
operations, or to which such Person or any of its property, products, business,
assets or operations is subject.

“Applicable Margin” means, (i) with respect to any Base Rate Loan, 5.00% per
annum, and (ii) with respect to any LIBOR Rate Loan, 6.00% per annum.

“Appraisal” means an Appraisal of the Aircraft by an Appraisal Firm.

“Appraisal Date” has the meaning assigned thereto in Section 8.15(b).

“Appraisal Firm” means a nationally-recognized appraisal firm with experience in
appraising Aircraft of the types that constitute Collateral and reasonably
acceptable to the Administrative Agent that provides an appraisal of the
Aircraft owned by the Loan Parties.

“Appraised Value” means the value of the Aircraft as determined by the Appraisal
Firm from time to time and as required by this Loan Agreement in a manner
consistent with that used to derive the adjusted current market value
(representing “adjusted half-life” values) in the desktop valuation report
provided to the Lenders (the “Ascend Report”) dated as of November 27, 2018. For
the avoidance of doubt, the Appraised Value provided in the Ascend Report was
$486,398,708.93.

“Approved Fund” means any Person (other than a natural person) that is or will
be engaged in making, purchasing, holding or investing in one or more debt
securities, bank loans, other commercial loans, or other similar extensions of
credit in the ordinary course of business, and which Person either: (a) is
administered, managed, advised or underwritten by (i) a Lender, (ii) an
Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that
administers, manages, advises or underwrites a Lender; or (b) purchases, holds
or invests in, or was formed for the purpose of purchasing, holding or investing
in, one or more debt securities, bank loans, other commercial loans, or other
similar extensions of credit originated by (i) a Lender or (ii) an Affiliate of
a Lender.

“APU” means (i) each APU installed on the Airframe as described in the Aircraft
Collateral Schedule as at the date of this Loan Agreement, whether or not
installed on an Airframe or other airframe from time to time, (ii) any Permitted
Substitute, as defined in the applicable Aircraft Collateral Mortgage, which
becomes subject to the terms of such Aircraft Collateral Mortgage pursuant to
the terms thereof, and (iii) any and all related Parts.

“Assignment and Acceptance” means an assignment and acceptance substantially in
the form of Exhibit E or such other form as may be approved by the
Administrative Agent.

“Assignment of Claims Act” means (i) Title 31, United States Code § 3727, and
Title 41, United States Code § 15, in each case as revised or amended, and any
rules or regulations issued pursuant

 

3

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thereto, and (ii) all other federal and state laws, rules and regulations
governing the assignment of government contracts or claims against a
Governmental Authority.

“Attributable Indebtedness” means, on any date, in respect of any Capitalized
Lease of any Person, the capitalized amount thereof that would appear as a
liability on a balance sheet of such Person prepared as of such date in
accordance with GAAP.

“Authorized Officer” means, with respect to any Person, the president, chief
executive officer, chief financial officer, chief operating officer or secretary
of such Person (or a manager, in the case of a Person that is a limited
liability company); provided that, with respect to financial reporting and other
financial matters (including Compliance Certificates, Consolidated Excess Cash
Flow), “Authorized Officer” means the chief financial officer of the applicable
Loan Party or such other officer performing such duties for such Loan Party.

“Aviation Authority” means, in respect of an Aircraft, the aviation authority of
the Country of Registration of that Aircraft and any successors thereto or other
Governmental Authority which shall have control or supervision of civil aviation
in the Country of Registration or have jurisdiction over the registration,
airworthiness or operation of, or other matters relating to, that Aircraft.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means Title 11 of the United States Code, as amended,
modified, succeeded or replaced from time to time.

“Bankruptcy Court” means the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division.

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the
rate last quoted by The Wall Street Journal (or another national publication
selected by Agent) as the “Prime Rate” in the United States or, if The Wall
Street Journal ceases to quote such rate, the highest per annum interest rate
published by the Federal Reserve Board in Federal Reserve Statistical Release
H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such
rate is no longer quoted therein, any similar rate quoted therein (as determined
by Administrative Agent in good faith) or any similar release by the Federal
Reserve Board (as determined by Administrative Agent in good faith), (b) the sum
of one-half of one percent (0.50%) per annum and the Federal Funds Rate, and
(c) the sum of (x) the LIBOR Rate calculated for each such day based on an
Interest Period of one month determined two (2) Business Days prior to such day
(but for the avoidance of doubt, not less than one and one half percent (1.50%)
per annum), plus (y) one percent (1.00%) per annum, in each instance, as of such
day. Any change in the Base Rate due to a change in any of the foregoing shall
be effective on the effective date of such change in the “bank prime loan” rate,
the Federal Funds Rate or LIBOR for an Interest Period of one month.

“Base Rate Loan” means a Term Loan that bears interest based on the Base Rate.

“Board” means the Board of Governors of the Federal Reserve System of the United
States, or any successor thereto.

 

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“Borrower” has the meaning set forth in the preamble to this Loan Agreement.

“Budget” has the meaning given to such term in Section 8.01(g).

“Business Day” means (a) any day that is not a Saturday, Sunday or other day on
which commercial banks in the City of New York are required, authorized or
otherwise permitted by law or other governmental actions to close, and (b) with
respect to any notices or determinations in connection with any LIBOR Rate
established hereunder, any day that is also a day for trading by and between
banks in Dollar deposits in the London Interbank Eurodollar market.

“Capital Stock” means any and all shares, interests, participations, units or
other equivalents (however designated) of capital stock of a corporation,
membership interests in a limited liability company, partnership interests of a
limited partnership, any and all equivalent ownership interests in a Person, and
in each case any and all warrants, rights or options to purchase, and all
conversion or exchange rights, voting rights, calls or rights of any character
with respect to, any of the foregoing.

“Capitalized Lease Obligations” means, as applied to any Person, subject to
Section 1.03, all obligations under Capitalized Leases of such Person or any of
its Subsidiaries, in each case taken at the amount thereof accounted for as
liabilities on the balance sheet (excluding the footnotes thereto) of such
Person in accordance with GAAP.

“Capitalized Leases” means, as applied to any Person, all leases of property
(real or personal) that have been or should be, in accordance with GAAP,
classified as capitalized leases on the balance sheet of such Person or any of
its Subsidiaries, on a consolidated basis.

“Cash Equivalents” means: any of the following: (a) money, (b) securities issued
or fully guaranteed or insured by the United States of America, Canada, New
Zealand, Australia or a member state of the European Union or any country in
whose currency funds are being held pending their application in the making of
an investment or capital expenditure by the Borrower or a Subsidiary in that
country or with such funds, or any agency or instrumentality of any thereof, or
obligations guaranteed by any of the foregoing, (c) overnight bank deposits,
time deposits, certificates of deposit, money market deposits or bankers’
acceptances of any commercial bank having capital and surplus in excess of
$500,000,000 (or the foreign currency equivalent thereof as of the date of such
investment) and the commercial paper of the holding company of which is rated at
least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody’s (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency), (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) above entered into with
any financial institution meeting the qualifications specified in clause (c)(i)
or (ii) above, (e) money market instruments, commercial paper or other
short-term obligations rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody’s (or if at such time neither is
issuing ratings, then a comparable rating of another nationally recognized
rating agency), (f) investments in money market funds subject to the risk
limiting conditions of Rule 2a-7 or any successor rule of the SEC under the
Investment Company Act of 1940, (g) investment funds investing at least 90% of
their assets in cash equivalents of the types described in clauses (a) through
(f) above (which funds may also hold cash pending investment and/or
distribution), and (h) investments similar to any of the foregoing denominated
in foreign currencies.

“Casualty Event” means the damage, destruction or condemnation, as the case may
be, of property of any Person or any of its Subsidiaries.

 

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“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. § 9601, et seq.), as amended, and all rules,
regulations and binding standards issued thereunder.

“CFC” means a controlled foreign corporation within the meaning of Section 957
of the Code.

“Change of Control” means (a) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”)) other than the Permitted Holders is or shall at any time become the
“beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of 35% or more on a fully diluted basis of the
voting interests in the Borrower’s Capital Stock, or (b) a “Change of Control”
as defined in the Indenture or under any documentation governing Credit
Facilities incurred pursuant to Section 9.01(h). Notwithstanding the foregoing,
the occurrence of the events described in (a) and (b) above shall not be deemed
a “Change of Control” if such events occur as a result of the Chapter 11 Cases.

“Chapter 11 Cases” means, collectively, the Chapter 11 bankruptcy cases to be
initiated by the Loan Parties in the Bankruptcy Court and administratively
consolidated.

“Claims” has the meaning set forth in the definition of Environmental Claims.

“Closing Date” means the first date upon which all conditions precedent listed
in Section 5.01 have been satisfied by no later than 1:00 pm pursuant to the
terms thereof (i.e., March 13, 2019).

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means any assets of any Loan Party or other assets upon which the
Collateral Agent has been granted a Lien in connection with this Loan Agreement,
including pursuant to the Security Documents.

“Collateral Agent” has the meaning set forth in the preamble to this Loan
Agreement.

“Collateral Assignee” has the meaning given to such term in Section 12.06(d).

“Collections” means all cash, checks, credit card slips or receipts, notes,
instruments, and other items of payment (including insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds) of the Loan Parties.

“Commitment” means with respect to each Lender, such Lender’s Term Loan
Commitment.

“Compliance Certificate” means a certificate duly completed and executed by an
Authorized Officer of the Borrower substantially in the form of Exhibit D,
together with such changes thereto or departures therefrom as the Administrative
Agent may reasonably request or approve from time to time.

“Confidential Information” has the meaning given to such term in Section 12.18.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Adjusted EBITDA” means, for a specified period, an amount
determined for the Consolidated Companies equal to, on a trailing twelve month
basis (including, subject to the established Consolidated Adjusted EBITDA
amounts provided below, any months that precede the Closing Date):

 

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(a)    Consolidated Net Income of the Consolidated Companies, plus

(b)    to the extent reducing Consolidated Net Income, the sum of, without
duplication, amounts for:

(i)    Consolidated Interest Expense during such measurement period,

(ii)    provisions for Taxes based on income or profits or capital, including,
without limitation, state franchise, excise and similar taxes, foreign taxes and
withholding taxes of such Person paid or accrued during such period, including
any penalties and interest relating to any tax examinations,

(iii)    total depreciation expense,

(iv)    total amortization expense,

(v)    other non-cash charges and expenses reducing Consolidated Net Income
(excluding any such non-cash item to the extent that it represents an accrual or
reserve for potential cash items in any future period or amortization of a
prepaid cash item that was paid in a prior period),

(vi)    fees and expenses incurred in connection with the negotiation, execution
and delivery of this Loan Agreement and the other Loan Documents (excluding any
capitalized amounts),

(vii)    reasonable out-of-pocket fees and expenses paid in connection with
(a) Investments and other non-ordinary course transactions that have been
consummated and (b) failed acquisitions, other Investments, and other
non-ordinary course transactions that have not been (and will not be)
consummated, in an aggregate amount, solely with respect to this clause (b), not
to exceed $1,000,000 in the aggregate during any trailing twelve-month period,

(viii)    earn-out obligations and contingent consideration obligations
(including to the extent accounted for as performance and retention bonuses,
compensation or otherwise) and adjustments thereof and purchase price
adjustments paid or accrued in accordance with GAAP to the extent permitted
under the Loan Documents,

(ix)    fees paid to the Administrative Agent and the Lenders to the extent not
included above,

(x)    non-recurring expenses and fees in connection with the Chapter 11 Cases,
including, but not limited to, professional fees, severance payments and
retention bonus payments,

(xi)    the amount of any restructuring charge or provision (whether or not
classified as a restructuring charge or provision under GAAP), integration cost
or other business optimization expense or cost, including any one-time costs
incurred in connection with acquisitions or divestitures after the Closing Date,
any recruiting expenses and costs related to the closure and/or consolidation of
facilities and to exiting lines of business and any reconstruction,
recommissioning or reconfiguring of fixed assets for alternative use; provided
that any amounts described by this clause (xi) shall be reasonably expected to
be incurred within twelve (12)

 

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months and the aggregate amount added back for actions to be taken will not
exceed in any period 5% of Consolidated Adjusted EBITDA, determined on a pro
forma basis,

(xii)    any other non-cash expenses or charges including any write-offs or
write downs reducing Consolidated Net Income for such period (provided that if
any such non-cash expenses or charges represent an accrual or reserve for
potential cash items in any future period, (1) the Borrower may determine not to
add back such non-cash expense or charge in the current period and (2) to the
extent the Borrower does decide to add back such non-cash expense or charge, the
cash payment in respect thereof in such future period shall be subtracted from
Consolidated Adjusted EBITDA to such extent, and excluding amortization of a
prepaid cash item that was paid in a prior period),

(xiii)    realized foreign exchange losses resulting from the impact of foreign
currency changes on the valuation of assets or liabilities on the balance sheet
of such Person and its Restricted Subsidiaries; minus

(c)    to the extent increasing Consolidated Net Income, the sum of, without
duplication:

(i)    amounts for other non-cash gains increasing Consolidated Net Income for
such period (excluding any such non-cash gain to the extent it represents the
reversal of an accrual or reserve for potential cash items in any prior period);
and

(ii)    extraordinary gains received during the specified period.

Notwithstanding the foregoing, for all purposes under this Agreement,
Consolidated Adjusted EBITDA shall be deemed to equal (i) $10,683,533.51 for the
fiscal quarter ended September 30, 2018 and (ii) $11,149,298.28 for the fiscal
quarter ended December 31, 2018.

“Consolidated Capital Expenditures” means, for any specified period, the sum of,
without duplication, all expenditures made, directly or indirectly, by the
Consolidated Companies during such period, determined on a consolidated basis in
accordance with GAAP, that are or should be reflected as additions to property,
plant or equipment or similar items reflected in the consolidated statement of
cash flows of the Consolidated Companies, or have a useful life of more than one
year, but excluding (i) expenditures made in connection with the acquisition,
replacement, substitution, improvement, expansion or restoration of assets to
the extent financed (a) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or
restored, (b) with cash awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced, (c) with cash
proceeds of Dispositions that are reinvested in accordance with this Loan
Agreement, (d) with proceeds of landlord financed leasehold improvements, or
(e) to the extent financed with the Net Equity Proceeds of an equity issuance by
the Borrower to the extent not prohibited by this Loan Agreement, and
(ii) expenditures made to fund the purchase price for assets acquired in
permitted Investments in all or substantially all of the equity or assets of
another Person or business unit or division.

“Consolidated Companies” means the Loan Parties and their Subsidiaries on a
consolidated basis in accordance with GAAP.

“Consolidated Excess Cash Flow” means, for a specified period, the excess (if
any), of:

 

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(a)    Consolidated Adjusted EBITDA for such period plus the amount of cash
gains excluded in the calculation of Consolidated Net Income (other than such
excluded cash gains resulting from any Extraordinary Receipts), minus

(b)    the sum for such period (without duplication and to the extent that the
following amounts have not already been deducted in determining Consolidated
Adjusted EBITDA for such period or deducted pursuant to clause (b) above) of:

(i)    Consolidated Interest Expense paid in cash, plus , in each case, without
duplication,

(ii)    scheduled principal payments actually made during such period in
accordance with Section 2.03(a), plus

(iii)    optional prepayments of the Term Loans pursuant to Section 4.01, plus

(iv)    Taxes based on income paid in cash by the Consolidated Companies, plus

(v)    Consolidated Capital Expenditures made in cash and the cash consideration
actually paid in connection with any Investment (in each case, and not financed
other than with the proceeds of Term Loans), plus

(vi)    any cash addbacks to Consolidated Adjusted EBITDA or cash losses
excluded in the calculation of Consolidated Net Income, plus

(vii)    insurance proceeds (other than any insurance proceeds that are not
reinvested within the allotted 120-day reinvestment period pursuant to
Section 4.02(a)), plus

(viii)    increases in Consolidated Working Capital (and minus decreases in
Consolidated Working Capital).

“Consolidated Interest Expense” means, for the Consolidated Companies, the sum
of all interest (net of interest income) in respect of Indebtedness (including,
without limitation, the interest component of any payments in respect of
Capitalized Lease Obligations) payable in cash during such period (whether or
not actually paid during such period).

“Consolidated Net Income” means, for any specified period, the consolidated net
income (or deficit) of the Consolidated Companies, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP,
after eliminating therefrom all extraordinary nonrecurring items of income or
loss; provided that there shall be excluded: (a) the income (or loss) of any
Person in which any Person (other than any of the Consolidated Companies) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid in cash to any of the Consolidated Companies by such
Person during such specified period, (b) the income (or loss) of any Person
accrued prior to the date it becomes a consolidated Subsidiary of any of the
Consolidated Companies or is merged into or consolidated with any of the
Consolidated Companies or such Person’s assets are acquired by any of the
Consolidated Companies (provided that such Person shall be, for purposes of this
clause (b), a Subsidiary), (c) the income of any consolidated Subsidiary of any
of the Consolidated Companies to the extent that the declaration or payment of
dividends or other distributions by that consolidated Subsidiary of that income
is not at the time permitted by operation of the terms of any Contractual
Obligation or Applicable Law applicable to that consolidated Subsidiary, (d) any
restoration to income of any

 

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contingency reserve, except to the extent that provision for such reserve was
made out of income accrued during such period; (e) any gain attributable to the
write-up of any asset and any loss attributable to the write-down of any asset;
(f) any net gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of any of the Consolidated
Companies, (g) in the case of a successor to any consolidated Subsidiary of any
of the Consolidated Companies by consolidation or merger or as a transferee of
its assets, any earnings of such successor prior to such consolidation, merger
or transfer of assets (unless such successor was a consolidated Subsidiary of
any of the Consolidated Companies prior to such consolidation, merger or
transfer), (i) any deferred credit representing the excess of equity in any
consolidated Subsidiary of any of the Consolidated Companies at the date of
acquisition of such consolidated Subsidiary over the cost to the Consolidated
Companies of the investment in such Subsidiary, (j) the cumulative effect of any
change in GAAP during such period, and (k) any noncash FASB ASC 815 income (or
loss) related to hedging activities.

“Consolidated Working Capital” means, as of any date of determination, the
excess of (a) the sum of all amounts (other than cash and current tax assets)
that would, in conformity with GAAP, be set forth opposite the caption “total
current assets” (or any like caption) on a consolidated balance sheet of the
Consolidated Companies at such date over (b) the sum of all amounts that would,
in conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of the
Consolidated Companies on such date, including deferred revenue but excluding,
without duplication, (i) the current portion of any Indebtedness, (ii) all
Indebtedness consisting of the Term Loans to the extent otherwise included
therein, (iii) the current portion of interest and (iv) the current portion of
current and deferred income Taxes.

“Contingent Liability” means, for any Person, any agreement, undertaking or
arrangement by which such Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the Capital Stock of any other Person. The amount of any
Person’s obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be determined in accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person, or any agreement, instrument, permit, license or other
undertaking to which such Person is a party or by which such Person or any of
its property is bound or subject.

“Convention” shall mean the Convention on International Interests in Mobile
Equipment, signed contemporaneously with the Protocol in Cape Town, South Africa
on November 16, 2001, as may be amended.

“Conversion Date” means any date on which the Borrower converts a Base Rate Loan
to a LIBOR Rate Loan, or a LIBOR Rate Loan to a Base Rate Loan.

“Copyright Security Agreements” means the Copyright Security Agreements dated
the date hereof made in favor of the Collateral Agent and the Lenders by each
applicable Loan Party, and any copyright security agreement entered into after
the Closing Date (as required by this Loan Agreement or any other Loan
Document), in each case as amended, supplemented or otherwise modified, renewed
or replaced from time to time.

“Country of Registration” means in respect of an Aircraft, the jurisdiction
shown in the Aircraft Collateral Schedule in respect of that Aircraft.

 

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“Credit Facilities” means one or more debt facilities, loan agreements,
indentures, notes or other agreements or instruments (which may be outstanding
at the same time and including, without limitation, the Credit Agreement)
providing for revolving credit loans, term loans, letters of credit or debt
securities and, in each case, as such agreements or instruments may be amended,
amended and restated, supplemented, modified, refinanced, replaced or otherwise
restructured, in whole or in part from time to time..

“Default” means any event, act or condition that, with notice or lapse of time,
or both, would constitute an Event of Default.

“Deregistration Power of Attorney” means an irrevocable deregistration power of
attorney authorization in favor of the Collateral Agent issued or to be issued
by the Owner and any Disclosed Sublessee in form and substance reasonably
acceptable to Lender with any amendments and/or alterations as may be necessary
in order to make the same acceptable to the Aviation Authority in the relevant
jurisdiction.

“Disclosed Existing Sublease” means each Disclosed Sublease set forth in
Schedule 7.33 on the Closing Date in respect of which the Disclosed Sublessee is
not an Affiliate of the Borrower.

“Disclosed Sublease” means, in respect of an Aircraft, any lease and/or sublease
of that Aircraft as shown in Schedule 7.33.

“Disclosed Sublessee” means, in respect of a Disclosed Sublease and an Aircraft,
the person so shown in Schedule 7.33 in respect of that Disclosed Sublease and
Aircraft.

“Disposition” means, with respect to any Person, any sale, transfer, lease,
contribution or other conveyance (including by way of merger) of, or the
granting of options, warrants or other rights to, any of such Person’s or any of
such Person’s Subsidiaries’ assets or properties (including Capital Stock of
Subsidiaries) to any other Person in a single transaction or series of
transactions.

“Disposition Offset” means the amount by which the Appraisal Value is reduced
pursuant to Dispositions permitted pursuant to Section 9.04.

“Disqualified Capital Stock” means any Capital Stock that, by its terms (or by
the terms of any security or other Capital Stock into which it is convertible or
for which it is exchangeable) or upon the happening of any event or condition,
(a) matures or is mandatorily redeemable (other than solely for Qualified
Capital Stock), pursuant to a sinking fund obligation or otherwise, (b) is
redeemable at the option of the holder thereof (other than solely for Qualified
Capital Stock), in whole or in part, (c) provides for the scheduled payment of
dividends in cash or (d) is or becomes convertible into or exchangeable for
Indebtedness or any other Capital Stock that would constitute Disqualified
Capital Stock, in each case, prior to the date that is six (6) months after the
Maturity Date; provided that if such Capital Stock is issued pursuant to a plan
for the benefit of employees of any Loan Party or by any such plan to such
employees, such Capital Stock shall not constitute Disqualified Capital Stock
solely because it may be required to be repurchased by a Loan Party in order to
satisfy applicable statutory or regulatory obligations.

“Dollars” and “$” means dollars in lawful currency of the United States of
America.

“Domestic Subsidiary” means each Subsidiary of a Loan Party that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code.

 

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“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the effective date of the plan of reorganization in the
Chapter 11 Cases.

“Engine” means (i) each of the engines described in the Aircraft Collateral
Schedule as at the date of this Loan Agreement (and all accessories considered
as part of the engine higher assembly), whether or not installed on an Airframe
or other airframe from time to time, (ii) any Permitted Substitute, as defined
in the applicable Aircraft Collateral Mortgage (and all accessories considered
as part of the engine higher assembly), which becomes subject to the terms of
such Aircraft Collateral Mortgage pursuant to the terms thereof, (iii) a Spare
Engine to the extent it is, at any time, part of the Collateral and (iv) any and
all related Parts and, in each case, shall exclude (a) any Engine subject to a
Disposition permitted under Section 9.04 and (b) any Engine replaced by a
Permitted Substitute in accordance with clause (ii) above and the Aircraft
Collateral Mortgage.

“Environmental Claims” means any and all actions (including administrative,
regulatory and judicial actions), suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, requests for information, warning
letters, notices of deficiencies, investigations (other than internal reports
prepared by the Loan Parties (a) in the ordinary course of such Person’s
business or (b) as required in connection with a financing transaction or an
acquisition or disposition of real estate) or proceedings relating to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (“Claims”), including (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, fines, penalties,
remedial or other actions or damages pursuant to any applicable Environmental
Law and (ii) any and all Claims by any third party seeking damages,
contribution, indemnification, cost recovery, fines, penalties, compensation or
injunctive relief resulting from the Release or threatened Release of Hazardous
Materials or arising from any alleged violation of Environmental Law.

“Environmental Law” means any applicable federal, state, foreign, local or
municipal statute, law, rule, regulation, order, ordinance, code, decree, or
other binding written requirement of any Governmental Authority now or hereafter
in effect, in each case as amended, and any binding judicial or administrative
interpretation thereof, including any binding judicial or administrative order,
consent decree or judgment, relating to or imposing liability or standards of
conduct concerning protection of the environment or natural resources,
protection of human health or safety (from exposure to Hazardous Materials), or
occupational health and safety (from exposure to Hazardous Materials), including
public environmental notification requirements and environmental transfer of
ownership, notification or approval statutes.

 

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“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) that,
together with any Loan Party or any Subsidiary of any Loan Party, is, or within
the last six (6) years was, treated as a “single employer” (i) within the
meaning of Section 414(b), (c), (m) or (o) of the Code.

“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) that,
together with any Loan Party or any Subsidiary of any Loan Party, is, or within
the last six (6) years was, treated as a “single employer” (i) within the
meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of
any Loan Party or any Subsidiary of any Loan Party being or having been a
general partner of such person.

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of any Loan Party or any ERISA Affiliate from a Plan during a
plan year in which such entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such
a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Loan Party or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under Section 4041 or 4041A of ERISA; (e) the
institution by the PBGC of proceedings to terminate a Pension Plan; (f) any
event or condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(g) the determination that any Pension Plan is insolvent under Section 4245 of
ERISA (or notice of any such insolvency has been given to any of the Loan
Parties, any of their respective Subsidiaries or any ERISA Affiliate) or
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; (h) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate, (g) the imposition of a Lien under the Code or
ERISA on the assets of any of the Loan Parties, any of their respective
Subsidiaries or any ERISA Affiliate or notification to any of the Loan Parties,
any of their respective Subsidiaries or any ERISA Affiliate that such a Lien
will be imposed on the assets of any of the Loan Parties, any of their
respective Subsidiaries or any ERISA Affiliate on account of any Plan, or (h) a
failure by any Loan Party, any Subsidiary of any Loan Party or any ERISA
Affiliate to meet all applicable requirements under the Pension Funding Rules in
respect of a Pension Plan, whether or not waived, or the failure by any Loan
Party, any Subsidiary of any Loan Party or any ERISA Affiliate to make any
required contribution to a Multiemployer Plan.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Event of Default” has the meaning given to such term in Article X.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Excluded Subsidiary” means (i) any CFC or FSHCO to the extent a guaranty by or
pledge of the stock of such Subsidiary or its assets would trigger Material
Adverse Tax Consequences, (ii) any Domestic Subsidiary that is not a Loan Party
as of the Closing Date and (iii) upon the commencement and during the
continuation of the Chapter 11 Cases, any Foreign Subsidiary.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the

 

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case of any Lender, its applicable lending office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable
to or for the account of a Lender with respect to an applicable interest in a
Loan or Commitment pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Loan or Commitment (other than pursuant to
an assignment request by the Borrower under Section 12.07) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 4.04, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 4.04(f), and
(d) any withholding Taxes imposed under FATCA.

“Executive Order” has the meaning given to such term in Section 7.30.

“Existing Senior Notes” has the meaning given to such term in the recitals to
this Loan Agreement.

“Extraordinary Receipts” means any cash or other amounts or receipts received
by, on behalf of or on account of any Loan Party or any Subsidiary of any Loan
Party not in the ordinary course of business, including (a) proceeds of
judgments, proceeds of settlements and other consideration of any kind received
in connection with any cause of action and (b) indemnification payments received
by any Loan Party.

“FAA” means and refers to the United States Federal Aviation Administration, or
any successor or replacement administration or governmental agency having the
same or similar authority and responsibilities.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Loan Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any intergovernmental
agreements entered into pursuant to current Section 1471(b)(1) of the Code (or
any amended or successor version described above) and any intergovernmental
agreements or treaties implementing any of the foregoing (together with any law
implementing such agreements or treaties).

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System, as determined by Agent in a commercially reasonable manner, and if no
such rate is so published, the Federal Funds Rate for such day shall be the
average rate for such day on such transactions as quoted to the Administrative
Agent by three (3) federal funds brokers of recognized standing selected by it
in good faith (but in no event less than 0.0%).

“Fee Letter” means that certain fee letter, dated as of the date hereof, by and
among the Borrower, the Lenders and the Administrative Agent.

“Fees” means all amounts payable pursuant to, or referred to in, Section 3.02 or
in the Fee Letter.

“Fixed Charge Coverage Ratio” means (without duplication), as of the last day of
any specified Test Period, the ratio of (a) (x) Consolidated Adjusted EBITDA for
such Test Period ending on such date minus (y) Consolidated Capital Expenditures
for such Test Period ending on such date, divided by (b) Fixed Charges, in each
case of this definition, of the Consolidated Companies calculated on a
consolidated basis.

 

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“Fixed Charges” means the sum of (a) cash interest expense (including on
Capitalized Lease Obligations) (net of cash interest income), (b) regularly
scheduled principal amortization (including on Capitalized Lease Obligations)
(after giving effect to any mandatory or voluntary prepayments) and payments at
maturity, and (c) cash income Taxes (net of any Tax refund or benefit); provided
that for purposes of calculating the Fixed Charge Coverage Ratio for any Test
Period ending on or prior to the first period for which four full fiscal
quarters have elapsed since the Closing Date, the amounts calculated pursuant to
clauses (a), (b) and (c) for the relevant Test Periods shall equal such actual
amounts from the Closing Date to and including the last day of the relevant Test
Period, multiplied by a fraction equal to (x) 365 divided by (y) the number of
days actually elapsed from the Closing Date to such date of determination.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Subsidiary” means each Subsidiary of a Loan Party that is not a
Domestic Subsidiary.

“FSHCO” means a Subsidiary that (a) owns (directly or indirectly) no material
assets other than equity interests of one or more CFCs and (b) conducts no
material business other than holding such equity interests.

“Funded Debt” means, as of any date of determination, all then outstanding
principal amount of the Indebtedness of the Consolidated Companies of the type
described in clauses (a), (b) (with respect to unreimbursed amounts), (d) (but
in the case of earn-outs, only once earned, to the extent payable on or prior to
the Maturity Date and not subordinated in accordance with clause (ii) of the
proviso below), (e), (f), (h) and (i) of the definition of “Indebtedness”;
provided, however, (i) all intercompany Indebtedness among the Consolidated
Companies shall be disregarded in such determination and (ii) all Indebtedness
that satisfies the Subordination Requirements, shall be excluded from such
determination.

“Funded Secured Debt” means, as of any date of determination, all then
outstanding principal amount of the Secured Indebtedness of the Loan Parties of
the type described in clause (a) of the definition of “Indebtedness.”

“Funding Date” means the date on which the conditions set forth in Section 5.02
shall be satisfied, as determined by the Administrative Agent in its sole
discretion; provided that the Funding Date shall be no later than March 13,
2019, and all Commitments shall automatically terminate on March 13, 2019 at
1:00 p.m. (New York time) if the conditions set forth in Section 5.02 shall not
have been satisfied by such time.

“GAAP” means generally accepted accounting principles in the United States of
America set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), including the FASB Accounting
Standards Codification™, which are applicable to the circumstances as of the
date of determination, subject to Section 1.03.

“Governmental Authority” means any federal, state or local government of the
United States, any foreign country, any multinational authority, or any state,
commonwealth, province, protectorate or political subdivision thereof, and any
entity, body or authority exercising executive, legislative, judicial, taxing,
regulatory or administrative functions of or pertaining to government, including
the PBGC and other quasi-governmental entities established to perform such
functions, and in each case any department or agency thereof.

 

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“Guarantors” means (a) each Person that is a Subsidiary of the Borrower on the
Closing Date other than an Excluded Subsidiary and (b) each other Person that
becomes a party to the Guaranty and Security Agreement or otherwise provides a
guaranty for the payment and performance of the Obligations after the Closing
Date pursuant to an agreement reasonably acceptable to the Collateral Agent
pursuant to Section 8.10.

“Guaranty and Security Agreement” means a Guaranty and Security Agreement among
each Loan Party and the Collateral Agent for the benefit of the Secured Parties,
substantially in the form of Exhibit B, as amended, supplemented or otherwise
modified, renewed or replaced from time to time.

“Guaranty Obligations” means, as to any Person, any Contingent Liability of such
Person or other obligation of such Person guaranteeing or intended to guarantee
any Indebtedness of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including any obligation of such Person, whether
or not contingent, (a) to purchase any such Indebtedness or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such Indebtedness or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such Indebtedness of the ability of the primary obligor to make payment
of such Indebtedness or (d) otherwise to assure or hold harmless the owner of
such Indebtedness against loss in respect thereof; provided that the term
“Guaranty Obligations” shall not include endorsements of instruments for deposit
or collection in the ordinary course of business or customary and reasonable
indemnity obligations in effect on the Closing Date, entered into in connection
with any acquisition or disposition of assets permitted under this Loan
Agreement (other than with respect to Indebtedness). The amount of any Guaranty
Obligation shall be determined in accordance with GAAP.

“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive
materials, friable asbestos, urea formaldehyde foam insulation, transformers or
other equipment that contain dielectric fluid containing regulated levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of “hazardous substances”,
“hazardous waste”, “hazardous materials”, “extremely hazardous waste”,
“restricted hazardous waste”, “toxic substances”, “toxic pollutants”,
“contaminants” or “pollutants” under any applicable Environmental Law; and
(c) any other chemical, waste, recycled material, material or substance, which
is prohibited or regulated by any Environmental Law.

“Hedging Agreement” means any rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging agreement.

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under Hedging Agreements.

“Historical Financial Statements” means (a) audited consolidated balance sheets
and related statements of income, and stockholders’ equity and cash flows of the
Borrower and its Subsidiaries for the fiscal years ended December 31, 2015,
December 31, 2016 and December 31, 2017 and (b) unaudited consolidated balance
sheets and related statements of income and cash flows of Borrower and its
Subsidiaries for each monthly and quarterly period ending after December 31,
2017 through December 31, 2018.

 

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“IDERA” means an Irrevocable De-Registration and Export Authorization in such
format as required by applicable law, which in each case shall be in a form
acceptable for filing with the Aviation Authority.

“Immaterial Subsidiary” means, on any date of determination, any Subsidiary of
the Borrower that, (a) generates less than 2.5% of Consolidated Adjusted EBITDA
on a pro forma basis for the four fiscal quarter period for which financial
statements have been delivered (or are required to have been delivered) under
Section 8.01(c) that has ended on or most recently prior to such date or (b) has
total assets (excluding investments that are eliminated in consolidation) of
less than 2.5% of the consolidated total assets of the Borrower and its
Subsidiaries, taken as a whole, on a pro forma basis for the four fiscal quarter
period for which financial statements have been delivered (or are required to
have been delivered) under Section 8.01(c) that has ended on or most recently
prior to such date; provided that if, at any time and from time to time after
the Closing Date, Immaterial Subsidiaries that are Excluded Subsidiaries solely
because they do meet the thresholds set forth in clauses (a) and (b) comprise in
the aggregate more than 5.0% of the consolidated total assets of the Borrower
and its Subsidiaries, taken as a whole, on a pro forma basis for the four fiscal
quarter period for which financial statements have been delivered (or are
required to have been delivered) under Section 8.01(c) that has ended on or most
recently prior to such date or more than 5.0% of Consolidated Adjusted EBITDA on
a pro forma basis for the four fiscal quarter period for which financial
statements have been delivered (or are required to have been delivered) under
Section 8.01(c) that has ended on or most recently prior to such date, then the
Borrower shall (i) designate in writing to Administrative Agent one or more of
such Immaterial Subsidiary(ies) as no longer an Immaterial Subsidiary(ies) to
the extent required such that the foregoing condition ceases to be true.

“Indebtedness” means, as to any Person at a particular time, without
duplication, the following:

(a)    all indebtedness of such Person for borrowed money and all indebtedness
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments on which interest charges are customarily paid or accrued;

(b)    the maximum amount (after giving effect to any prior drawings or
reductions which may have been reimbursed) of all letters of credit (including
standby and commercial), bankers’ acceptances, bank guaranties, surety bonds,
performance bonds and similar instruments issued or created by or for the
account of such Person;

(c)    net Hedging Obligations of such Person;

(d)    all obligations of such Person from installment purchases of property or
services or representing the deferred purchase price for property or services,
other than trade accounts payable in the ordinary course of business (but
including any earn-out or similar obligations);

(e)    obligations secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) a Lien on property
owned or being purchased by such Person (including obligations arising under
conditional sales or other title retention agreements and mortgage, industrial
revenue bond, industrial development bond and similar financings), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f)    all Attributable Indebtedness;

(g)    all obligations of such Person in respect of Disqualified Capital Stock;

(h)    all Guaranty Obligations of such Person in respect of any of the
foregoing; and

 

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(i)    invoiced trade payables more than one hundred and twenty (120) days past
due unless such amount either (i) is unpaid as a result of the Chapter 11 Cases
or (ii) is subject to a good faith dispute by such Person and adequate reserves
in respect thereof have been established on the balance sheet of such Person in
accordance with GAAP.

Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, except to the extent such Person’s liability for such Indebtedness is
otherwise limited and only to the extent such Indebtedness would constitute
Funded Debt. The amount of any net Hedging Obligations on any date shall be
deemed to be the Swap Termination Value thereof as of such date. The amount of
Indebtedness of any Person for purposes of clause (e) above shall be deemed to
be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness
and (y) the fair market value of the property encumbered thereby as determined
by such Person in good faith.

“Indemnified Liabilities” has the meaning given to such term in Section 12.05.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes

“Indenture” means that certain Indenture dated as of March 17, 2014 by and among
PHI, Inc., as Issuer, the guarantors party thereto and U.S. Bank National
Association as Trustee, and shall be deemed to include all notes issues pursuant
to and in accordance with the Indenture from time to time, including the
Existing Senior Notes.

“Initial Blue Torch Lender” means BTC Holdings Fund I, LLC, for so long as it or
any of its Affiliates is a Lender.

“Insolvency Proceeding” means, with respect to any Person, including without
limitation any Lender, such Person or such Person’s direct or indirect parent
company (a) becomes the subject of a bankruptcy or insolvency proceeding
(including any proceeding under the Bankruptcy Code), or regulatory
restrictions, (b) has had a receiver, conservator, trustee, administrator,
custodian, assignee for the benefit of creditors or similar Person charged with
the reorganization or liquidation of its business appointed for it or has called
a meeting of its creditors, (c) admits in writing its inability, or be generally
unable, to pay its debts as they become due or ceases operations of its present
business, (d) becomes the subject of a foreclosure (whether by power of judicial
proceeding or otherwise) or deed in lieu of foreclosure, (e) in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment of a type described in clauses (a) or (b); provided
that an Insolvency Proceeding shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person or such
Person’s direct or indirect parent company by a Governmental Authority or
instrumentality thereof if, and only if, such ownership interest does not result
in or provide such Person with immunity from the jurisdiction of courts within
the United States or from the enforcement of judgments or writs of attachment on
its assets or permit such Person (or such Governmental Authority or
instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.

“Intercompany Note” has the meaning given to such term in Section 9.01(g).

 

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“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of the date hereof, by the Agents and Thirty Two as may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

“International Interest” shall mean an “international interest” as defined in
the Treaty.

“International Registry” shall mean the international registry created pursuant
to the Treaty.

“Interest Payment Date” means, (a) with respect to any LIBOR Rate Loan, the last
day of each Interest Period applicable to such LIBOR Rate Loan, and (b) with
respect to any Base Rate Loan, the last Business Day of each calendar quarter.

“Interest Period” means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Term Loan is disbursed or continued or on
the Conversion Date on which a Base Rate Loan is converted to a LIBOR Rate Loan
and ending on the date one or three months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation, as
applicable; provided that:

(a)    if any Interest Period pertaining to a LIBOR Rate Loan would otherwise
end on a day which is not a Business Day, that Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;

(b)    any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period;

(c)    no Interest Period for the Term Loans shall extend beyond the last
scheduled payment date therefor; and

(d)    no Interest Period applicable to the Term Loans or portion thereof shall
extend beyond any date upon which is due any scheduled principal payment in
respect of the Term Loans unless the aggregate principal amount of Term Loans
represented by Base Rate Loans or by LIBOR Rate Loans having Interest Periods
that will expire on or before such date is equal to or in excess of the amount
of such principal payment.

“Inventory” means any and all “goods” (as defined in the UCC) which shall at any
time constitute “inventory” (as defined in the UCC) of any Loan Party, wherever
located (including without limitation, goods in transit and goods in the
possession of third parties), or which from time to time are held for sale,
lease or consumption in any Loan Party’s business, furnished under any contract
of service or held as raw materials, work in process, finished inventory or
supplies (including without limitation, packaging and/or shipping materials).

“Investment” means, relative to any Person, (a) any loan, advance or extension
of credit made by such Person to any other Person, including the purchase by
such first Person of any bonds, notes, debentures or other debt securities of
any such other Person; (b) the incurrence of Contingent Liabilities in favor of
any other Person; and (c) the acquisition of, or capital contribution in respect
of, any Capital Stock or other investment held by such Person in any other
Person. The amount of any Investment at any time shall be the original principal
or capital amount thereof less all returns of principal or equity or capital
thereon received (in cash or in the same form as the Investment) on or before
such time and shall,

 

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if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property at the time of such Investment.

“Irrevocable Power of Attorney in Fact” means an Irrevocable Power of Attorney
in Fact (Aircraft Registration) in such format as required by applicable law,
which in each case shall be in a form acceptable for filing with the Aviation
Authority.

“IRS” means the U.S. Internal Revenue Service.

“Landlord Agreement” means a landlord waiver, bailee letters, collateral access
agreement or other acknowledgement agreement of the applicable landlord, lessor,
warehouseman, processor, consignee, or other Person in possession of, having a
Lien upon, or having rights or interests in Collateral, in each case in form and
substance reasonably satisfactory to the Collateral Agent, pending execution.

“Law” means any law (including common law), statute, regulation, ordinance,
rule, order, decree, judgment, consent decree, writ, injunction, settlement
agreement or binding governmental requirement enacted, promulgated or imposed or
entered into or agreed by any Governmental Authority or determination of an
arbitrator.

“Lender” means each Person listed as a Lender on Schedule 1.01 and each Person
that becomes a Lender pursuant to an Assignment and Acceptance in accordance
with Section 12.06, in each case other than such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.

“LIBOR Rate” means, for any Interest Period, a rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1.00%) equal to the greater of (i) one
month or three month (as applicable) London Inter-Bank Offered Rate for
U.S. Dollar Deposits as set and published by ICE Benchmark Administration
Limited (or its successor) and as obtained by the Administrative Agent on the
applicable Bloomberg screen page, (or, if unavailable, another service or
publication selected by the Administrative Agent) two (2) Business Days prior to
the first day of such Interest Period, or, if such rates referenced above in
this clause (i) are unavailable, the rate per annum equal to the quotation rate
offered to first class banks in the London interbank market for deposits (for
delivery on the first day of the relevant period) in Dollars of amounts in same
day funds comparable to the principal amount of the applicable Loan, in each
case as determined by the Administrative Agent in good faith, and (ii) one and
one half percent (1.50%) per annum.

“LIBOR Rate Loan” means a Term Loan that bears interest based on the LIBOR Rate.

“Lien” means (a) any statutory or other lien, security interest, mortgage,
pledge, registrations on the International Registry, hypothecation, assignment
for collateral purposes, encumbrance, option, purchase right, call right,
easement, right-of-way, license, restriction (including zoning restrictions),
defect, exception or irregularity in title or similar charge or encumbrance,
including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof and (b) any
PPSA Security Interest that is not included in paragraph (a).

“Liquidity” means, as of any date of determination, the unrestricted cash
(excluding any cash subject to reinvestment) and Cash Equivalents of the Loan
Parties and each of their Subsidiaries; provided that at least $10,000,000 of
such cash and Cash Equivalents shall, as of any date of determination, be held
by the Loan Parties.

 

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“Liquidity Satisfaction Date” means the date upon which Liquidity has been no
less than $35,000,000 for a period of 90 consecutive days following the date
that is the two year anniversary of the commencement of the Chapter 11 Cases.

“Loan Agreement” means this Loan Agreement, as amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time.

“Loan Documents” means this Loan Agreement, the Notes, the Intercreditor
Agreement, the Fee Letter, the Security Documents, the Perfection Certificate
and any other document, instrument, certificate or agreement executed by any
Loan Party, or by the Borrower on behalf of any Loan Party, and delivered to any
Agent or Lender in connection with any of the foregoing or the Obligations, in
each case as amended, supplemented or otherwise modified, renewed or replaced
from time to time.

“Loan Party” means the Borrower, each of the other Guarantors, and each other
Person that becomes a Loan Party pursuant to the execution of joinder documents.

“Loans” means, collectively, each Term Loan.

“Margin Stock” means “margin stock” or “margin securities” as such terms are
defined in Regulations T, U or X of the Board.

“Maintenance Log” means, with respect to any Aircraft, a maintenance log or
engine status sheet that serves as an official record of maintenance performed
in respect of such Aircraft and is in customary form and substance for such a
record, and which evidences, among other things, all engine removals and
installations.

“Maintenance Program” means in respect of an Aircraft a maintenance program, as
amended from time to time, for the that Aircraft approved by the relevant
Aviation Authority (including, for the avoidance of doubt, the Aviation
Authority of the Country of Registration) and acceptable to Collateral Agent in
its reasonable discretion, encompassing scheduled maintenance, condition
monitored maintenance, and/or on-condition maintenance of Airframe, Engines or
Parts, including storage, servicing, testing, preventive maintenance, repairs,
structural inspections, system checks, overhauls, approved modifications,
service bulletins, engineering orders, Airworthiness Directives, corrosion
control, inspections and treatments, which complies with applicable Law, and
does not conflict in any regard with the Manufacturer recommendations.

“Manufacturer” means the manufacturer of an Airframe, Engine or Part, as the
case may be.

“Material Adverse Effect” means any event, development, state of facts, change
in circumstance, occurrence, condition or effect that, either individually or in
the aggregate, has had or could reasonably be expected to have a material
adverse effect or material adverse change on (a) (i) the financial condition,
results of operations, assets, liabilities or properties of the Borrower, the
Loan Parties, and their respective Subsidiaries, taken as a whole, (ii) the
validity or enforceability of this Loan Agreement, any of the other Loan
Documents, any material provision hereof or thereof, or any right or remedy of
the Secured Parties hereunder or thereunder (iii) the value of Collateral or
(iv) the attachment, perfection or priority of any Liens granted to the
Collateral Agent in or to any portion of the Collateral (other than as the
result of any action or inaction of the Agents or any Lender) or (b) the ability
of the Borrower, any other Loan Party, or any of their respective Subsidiaries,
taken as a whole, to perform any of their material obligations contained in this
Loan Agreement or any of the other Loan Documents.

 

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“Material Adverse Tax Consequences” means, with respect to any United States
shareholder of an CFC, additional material Taxes payable by such United States
shareholder to the extent resulting from an investment by such CFC in “United
States property” within the meaning of Section 956 of the Code, determined by
reasonable mutual agreement of the Borrower and the Lenders after taking into
account the cumulative effect of (a) any inclusion of “deferred foreign income”
under Section 965 of the Code, (b) any amounts required to be included in income
under Section 951 or 951A of the Code or any similar Code provision (other than
any inclusion required with respect to an investment in United States property
under Section 956 of the Code), (c) any deductions permitted under Section 243,
245, or 245A of the Code or any similar Code provision with respect to actual
distributions by such CFC, (d) any reductions to amounts specified under
Section 956 of the Code pursuant to proposed United States Treasury Regulations
under Section 956 of the Code and (e) the availability of foreign tax credits.

“Material Contracts” means and includes (a) any Contractual Obligation of any
Loan Party or any Subsidiary of a Loan Party, the failure to comply with which,
or the termination (without contemporaneous replacement) of which, could
reasonably be expected to have a Material Adverse Effect and (b) each Disclosed
Sublease.

“Maturity Date” means the date that is the four (4) year anniversary of the
Funding Date.

“Moody’s” means Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.

“Mortgage” means a mortgage or a deed of trust, deed to secure debt, trust deed
or other security document entered into by any applicable Loan Party and the
Collateral Agent for the benefit of the Secured Parties in respect of any Real
Property owned by such Loan Party, in form and substance satisfactory to the
Collateral Agent.

“Mortgaged Property” means each parcel of Real Property and the improvements
thereto (if any) with respect to which a Mortgage is granted pursuant to
Section 8.13(a).

“Multiemployer Plan” means any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or
may be an obligation to contribute of) any Loan Party, any Subsidiary of any
Loan Party or any ERISA Affiliate.

“Net Casualty Proceeds” means, with respect to any Casualty Event, the amount of
any insurance proceeds or condemnation awards received by any Loan Party or any
of its Subsidiaries in connection with such Casualty Event (net of all
reasonable and customary collection expenses thereof (including, without
limitation, any legal or other professional fees) (except with respect to any
expenses paid to a Loan Party or an Affiliate thereof)), but excluding any
proceeds or awards required to be paid to a creditor (other than the Lenders)
which holds a first priority Lien permitted by Section 9.04(b) or (c) on the
property which is the subject of such Casualty Event, and less any Taxes payable
by such Person on account of such insurance proceeds or condemnation award,
actually paid, assessed or estimated by such Person (in good faith) to be
payable within the next 12 months in cash in connection with such Casualty
Event, in each case to the extent, but only to the extent, that the amounts are
properly attributable to such transaction; provided that if, after the
expiration of such 12-month period, the amount of such estimated or assessed
Taxes, if any, exceeded the Taxes actually paid in cash in respect of proceeds
from such Casualty Event, the aggregate amount of such excess shall constitute
additional Net Casualty Proceeds under Section 4.02(a)(iii) and be applied to
the prepayment of the Obligations pursuant to Section 4.02(c).

“Net Debt Proceeds” means, with respect to the sale or issuance by any Loan
Party or any of its Subsidiaries of any Indebtedness, the excess of: (a) the
gross cash proceeds received by the issuer of such

 

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Indebtedness from such sale or issuance, over (b) all reasonable and customary
underwriting commissions and legal, investment banking, underwriting, brokerage,
accounting and other professional fees, sales commissions and disbursements and
all other reasonable fees, expenses and charges, in each case actually incurred
in connection with such sale or issuance which have not been paid and are not
payable to any Loan Party or an Affiliate thereof in connection therewith.

“Net Disposition Proceeds” means, with respect to any Disposition by any Loan
Party or any of its Subsidiaries, the excess of: (a) the gross cash proceeds
received by such Person from such Disposition, over (b) the sum of: (i) all
reasonable and customary legal, investment banking, underwriting, brokerage and
accounting and other professional fees, sales commissions and disbursements and
all other reasonable fees, expenses and charges, in each case actually incurred
in connection with such Disposition which have not been paid and are not payable
to any Loan Party or Affiliate thereof in connection therewith, and (ii) all
Taxes payable by such Person on account of proceeds from such Disposition,
actually paid, assessed or estimated by such Person (in good faith) to be
payable in cash within the next 12 months in connection with such proceeds, in
each case to the extent, but only to the extent, that the amounts are properly
attributable to such transaction; provided that if, after the expiration of the
twelve-month period referred to in clause (b)(ii) above, the amount of estimated
or assessed Taxes, if any, pursuant to clause (b)(ii) above exceeded the Taxes
actually paid in cash in respect of proceeds from such Disposition, the
aggregate amount of such excess shall constitute Net Disposition Proceeds under
Section 4.02(a)(ii) and be applied to the prepayment of the Obligations pursuant
to Section 4.02(c).

“Net Equity Proceeds” means, with respect to the sale, issuance or exercise
after the Closing Date by any Loan Party or any of its Subsidiaries of any
Capital Stock or any capital contribution by any Person to any such Loan Party
or Subsidiary, the excess of (a) the gross cash proceeds received by such Loan
Party or Subsidiary from such sale, issuance or exercise, over (b) all
reasonable and customary underwriting commissions and legal, investment banking,
brokerage, accounting and other professional fees, sales commissions and
disbursements actually incurred in connection with such sale or issuance which
have not been paid and are not payable to any Loan Party or an Affiliate thereof
in connection therewith.

“Notes” means, collectively, the Term Loan Notes.

“Notice of Borrowing” means a written notice of borrowing from an Authorized
Officer of the Borrower in the form of Exhibit G.

“Notice of Conversion/Continuation” has the meaning given to such term in
Section 2.09.

“Obligations” means (a) with respect to the Borrower, all obligations (monetary
or otherwise, whenever arising, and whether absolute or contingent, liquidated
or unliquidated, due or to become due, or matured or unmatured) of the Borrower
arising under or in connection with this Loan Agreement, the Notes, the Fee
Letter or any other Loan Document, including the principal of, and interest
(including interest accruing after the commencement or during the pendency of
any Insolvency Proceeding, whether or not allowed in such Insolvency Proceeding,
action or case) on, and all fees, expenses, costs, indemnities and other sums
payable at any time under any Loan Document and (b) with respect to each Loan
Party other than the Borrower, all obligations (monetary or otherwise, whenever
arising, and whether absolute or contingent, liquidated or unliquidated, due or
to become due, or matured or unmatured) of such Loan Party arising under or in
connection with this Loan Agreement or any other Loan Document.

“OFAC Sanctions” has the meaning given to such term in Section 7.31.

 

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“Organization Documents” means, (a) with respect to any corporation, its
certificate or articles of incorporation and its bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction),
(b) with respect to any limited liability company, its certificate or articles
of formation or organization and its operating agreement, (c) with respect to
any partnership, joint venture, trust or other form of business entity, its
partnership, joint venture or other applicable agreement of formation or
organization and, if applicable, any agreement, instrument, filing or notice
with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity and (d) with respect to any entity, any applicable
stockholders agreement, shareholders agreement, voting agreement or other
similar agreement.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 12.07).

“Owner” means, in respect of an Aircraft, Airframe, Engine or Spare Parts as
applicable, the Owner of such Aircraft, Airframe or Engine as shown in the
Aircraft Collateral Schedule.

“Participant” has the meaning given to such term in Section 12.06(c).

“Participant Register” has the meaning given to such term in
Section 12.06(c)(ii).

“Part” means each part, component, line replacement unit, appliance, accessory,
instrument or other item of equipment (other than complete Engines or other
engines) for the time being installed or incorporated in or attached to the
Airframe or an Engine or which, having been removed therefrom, remains the
property of Owner. Not in limitation of the foregoing, “Part” shall include all
main and tail rotor blades and all main and tail rotor blade dynamic components
associated therewith.

“Patriot Act” has the meaning given to such term in Section 12.21.

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any Multiemployer Plan or any “employee pension benefit
plan,” as defined in Section 3(2) of ERISA subject to Title IV of ERISA,
Section 412 of the Code or Sections 302 or 303 of ERISA, sponsored, maintained
or contributed to by any Loan Party, Subsidiary of a Loan Party

 

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or any ERISA Affiliate (or to which any Loan Party, Subsidiary of a Loan Party
or any ERISA Affiliate has or could have an obligation to contribute or to make
payments).

“Perfection Certificate” means a Perfection Certificate substantially in the
form of Exhibit D, delivered by each Loan Party to the Administrative Agent
pursuant to Section 5.01(f).

“Permits” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

“Permitted Holders” means Al Gonsoulin.

“Permitted Aircraft Liens” means (a) any Permitted Lien, (b) any Lien of an
airport hangar-keeper, mechanic, materialman, carrier, employee or other similar
Lien arising in the ordinary course of business by statute or by operation of
Law, in respect of obligations that are not overdue or that are being contested
in good faith by appropriate proceedings and in the case of such proceedings so
long as adequate cash reserves are maintained in respect of such amounts in
accordance with relevant generally accepted accounting principles, (c) any Lien
arising under, or permitted by, a Disclosed Sublease provided, however, that,
except with respect to any Disclosed Existing Sublease, any proceedings in
respect of any such Lien, or the continued existence of such Lien, do not
involve any material likelihood of the sale, forfeiture or loss of an Aircraft,
Airframe, or any Engine or Part or any interest therein and (d) any “Permitted
Lien” as defined in any Aircraft Collateral Mortgage.

“Permitted Liens” has the meaning given to such term in Section 9.02.

“Permitted Refinancing” means, with respect to any Person, any modification
(other than a release of such Person), refinancing, refunding, renewal or
extension of any Indebtedness of such Person; provided:

(a)    the principal amount (or accreted value, if applicable) thereof does not
exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so modified, refinanced, refunded, renewed or extended except by an
amount equal to unpaid accrued interest and premium thereon plus other
reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder;

(b)    such modification, refinancing, refunding, renewal or extension has a
final maturity date equal to or later than the final maturity date of, and has a
weighted average life to maturity equal to or greater than the weighted average
life to maturity of, the Indebtedness being modified, refinanced, refunded,
renewed or extended;

(c)    (i) to the extent such Indebtedness being so modified, refinanced,
refunded, renewed or extended is subordinated in right of payment to the
Obligations, such modification, refinancing, refunding, renewal or extension is
subordinated in right of payment to the Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being so modified, refinanced, refunded, renewed or extended,
(ii) such Indebtedness being so modified, refinanced, refunded, renewed or
extended is at all times subject to the Intercreditor Agreement or a replacement
intercreditor agreement in substantially the same form or which is otherwise
acceptable to the Required Lenders in their sole discretion, in each case, to
the extent the Indebtedness

 

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being so modified, refinanced, refunded, renewed or extended was subject to the
Intercreditor Agreement or such replacement intercreditor agreement and
(iii) such Indebtedness being so modified, refinanced, refunded, renewed or
extended is non-recourse as to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness being so modified, refinanced, refunded, renewed or extended;

(d)    the ranking of such Permitted Refinancing as to right of payment or as to
security interests in the Collateral shall be no different or junior to that of
the debt being refinanced; and

(e)    the Fixed Charge Coverage Ratio, tested pro forma for and as of the date
of the incurrence of such modification, refinancing, refunding, renewal or
extension, shall be no greater than the level required by Section 9.13.

“Person” means any individual, corporation, limited liability company,
partnership, limited partnership, joint venture, firm, association, trust,
unincorporated organization, or other enterprise (whether or not legally formed)
or any Governmental Authority.

“Plan” means any “employee benefit plan,” as defined in Section 3(3) of ERISA.

“Pledged Stock” has the meaning given to such term in the Guaranty and Security
Agreement.

“PPS Security Interest” means a security interest as defined in the PPSA.

“PPSA” means the Personal Property Securities Act 2009 (Cth) and of the personal
property security acts in force in each province in Canada in which any
Collateral or Disclosed Sublessee is located or which act(s) may govern the
Collateral, and regulations as amended from time to time.

“Premises” has the meaning given to such term in Section 8.13(b).

“Projections” means all financial estimates, forecasts, models, projections,
other forward-looking information, and underlying assumptions relating to any of
the foregoing, concerning the Loan Parties and their respective Subsidiaries,
that have been or are hereafter made available to the Administrative Agent or a
Lender by or on behalf of a Loan Party.

“Prospective International Interest” shall mean a “prospective international
interest” as defined in the Treaty.

“Protocol” shall mean the Protocol to the Convention on International Interests
in Mobile equipment on Matters Specific to Aircraft Equipment, adopted
contemporaneously and as part of the Convention.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified
Capital Stock.

“Rating Agency” has the meaning given to such term in Section 12.08.

“Real Property” means, with respect to any Person, all right, title and interest
of such Person (including, without limitation, any leasehold estate) in and to a
parcel of real property owned, leased or operated by such Person together with,
in each case, all improvements and appurtenant fixtures, equipment, personal
property, easements and other property and rights incidental to the ownership,
lease or operation thereof.

 

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“Reasonable Wear” means reasonable wear and tear consistent with the age and
operational use of an Aircraft.

“Recipient” means (a) the Administrative Agent, (b) the Collateral Agent, and
(c) any Lender, as applicable.

“Register” has the meaning given to such term in Section 12.06(b)(iii).

“Regulation T” means Regulation T of the Board as from time to time in effect,
and any successor to all or a portion thereof establishing margin requirements.

“Regulation U” means Regulation U of the Board as from time to time in effect,
and any successor to all or a portion thereof establishing margin requirements.

“Regulation X” means Regulation X of the Board as from time to time in effect,
and any successor to all or a portion thereof establishing margin requirements.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors of
such Person and any Person that possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise.

“Release” means any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, depositing,
disposing, emanating or migrating of Hazardous Materials in the environment, and
in any event includes any “release” as such term is defined in CERCLA.

“Reportable Event” means an event described in Section 4043(c) of ERISA with
respect to a Pension Plan other than a Multiemployer Plan as to which the PBGC
has not waived by regulation the requirement that the PBGC be notified of such
event.

“Required Lenders” means, at any time, Lenders holding more than fifty percent
(50.0%) of the sum of the aggregate outstanding principal amount of the Loans;
provided that any time that there are two (2) or more non-Affiliated Lenders,
the Required Lenders shall be comprised of at least two (2) non-Affiliated
Lenders.

“Restricted Payment” means, with respect to any Person, (a) the declaration or
payment of any dividend on, or the making of any payment or distribution on
account of, or setting apart assets for a sinking or other analogous fund for
the purchase, redemption, defeasance, retirement or other acquisition of, any
class of Capital Stock of such Person or any warrants or options to purchase any
such Capital Stock, whether now or hereafter outstanding, or the making of any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property, (b) any payment of a management fee or other fee of a similar
nature by such Person to any holder of its Capital Stock or any other Affiliate
thereof, or (c) the payment or prepayment of principal of, or premium or
interest on, any Indebtedness subordinate to the Obligations unless such payment
is permitted under the terms of the subordination agreement applicable thereto.

“S&P” means Standard & Poor’s Ratings Services or any successor by merger or
consolidation to its business.

“Sale” or “Prospective Sale” means a sale or prospective sale as defined in the
Treaty.

 

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“Sanctioned Country” has the meaning given to such term in Section 7.31.

“Sanctioned Person” has the meaning given to such term in Section 7.31.

“Sanctions” has the meaning given to such term in Section 7.31.

“SEC” means the Securities and Exchange Commission and any Governmental
Authority succeeding to some or all of the functions thereof.

“Secured Indebtedness” means, with respect to a Person as of a given date, the
aggregate principal amount of all Indebtedness of such Person outstanding on
such date that is secured in any manner by any Lien on any property of such
Person.

“Secured Leverage Ratio” means, as of any date of determination, the ratio of
(a) Funded Secured Debt divided by (b) Consolidated Adjusted EBITDA.

“Secured Parties” means, collectively, (a) the Lenders, (b) the Agents, (c) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under the Loan Documents, (d) any successors, endorsees, transferees and assigns
of each of the foregoing, and (e) any other holder of any Secured Obligation (as
defined in the Guaranty and Security Agreement).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Securitization” has the meaning given to such term in Section 12.08.

“Security Documents” means, collectively, the Guaranty and Security Agreement,
each Aircraft Collateral Mortgage, each Subordination Acknowledgment, any IDERA
granted by a Loan Party, any Irrevocable Power of Attorney in Fact, any
Deregistration Power of Attorney granted by a Loan Party and/or Disclosed
Sublessee, and each other instrument or document executed and delivered pursuant
to Sections 8.10, 8.13, 8.15 or 8.20 or pursuant to any of the Security
Documents to guarantee or secure any of the Obligations.

“Spare Engine” means a spare engine owned by Borrower for an Aircraft. For the
avoidance of doubt, an auxiliary power unit shall not be considered a spare
engine for the purposes of this definition.

“Spare Parts” means any and all appliances, engines, propellers, rotors, parts,
instruments, appurtenances, accessories, rotables, furnishings, avionics, seats
and other equipment of whatever nature (other than complete Airframes,
airframes, Engines or engines, unless being surveyed) designated generally by
type (including but not limited to any “appliances” and “spare parts” as defined
in § 40102(a) of the Act) which are now or hereafter maintained as spare parts
or appliances by or on behalf of the Borrower at the Spare Parts Locations in
connection with any Airframe or Engine.

“Spare Parts Locations” shall mean any of the locations at which Spare Parts are
held by or on behalf of the Borrower and which are designated in accordance with
relevant Aviation Authority requirements.

“Specified Engines” means, collectively, one Arriel 2E Engine with serial number
60041 and two Pratt & Whitney Canada PT6C-67C Engines with serial numbers KB0843
and KB0657.

 

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“Subordination Acknowledgement” means in respect of each Disclosed Sublease, a
document in form and substance reasonably acceptable the Lenders under which,
amongst other matters, each relevant Disclosed Sublessee acknowledges the
interest of the Collateral Agent in the Aircraft and agrees that its Disclosed
Sublease is subject and subordinate to the Loan Documents.

“Subordination Requirements” means that the applicable Indebtedness is expressly
subordinated in right of payment to the Obligations on customary terms
reasonably satisfactory to the Administrative Agent, which shall include (but
not be limited to) that (a) no cash principal payments in respect thereof shall
be made prior to the payment in full of the Obligations (other than scheduled
amortization payments that are made with the express written consent of the
Administrative Agent) and (b) no cash payments shall be made in respect thereof
during the existence of an Event of Default; provided that, with respect to
restrictions on cash payments with respect to such Indebtedness, the inclusion
of restrictions reflecting clauses (a) and (b) shall be deemed satisfactory to
the Administrative Agent.

“Subsidiary” of any Person means and includes (a) any corporation more than
fifty percent (50%) of whose Voting Stock having by the terms thereof power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time stock of any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and
(b) any partnership, limited liability company, association, joint venture or
other entity in which such Person directly or indirectly through one or more
Subsidiaries has more than fifty percent (50%) of Capital Stock (measured by
vote or value) at the time. Unless otherwise expressly provided, all references
herein to a “Subsidiary” mean a direct or indirect Subsidiary of the Borrower.

“Swap Termination Value” means, in respect of any one or more Hedging
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedging Agreements, (a) for any date on or
after the date such Hedging Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s)
determined as the mark-to-market value(s) for such Hedging Agreements, as
determined based upon one or more mid-market or other readily available
quotations typically used for such mark-to-market valuation purpose and provided
by any recognized independent dealer in such Hedging Agreements.

“Taxes” and “taxes” means all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges in the nature of a tax imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.

“Term Loan” has the meaning given to such term in Section 2.01(a).

“Term Loan Commitment” means, in the case of each Lender as of the Closing Date,
the amount set forth opposite such Lender’s name on Schedule 1.01 as such
Lender’s “Term Loan Commitment”, as the same may be changed from time to time
pursuant to the terms hereof.

“Term Loan Note” means a promissory note substantially in the form of Exhibit A.

“Test Period” means, for any determination under this Loan Agreement, the four
consecutive fiscal quarters of the Consolidated Companies most recently ended as
of the date of such determination.

“Thirty Two” means Thirty Two, L.L.C., a Nevada limited liability company.

 

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“Thirty Two Loan Agreement” means that certain Loan Agreement, dated as of
September 21, 2018, by and among Thirty Two, as Lender, the Borrower, as
borrower and the guarantors party thereto, as may be amended, restated,
supplemented or otherwise modified from time to time.

“Total Credit Exposure” means, as of any date of determination, (a) with respect
to each Lender, the outstanding principal amount of such Lender’s Term Loans,
and (b) with respect to all Lenders, the aggregate outstanding principal amount
of all Term Loans.

“Total Loss” means, in relation to an Aircraft, an Airframe or any Engine
(i) its actual, constructive, compromised, arranged or agreed total loss
(including any damage thereto or requisition for use or hire which results in an
insurance settlement on the basis of a total loss), or (ii) its destruction or
damage beyond economic repair (as determined by an Aircraft Insurer acting
reasonably) or being rendered permanently unfit for normal use for any reason
whatsoever, or (iii) its requisition, condemnation, confiscation, seizure,
sequestration, detention, forfeiture or compulsory acquisition, or (iv) its
requisition for use or hire, confiscation, seizure, detention, hijacking, theft
or disappearance which deprives any Person permitted to have possession and/or
use of the Aircraft for a period of more than thirty (30) days, and a Total Loss
of an Aircraft shall be deemed to have occurred if a Total Loss occurs with
respect to the Airframe (whether or not the Engines are also a Total Loss).

“Total Loss Payment Date” shall have the meaning set forth in Schedule 10.10 of
this Loan Agreement.

“Total Appraisal Ratio” means, as of any date of determination, the ratio of
(a) (x) the Appraised Value minus (y) any Disposition Offset divided by (b) the
aggregate principal amount of the Loans outstanding hereunder.

“Total Term Loan Commitment” means the sum of all Lenders’ Term Loan
Commitments, which as of the Closing Date is as set forth on Schedule 1.01. As
of the Closing Date, the aggregate amount of the Lenders’ Total Term Loan
Commitments is $70,000,000.

“Trading with the Enemy Act” has the meaning given to such term in Section 7.30.

“Treaty” shall mean the Convention, the Protocol, together with the regulations
and International Registry issued by the Supervisory Authority for the
International Registry, and all other rules, amendments, supplements,
modifications, and revisions thereto.

“TUE” has the meaning given to such term in Section 5.01(p)(i).

“United States Treasury Regulations” means the income tax regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).

“U.S.” and “United States” mean the United States of America.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning given to such term in
Section 4.04(f).

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided, however, that if by reason of mandatory provisions
of law, the perfection or the effect of

 

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perfection or non-perfection or priority of the security interest in any item or
portion of the collateral is governed by the Uniform Commercial Code as in
effect in a state other than the State of New York, “UCC” means the Uniform
Commercial Code in effect in such other state for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection or
priority.

“Unasserted Contingent Obligations” has the meaning given to such term in the
Guaranty and Security Agreement.

“Unfunded Current Liability” of any Plan means the amount, if any, by which the
value of the accumulated plan benefits under the Plan, determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

“Voting Stock” means, with respect to any Person, shares of such Person’s
Capital Stock having the right to vote for the election of directors (or Persons
acting in a comparable capacity) of such Person under ordinary circumstances.

“Welfare Plan” means any welfare plan as defined in Section 3(1) of ERISA.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

“Withholding Agent” means any Loan Party and the Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

SECTION 1.02    Other Interpretive Provisions. With reference to this Loan
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:

(a)    The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b)    The words “herein”, “hereto”, “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

(c)    Article, Section, clause, Exhibit and Schedule references are to the Loan
Document in which such reference appears.

(d)    The terms “include”, “includes” and “including” are by way of example and
not limitation, and shall be deemed to be followed by the words “without
limitation” whether or not they are in fact followed by such words.

(e)    The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

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(f)    In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including”.

(g)    The Table of Contents and Article, Section and clause headings herein and
in the other Loan Documents are included for convenience of reference only and
shall not affect the interpretation of this Loan Agreement or any other Loan
Document.

SECTION 1.03    Accounting Terms and Principles. All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Loan Agreement shall be
prepared in conformity with, GAAP, applied in a manner consistent with that used
in preparing the Historical Financial Statements, except as otherwise
specifically prescribed herein. No change in the accounting principles used in
the preparation of any financial statement hereafter adopted by the Borrower or
any of its Subsidiaries shall be given effect for purposes of measuring
compliance with any provision of Article IX, including Section 9.13, or
otherwise in this Loan Agreement unless the Borrower, the Administrative Agent
and Required Lenders agree in writing to modify such provisions to reflect such
changes in GAAP and, unless such provisions are modified, all financial
statements, Compliance Certificates and similar documents provided hereunder
shall be provided together with a reconciliation between the calculations and
amounts set forth therein before and after giving effect to such change in GAAP.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to in Article IX shall be made, without giving
effect to any election under Accounting Standards Codification 825-10 (or any
other Financial Accounting Standard having a similar result or effect) to value
any Indebtedness or other liabilities of any Loan Party or any Subsidiary of any
Loan Party at “fair value”. A breach of a financial covenant contained in
Article IX shall be deemed to have occurred as of any date of determination by
the Administrative Agent or as of the last day of any specified measurement
period, regardless of when the financial statements reflecting such breach are
delivered or required to be delivered to any Agent or any Lender. In addition,
any lease which would have been treated as an operating lease on or prior to
December 31, 2018 shall continue to be treated as an operating lease during the
term of this Loan Agreement notwithstanding a change in the treatment thereof to
a Capitalized Lease Obligations in accordance with any change in GAAP (or the
implementation thereof).

SECTION 1.04    Rounding. Any financial ratios required to be maintained or
complied with by any Loan Party pursuant to this Loan Agreement (or required to
be satisfied in order for a specific action to be permitted under this Loan
Agreement) shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).

SECTION 1.05    References to Agreements, Laws, etc.. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
this Loan Agreement and each of the other Loan Documents) and other Contractual
Obligations shall be deemed to include all subsequent amendments, restatements,
amendment and restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, amendment
and restatements, extensions, supplements and other modifications are permitted
by any Loan Document, and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

SECTION 1.06    Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight saving or
standard, as then applicable).

 

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SECTION 1.07    Timing of Payment or Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment or performance shall extend to the immediately succeeding Business
Day.

SECTION 1.08    Corporate Terminology. All references to officers, shareholders,
stock, shares, directors, boards of directors, corporate authority, articles of
incorporation, bylaws or other matters relating to a corporation, herein or in
any other Loan Document, with respect to a Person that is not a corporation,
mean and are references to the comparable terms used with respect to such
Person.

SECTION 1.09    Independence of Provisions. This Loan Agreement and the other
Loan Documents may use different limitations, tests, “baskets”, thresholds or
other measurements to regulate the same or similar matters. All such
limitations, tests, “baskets”, thresholds and other measurements are cumulative,
and each must be performed or complied with independently of all others.

SECTION 1.10    Certain Definitions. References in this Loan Agreement to (i) an
“Aircraft” include any part of the Aircraft, and, where the context so admits,
any of the Aircraft Documents, and references to any part of the Aircraft
include any part of any Engine, and (ii) “national interest” has the meaning
given to such term in the Cape Town Convention.

ARTICLE II

AMOUNT AND TERMS OF CREDIT FACILITIES

SECTION 2.01    Term Loans.

(a)    Subject to and upon the terms and conditions set forth herein, each
Lender agrees, severally and not jointly, to make a loan or loans (each, a “Term
Loan”) to the Borrower on the Funding Date in an amount equal to such Lender’s
Term Loan Commitment. All such Term Loans in the aggregate shall not exceed the
Total Term Loan Commitment. Such Term Loans may be repaid or prepaid in
accordance with the terms and conditions hereof, but once repaid or prepaid may
not be re-borrowed.

(b)    Each Lender may, at its option, make any Term Loan in its entirety by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Term Loan; provided that (i) any exercise of such option shall not affect the
obligation of the Borrower to repay such Term Loan in accordance with the terms
hereof and (ii) in exercising such option, such Lender shall use reasonable
efforts to minimize any increased costs to the Borrower resulting therefrom
(which obligation of the Lender shall not require it to take, or refrain from
taking, actions that it determines would result in increased costs for which it
will not be compensated hereunder or that it determines would be otherwise
disadvantageous to it, and in the event of any Lender request for costs for
which compensation is provided under this Loan Agreement, the provisions of
Section 2.06 shall apply).

SECTION 2.02    Disbursement of Funds.

(a)    To request the initial funding of the Term Loans hereunder, the Borrower
shall provide a Notice of Borrowing to the Administrative Agent by 12:00 p.m. at
least one (1) Business Day in advance of the Closing Date, or such shorter
period as the Administrative Agent may agree. Upon receipt of such Notice of
Borrowing, the Administrative Agent shall promptly notify each Lender of its pro
rata portion of the Term Loans. Each Lender will then make available its pro
rata portion of the applicable Term Loans to be made by it in the manner
provided below by no later than 1:00 p.m. on the Closing Date.

 

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(b)    Each Lender shall make available to the Administrative Agent in
immediately available funds, in Dollars, all amounts such Lender is required to
fund to the Borrower, and, following receipt of all requested funds thereof in
an account designated by the Administrative Agent, Administrative Agent will
make available to the Borrower in immediately available funds, in Dollars, the
aggregate of the amounts so made available, by remitting such aggregate amount
to an account designated by the Borrower to Administrative Agent in writing. The
failure of any Lender to make available the amounts it is required to fund
hereunder or to make a payment required to be made by it under any Loan Document
shall not relieve any other Lender of its obligations under any Loan Document,
but no Lender shall be responsible for the failure of any other Lender to make
any payment required to be made by such other Lender under any Loan Document.

(c)    Nothing in this Section 2.02 shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
that the Borrower may have against any Lender as a result of any default by such
Lender hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to fulfill its commitments
hereunder).

SECTION 2.03    Payment of Loans; Notes.

(a)    The Borrower agrees to pay to the Administrative Agent, for the benefit
of the Lenders, on the last Business Day of each March, June, September, and
December of each year, commencing on March 31, 2020 (each, a “Term Loan
Repayment Date”), an aggregate principal amount equal to 1.25% of the Term Loan
Commitments outstanding on the Closing Date (each such quarterly payment, a
“Term Loan Repayment Amount”).

(b)    The Borrower agrees to pay to the Administrative Agent, for the benefit
of the Lenders, on the Maturity Date, the principal amount of the Term Loans
then outstanding (subject to Section 3.01), together with all accrued interest
thereon, and all fees, expenses and other Obligations accrued in respect
thereof.

(c)    Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to the
appropriate lending office of such Lender resulting from each Loan made by such
lending office of such Lender from time to time, including the amounts of
principal and interest payable and paid to such lending office of such Lender
from time to time under this Loan Agreement.

(d)    The Borrower shall execute and deliver to any Lender that has made a
request therefor, on the Closing Date, one or more Notes payable to such Lender
and its registered assigns which in the aggregate equal the amount of such
Lender’s Term Loan Commitment, to the extent requested by such Lender.

(e)    The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender’s Note(s)
(or on any continuation of such grid), which notations, if made, shall be prima
facie evidence (absent manifest error) of, among other things, the date of, the
outstanding principal amount of, and the interest rate and Interest Period
applicable to, the Loans evidenced thereby. Such notations shall, to the extent
not inconsistent with notations made by Administrative Agent in the Register, be
conclusive and binding on each Loan Party absent manifest error; provided that
the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of any Loan Party. The Administrative Agent
shall maintain the Register pursuant to Section 12.06(b)(iii), in which shall be
recorded (i) the amount of each Loan made hereunder and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to

 

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become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by Administrative Agent from the Borrower and each
Lender’s share thereof.

(f)    The entries made in the Register and accounts and subaccounts maintained
pursuant to Section 2.03(c) and (e) shall, to the extent permitted by Applicable
Law, be prima facie evidence (absent manifest error) of the existence and
amounts of the obligations of the Borrower recorded therein; provided that the
failure of any Lender or Administrative Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Loan Agreement. For avoidance of doubt, in the event of any
inconsistency between the Register and any Lender’s records under
Section 2.03(c) and (e), the recordations in the Register shall govern.

SECTION 2.04    Pro Rata Making of Term Loans. The Term Loans under this Loan
Agreement shall be made by the Lenders pro rata on the basis of their Term Loan
Commitments. No Lender shall be responsible for any default by any other Lender
in its obligation to make Loans hereunder, and each Lender shall be obligated to
make the Loans, as applicable, provided to be made by it hereunder regardless of
the failure of any other Lender to fulfill its commitments hereunder.

SECTION 2.05    Interest.

(a)    Subject to Sections 2.05(c) and 2.05(f), the outstanding principal amount
of each Term Loan shall accrue interest from the date of the making thereof to
but excluding the date of any repayment in full thereof, at a rate per annum
equal to the LIBOR Rate or the Base Rate, as the case may be, plus the
Applicable Margin.

(b)    On each Interest Payment Date, interest accrued on each Term Loan shall
be payable in cash in arrears.

(c)    From and after the occurrence and during the continuance of any Event of
Default under Sections 10.01(a), 10.01(f) and 10.01(g), the Borrower shall pay
interest on the principal amount of the outstanding Term Loans and all other
outstanding Obligations, to the extent permitted by Applicable Law, at the rate
applicable to such Term Loans pursuant to Section 2.05(a) plus two percent (2%)
per annum. All such additional interest shall be payable in cash on demand, and
such increase shall apply automatically upon the date of occurrence of such
Event of Default.

(d)    All computations of interest hereunder shall be made in accordance with
Section 4.06.

(e)    The Administrative Agent’s determination of the interest rate applicable
to any Term Loan shall be final and conclusive and binding on all parties hereto
absent manifest error.

(f)    In no event shall the interest rate or rates payable under this Loan
Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Each of the Loan Parties, the
Administrative Agent and the Lenders, in executing and delivering this Loan
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Loan Agreement, the Borrower is and shall be liable only for
the payment of such maximum as allowed by applicable law, and payment received
from the Borrower in excess of such legal maximum,

 

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whenever received, shall be applied to reduce the principal balance of the Loans
and Obligations to the extent of such excess.

SECTION 2.06    Increased Costs, Illegality, etc..

(a)    In the event that (x) in the case of clause (i) below, the Administrative
Agent or (y) in the case of clauses (ii) and (iii) below, any Lender or any
Agent, in each case, shall have determined (which determination shall, absent
demonstrable error, be final and conclusive and binding upon all parties
hereto):

(i)    on any date for determining the LIBOR Rate for any Interest Period that
(A) deposits in the principal amounts of the Loans are not generally available
in the relevant market or (B) by reason of any changes arising after the Closing
Date affecting the interbank Eurodollar market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided for in
the definition of LIBOR Rate; or

(ii)    at any time, after the later of the Closing Date and the date such
Person became a Lender hereunder, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect to
any Loan, including costs arising from Taxes (other than (x) Indemnified Taxes,
(y) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (z) Connection Income Taxes) because of (A) any change since the date
hereof in any Applicable Law (or in the interpretation or administration thereof
and including the introduction of any new Applicable Law), such as, for example,
without limitation, a change in official reserve requirements, and/or (B) other
circumstances affecting the interbank Eurodollar market or the position of such
Lender in such market; or

(iii)    at any time, that the making or continuance of any Loan has become
unlawful by compliance by such Lender in good faith with any Applicable Law (or
would conflict with any such Applicable Law), or has become impracticable as a
result of a contingency occurring after the date hereof that materially and
adversely affects the interbank Eurodollar market,

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice to the Borrower and the
Administrative Agent of such determination, which notice the Administrative
Agent shall promptly transmit to each of the Lenders. Thereafter (A) in the case
of clause (i) above, Loans shall no longer accrue interest with reference to the
LIBOR Rate pursuant to Section 2.05(a) and, in lieu thereof, shall accrue
interest under Section 2.05(a) at a rate per annum equal to the Base Rate plus
the Applicable Margin, until such time as the Administrative Agent notifies the
Borrower, the Collateral Agent and the Lenders that the circumstances giving
rise to such notice by the Administrative Agent no longer exist (which notice
the Administrative Agent agrees to give at such time when it becomes aware that
such circumstances no longer exist), (B) in the case of clause (ii) above, the
Borrower shall pay to such Lender, within five (5) Business Days after receipt
of written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its reasonable discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
receivable hereunder (it being agreed that a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Lender shall, absent
clearly demonstrable error, be final and conclusive and binding upon all parties
hereto) and (C) in the case of clause (iii) above, the Borrower shall take the
actions specified by Applicable Law as promptly as possible and, in any event,
within the time period required by Applicable Law.

 

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(b)    If, after the later of the date hereof and the date such entity becomes a
Lender hereunder, the adoption of any Law, rule, guideline, request or directive
(including, regardless of the date enacted, adopted or issued, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III)), whether or not having the
force of law, regarding capital adequacy, or any change to any such Law, rule,
guideline, request or directive, or any change in the interpretation or
administration of any such Law rule, guideline, request or directive by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender (or its
lending office) or its parent with any request or directive made or adopted
after such date regarding capital adequacy (whether or not having the force of
law) of any such authority, association, central bank or comparable agency, has
the effect of reducing the rate of return on such Lender’s or its parent’s
capital or assets as a consequence of such Lender’s commitments or obligations
hereunder to a level below that which such Lender or its parent could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender’s or its parent’s policies with respect to capital
adequacy), then within five (5) Business Days after receipt of written demand by
such Lender (with a copy to the Administrative Agent), the Borrower shall pay to
such Lender or its parent such additional amount or amounts as will compensate
such Lender for such reduction; provided, however, that a Lender shall not be
entitled to such compensation as a result of such Lender’s compliance with, or
pursuant to any request or directive to comply with, any such Applicable Law as
in effect on the date hereof or the later date on which it becomes a Lender, as
the case may be. Each Lender (on its own behalf), upon determining in good faith
that any additional amounts will be payable pursuant to this Section 2.06(b),
will, as promptly as practicable upon ascertaining knowledge thereof, give
written notice thereof to the Borrower, which notice shall set forth in
reasonable detail the basis of the calculation of such additional amounts. The
failure or delay to give any such notice with respect to a particular event
shall not release or diminish any of the Borrower’s obligations to pay
additional amounts pursuant to this Section 2.06(b) for amounts accrued or
incurred prior to the date that such notice with respect to such event is
actually given, unless such notice is given more than 180 days (or such longer
period based on any retroactive effect as described in Section 2.06(a)) after
Lender has knowledge of any such event.

SECTION 2.07    Compensation. If (a) any payment of principal of a Loan is made
by the Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Loan as a result of a payment pursuant to Sections
2.03, 4.01 or 4.02, as a result of acceleration of the maturity of the Loans
pursuant to Article X or for any other reason, or (b) any prepayment of
principal of a Loan is not made as a result of a withdrawn notice of prepayment
pursuant to Sections 4.01 or 4.02, the Borrower shall within five (5) Business
Days after receipt of a written request by such Lender (which request shall set
forth in reasonable detail the basis for requesting such amount), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that such
Lender may reasonably incur as a result of such payment or failure to prepay,
including any loss, cost or expense (excluding loss of anticipated profits)
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Loan.

SECTION 2.08    Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Sections 2.06(a)(ii),
2.06(a)(iii), or 4.04 with respect to such Lender, it will, if requested by the
Borrower use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event if, in the judgment of such Lender, such designation will eliminate or
reduce amounts payable pursuant to Sections 2.06(a)(ii), 2.06(a)(iii), or 4.04,
as the case may be, in the future; provided that such designation

 

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(a) is made on such terms that such Lender and its lending office suffer no
economic, legal or regulatory disadvantage or unreimbursed costs, with the
object of avoiding the consequence of the event giving rise to the operation of
any such Section and (b) would eliminate or reduce amounts payable pursuant to
Sections 2.06 or 4.04, as the case may be, in the future. Nothing in this
Section 2.08 shall affect or postpone any of the obligations of the Borrower or
the right of any Lender provided in Sections 2.06 or 4.04.

SECTION 2.09    Conversion and Continuation Elections.

(a)    The Borrower shall have the option to (i) request that any Term Loan be
funded as a LIBOR Rate Loan or a Base Rate Loan, (ii) convert at any time all or
any part of outstanding Term Loans from a Base Rate Loan to a LIBOR Rate Loan,
(iii) convert any LIBOR Rate Loan to a Base Rate Loan, subject to
Section 12.28(e) if such conversion is made prior to the expiration of the
Interest Period applicable thereto, or (iv) continue all or any portion of any
Term Loan as a LIBOR Rate or Base Rate Loan, as applicable, upon the expiration
of the applicable Interest Period. Except with respect to the initial funding of
the Term Loans on the Closing Date (which shall be governed by Section 2.02),
any such election must be made by the Borrower by (a) 12:00 p.m. on the Business
Day prior to (1) the date of any proposed funding of a Base Rate Loan, (2) the
end of each Interest Period with respect to any Base Rate Loan to be continued
as such, or (3) the date on which the Borrower wishes to convert any LIBOR Rate
Loan to a Base Rate Loan, and (b) 12:00 p.m. on the third Business Day prior to
(1) the date of any proposed funding of a LIBOR Rate Loan, (2) the end of each
Interest Period with respect to any LIBOR Rate Loan to be continued as such, or
(3) the date on which the Borrower wishes to convert any Base Rate Loan to a
LIBOR Rate Loan for an Interest Period designated by the Borrower in such
election. If no election is received with respect to any Term Loan by the time
specified in the preceding sentence, (x) any Base Rate Loan shall be continued
as such the end of its Interest Period and (y) any LIBOR Rate Loan shall be
continued at the end of its Interest Period as a LIBOR Rate Loan with an
Interest Period of one or three months as applicable. If the Borrower fails to
specify an Interest Period in its Notice of Conversion/Continuation for a LIBOR
Rate Loan, the borrower shall be deemed to have elected an Interest Period of
one month’s duration. The Borrower must make such election by notice to
Administrative Agent in writing, including by electronic transmission. In the
case of any conversion or continuation, such election must be made pursuant to a
written notice (a “Notice of Conversion/Continuation”) substantially in the form
of Exhibit F or in a writing in any other form acceptable to Administrative
Agent. Notwithstanding anything to the contrary, no Term Loan shall be made,
converted into or continued as a LIBOR Rate Loan if an Event of Default has
occurred and is continuing and the Administrative Agent or Required Lenders have
determined not to make or continue any Term Loan as LIBOR Rate Loan as a result
thereof.

(b)    Upon receipt of a Notice of Conversion/Continuation, Administrative Agent
will promptly notify each Lender thereof. In addition, Administrative Agent
will, with reasonable promptness, notify the Borrower and the Lenders of each
determination of the LIBOR Rate; provided that any failure to do so shall not
relieve the Borrower of any liability hereunder or provide the basis for any
claim against Administrative Agent. All conversions and continuations shall be
made pro rata according to the respective outstanding principal amounts of the
Loans held by each Lender with respect to which the notice was given.

(c)    Notwithstanding any other provision contained in this Loan Agreement,
after giving effect to any borrowing of Term Loans, or to any continuation or
conversion of any Term Loans, there shall not be more than three (3) different
Interest Periods in effect for Term Loans.

SECTION 2.10    Tax Treatment. The Borrower, Lenders and Agents each agree (a)
that the Loans are debt for U.S. federal income Tax purposes, (b) that the Loans
are not governed by the rules set

 

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out in United States Treasury Regulations Section 1.1275-4 and (c) to adhere to
this Loan Agreement for U.S. federal income Tax purposes and not to take any
action or file any Tax return, report or declaration inconsistent herewith. The
inclusion of this Section 2.10 is not an admission by any Lender that it is
subject to U.S. taxation.

ARTICLE III

ORIGINAL ISSUE DISCOUNT, FEES, AND COMMITMENT TERMINATIONS

SECTION 3.01    Funding Fee.

(a)    In connection with, and in consideration of the agreements contained in
the Loan Agreement and the services in connection therewith, in addition to any
other fees payable under the Loan Agreement or the other Loan Documents, the
Borrower agrees that a funding fee (the “Funding Fee”) (which, at the option of
the Lenders, may be netted from the disbursement of the Term Loans on the
Funding Date and structured as original issue discount) in an amount equal to
2.00% of the Term Loan Commitments, shall be fully earned, due and payable on
the Funding Date.

(b)    Subject to clause (d) below, on the first anniversary of the Funding
Date, to the extent the Loans have not, as of such date, been fully repaid in
cash, solely for purposes of the prepayment or repayment of all the Loans
outstanding upon the sooner to occur of (i) any voluntary prepayment of the
Loans the Borrower may choose to consummate after such date (provided that such
voluntary prepayment would be of the entirety of the Loans outstanding on the
date of such voluntary prepayment) or (ii) the repayment of the Loans on the
Maturity Date pursuant to Section 2.03(b), the outstanding principal amount of
the Loans shall be reduced by $700,000 (separate and apart from the amount
described in clause (c) below) and such amount shall be considered forgiven and
discharged and shall no longer be considered Obligations for purposes of
calculating the amount to be prepaid or repaid.

(c)    Subject to clause (d) below, if (x) no Event of Default has occurred or
is continuing, (y) the Effective Date has occurred and (z) all Loans outstanding
at the time of the conclusion of the Chapter 11 Cases have been reinstated or
unimpaired on the Effective Date, to the extent the Loans have not, as of such
date, been fully repaid in cash, solely for purposes of the prepayment or
repayment of all the Loans outstanding upon the sooner to occur of (i) any
voluntary prepayment of the Loans the Borrower may choose to consummate after
such date (provided that such voluntary prepayment would be of the entirety of
the Loans outstanding on the date of such voluntary prepayment) or (ii) the
repayment of the Loans on the Maturity Date pursuant to Section 2.03(b), the
outstanding principal amount of the Loans shall be reduced by $700,000 (separate
and apart from the amount described in clause (b) above) and such amount shall
be considered forgiven and discharged and shall no longer be considered
Obligations for purposes of calculating the amount to be prepaid or repaid.

(d)    Notwithstanding anything herein to the contrary, all calculations of
interest and fees in respect of the Loans shall at all times be calculated on
the basis of their full stated principal amount and without giving effect to the
provisions of clauses (b) and (c) above.

SECTION 3.02    Fee Letter. In addition to all fees, expenses and other amounts
payable by the Loan Parties to the Secured Parties under this Loan Agreement,
the Borrower agrees to pay to the Administrative Agent the fees set forth in the
Fee Letter, in the amounts and at the times specified therein.

SECTION 3.03    Termination of Commitments. The obligation of each Lender to
make its respective Term Loan to the Borrower pursuant to Section 2.01(a) shall
terminate on the Closing Date upon the disbursement of such Lender’s Term Loan
in accordance with such Lender’s Commitment.

 

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ARTICLE IV

PAYMENTS

SECTION 4.01    Voluntary Prepayments.

(a)    The Borrower shall have the right to prepay Term Loans in whole (subject
to Section 3.01) or in part from time to time on the following terms and
conditions:

(i)    as a specifically negotiated requirement, additional consideration for
providing the Term Loans, and an important economic provision upon which the
Agents and the Lenders are relying, the Borrower shall deliver to the
Administrative Agent written notice of the Borrower’s intent to make such
prepayment and the amount of such prepayment, no later than 12:00 p.m. five
(5) Business Days prior to the date of such prepayment, specifying the date on
which such prepayment is to be made;

(ii)    a notice delivered pursuant to Section 4.01(a)(i) shall be irrevocable,
shall include or be accompanied by a certification of an Authorized Officer of
the Borrower that the prepayment is being made pursuant to and in compliance
with all provisions of Section 4.01(a), and shall obligate the Borrower to
prepay the amount specified in such notice on the date specified therein
together with accrued interest thereon, if any, all of which shall become due
and payable on the prepayment date set forth in such notice; provided that
notwithstanding the foregoing any such voluntary prepayment occurring as a
result of a Change of Control or a refinancing of the Obligations may be
conditional upon the closing of any such transaction;

(iii)    each partial prepayment of any Term Loans shall be in a multiple of
$50,000 and in an aggregate principal amount of at least $250,000; and

(iv)    each prepayment of Term Loans pursuant to this Section 4.01 on any day
other than the last day of the applicable Interest Period shall be subject to
compliance by the Borrower with the applicable provisions of Section 2.07.

(b)    Each prepayment pursuant to this Section 4.01 shall be applied to reduce
the Term Loan as directed by the Borrower.

(c)    Notwithstanding anything in Section 4.01(a) to the contrary, if the
Lenders decline all or any portion of any Term Loan Repayment Amount or any
other mandatory payment in accordance with Section 4.05, any voluntary
prepayment of the applicable Term Loans that occurs within five (5) Business
Days of the date that the applicable Lenders decline such Term Loan Repayment
Amount or such other mandatory prepayment, as applicable, and in each case an
amount equal to such declined proceeds, shall be excluded from the notice and
minimum amount requirements of Sections 4.01(a)(i) and 4.01(a)(iii).

SECTION 4.02    Mandatory Prepayments.

(a)    The Borrower shall prepay the Term Loans in accordance with the
following:

(i)    Concurrently with the incurrence of any Indebtedness by any Loan Party or
any of its Subsidiaries (other than Indebtedness permitted under Section 9.01),
the Borrower shall prepay the Term Loans in an amount equal to one hundred
percent (100%) of the applicable Net Debt Proceeds, to be applied as set forth
in Section 4.02(b). Nothing in this Section 4.02(a)(i)

 

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shall be construed to permit or waive any Default or Event of Default arising
directly or indirectly from any incurrence of Indebtedness not permitted under
the terms of this Loan Agreement.

(ii)    Subject to the Intercreditor Agreement, within three (3) Business Days
of the receipt by any Loan Party or any of its Subsidiaries of any proceeds from
one or more Dispositions of Collateral permitted under Section 9.04(b) or
Section 9.04(j) (but, for the avoidance of doubt, not with respect to the
receipt of proceeds of Dispositions permitted under any of the other clauses of
Section 9.04) the Borrower shall prepay the Term Loans in an amount equal to one
hundred percent (100%) of the Net Disposition Proceeds from such Dispositions
that exceed $100,000 in the aggregate during any fiscal year, to be applied as
set forth in Section 4.02(b); provided that such percentage shall be reduced to
seventy-five percent (75%) if (x) the Secured Leverage Ratio is less than or
equal to 1.50:1.00 and (y) the Total Appraisal Ratio is greater than or equal to
5.00:1.00, in each case for the most recent Test Period for which financial
statements have been delivered (but, for purposes of the calculations of such
ratios, without giving effect, on a pro forma basis or otherwise, to such
Disposition or the consequent prepayment hereunder). Nothing in this
Section 4.02(a)(ii) shall be construed to permit or waive any Default or Event
of Default arising from any Disposition not permitted under the terms of this
Loan Agreement.

(iii)    Within three (3) Business Days of the receipt by any Loan Party or any
of its Subsidiaries of any proceeds from any Casualty Event, the Borrower shall
prepay the Term Loans in an amount equal to one hundred percent (100%) of such
Net Casualty Proceeds that exceed $100,000 in the aggregate during any fiscal
year, to be applied as set forth in Section 4.02(b); provided, however, that the
Borrower may, at its option by written notice to the Administrative Agent and
Collateral Agent no later than thirty (30) days following the occurrence of the
Casualty Event resulting in such Net Casualty Proceeds, apply such Net Casualty
Proceeds to the rebuilding or replacement of such damaged, destroyed or
condemned assets or property so long as such Net Casualty Proceeds are in fact
used or are committed to be used to rebuild or replace the damaged, destroyed or
condemned assets or property within one hundred twenty (120) days following the
receipt of such Net Casualty Proceeds, with the amount of Net Casualty Proceeds
not so used after such period to be applied as set forth in Section 4.02(b), so
long as (A) no Default or Event of Default has occurred and is continuing, and
the Borrower certifies in writing to the Administrative Agent that no Default or
Event of Default has occurred and is continuing and (B) such Net Casualty
Proceeds are held in an account subject to an Account Control Agreement while
awaiting reinvestment. Nothing in this Section 4.02(a)(iii) shall be construed
to permit or waive any Default or Event of Default arising, directly or
indirectly, from any Casualty Event.

(iv)    Within three (3) Business Days of the receipt by or on behalf of any
Loan Party or any of its Subsidiaries of any Extraordinary Receipts, the
Borrower shall prepay the Term Loans in an amount equal to one hundred percent
(100%) of the amount by which all Extraordinary Receipts exceed $100,000 in the
aggregate in any fiscal year, to be applied as set forth in Section 4.02(b).

(v)    For each fiscal year of the Borrower, commencing with the fiscal year
ending December 31, 2019 (provided, that for the fiscal year ending December 31,
2019, Consolidated Excess Cash Flow shall be measured for the period beginning
on the Closing Date and ending on December 31, 2019), within five (5) days after
the date upon which annual financial statements are actually delivered pursuant
to Section 8.01(d) for such fiscal year, the Borrower shall (x) deliver to the
Administrative Agent a written calculation of Consolidated Excess Cash Flow for
the applicable fiscal year, certified by an Authorized Officer of the

 

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Borrower, and (y) prepay the Term Loan in an amount equal to fifty percent
(50.0%) of Consolidated Excess Cash Flow for such fiscal year. Calculations of
amounts payable under this Section 4.02(a)(v) shall be based on the annual
financial statements for the Borrower and its Subsidiaries for the applicable
fiscal year. Prepayments of Term Loan under this Section 4.02(a)(v) shall be
applied, in each case, pro rata among the remaining installments of the Term
Loan on a dollar for dollar basis, and shall be made, in each case, pro rata
among the applicable Lenders.

(b)    Application of Payments. Voluntary prepayments shall be applied as set
forth in Section 4.01(b) and, except as set forth in Section 4.02(c), each
payment and prepayment of Term Loans required by Section 2.03(a) and
Section 4.02(a) and any other amount that the Administrative Agent receives from
any Person as a result of a provision in any Loan Document requiring that such
amount be paid to the Administrative Agent, one hundred percent (100%) of such
amount shall be applied to the outstanding principal amount of Term Loans, pro
rata among the remaining installments of the Term Loan, until the Term Loan is
paid in full, pro rata among the applicable Lenders and until paid in full, and
thereafter to any other outstanding Obligations until paid in full; provided
that the Borrower shall pay all amounts, if any, required to be paid pursuant to
Section 2.07 with respect to each prepayment of Term Loans made on any date
other than the last day of the applicable Interest Period. Each such prepayment
shall be accompanied by all accrued interest on the Term Loans so prepaid,
through the date of such prepayment.

(c)    Application of Collateral Proceeds. Notwithstanding anything to the
contrary in Section 4.01 or this Section 4.02, (x) all proceeds of Collateral
received by an Agent, a Lender or any other Person pursuant to the exercise of
rights or remedies against the Collateral and (y) all payments received by an
Agent or any Lender upon and after the acceleration of any of the Obligations,
shall be applied as follows:

(i)    first, to pay any and all costs, fees, and expenses of, and any indemnity
payments then due to, the Agents under the Loan Documents, until paid in full;

(ii)    second, ratably to pay any costs, fees, and expenses of, and any
indemnity payments then due to, any of the Lenders under the Loan Documents,
until paid in full;

(iii)    third, ratably to the Lenders to pay interest due in respect of the
outstanding Term Loan until paid in full;

(iv)    fourth, ratably to the Lenders to pay the outstanding principal balance
of the Term Loan in the inverse order of maturity until the Term Loan is paid in
full;

(v)    fifth, ratably to the Lenders to pay any applicable premiums in respect
of the Term Loans;

(vi)    sixth, to pay any other Obligations, ratably to the Persons entitled
thereto; and

(vii)    seventh, to the Borrower or such other Person entitled thereto under
Applicable Law.

 

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SECTION 4.03    Payment of Obligations; Method and Place of Payment.

(a)    The obligations of each Loan Party hereunder and under each other Loan
Document are not subject to counterclaim, set-off, rights of rescission, or any
other defense of any kind whatsoever (other than defense of payment). Subject to
Section 4.04, and except as otherwise specifically provided herein, all payments
under any Loan Document shall be made by the Borrower, without counterclaim,
set-off, rights of rescission, or deduction of any kind, to the Administrative
Agent for the ratable account of the Secured Parties entitled thereto, not later
than 1:00 p.m. on the date when due and shall be made in immediately available
funds in Dollars to the Administrative Agent. The Administrative Agent will
thereafter cause to be distributed like funds relating to the payment of
principal or interest or Fees ratably to the Secured Parties entitled thereto.

(b)    For purposes of computing interest or fees, any payments under this Loan
Agreement that are made later than 1:00 p.m. on any Business Day may, at the
discretion of the Administrative Agent, be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day that is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall continue to accrue during such extension at the
applicable rate in effect immediately prior to such extension.

(c)    Pursuant to Section 4.03(a), the Borrower shall make each payment under
any Loan Document by wire transfer to such U.S. account as the Administrative
Agent may identify in a written notice to the Borrower from time to time.

SECTION 4.04    Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Law (as determined by an applicable Withholding Agent) requires the
deduction or withholding of any Tax from any such payment by a Withholding
Agent, then the applicable Withholding Agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with Applicable
Law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b)    Payment of Other Taxes. The Loan Parties shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.

(c)    Indemnification by the Loan Parties. Without duplication of payments made
pursuant to Section 4.04(a), the Loan Parties shall jointly and severally
indemnify each Recipient, within ten (10) days after demand therefor, for the
full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section) payable or
paid by such Recipient or required to be withheld or deducted from a payment to
such Recipient and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender (with
a copy to the

 

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Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

(d)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after receipt of demand therefor, for
(i) any Indemnified Taxes attributable to such Lender (but only to the extent
that any Loan Party has not already indemnified the Administrative Agent for
such Indemnified Taxes and without limiting the obligation of the Loan Parties
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 12.06(c)(ii) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this Section 4.04(d).

(e)    Evidence of Payments. As soon as practicable after any payment of Taxes
by any Loan Party to a Governmental Authority pursuant to this Section 4.04,
such Loan Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

(f)    Status of Lenders.

(i)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Sections 4.04(f)(ii)(A), (B) and (D) below) shall not be required
if in the relevant Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender. Solely for purposes of this Section 4.04(f), the Administrative Agent
will be included in the definition of “Lender”.

(ii)    Without limiting the generality of the foregoing,

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Loan Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), copies of IRS
Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;

 

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(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Loan Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(w)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (1) with respect to payments of
interest under any Loan Document, copies of IRS Form W-8BEN or, in the case of
an entity, IRS Form W-8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (2) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN or, in the case of an entity, IRS Form W-8BEN-E
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(x)    copies of IRS Form W-8ECI;

(y)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (1) a certificate
substantially in the form of Exhibit J-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (2) copies of IRS Form W-8BEN or, in the case of an entity,
IRS Form W-8BEN-E; or

(z)    to the extent a Foreign Lender is not the beneficial owner, copies of IRS
Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or, in the case of
an entity, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in
the form of Exhibit J-2 or Exhibit J-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit J-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Loan Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), copies of any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit the Borrower or the Administrative Agent to
determine the withholding or deduction required to be made; and

(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those

 

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contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Loan Agreement.

Each Lender agrees that, if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(g)    Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes
as to which it has been indemnified by any Loan Party or with respect to which
any Loan Party has paid additional amounts pursuant to this Section 4.04, it
shall pay to the applicable Loan Party an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by such
Loan Party under this Section with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses (including Taxes) incurred by the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided that the Loan Parties, upon the request of the
Administrative Agent or such Lender, shall repay the amount paid over to the
Loan Parties (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
the Loan Parties or any other Person. Notwithstanding anything to the contrary
in this Section 4.04(g), in no event will the Administrative Agent or any Lender
be required to pay any amount to the Loan Parties pursuant to this
Section 4.04(g) the payment of which would place the Administrative Agent or
such Lender in a less favorable net after-Tax position than the Administrative
Agent or such Lender would have been in if the Tax subject to indemnification
and giving rise to such refund had not been deducted, withheld or otherwise
imposed and the indemnification payments or additional amounts giving rise to
such Tax had never been paid. This Section 4.04(g) shall not be construed to
require the Administrative Agent or any Lender to make available its Tax returns
(or any other information relating to its Taxes that it deems confidential) to
the Loan Party.

(h)    Survival. Each party’s obligations under this Section 4.04 shall survive
the resignation or replacement of any or all of the Agents or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

SECTION 4.05    Right to Decline Payments. Borrower shall provide prior written
notice of any prepayment under Section 4.02 to the Administrative Agent at least
five (5) Business Days prior to such proposed prepayment date (or such other
date as agreed by the Administrative Agent). Any Lender in its sole discretion
may decline, in whole or in part, any Term Loan Repayment Amount or any payment
in respect of a mandatory prepayment under Section 4.02(a) without prejudice to
such Lender’s rights hereunder to accept or decline any future Term Loan
Repayment Amount or mandatory prepayment. If

 

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any Lender chooses to decline, in whole or in part, payment in respect of a Term
Loan Repayment Amount or mandatory prepayment, (i) the Lender shall promptly
notify the Administrative Agent in writing three (3) Business Days prior to the
prepayment date of its election to do so (it being understood that any Lender
which does not notify the Administrative Agent of its election to exercise such
option in respect of any Term Loan Repayment Amount or any payment in respect of
a mandatory prepayment shall be deemed as of such date not to exercise such
option), and the Administrative Agent shall provide written notice thereof to
each Lender and the Borrower thereof, and (ii) the amount of such declined
payment shall be offered ratably to the Lenders that have accepted payment in
respect of the Term Loan Repayment Amount or mandatory prepayment, as
applicable, who shall provide written notice not later than one (1) Business Day
prior to the prepayment date of its acceptance of any declined payment (it being
understood that any Lender who does not notify the Administrative Agent of its
election to exercise such option shall be deemed as of such date to exercise
such option) and (iii) if such other Lenders decline the additional repayment
amount offered pursuant to clause (ii) above, such declined amount may be
retained by the Loan Parties.

SECTION 4.06    Computations of Interest and Fees. All interest and fees shall
be computed on the basis of the actual number of days occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, a 365/366 day year).
Payments due on a day that is not a Business Day shall (except as otherwise
required by) be made on the next succeeding Business Day and such extension of
time shall be included in computing interest and fees in connection with that
payment.

ARTICLE V

CONDITIONS PRECEDENT TO TERM LOANS

SECTION 5.01    Conditions Precedent to the Signing of the Loan Agreement. The
execution of this Loan Agreement by the Agents and Lender is subject to the
satisfaction of, and no Agent or Lender shall have any obligation to take or
perform any other action hereunder until the satisfaction (or waiver by the
Lenders as of the Closing Date) of the following conditions precedent on or
before the Closing Date:

(a)    The Administrative Agent shall have received copies of the following
documents, duly executed and delivered by an Authorized Officer of each
applicable Loan Party and each other relevant party thereto:

(i)    this Loan Agreement;

(ii)    the Notes, in accordance with Section 2.03(c);

(iii)    the Guaranty and Security Agreement;

(iv)    [Reserved];

(v)    a fully executed Notice of Borrowing;

(vi)    [Reserved];

(vii)    the Fee Letter;

(viii)    [Reserved];

 

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(ix)    [Reserved]; and

(x)    each other Loan Document.

(b)    Lien and Other Searches.

(i)    The Collateral Agent shall have received the results of a search of the
UCC filings (or equivalent filings), tax Liens, judgment Liens, bankruptcies and
litigations made with respect to each Loan Party, and filings at each Aviation
Authority, including, but not limited to the FAA, and the registrations on
International Registry, with respect to Aircraft, the Engines, Spare Engines
and/or other mobile equipment or aircraft equipment, the Spare Parts and Spare
Parts Locations made with respect to the Borrower and each other Loan Party in
the jurisdictions in which the Borrower and each other Loan Party is doing
business and/or in which any Collateral is located together with copies of the
financing statements and other filings (or similar documents) disclosed by such
searches, and accompanied by evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated in all such financing statements and other
filings (or similar document) or registrations either are Permitted Liens or
have been released or will be released on the Closing Date concurrently with the
funding of the Loans hereunder.

(c)    Legal Opinions. The Administrative Agent shall have received (i) an
executed legal opinion of DLA Piper LLP (US), counsel to the Loan Parties,
(ii) an executed legal opinion of Jones Walker LLP, local counsel to the Loan
Parties in Louisiana, (iii) an executed legal opinion of McAfee & Taft LLP,
aircraft and FAA/International Registry special counsel to the Loan Parties,
(iv) an executed legal opinion of Blake, Cassels & Graydon LLP, local counsel to
the Loan Parties in Canada, (v) an executed legal opinion of Minter Ellison LLP,
local counsel to the Loan Parties in Australia and (vi) an executed legal
opinion of Herbert Smith Freehills LLP, local counsel to the Lender in
Australia, each of which legal opinions shall be addressed to the Administrative
Agent, the Collateral Agent and the Lenders and shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders and each of
their legal counsel.

(d)    Secretary’s Certificates. The Administrative Agent shall have received a
certificate for each Loan Party, Petroleum Helicopters Australia Pty Ltd and HNZ
Australia Pty Ltd, dated the Closing Date, duly executed and delivered by such
person’s secretary or assistant secretary, managing member, director or general
partner, as applicable, as to:

(i)    such Person’s Organization Documents, as amended, modified or
supplemented as of the Closing Date, certified by the appropriate officer or
official body of the jurisdiction of organization of such Person;

(ii)    resolutions of each such Person’s board of directors (or other managing
body, in the case of a Person that is not a corporation) then in full force and
effect expressly and specifically authorizing, to the extent relevant, all
aspects of the Loan Documents applicable to such Person and the execution,
delivery and performance of each Loan Document, in each case to be executed by
such Person; and

(iii)    the incumbency and specimen signatures of its Authorized Officers and
any other of its officers, managing member or general partner, as applicable,
authorized to act with respect to each Loan Document to be executed by such
Person, and a list of all officers and directors of the Loan Parties.

 

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Each such certificate shall provide that each Secured Party may conclusively
rely thereon until such Secured Party shall have received a further certificate
of the secretary, assistant secretary, managing member or general partner, as
applicable, of such Person canceling or amending the prior certificate of such
Person as provided in Section 8.01(m).

(e)    Officer’s Certificate. A certificate of an Authorized Officer of the
Borrower, certifying as to such items as reasonably requested by the
Administrative Agent, including, without limitation, the following:

(i)    the receipt of all required consents and approvals of all Governmental
Authorities and other third parties with respect to the execution, delivery and
performance of the Loan Documents, copies of all of which shall be attached
thereto and certified as being true and complete copies thereof;

(ii)    the Consolidated Net Tangible Assets (as defined in the Indenture) of
the Borrower and the Restricted Subsidiaries (as defined in the Indenture);

(iii)    that both before and after giving effect to the making of the Term
Loans on the Closing Date, no Default or Event of Default has occurred; and

(iv)    as of the Closing Date, all representations and warranties set forth in
this Loan Agreement and the other Loan Documents are true and correct.

(f)    Perfection Certificate. A Perfection Certificate by, and in respect of,
each Loan Party;

(g)    Good Standing. Certificates of good standing with respect to each Loan
Party, each dated no more than five (5) Business Days prior to the Closing Date
(or such other date as the Administrative Agent may agree), such certificates to
be issued by (i) the appropriate officer or official body of the jurisdiction of
organization of such Loan Party and (ii) the appropriate officer or official
body of each other jurisdiction in which such Loan Party is qualified to do
business as a foreign entity, each of which certificates shall indicate that
such Loan Party is in good standing in the applicable jurisdiction.

(h)    Letter of Direction. A letter of direction, dated the Closing Date and
duly executed by an Authorized Officer of each applicable Loan Party, in form
and substance reasonably satisfactory to the Administrative Agent and its legal
counsel, attaching a customary funds flow describing in detail the proposed use
of the proceeds of the Loans, including all transaction fees, costs and expenses
incurred and estimated as of the Closing Date in connection with this Loan
Agreement, whether or not actually paid in cash on the Closing Date.

(i)    [Reserved].

(j)    Financial and Other Information. The Administrative Agent shall have
received a certificate in form and substance reasonably satisfactory to it,
dated the Closing Date and duly executed by each of the chief financial officer
and the chief executive officer of the Borrower, attaching the following
documents and reports (each in form and substance reasonably satisfactory to the
Administrative Agent) and certifying that such documents and reports are true
and complete in all material respects as of the Closing Date and that all
forecasts and projections were prepared by the Loan Parties in good faith based
upon reasonable assumptions at the time of delivery thereof (it being understood
that forecasts and projections are subject to uncertainties and contingencies,
many of which

 

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are beyond the Loan Parties’ control, and no assurance can be given that any
forecast or projection will be realized and that actual results may differ and
such differences may be material):

(i)    the Historical Financial Statements;

(ii)    the consolidated balance sheet, consolidated cash flow statement and
related consolidated statement of income of the Borrower as of and for the
twelve-month period ending on the last day of the most recently completed
twelve-month period ended December 31, 2018;

(iii)    forecasted financial projections for the Borrower and its Subsidiaries
for the then upcoming fiscal year (on a month-by-month basis) and each other
fiscal year through the fiscal year ending December 31, 2021, a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
each such fiscal year, the related consolidated statements of projected cash
flow and projected income, and a description of the underlying assumptions
applicable thereto, in each case prepared by management of the Loan Parties in
good faith based upon reasonable assumptions and setting forth the principal
assumptions on which such projections are based; and

(iv)    calculations in form and substance reasonably satisfactory to the
Administrative Agent demonstrating to the Administrative Agent’s reasonable
satisfaction that, on the Closing Date on a pro forma basis giving effect to the
Term Loans to be made hereunder, (A) Liquidity is at least $65,000,000 and
(B) the Total Appraisal Ratio is no less than 6.50:1.00.

(k)    Insurance. The Collateral Agent shall have received endorsements
(containing or accompanied by a copy of the policy or binder in respect thereof)
and certificates of insurance naming the Collateral Agent, the Lenders and the
other Secured Parties as additional insureds and naming the Collateral Agent on
behalf of the Secured Parties as lenders loss payee, in each case with regard to
the insurance required by Section 8.03, in form and substance reasonably
satisfactory to the Collateral Agent.

(l)    Fees and Expenses. Each Agent and each Lender shall have received, for
its own respective account, (a) all fees and expenses due and payable to such
Person under the Fee Letter and (b) the reasonable fees, costs and expenses due
and payable to such Person pursuant to Section 3.02 and 12.05 (including the
reasonable and documented fees, disbursements and other charges of counsel) due
as of the Closing Date.

(m)    Patriot Act Compliance and Reference Checks. The Administrative Agent
shall have received completed background and reference checks with respect to
each Loan Party’s senior management and any required Patriot Act compliance, in
each case the results of which are satisfactory the Administrative Agent in its
sole discretion (the Administrative Agent hereby acknowledges receipt of such
information and such information is satisfactory), which shall include, for the
avoidance of doubt, a duly executed IRS Form W-9, or other applicable tax form.

(n)    Non-US Aircraft. In respect of each Aircraft for which the Country of
Registration is other than the United States:

(i)    certified true copies of each Disclosed Sublessee’s air operator’s
certificate or evidence satisfactory to the Collateral Agent that an application
has been made to the applicable Aviation Authority for the issue of a
replacement of such certificate;

 

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(ii)    copies of the certificate of airworthiness and certificate of
registration issued by the applicable Aviation Authority in respect of each such
Aircraft or evidence satisfactory to the Collateral Agent that an application
has been made to the applicable Aviation Authority for the issue of a
replacement of such certificate;

(iii)    copies of certificates evidencing the Aircraft Insurances required to
be maintained under this Loan Agreement in respect of such Aircraft;

(iv)    a letter of undertaking addressed to the Collateral Agent from the
allocable Aircraft Insurer (or insurance broker) in the broker’s customary form;

(v)    if applicable, either (A) a letter addressed by each of the Owner and
Disclosed Sublessee to the Aviation Authority irrevocably (x) authorizing the
de-registration of the Aircraft on the register of aircraft maintained by the
Aviation Authority upon the request of Collateral Agent or (y) confirming that
the Aircraft may not be so de-registered without the previous consent of
Collateral Agent or (B) a Deregistration Power of Attorney executed by each of
Owner’s and Disclosed Sublessee’s duly authorized officer in proper form for
filing with the Aviation Authority, if applicable;

(vi)    a letter from each Disclosed Sublessee addressed to Airservices
Australia, NAV Canada, the relevant airport authorities, or the relevant
equivalent party (if any), pursuant to which that Disclosed Sublessee authorizes
Airservices Australia, NAV Canada, the relevant airport authorities, or such
equivalent party, as the case may be, to issue to Collateral Agent, upon the
Collateral Agent’s request from time to time, a statement of account of all sums
due by that Disclosed Sublessee to Airservices Australia, NAV Canada, the
relevant airport authorities, or such equivalent party, as the case may be, in
respect of its Aircraft;

(vii)    reasonably satisfactory evidence of filings in favor of the Collateral
Agent in respect of each Disclosed Sublease that meet the requirements of the
PPSA with respect to their respective PPS Security Interests (including any
Purchase Money Security Interests);

(viii)    a copy of each Disclosed Sublease, together with evidence that such
Disclosed Sublease has been perfected on all applicable registers (including the
International Registry and the register maintained under the PPSA).

(o)    Process agents. Evidence of appointment of each Loan Party’s agent for
service of process pursuant to the Loan Documents.

(p)    Cape Town: each grantor of an Aircraft Collateral Mortgage or
Subordination Undertaking shall have:

(i)    registered as a transaction user entity (“TUE”) with the International
Registry and such TUE status is current and neither suspended or disabled;

(ii)    consented to the registration on the International Registry of an
International Interest or Prospective International Interest, as appropriate,
with respect to each Airframe and each Engine created by this Loan Agreement and
any other Loan Document requested by the Collateral Agent, and the Collateral
Agent shall have received satisfactory priority search results evidencing such
registrations and the priority of such registrations in favor of Collateral
Agent; and

 

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(q)    [Reserved]

(r)    Maintenance Logs. The Administrative Agent shall have received complete
and accurate copies of the up-to-date Maintenance Logs as of a date no earlier
than ten (10) days of the Closing Date for each Aircraft.

(s)    No Default. No Default or Event of Default shall have occurred and be
continuing.

(t)    Representations and Warranties. The representations and warranties set
forth in the Loan Documents shall be true and correct on and as of the Closing
Date (except where such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects as of such earlier date).

(u)    No Injunctions. No injunction, writ, restraining order, or other order of
any nature (other than an injunction, writ, restraining order, or other order
resulting from the actions of a Lender for purposes of avoiding its Commitments
hereunder, as determined by a final non-appealable judgment from a court of
competent jurisdiction) restricting or prohibiting, directly or indirectly, the
incurrence of the Term Loans hereunder shall have been issued and remain in
force against the Loan Parties, any Agent or any Lender.

SECTION 5.02    Conditions Precedent to the Funding Date. The obligation of the
Lenders to fund the Term Loans under the Loan Agreement is subject to the
satisfaction of, and no Agent or Lender shall have any obligation to take or
perform any other action hereunder until the satisfaction (or waiver by the
Lenders as of the Closing Date) of the following conditions precedent on or
before the Closing Date:

(a)    Filings. The Collateral Agent shall have received (i) evidence in form
and substance satisfactory to the Collateral Agent that appropriate UCC (or
equivalent) financing statements and such documents as are required by the FAA
and the International Registry of Mobile Assets pursuant to the Cape Town
Convention and the Aircraft Protocol have been provided for filing or
registration in such office or offices as may be necessary or, in the opinion of
Collateral Agent, desirable, to perfect and evidence the Collateral Agent’s
Liens in and to the Collateral, (ii) such statements in support of filings with
the FAA that are necessary with respect to the recordation with the FAA of the
Collateral Agent’s security interest in the Collateral including, but not
limited to the Aircraft, Engines, Spare Parts, Spare Parts Locations (and the
termination of existing security interests therein), including but not limited
to, the Aircraft Collateral Mortgage, the IDERA and Irrevocable Power of
Attorney, (iii) evidence that a counterpart of the Aircraft Collateral Mortgage
covering such Initial Mortgaged Aircraft has been recorded in all places
necessary, in the Collateral Agent’s judgment, to create a valid and enforceable
Lien in favor of the Collateral Agent for the benefit of the Lenders, prior and
superior in right to any other Person, and (iv) evidence that the registrations
on the International Registry associated with and in furtherance of Aircraft
Collateral Mortgage covering such Initial Mortgaged Aircraft has been duly
registered, in the Collateral Agent’s judgment, to create a valid and
enforceable Lien in favor of the Collateral Agent for the benefit of the
Lenders, prior and superior in right to any other Person on the International
Registry.

(b)    [Reserved].

(c)    Perfection. Each document (including, without limitation, each UCC
financing statement and similar or equivalent documents in connection with
mobile equipment and aircraft equipment) required by law or requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Collateral Agent for its own benefit and for the benefit of the
Lenders a

 

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perfected Lien in the Collateral shall have been properly filed, registered or
recorded in each jurisdiction in which the filing, registration or recordation
thereof is so required or requested, or arrangements reasonably satisfactory to
the Administrative Agent for the filing, registering or recording thereof shall
have been made.

(d)    [Reserved].

(e)    No Default. No Default or Event of Default shall have occurred and be
continuing.

(f)    Representations and Warranties. The representations and warranties set
forth in the Loan Documents shall be true and correct on and as of the Closing
Date (except where such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects as of such earlier date).

(g)    Fees and Expenses. Each Agent and each Lender shall have received, for
its own respective account, (a) all fees and expenses due and payable to such
Person under the Fee Letter and (b) the reasonable fees, costs and expenses due
and payable to such Person pursuant to Section 3.02 and 12.05 (including the
reasonable and documented fees, disbursements and other charges of counsel) due
as of the Funding Date.

(h)    Expense Deposit. The Lenders shall have received from the Borrower an
expense deposit equal to an amount no less than $500,000.00, which amount shall
be held by the Lenders and applied solely to expenses payable by the Loan
Parties pursuant to Section 12.05, with any unused portion of such amount repaid
to the Borrower upon the repayment in full of the Loans.

ARTICLE VI

[RESERVED]

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Loan Agreement and the
Lenders to make the Loans and Commitments hereunder, each of the Loan Parties,
jointly and severally, represents and warrants to the Agents and the Lenders as
follows:

SECTION 7.01    Status. Each Loan Party (a) is a duly organized or formed and
validly existing corporation or other registered entity in good standing under
the laws of the jurisdiction of its organization and has the corporate or other
organizational power and authority to own its property and assets and to
transact its business as presently conducted and (b) is duly qualified and
authorized to do business, and is in good standing, in all jurisdictions where
it does business or owns assets, except in the case of clause (b), where the
failure to be so qualified could not reasonably be expected to result in a
Material Adverse Effect.

SECTION 7.02    Power and Authority; Execution and Delivery. Each Loan Party has
the corporate or other organizational power and authority to execute, deliver
and carry out the terms and provisions of the Loan Documents to which it is a
party (including, in the case of the Borrower, such power and authority to
borrow the Loans as contemplated herein, in the case of the Guarantors, to
guaranty the Obligations as contemplated by the Guaranty and Security Agreement,
and in the case of all

 

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Loan Parties, to grant the Liens contemplated by this Loan Agreement and the
other Security Documents) and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party. Each Loan Party has duly executed and
delivered the Loan Documents to which it is a party.

SECTION 7.03    Enforceability. This Loan Agreement and the other Loan Documents
to which each Loan Party is a party constitutes the legal, valid and binding
obligation of such Loan Party, enforceable against each such Loan Party in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization and other similar laws
relating to or affecting creditors’ rights generally.

SECTION 7.04    No Violation. The execution, delivery and performance by the
Loan Parties of this Loan Agreement and the other Loan Documents to which it is
a party, the compliance with the terms and provisions hereof and thereof, and
the incurrence of the Term Loans hereunder and the other transactions
contemplated hereby, do not and will not (a) conflict with, contravene or
violate any provision of any Applicable Law, (b) violate any order or decree of,
or require any authorization, consent, approval, exemption or other action by or
notice to, any Governmental Authority, (c) expect as would not reasonably be
expected to have a Material Adverse Effect, conflict with, result in a breach of
any of the terms, covenants, conditions or provisions of, constitute a default
under, otherwise result in the termination of or a termination right under,
(i) any material indenture, note, loan agreement, lease agreement, mortgage,
deed of trust or other financing or security agreement (including, for the
avoidance of doubt, the Indenture and the Thirty Two Loan Agreement) or (ii) any
Material Contract, (d) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
any Loan Party (other than Liens created under the Loan Documents or Permitted
Liens), or (e) violate any provision of the Organization Document or any
material Permit of any Loan Party or Subsidiary of a Loan Party.

SECTION 7.05    Approvals, Consents, etc.. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or other
Person, and no consent or approval under any contract or instrument (other than
(a) those that have been duly obtained or made and which are in full force and
effect or, if not obtained or made, individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (b) the filing of UCC
financing statements and (c) the filings or other actions necessary to perfect
Liens under the Loan Documents is required for the incurrence of the Term Loans
hereunder or the due execution, delivery or performance by any Loan Party of any
Loan Document to which it is a party, or for the due execution, delivery or
performance of the Loan Documents, in each case by any of the Loan Parties party
thereto. There is no judgment, order, injunction or other restraint issued or
filed with respect to the transactions contemplated by the Loan Documents, the
incurrence of the Term Loans hereunder, the making of any Loan or the
performance by any Loan Party of its Obligations under the Loan Documents.

SECTION 7.06    Use of Proceeds; Regulations T, U and X. The Borrower will use
the proceeds of the Loans solely for the purposes set forth in, as permitted by,
and in accordance with Section 8.12 and Section 9.18. No Loan Party is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Loan will be used to purchase or carry any
Margin Stock or otherwise for a purpose which violates or would be inconsistent
with Regulations T, U or Regulation X.

SECTION 7.07    Investment Company Act; etc.. No Loan Party is, or after giving
effect to the incurrence of the Term Loans hereunder and the other transactions
contemplated under the Loan Documents will be, (i) an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, or (ii) subject to the Federal

 

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Power Act, the Interstate Commerce Act, or any other Law limiting its ability to
incur any of its respective obligations hereunder or under any of the other Loan
Documents.

SECTION 7.08    Litigation, Labor Controversies, etc.. Except as disclosed on
Schedule 7.08, there is no pending or, to the knowledge of any Loan Party,
threatened in writing, litigation, action, investigation, proceeding, union or
labor controversy (including without limitation, strikes, lockouts or slowdowns)
against or involving any of the Loan Parties or any of their respective
Subsidiaries, including any employee thereof, (i) which purports to affect the
legality, validity or enforceability of any Loan Document or the incurrence of
the Term Loans hereunder, (ii) in which the amount of damages claimed is
$1,000,000 or more, (iii) which seeks specific performance or injunctive relief
or (iv) which could reasonably be expected to have a Material Adverse Effect.

SECTION 7.09    Capitalization; Subsidiaries.

(a)    The “Capitalization and Subsidiaries Schedule” attached hereto as
Schedule 7.09 sets forth all issued and outstanding Capital Stock of each Loan
Party, including the number of issued and outstanding shares or other units of
Capital Stock of each Loan Party and the holders of such Capital Stock, all on
and as of the Closing Date. Each outstanding share or unit of Capital Stock of
each Loan Party have been duly authorized, validly issued, are fully paid and
non-assessable and have not been issued in violation of any preemptive or
similar rights created by applicable Law, any Loan Party’s Organization
Documents or by any agreement to which any Loan Party is a party or by which it
is bound, and have been issued in compliance with applicable federal and state
securities or “blue sky” Laws. All issued and outstanding Capital Stock of each
Loan Party is free and clear of all Liens (except for the benefit of the Secured
Parties). No Loan Party has outstanding any Capital Stock convertible or
exchangeable for any shares of its Capital Stock or any rights or options to
subscribe for or to purchase its Capital Stock convertible into or exchangeable
for its Capital Stock. No Loan Party is subject to any obligation (contingent or
otherwise) to repurchase or acquire or retire any of its Capital Stock, other
than stock repurchases otherwise permitted hereunder. None of the Loan Parties
has violated any applicable federal or state securities Laws in connection with
the offer, sale or issuance of any of its Capital Stock, and, to the knowledge
of any Loan Party, the issuance of the Notes hereunder does not require
registration under the Securities Act or any applicable state securities Laws.
Except for the agreements listed on Schedule 7.09, there are no agreements among
the Borrower stockholders with respect to the voting or transfer of the
Borrower’s Capital Stock.

(b)    None of the Loan Parties has any Subsidiaries other than the Subsidiaries
listed on Schedule 7.09. Schedule 7.09 describes the direct and indirect
ownership interest of each of the Loan Parties in each Subsidiary.

SECTION 7.10    Accuracy of Information.

(a)    All factual information and data at any time furnished by any Loan Party,
any of their respective Affiliates or any of their respective representatives to
any Agent or any Lender (in each case, on behalf of the Borrower or related to
the incurrence of the Term Loans hereunder) for purposes of or in connection
with this Loan Agreement or any of the incurrence of the Term Loans hereunder
(other than financial estimates, forecast, models and projections, other forward
looking information and underlying assumptions relating to any of the foregoing
and information of an industry specific on general economic nature), taken as a
whole, is, and all such written factual information and data hereafter furnished
by any Loan Party, any of their respective Affiliates or any of their respective
representatives to any Agent or any Lender will be true, correct and complete in
all material respects on the date as of which such information or data is or
will be furnished, and none of such factual information and data at any time
furnished by any Loan Party, any of their respective Affiliates or any of their
respective representatives to

 

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any Agent or any Lender for purposes of or in connection with this Loan
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make such information and data, taken as a whole, not
materially misleading, in each case, at the time such information and data was
furnished in light of the circumstances under which such information or data was
furnished; provided that, to the extent any such information or data was based
upon or constitutes a forecast or projection, the Loan Parties represent only
that such forecast or projection was prepared by the Loan Parties in good faith
based upon reasonable assumptions, it being understood that forecasts and
projections are subject to uncertainties and contingencies, many of which are
beyond the Loan Parties’ control, and no assurance can be given that any
forecast or projection will be realized and that actual results may differ and
such differences may be material.

(b)    The Budget and pro forma financial information provided to the
Administrative Agent on or prior to the Closing Date were prepared in good faith
based upon reasonable assumptions, it being recognized by the Administrative
Agent and the Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results and such differences
may be material.

SECTION 7.11    Financial Condition; Financial Statements. The Historical
Financial Statements present fairly in all material respects the financial
condition and results of operations of the Consolidated Companies at the
respective dates of such information and for the respective periods covered
thereby, subject in the case of unaudited financial information to changes
resulting from normal year-end audit adjustments and to the absence of
footnotes. The Historical Financial Statements have been prepared in a manner
consistent with the historical accounting practices of the Borrower. For all
periods following the Closing Date, all financial information furnished pursuant
to Section 8.01 will be prepared in accordance with GAAP consistently applied
(subject, in the case of unaudited financial statements, to the absence of
footnotes and normal year-end adjustments). All of the financial information to
be furnished pursuant to Section 8.01 will present fairly in all material
respects the financial position and results of operations of the Loan Parties
and their Subsidiaries at the respective dates of such information and for the
respective periods covered thereby (to the Borrower’s knowledge, in the case of
any estimates that have been provided), subject in the case of unaudited
financial information to changes resulting from normal year-end audit
adjustments and to the absence of footnotes. Other than with respect to the
Loans, none of the Loan Parties has, and none of their respective Subsidiaries
has, any Indebtedness or other material obligations or liabilities, direct or
contingent, that are not reflected in the financial information referenced in
Section 5.01(j) to the extent required to be reflected therein in accordance
with GAAP.

SECTION 7.12    Tax Returns and Payments. Each Loan Party and each Subsidiary of
each Loan Party has filed all applicable U.S. federal, state, local and foreign
Tax returns required to be filed by them, and has paid all Taxes and assessments
payable by them that have become due (whether or not reflected on a Tax return)
other than those contested in good faith by appropriate proceedings in
accordance with Section 9.02(h) and with respect to which the applicable Loan
Party has maintained adequate reserves in accordance with GAAP. Each Loan Party
and its Subsidiaries has paid, or has provided adequate reserves in accordance
with GAAP for the payment of, all applicable federal, state, local and foreign
income Taxes applicable for all prior fiscal years and for the current fiscal
year. No Tax Lien has been filed, and, to the knowledge of any Loan Party, no
claim is being asserted, with respect to any such U.S. federal, state, local and
foreign Taxes, fees or other charges.

SECTION 7.13    Compliance with ERISA. Except as set forth on Schedule 7.13, no
Loan Party, Subsidiary, or ERISA Affiliate has, or has had in the last six
years, any material obligation to contribute or any other material liability to
a Pension Plan. Other than as could not reasonably be expected to result in a
material liability to a Loan Party or any Subsidiary of a Loan Party (i) each
Plan,

 

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and each related trust, insurance contract or fund, is in compliance in all
material respects with its terms and with ERISA, the Code and all Applicable
Laws; (ii) no ERISA Event has occurred or is reasonably expected to occur,
which, individually or in the aggregate, has resulted or could result in
liability to any Loan Party or any Subsidiary of any Loan Party; (iii) to the
extent applicable, each Plan (and each related trust, if any) that is sponsored
or maintained by a Loan Party or any Subsidiary or, other than as could not
reasonably be expected to result in a liability to any Loan Party or any
Subsidiary of any Loan Party, by an ERISA Affiliate of a Loan Party for the
benefit of employees of a Loan Party or Subsidiary of a Loan Party has received
a favorable determination or opinion letter from the IRS, including for all
required amendments, regarding its qualification thereunder that considers the
law changes incorporated in the plan sponsor’s most recently expired remedial
amendment cycle determined under the provisions of Rev. Proc. 2007-44, and
nothing has occurred subsequent to the issuance of such determination or opinion
letter which would reasonably be expected to prevent, or cause the loss of, such
qualification; (iv) no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) that is sponsored or maintained by
a Loan Party or any Subsidiary of a Loan Party is pending, expected or
threatened and anticipated to result in liability; (v) no Pension Plan has an
Unfunded Current Liability that has resulted or could reasonably be expected to
result in liability to any Loan Party or any Subsidiary of any Loan Party;
(vi) no Welfare Plan of any Loan Party or any of their respective Subsidiaries
provides material post-termination or post-retirement medical, dental, vision,
disability or life insurance benefit coverage except pursuant to a severance
arrangement or as required by Title I, Part 6 of ERISA or applicable state
insurance laws; and (vii) no liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA has been, or is reasonably
expected to be, incurred.

SECTION 7.14    Intellectual Property; Licenses, etc.. Each Loan Party and each
Subsidiary of each Loan Party owns, or possesses the right to use, all of the
material trademarks, service marks, trade names, internet domain names,
copyright registrations, issued patents and other intellectual property rights
or applications to register any of the foregoing and all rights to sue or
recover at law or in equity for any past, present or future infringement,
misappropriation, dilution, violation or other impairment thereof that are
reasonably necessary for the operation of a material portion of their business,
taken as a whole (collectively, the “IP Rights”). The conduct and operations of
the businesses of each Loan Party and each of its Subsidiaries do not infringe,
misappropriate, dilute, or otherwise violate any IP Rights owned by any other
Person. Except as set forth on Schedule 7.14, no Person has challenged in
writing any right, title or interest of any Loan Party or any of its
Subsidiaries in any IP Rights of such Loan Party or Subsidiary. Except as set
forth on Schedule 7.14, no Person has contested in writing the use of any IP
Rights owned by such Loan Party or Subsidiary or the validity or enforceability
of such IP Rights. No claim or litigation regarding any of the foregoing is
pending or, to the knowledge of any Loan Party, threatened in writing. As of the
Closing Date, none of the material IP Rights owned by any Loan Party or any of
its Subsidiaries is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 7.14.

SECTION 7.15    Ownership of Properties; Title; Real Property; Leases.
Schedule 7.15 lists all of the Real Property owned or leased by any of the Loan
Parties as of the Closing Date at which Collateral is located or stored,
indicating in each case whether the respective property is owned or leased, the
identity of the owner or lessor and the location of the respective property.
Each Loan Party owns (a) in the case of material owned Real Property, good,
indefeasible and valid fee simple title to such Real Property, (b) in the case
of material owned personal property, good and valid title to such personal
property, and (c) in the case of material leased Real Property or personal
property, valid and enforceable (except as may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or other laws applicable to
creditors’ rights generally and by generally applicable equitable principles)
leasehold interests in such leased property, in each case, free and clear of all
Liens or claims except for Permitted Liens.

 

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SECTION 7.16    Environmental Matters.

(a)    The Loan Parties, each of their respective Subsidiaries, and each of
their respective businesses, operations and Real Property (i) are in material
compliance with all Environmental Laws in all jurisdictions in which the Loan
Parties or such Subsidiary, as the case may be, are currently doing business,
and (ii) have obtained and are in compliance with all material Permits required
under Environmental Laws. None of the Loan Parties or any of their respective
Subsidiaries has become subject to any pending or, to the knowledge of such Loan
Party, threatened in writing, material Environmental Claim or any other material
liability under any Environmental Law.

(b)    None of the Loan Parties or any of their respective Subsidiaries or, to
the knowledge of any Loan Party, any other Person, has used, managed, handled,
generated, treated, stored, transported, Released or disposed of Hazardous
Materials in, on, at, under, to or from any currently or formerly owned or
leased Real Property or facility relating to its business in a manner that
requires or is reasonably expected to require corrective, investigative,
monitoring, remedial or cleanup actions under any Environmental Law.

(c)    To the knowledge of the Loan Parties, there are no actions, activities,
circumstances, facts, conditions, events or incidents, including the presence of
any Hazardous Material, which could be reasonably be expected to form the basis
of any Environmental Claim against any Loan Party or any of their respective
Subsidiaries.

(d)    The Loan Parties have delivered or otherwise made available for
inspection to the Administrative Agent true, complete and correct copies and
results of all material reports, data, investigations, audits, assessments
(including Phase I environmental site assessments and Phase II environmental
site assessments) studies, analyses, tests or monitoring in the custody,
possession or control of the Loan Parties or any of their Subsidiaries
pertaining to: (i) any Environmental Claims involving any Loan Party or any of
their Subsidiaries; (ii) any Hazardous Materials in, on, beneath or adjacent to
any property currently or formerly owned, operated or leased by any Loan Party
or any of their Subsidiaries; or (iii) any Loan Party’s or any of their
Subsidiaries’ compliance with applicable Environmental Laws.

SECTION 7.17    [Reserved].

SECTION 7.18    [Reserved].

SECTION 7.19    Security Documents; Perfection.

(a)    The Security Documents are effective to create in favor of the Collateral
Agent, for the benefit of the Secured Parties, legal, valid and enforceable
(subject only to Permitted Liens which, pursuant to the terms of this Loan
Agreement, are permitted to have priority over Collateral Agent’s Liens thereon)
security interests in the Collateral described therein and proceeds thereof.

(b)    In the case of the Collateral, when financing statements and other
filings specified on Schedule 7.19 in appropriate form are filed in the offices
specified on Schedule 7.19, the Liens granted under the Security Documents shall
constitute fully perfected Liens on, and first priority (subject only to
Permitted Liens which, pursuant to the terms of this Loan Agreement, are
permitted to have priority over Collateral Agent’s Liens thereon) security
interests in, all right, title and interest of the Loan Parties in Collateral
and the proceeds thereof (to the extent that a security interest in the
Collateral or such proceeds can be perfected by any such filing), as security
for the Obligations.

 

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SECTION 7.20    Compliance with Laws and Permits; Authorizations.

(a)    Each Loan Party and each of its Subsidiaries is, and since December 31,
2017, has been in material compliance with all Permits and Applicable Laws.

(b)    Each Loan Party and each of its Subsidiaries has all requisite
governmental licenses, Permits, authorizations, consents and approvals to
operate its business as currently conducted, except in such instances in which
(x) such requirement of Applicable Laws, Permits, government licenses,
authorizations or approvals are being contested in good faith by appropriate
proceedings diligently conducted or (y) the failure to have or comply therewith,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

(c)    No Loan Party has knowledge that, or has received any notice that is
outstanding or unresolved to the effect that, such Loan Party’s or any of its
Subsidiaries’ operations are not in compliance with any Environmental Law or
Permit or are the subject of any investigation by any Governmental Authority
evaluating whether such Loan Party or any of its Subsidiaries needs to take any
action under Environmental Laws (including any cleanup) or any other action is
needed to respond to a Release or impose further controls on any existing
discharge of Hazardous Materials to the environment, except any such
noncompliance, investigation or other action which could not reasonably be
expected to have a Material Adverse Effect.

SECTION 7.21    [Reserved].

SECTION 7.22    Contractual or Other Restrictions. Other than the Loan
Documents, no Loan Party or any of its Subsidiaries is a party to any agreement
or arrangement or subject to any Applicable Law that (a) limits its ability to
pay dividends to, or otherwise make Investments in or other payments to, any
Loan Party, (b) limits its ability to grant Liens in favor of the Collateral
Agent or (c) otherwise limits its ability to perform the terms of the Loan
Documents.

SECTION 7.23    No Brokers. Except as set forth on Schedule 7.23, there is no
broker’s or finder’s fee or commission will be payable with respect hereto or
any of the transactions contemplated hereby.

SECTION 7.24    Insurance. The properties of each Loan Party are insured with
financially sound and reputable insurance companies that are not Affiliates of
any Loan Party against loss and damage in such amounts, with such deductibles
and covering such risks, as are customarily carried by Persons of comparable
size and of established reputation engaged in the same or similar businesses and
owning similar properties in the general locations where such Loan Party
operates, in each case as described on Schedule 7.24. As of the Closing Date,
all premiums with respect thereto that are due and payable have been duly paid
and no Loan Party has received or is aware of any notice of any material
violation or cancellation thereof and each Loan Party has complied in all
material respects with the requirements of each such policy.

SECTION 7.25    Evidence of Other Indebtedness; Subordinated Debt. Schedule 7.25
is a complete and correct list of each credit agreement, loan agreement,
promissory note, indenture, purchase agreement, guaranty, letter of credit or
other arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to any Loan
Party outstanding on the Closing Date which will remain outstanding after the
Closing Date (other than (x) this Loan Agreement and the other Loan Documents
and (y) the Indenture and the Thirty Two Loan Agreement). The aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement as of the Closing Date is correctly described in Schedule 7.25.

 

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SECTION 7.26    Certain Collateral. As of the Closing Date, the Aircraft with
Registration Number N753P (S/N 760726) has an adjusted current market value
(representing “adjusted half-life” values) (as reflected in the Ascend Report)
which equals or exceeds the fair market value of the Specified Engines.

SECTION 7.27    Principal Business. As of the Closing Date and at all times
thereafter each Loan Party is engaged solely in the business it is engaged in as
of the Closing Date, and any business reasonably related, supplemental,
complimentary or incidental thereto.

SECTION 7.28    Absence of any Undisclosed Liabilities. There are no material
liabilities of any Loan Party of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in any such liabilities, other than those liabilities
provided for or disclosed in the financial statements provided on or prior to
the Closing Date or otherwise disclosed in writing to the Administrative Agent.

SECTION 7.29    Certificates of Airworthiness. For each Aircraft in respect of
which a certificate of airworthiness is not delivered to the Administrative
Agent on the Closing Date, such Aircraft possesses all required equipment and
would be capable of receiving a certificate of airworthiness on such date.

SECTION 7.30    Anti-Terrorism Laws; the Patriot Act. Each Loan Party and each
Subsidiary of a Loan Party is in compliance with, and no Loan Party and no
Subsidiary of a Loan Party is in violation of, any Law concerning or relating to
terrorism or money laundering (“Anti-Terrorism Laws”), including the Patriot
Act, the Trading with the Enemy Act of the United States of America (50 U.S.C.
App. §§1 et seq.), as amended (the “Trading with the Enemy Act”), the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended), and Executive Order No. 13224 on Terrorism
Financing, effective September 24, 2001 (the “Executive Order”). No Loan Party,
Subsidiary of a Loan Party or other agent acting or benefiting in any capacity
in connection with the Term Loans is (i) a Person that is listed in the Annex
to, or is otherwise subject to the provisions of, the Executive Order, (ii) a
Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the Annex to, or is otherwise subject to the provisions of, the
Executive Order, (iii) a Person with whom any Lender is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law, (iv) a
Person who commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order, (v) an “enemy” or an “ally of the enemy” within
the meaning of Section 2 of the Trading with the Enemy Act, or (vi) a Person
that is named as a “specially designated national and blocked person” on the
most current list published by the United States Treasury Department Office of
Foreign Asset Control at its official website or any replacement website or
other replacement official publication of such list. No Loan Party, Subsidiary
of a Loan Party or other agent acting or benefiting in any capacity in
connection with the Term Loans (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Person described in the preceding sentence, (ii) deals in, or otherwise
engages in any transaction relating to, any property or interests in any
property blocked pursuant to the Executive Order, or (iii) engages in or
conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in the Anti-Terrorism Laws.

SECTION 7.31    Economic Sanctions/OFAC. No Loan Party or any director, officer
or employee of any Loan Party, and to the knowledge of any Loan Party no
Affiliate, agent or representative of any Loan Party, is, or is owned or
controlled by, a Person that is (i) the subject of any economic or financial
sanctions or trade embargoes imposed, administered or enforced by any
Governmental Authority (“Sanctions”), including those administered by the U.S.
Department of Treasury’s Office of

 

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Foreign Assets Control (“OFAC Sanctions”) or (ii) located, organized or
conducting business in a country, region or territory that is the subject of any
OFAC Sanctions or other Sanctions (each, a “Sanctioned Country”), including,
without limitation, Crimea, Cuba, Iran, North Korea and Syria (any such Person
referred to in clause (i) or (ii), a “Sanctioned Person”), in each case in
violation of applicable Sanctions.

SECTION 7.32    Foreign Corrupt Practices Act. No Loan Party or any director,
officer or employee of any Loan Party, and to the knowledge of any Loan Party no
Affiliate, agent or representative of any Loan Party has taken any action in
violation of Applicable Law in furtherance of an offer, payment, promise to pay
or authorization or approval of the payment or giving of money, property, gifts
or anything else of value, directly or indirectly, to any “government official”
(including any officer or employee of a government or a government-owned,
government-controlled or other quasi-governmental entity or of a public
international organization, or any Person acting in an official capacity for or
on behalf of any of the foregoing, or any political party or party official or
candidate for political office) to influence official action or secure an
improper advantage, and each Loan Party and each Subsidiary of each Loan Party
will conduct its businesses in compliance in all material respects with
applicable anti-corruption laws and have instituted and maintained and will
continue to maintain policies and procedures designed to promote and achieve
compliance in all material respects with all such laws and with the
representation and warranty contained in this Section 7.32.

SECTION 7.33    Disclosed Subleases.

(a)    Schedule 7.33 sets forth, as of the Closing Date, all Disclosed
Subleases.

(b)    As of the Closing Date, to the knowledge (in management’s reasonable
judgment after due inquiry) of the Loan Parties, there is no pending or
threatened termination of any Disclosed Sublease or adverse amendment or
modification to (i) any Disclosed Sublease or (ii) the nature or economics of
the commercial relationship between the Borrower and any counterparty to a
Disclosed Sublease.

(c)    Each Disclosed Sublessee is in possession and control of the Aircraft
which it has leased pursuant to the relevant Disclosed Sublease.

SECTION 7.34    Affiliate Transactions. Except as set forth on Schedule 7.34, no
Loan Party is a party to any contracts or agreements with any of its Affiliates
on terms and conditions which are less favorable to such Loan Party than would
be usual and customary in similar contracts or agreements between Persons not
affiliated with each other.

SECTION 7.35    Collective Bargaining Agreements. Schedule 7.35 is a complete
and correct list and description (including dates of termination) as of the
Closing Date of all collective bargaining or similar agreements between or
applicable to any Loan Party or any of its Subsidiaries and any union, labor
organization or other bargaining agent in respect of the employees of any Loan
Party or any of its Subsidiaries. Each Loan Party and each of its Subsidiaries
is, and since December 31, 2017, has been in material compliance with all such
agreements and any obligations imposed by law relating to the employees of any
Loan Party or any of its Subsidiaries.

SECTION 7.36    Aircraft Interests. Each Owner listed in the Aircraft Collateral
Schedule has full title of each Airframe, Engine and Spare Engine as described
therein. Neither any Owner nor any Disclosed Sublessee has granted to any person
other than the Collateral Agent an International Interest, national interest,
Prospective International Interest, lien, de-

 

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registration power of attorney or a de-registration and export request
authorization with respect to any Aircraft, Airframe, Engine or Spare Engine
other than any Permitted Aircraft Liens.

SECTION 7.37    Aircraft Operator. Each Aircraft is operated by a duly
authorized and certificated air carrier in good standing under applicable law,
who has complied with and satisfied all of the requirements of and is in good
standing with the applicable Aviation Authority, so as to enable compliance with
this Loan Agreement, and to otherwise lawfully operate, possess, use and
maintain the applicable Aircraft in accordance with the Loan Documents.

ARTICLE VIII

AFFIRMATIVE COVENANTS

The Loan Parties hereby covenant and agree that, on the Closing Date and
thereafter until the Loans, together with interest, Fees and all other
Obligations incurred hereunder (other than Unasserted Contingent Obligations),
are paid in full and all Commitments are terminated, in each case, in accordance
with the terms of this Loan Agreement:

SECTION 8.01    Financial Information, Reports, Certificates and Other
Information. The Loan Parties shall furnish to the Administrative Agent and each
Lender copies of the following financial statements, reports, notices and
information:

(a)    Weekly Reporting and Certificate. As soon as available and in any event
within seven (7) days after the end of each week, and in each case in form and
substance reasonably satisfactory to the Administrative Agent (i) a rolling
thirteen (13) cash flow forecast, (ii) updates on key performance indicators and
(iii) a certificate executed by an Authorized Officer certifying that (A) the
Borrower remains the owner of each of the Aircraft, (B) unless swapped with in
accordance with the Loan Documents, each engine installed in each Aircraft on
the Closing Date remains installed in such Aircraft, (C) no Lien has been
granted over an Aircraft (other than a Permitted Lien), (D) each Disclosed
Sublease is in full force and effect and (E) the lessee under each Disclosed
Sublease outstanding on the Closing Date remains in possession and control of
the Aircraft as of the date of such certificate. Notwithstanding the foregoing,
the requirements of clause (i) above shall terminate following the Liquidity
Satisfaction Date.

(b)    Monthly Reporting. As soon as available and in any event within thirty
(30) days after the end of each calendar month, (u) a report on Spare Parts in
form reasonably satisfactory to the Administrative Agent, (v) complete and
accurate updates of the Maintenance Logs as of the end of such calendar month
for each Aircraft, (w) a Liquidity report (including a certificate executed by
an Authorized Officer of the Borrower showing compliance with the covenants set
forth in Section 9.13(a) and stating that no Default or Event of Default has
occurred and is continuing in respect thereof (or, if a Default or an Event of
Default has occurred in respect of Section 9.13(a), specifying the details of
such Default or Event of Default and the actions taken or to be taken with
respect thereto), (x) a report reflecting Appraisal Value as of the most recent
Appraisal Date (taking into account any Disposition Offset) (including a
certificate executed by an Authorized Officer of the Borrower showing compliance
with the covenants set forth in Section 9.13(d) and stating that no Default or
Event of Default has occurred and is continuing in respect thereof (or, if a
Default or an Event of Default has occurred in respect of Section 9.13(d),
specifying the details of such Default or Event of Default and the actions taken
or to be taken with respect thereto) (y) unaudited consolidated balance sheets
of the Borrower and its Subsidiaries as of the end of such month and
(z) unaudited consolidated statements of income and cash flow of the Borrower
and its Subsidiaries as of the end of such month, in each case including in
comparative form (both in Dollar and percentage terms) the figures for the
corresponding month in the

 

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immediately preceding fiscal year of the Borrower, and the year-to-date portion
of the immediately preceding fiscal year of the Borrower.

(c)    Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) days after the end of each fiscal quarter of the
Borrower, unaudited (x) consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, and (y) consolidated
statements of income and cash flow of the Borrower and its Subsidiaries for such
fiscal quarter, in each case and for the period commencing at the end of the
previous fiscal year of the Borrower and ending with the end of such fiscal
quarter, including (in the case of each of clause (x) and clause (y) (if
applicable)) in comparative form the figures for the corresponding fiscal
quarter in, and year-to-date portion of, the immediately preceding fiscal year
of the Borrower.

(d)    Annual Financial Statements. As soon as available and in any event within
one hundred and twenty (120) days after the end of each fiscal year of the
Borrower, copies of the consolidated balance sheets of the Borrower and its
Subsidiaries for such fiscal year, and the related consolidated statements of
income and cash flows of the Borrower and its Subsidiaries for such fiscal year,
and setting forth in comparative form (both in Dollar and percentage terms) the
figures for the immediately preceding fiscal year and against the then-current
Budget for such fiscal year, (provided that after the conclusion of the Chapter
11 Cases such consolidated statements shall be audited and certified without
“going concern” or other qualification, exception or assumption and without
qualification or assumption as to the scope of such audit as conducted in
accordance with GAAP, by an independent public accounting firm of nationally
recognized standing, or otherwise reasonably acceptable to the Administrative
Agent, and stating that, in performing the examination necessary to deliver such
audited financial statements, no knowledge was obtained by such accounting firm
of any Default or Event of Default (other than any Default or Event of Default
arising in connection with the Chapter 11 Cases)), together with a management
discussion and analysis (with reasonable detail and specificity) of the results
of operations for the fiscal periods reported.

(e)    Compliance Certificates. Concurrently with the delivery of the financial
information pursuant to clauses (b), (c) and (d) above, a Compliance Certificate
executed by an Authorized Officer of the Borrower (i) certifying that such
financial information presents fairly in all material respects the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP at the respective dates of such information
and for the respective periods covered thereby, subject in the case of unaudited
financial information, to changes resulting from normal year-end audit
adjustments and to the absence of footnotes, (ii) showing compliance with the
applicable covenants set forth in Section 9.13 (to the extent tested as of the
applicable fiscal period covered by financials attached to such Compliance
Certificate; provided that the covenants set forth in Sections 9.13(b) and
(c) shall be included in such Compliance Certificate only when delivered
concurrently with delivery of the financial information pursuant to clauses
(c) and (d) above) and stating that no Default or Event of Default has occurred
and is continuing (or, if a Default or an Event of Default has occurred,
specifying the details of such Default or Event of Default and the actions taken
or to be taken with respect thereto), (iii) specifying any change in the
identity of the Subsidiaries as at the end of such fiscal year or period, as the
case may be, from the Subsidiaries listed on Schedule 7.09, or from the most
recently delivered Compliance Certificate, as applicable, and (iv) including
(x) an updated Schedule 7.15 and Schedule 7.26 of this Loan Agreement (if
applicable) and (y) a written supplement substantially in the form of the
relevant schedules to the Guaranty and Security Agreement with respect to any
additional assets and property acquired by any Loan Party after the date hereof
during the period covered by the relevant financial information, if required to
update the perfection of Collateral Agent’s Lien with respect to such assets,
all in reasonable detail.

(f)    [Reserved].

 

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(g)    Budget. On or prior to sixty (60) days after the end of each calendar
year, forecasted financial projections for the Borrower and its Subsidiaries for
the then upcoming fiscal year (on a month-by-month basis), a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a description
of the underlying assumptions applicable thereto, and in each case prepared by
management of the Loan Parties in good faith based upon reasonable assumptions,
consistent in scope with the financial statements provided pursuant to
Section 8.01(d) and setting forth the principal assumptions on which such
projections are based (each such projections and the projections delivered
pursuant to this Section 8.01(g) being referred to as a “Budget”).

(h)    Defaults; Litigation. As soon as possible and in any event within five
(5) Business Days after an Authorized Officer of any Loan Party or any of their
respective Subsidiaries obtains knowledge thereof, written notice from an
Authorized Officer of the Borrower of (i) the occurrence of any event that
constitutes a Default or an Event of Default, which notice shall specify the
nature thereof, the period of existence thereof, and what action the applicable
Loan Parties have taken and propose to take with respect thereto, (ii) the
occurrence of any material adverse development with respect to any litigation,
action, proceeding or labor controversy described in Schedule 7.08, (iii) the
commencement of any litigation, action, proceeding or labor controversy of the
type and the materiality described in Section 7.08, and (iv) to the extent the
Administrative Agent requests and subject to any attorney client privilege
requirements, copies of all documentation related thereto.

(i)    Notices. Written notice promptly upon becoming aware of (and in no event
later than five (5) Business Days after an Authorized Officer of any Loan Party
becomes aware of) each the following, and copies of all notices and related
documents and correspondence with respect to:

(i)    any pending or, to the knowledge of an Authorized Officer of a Loan
Party, threatened in writing litigation, action, proceeding or other controversy
which purports to affect the legality, validity or enforceability of any Loan
Document or any other document or instrument referred to in Section 9.08, which
notice shall include a statement of an Authorized Officer of the Borrower
specifying the nature thereof and what actions the applicable Loan Parties have
taken and propose to take with respect thereto;

(ii)    the commencement of, and any material development in, each litigation,
investigation or proceeding affecting any Loan Party or any Subsidiary thereof
(A) in which the amount of damages is $1,000,000 (or its equivalent in another
currency or currencies) or more (in excess of insured amounts), (B) in which
injunctive or similar relief is sought and which could reasonably be expected to
have a Material Adverse Effect or (C) in which the relief sought is an
injunction or other stay of the performance of this Loan Agreement or any other
Loan Document, or which otherwise purports to affect the legality, validity or
enforceability of any Loan Document;

(iii)    each pending or, to the knowledge of an Authorized Officer of a Loan
Party, threatened in writing labor dispute, strike, walkout, or union organizing
activity with respect to any employees of a Loan Party that could reasonably be
expected to have a Material Adverse Effect;

(iv)    each default by any Loan Party under, or termination of, any Material
Contract;

 

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(v)    the discharge, withdrawal or resignation by a Loan Party’s independent
accountants;

(vi)    the creation or acquisition of any Subsidiary of the Borrower no later
than ten (10) Business Days prior to such creation or acquisition;

(vii)    all amendments, consent letters, waivers or modifications to a Loan
Party’s Organization Documents;

(viii)    all significant written final reports submitted to a Loan Party or any
Subsidiary of a Loan Party by its accountants in connection with each annual,
interim or special audit or review of any type of the financial statements or
related internal control systems, including any final comment letters delivered
to management and all responses thereto;

(ix)    any pending or threatened termination of any material customer contract
or adverse amendment or modification to (x) any material customer contract or
(y) the nature or economics of the commercial relationship between any Loan
Party and any material customer of such Loan Party; or

(x)    all (A) notices submitted or delivered to a Loan Party or any Subsidiary
of a Loan Party any regulatory agency if the notice or the matter referenced in
such notice pursuant to this sub-clause (A) could reasonably be expected to have
a Material Adverse Effect and (B) material reports submitted or delivered to a
Loan Party or any Subsidiary of a Loan Party which were prepared by the SEC.

(j)    Loan Documents, etc. As soon as possible and in any event within five
(5) Business Days after any Loan Party obtains knowledge of the occurrence of a
breach or default or notice of termination by any party under, or material
amendment or other modification entered into by any party to, any Loan Document,
any Material Contract, or any other document or instrument referred to in
Section 9.08, a statement of an Authorized Officer of the Borrower setting forth
details of such breach or default or notice of termination and the actions taken
or to be taken with respect thereto and, if applicable, a copy of such amendment
or other modification.

(k)    Management Letters. Promptly upon, and in any event within five
(5) Business Days after, receipt thereof, copies of all “management letters”
submitted to any Loan Party by the independent public accountants referred to in
Section 8.01(d) in connection with each audit made by such accountants.

(l)    [Reserved].

(m)    Corporate Information. Promptly upon, and in any event within five
(5) Business Days after, becoming aware of any additional corporate or limited
liability company information of the type delivered pursuant to Section 5.01(d),
or of any change to such information delivered on or prior to the Closing Date
or pursuant to this Section 8.01, change in the identity of the chief executive
officer, chief operations officer, chief financial officer or other “C-Level”
officers, a certificate, certified to the extent of any change from a prior
certification, from the secretary, assistant secretary, managing member or
general partner of such Loan Party notifying the Administrative Agent of such
information or change and attaching thereto any relevant documentation in
connection therewith.

 

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(n)    Insurance Report. Substantially concurrently with the delivery of the
financial statements provided for in Section 8.01(d), a current report of a
reputable insurance broker with respect to insurance policies maintained by the
Loan Parties.

(o)    Leased Property. Promptly upon, and in any event within five (5) Business
Days after, entering into any new material lease in respect of Real Property, a
copy of such lease.

(p)    Other Information. Promptly, such other information (financial or
otherwise) as any Agent on its own behalf or on behalf of any Lender may
reasonably request in writing from time to time.

SECTION 8.02    Books, Records and Inspections. The Loan Parties shall, and
shall cause each of their respective Subsidiaries to, maintain proper books of
record and account, in which entries that are complete, true and correct in all
material respects and are in conformity with GAAP consistently applied shall be
made of all material financial transactions and matters involving the assets and
business of the Loan Parties or such Subsidiary, as applicable, in accordance
with GAAP; provided that, and without limiting the foregoing, the Borrower will
store original Aircraft log books in a fireproof container and will back up such
log books no less frequently than monthly. The Loan Parties shall, and shall
cause each of their respective Subsidiaries to, permit the Administrative Agent
(who may be accompanied by any Lender) and any of its representatives and
independent contractors to visit and inspect any of its properties, and assets
(including the Aircraft, Engines, Spare Engines and Spare Parts), to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Loan
Parties and (unless an Event of Default then exists) at reasonable times during
normal business hours, upon reasonable advance notice to the Loan Parties;
provided that (i) unless an Event of Default has occurred and is continuing, the
Administrative Agent (who may be accompanied by any Lender) shall not be
permitted to conduct, and, the Loan Parties shall not be required to reimburse
the Administrative Agent for, more than two (2) such inspections in any calendar
year and (ii) the Administrative Agent and the Lenders shall be permitted to
conduct unlimited inspections during a calendar year at their own expense during
the occurrence and continuance of an Event of Default, and the Loan Parties
shall reimburse the Administrative Agent and the Lenders for any such
inspections. Any information obtained by the Administrative Agent or any Lender
pursuant to this Section 8.02 may be shared with the Administrative Agent,
Collateral Agent or any Lender upon such Person’s request. The Administrative
Agent and Lenders shall give the Loan Parties the opportunity to participate in
any discussions with the Loan Parties’ independent public accountants.

SECTION 8.03    Maintenance of Insurance. The Loan Parties shall, and shall
cause each of their respective Subsidiaries to, maintain in full force and
effect at all times (including by paying all applicable premiums), with
insurance companies that are financially sound and reputable at the time the
relevant coverage is placed or renewed, insurance in at least such amounts and
against at least such risks (and with such risk retentions) as reasonably
determined by the Administrative Agent, and in any case insuring against
casualty, general liability, product liability, employment practices liability,
errors and omissions, “D&O” insurance and including, for the avoidance of doubt,
physical damage insurance on the Aircraft. The Loan Parties shall furnish to the
Collateral Agent for further delivery to the Lenders, upon written request from
the Collateral Agent, information presented in reasonable detail as to all such
insurance so carried, and in any case including, without limitation,
(i) endorsements to (x) all “All Risk” and business interruption policies naming
the Collateral Agent, on behalf of the Secured Parties, as lenders loss payee,
and (y) all general liability, product liability, employment practices
liability, other liability, and errors and omissions policies naming the
Administrative Agent, Collateral Agent, the Lenders and the other Secured
Parties as additional insureds, and (ii) legends providing that no cancellation,
material reduction in amount or material change in insurance coverage thereof
shall be

 

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effective until at least thirty (30) days (ten (10) days with respect to failing
to pay premiums) after receipt by the Collateral Agent of written notice
thereof. Each Loan Party shall, at its own expense, procure that the Aircraft
Insurances are maintained in full force and effect with respect to each Aircraft
in accordance with Schedule 8.03. Each Loan Party must immediately cease, and
cause the immediate cessation of, all operations of an Aircraft and inform the
Collateral Agent in the event that the Aircraft Insurances in respect of an
Aircraft cease to be in full force and effect.

SECTION 8.04    Payment of Taxes and Liabilities. Each Loan Party shall file all
U.S. federal, state, local and foreign Tax returns and pay and discharge, and
shall cause each of its Subsidiaries to timely file all U.S. federal, state,
local and foreign Tax returns pay and discharge, all U.S. federal state, local
and foreign Taxes, assessments, or governmental charges as they become due and
payable, but in any event prior to the date on which penalties attach thereto;
provided that no Loan Party or any of its Subsidiaries shall be required to pay
any such Tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings in accordance with Section 9.02(h) and as to
which such Loan Party has maintained adequate reserves with respect thereto in
accordance with GAAP.

SECTION 8.05    Maintenance of Existence; Compliance with Laws, etc.. Each Loan
Party shall, and shall cause its Subsidiaries to, (a) preserve and maintain in
full force and effect its organizational existence (except in a transaction
permitted by Section 9.03), (b) preserve and maintain its good standing under
the laws of its state or jurisdiction of incorporation, organization or
formation; and preserve and maintain its good standing under the laws of each
other state or jurisdiction where such Person is qualified, or is required to be
so qualified, to do business as a foreign entity, except to the extent that
failure to maintain its good standing under the laws of any state or
jurisdiction other than the state or jurisdiction of incorporation, organization
or formation where such Person is qualified could not reasonably be expected to
have a Material Adverse Effect, (c) comply in all material respects with all
Applicable Laws, Permits, rules, regulations and orders material to such Loan
Party’s or such Subsidiary’s business, (d) do or cause to be done all things
reasonably necessary to preserve, renew and keep in full force and effect the
rights, agreements, licenses, registrations, Permits, certifications, approvals,
consents, franchises, patents, copyrights, trademarks and trade names that are
material to the conduct of such Loan Party’s or such Subsidiary’s business
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect, (e) comply in all respects with all Laws
applicable to the operation of such Loan Party’s or such Subsidiary’s business,
whether now in effect or hereafter enacted and with all other applicable Laws,
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect, (f) maintain, preserve and protect all property
of the Loan Parties, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (g) except for
obsolete or worn out equipment, keep their property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that such Loan Party’s or such Subsidiary’s business carried
on in connection therewith may be properly conducted at all times, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

SECTION 8.06    Environmental Compliance.

(a)    Each Loan Party shall, and shall cause its Subsidiaries to, use and
operate all of its and their businesses, facilities and properties in compliance
with all Environmental Laws, including (i) keeping all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remaining in material compliance therewith,
(ii) using, handling, managing, generating, treating, storing, transporting and
disposing of all Hazardous Materials in material compliance with all applicable
Environmental Laws, and (iii) keeping its and their property free of any

 

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Lien imposed by any Environmental Law, except in each case where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.

(b)    The Borrower shall promptly give notice to the Administrative Agent upon
any Loan Party or Subsidiary thereof becoming aware of (i) any violation by any
Loan Party or any of its Subsidiaries of any Environmental Law, (ii) any inquiry
with respect to, proceeding against, investigation of or other Environmental
Claim with respect to any Loan Party under any Environmental Law, including
without limitation a written request for information or a written notice of
violation or potential environmental liability from any foreign, federal, state
or local environmental agency or board or any other Governmental Authority or
Person, or (iii) the discovery of a Release or threat of a Release in, at, on,
under, to or from any of the Real Property of any Loan Party or any facility or
assets therein in excess of reportable or allowable standards or levels under
any Environmental Law, or under circumstances, or in a manner or amount which
could reasonably be expected to require responsive, corrective, investigative,
remedial, monitoring, cleanup or other corrective action under any Environmental
Law, which in each case could reasonably be expected to have a Material Adverse
Effect.

(c)    In the event of material violation of any Environmental Law or the
Release or presence of any Hazardous Material in, at, on, under, to or from any
Real Property of any Loan Party in amounts which require responsive, corrective,
investigative, remedial, monitoring, cleanup or other corrective or other action
under any Environmental Law or which subject any Loan Party to material
liability under any Environmental Law, each Loan Party and its respective
Subsidiaries, upon discovery thereof, shall take all steps required by
Environmental Laws to initiate and expeditiously complete all responsive,
corrective, investigative, remedial, monitoring, cleanup or other corrective
action or other action to mitigate and eliminate any such violation or potential
liability, and shall keep the Administrative Agent informed on a regular basis
of their actions and the results of such actions.

(d)    Each Loan Party shall provide the Administrative Agent with copies of any
material notice, submittal or documentation (other than notices, submittals and
documentation submitted in the ordinary course of any Loan Party’s business)
provided by any Loan Party or any of its Subsidiaries to any Governmental
Authority or other Person under any Environmental Law. Such notice, submittal or
documentation shall be provided to the Administrative Agent promptly and, in any
event, within five (5) Business Days after such material is provided to any
Governmental Authority or third party.

SECTION 8.07    ERISA.

(a)    As soon as possible and, in any event, within ten (10) days after any
Loan Party or any of its Subsidiaries knows or has reason to know of the
occurrence of any of the following events, the Borrower shall deliver to the
Administrative Agent a certificate of an Authorized Officer of the Borrower
setting forth the full details as to such occurrence and the action, if any,
that such Loan Party or such Subsidiary has taken and is required or proposes to
take, together with any notices (required, proposed or otherwise) given to or
filed with or by such Loan Party, such Subsidiary, an ERISA Affiliate, the PBGC,
a Plan participant (other than notices relating to an individual participant’s
benefits) or the Plan administrator with respect thereto: (i) the institution of
any steps by any Person to terminate any Plan; (ii) the failure to make a
required contribution to any Plan if such failure is sufficient to give rise to
a Lien under Sections 303(k) or 4068 of ERISA or under Section 430(k) of the
Code; (iii) the taking of any action (including inaction) with respect to a Plan
which could result in the requirement that any Loan Party furnish a bond or
other security to the PBGC or such Plan; (iv) the occurrence of any event with
respect to any Plan which could result in the incurrence by any Loan Party of
any material liability, fine or penalty, notice thereof and copies of all
documentation relating thereto; (v) that a Reportable Event has occurred (except
to the extent that the Borrower has previously delivered to the Administrative
Agent a certificate and notices (if any) concerning such event pursuant to the
next clause hereof); (vi) that a

 

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contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; (vii) that a failure to satisfy the minimum
funding standard within the meaning of Section 430 of the Code or Section 303 of
ERISA (whether or not waived in accordance with Section 412(c) of the Code or
Section 302(c) of ERISA) has occurred (or is reasonably likely to occur) or an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412, 430 or 431 of the Code or Section 302, 303 or 304 of ERISA with
respect to a Plan; (viii) the adoption of, or the commencement of, contributions
to, any Plan subject to Title IV of ERISA, Section 412 of the Code or
Section 302 of ERISA which results in a material increase in the contribution
obligations of any Loan Party, any Subsidiary of any Loan Party or any ERISA
Affiliate; (ix) that a material non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA with respect to an
employee benefit plan has occurred; (x) that any Loan Party, any Subsidiary of
any Loan Party or, to the knowledge of the Loan Parties, an ERISA Affiliate
files a Schedule SB (or such other schedule as contains actuarial information)
to IRS Form 5500 in respect of a Plan with Unfunded Current Liabilities;
(xi) that a Plan having any material Unfunded Current Liability has been or is
to be terminated, partitioned or declared insolvent under Title IV of ERISA
(including the giving of written notice thereof); (xii) that a Plan has an
Unfunded Current Liability that has or will result in a Lien under ERISA or the
Code; (xiii) that proceedings have been instituted to terminate a Plan having an
Unfunded Current Liability (including the giving of written notice thereof);
(xiv) that a proceeding has been instituted against a Loan Party, a Subsidiary
thereof or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan and that such proceeding could reasonably be
expected to result in a material liability to a Loan Party; (xv) that the PBGC
has notified any Loan Party, any Subsidiary thereof or any ERISA Affiliate of
its intention to appoint a trustee to administer any Plan, and, with respect to
any such failure made by an ERISA Affiliate, such failure could reasonably be
expected to result in a material liability to a Loan Party; (xvi) that any Loan
Party, any Subsidiary thereof or any ERISA Affiliate has failed to make a
required installment or other payment pursuant to Section 412 of the Code with
respect to a Plan; (xvii) that any Loan Party, any Subsidiary thereof or, to the
extent applicable or potentially applicable to the Loan Parties or any of their
respective Subsidiaries, any ERISA Affiliate has incurred or will incur (or has
been notified in writing that it will incur) any material liability (including
any indirect, contingent or secondary liability) to or on account of an employee
benefit plan pursuant to Section 409, 502(i), or 502(l) of ERISA, or any of
Sections 4971 through 5000 of the Code, or to or on account of a Plan pursuant
to Section 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 436(f) of the Code; (xviii) that any Loan Party, any Subsidiary thereof
may be directly or indirectly liable for a material violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under
Section 401(a) of the Code by any fiduciary or disqualified person with respect
to any employee benefit plan; or (xix) that any Loan Party, any Subsidiary
thereof or any ERISA Affiliate has incurred or will incur (or has been notified
in writing that it will incur) any material Withdrawal Liability; and

(b)    Promptly following any request therefor, copies of any documents
described in Section 101(k) of ERISA that any Loan Party, any of its
Subsidiaries may request with respect to any Plan, any notices described in
Section 101(l) of ERISA that any Loan Party, any of its Subsidiaries may request
with respect to any Plan and any information that any Loan Party, any of its
Subsidiaries may request with respect to any Multiemployer Plan; provided that
if any Loan Party, any of its Subsidiaries has not requested such documents or
notices from the administrator or sponsor of the applicable Plan, the applicable
Loan Party, the applicable Subsidiary(ies) shall promptly make a request for
such documents or notices from such administrator or sponsor and shall provide
copies of such documents and notices promptly after receipt thereof.

 

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SECTION 8.08    Maintenance of Properties. Each Loan Party shall, and shall
cause its Subsidiaries to, (i) maintain, preserve, protect and keep its material
Real Property, properties and assets in good repair, working order and condition
(ordinary wear and tear excepted, and subject to dispositions permitted pursuant
to Section 9.04), (ii) make necessary repairs, renewals and replacements
thereof, (iii) maintain and renew as necessary all material leases, licenses,
permits and other clearances necessary to use and occupy such properties and
assets, in each case so that the business carried on by such Person may be
properly conducted in all material respects at all times consistent with the
manner in which business is conducted as of the Closing Date or such changes
thereto as reasonably determined by the Loan Parties in their good faith
business judgment from time to time, and (iv) continue to conduct at all times
its business consistent with the manner in which business is conducted as of the
Closing Date or such changes thereto as reasonably determined by the Loan
Parties in their good faith business judgment from time to time.

SECTION 8.09    End of Fiscal Years; Fiscal Quarters. The Loan Parties shall
cause (a) each of their fiscal years and the fiscal years of each of their
Subsidiaries to end on December 31 of each year and (b) each of their fiscal
quarters and the fiscal quarters of each of their Subsidiaries to end on dates
consistent with such fiscal year-end.

SECTION 8.10    Additional Collateral, Guarantors and Grantors. The Loan Parties
shall, upon the formation or acquisition thereof, promptly cause any direct or
indirect Subsidiary (other than an Excluded Subsidiary) formed or otherwise
purchased or acquired after the Closing Date to (i) execute a supplement to the
Guaranty and Security Agreement in the form of Annex I to the Guaranty and
Security Agreement or otherwise in form and substance satisfactory to the
Collateral Agent, (ii) execute a joinder to this Loan Agreement, whereby such
Subsidiary becomes a Loan Party hereunder, (iii) obtain all consents and
approvals required to be obtained by it in connection with the execution and
delivery of the aforementioned joinder and the Security Documents and the
performance of its obligations hereunder and thereunder and the granting by it
of the Liens thereunder, and (iv) to the extent required by the Loan Documents,
cause its assets to be subject to a first priority perfected Lien (subject only
to Permitted Liens that, pursuant to the terms of this Loan Agreement, are
permitted to have priority over the Collateral Agent’s Liens thereon) in favor
of the Collateral Agent for the benefit of the Secured Parties and take such
actions as shall be necessary or reasonably requested by the Collateral Agent to
grant and perfect or record such first priority Lien. Not later than ten
(10) Business Days after the acquisition by any Loan Party of any asset that is
required to be provided as Collateral pursuant to this Loan Agreement or any
Security Document, which asset would not automatically be subject to the
Collateral Agent’s first priority perfected Lien pursuant to pre-existing
Security Documents, the applicable Loan Party shall cause such asset to be
subject to a first priority perfected Lien (subject only to Permitted Liens
that, pursuant to the terms of this Loan Agreement, are permitted to have
priority over the Collateral Agent’s Liens thereon) in favor of the Collateral
Agent for the benefit of the Secured Parties and take such actions as shall be
necessary or reasonably requested by the Collateral Agent to grant and perfect
or record such first priority Lien.

SECTION 8.11    [Reserved].

SECTION 8.12    Use of Proceeds.

The proceeds of the Term Loans shall be used on the Closing Date for general
corporate purposes.

SECTION 8.13    Mortgages; Landlord Agreements.

 

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(a)    The Loan Parties shall cause each Loan Party’s fee simple interests in
Real Property with a fair market value in excess of $10,000,000 to be subject to
a Lien in favor of the Collateral Agent pursuant to a Mortgage securing the
Obligations. If any Loan Party acquires a fee simple interest in Real Property
with a fair market value in excess of $5,000,000 after the Closing Date, the
Borrower shall promptly notify the Agents and the Lenders thereof in writing.
With respect to all Loan Parties’ fee simple interests in Real Property with a
fair market value in excess of $10,000,000, the Loan Parties shall take, and
cause the other Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Collateral Agent to grant and/or perfect such Liens
consistent with the applicable requirements of the Security Documents, including
actions described in Section 8.15, all at the sole cost and expense of the
Borrower. Each Mortgage delivered to the Collateral Agent hereunder shall be
accompanied by (i) a policy or policies (or unconditional binding commitment
thereof) of title insurance issued by a nationally recognized title insurance
company insuring the Lien of each Mortgage as a valid Lien (with the priority
described therein) on the Mortgaged Property described therein, free of any
other Liens except as expressly permitted by Section 9.02, together with such
endorsements and reinsurance as the Collateral Agent may reasonably request, and
(ii) if requested by the Collateral Agent, an opinion of local counsel to the
applicable Loan Parties with respect to the Mortgage and the Liens granted
thereunder, in form and substance reasonably satisfactory to the Collateral
Agent.

(b)    The Loan Parties shall use commercially reasonable efforts to provide (or
with respect to any properties existing as of the Closing Date, use commercially
reasonable efforts to provide no later than 90 days after the Closing Date) a
Landlord Agreement to the Collateral Agent with respect to (i) the headquarters
location of each Loan Party, (ii) each other location at which original books
and records, primary servers, or any other systems necessary to operate the
business in the ordinary course of business are located, and (iii) each leased
location of a Loan Party and each other location owned by a third party at which
a Loan Party stores Collateral with an aggregate value of greater than
$1,000,000.

(c)    Each Loan Party grants to, and agrees to procure for, the Collateral
Agent, the Appraisal Firm or the Collateral Agent’s designee (or the authorized
representative of any of the foregoing), as the case may be, at any time
mutually agreed to by the applicable Loan Party and Collateral Agent the right
to enter upon the Loan Parties’ premises or such other premises at which an
Aircraft may be located (the “Premises”) for the purpose of inspecting or,
following the occurrence of an Event of Default and in accordance with
Section 10.02, removing an Aircraft and the Aircraft Documents or any part
thereof from the Premises or conducting sales of Aircraft on the Premises.

SECTION 8.14    [Reserved].

SECTION 8.15    Further Assurances.

(a)    The Loan Parties shall execute any and all further documents, financing
statements, agreements and instruments, and shall take all such further actions,
which may be required under any Applicable Law or which either Agent may
reasonably request, in order to grant, preserve, protect, perfect and evidence
the validity and priority of the security interests created or intended to be
created by the Guaranty and Security Agreement or any other Security Document
(including, without limitation, the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents, and
assisting the Collateral Agent in completing all documentation relating to the
Assignment of Claims Act, if applicable), all at the sole and reasonable cost
and expense of the Borrower.

(b)    The Loan Parties shall cause an updated Appraisal to be completed no
later than one year following the Closing Date, and thereafter, no less
frequently than once in every subsequent consecutive six (6) month period (each
such date, an “Appraisal Date”).

 

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(c)    Notwithstanding anything herein to the contrary, if the Collateral Agent
determines in its sole discretion that the cost of creating or perfecting any
Lien on any property is excessive in relation to the practical benefits afforded
to the Lenders thereby, then such property may be excluded from the Collateral
for all purposes of the Loan Documents.

SECTION 8.16    Lender Meetings. Each Loan Party shall upon the request of the
Administrative Agent, participate in a meeting of the Lenders, as frequently as
may be reasonably required, but not more frequently than once per month, by the
Administrative Agent, in each case to be held via teleconference or in person
(at the Administrative Agent’s election) at least once per year, at a time
selected by the Administrative Agent and reasonably acceptable to the Lenders
and the Borrower. The purpose of this meeting shall be to present the Loan
Parties’ previous fiscal year’s financial results and to present the Loan
Parties’ Budget for the current fiscal year.

SECTION 8.17    [Reserved].

SECTION 8.18    Payment of Obligations. Each Loan Party shall, and shall cause
each of its Subsidiaries to, pay, discharge and perform as the same shall become
due and payable or required to be performed, all their respective material
obligations and liabilities, including:

(a)    [reserved];

(b)    all lawful claims which, if unpaid, would by law become a Lien (other
than a Permitted Lien) upon its property and assets unless the same are being
contested in good faith by appropriate proceedings diligently prosecuted which
stay the imposition or enforcement of any Lien and for which adequate reserves
in accordance with GAAP are being maintained by such Person; and

(c)    the performance of all obligations under any Contractual Obligation to
which such Loan Party or any of its Subsidiaries is bound, or to which it or any
of its property and assets are subject, including any Material Contracts, except
where the failure to perform could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

SECTION 8.19    Intellectual Property; Licenses, etc.. Each Loan Party shall,
and shall cause each Subsidiary to, maintain ownership, or possession of the
material IP Rights that are reasonably necessary for the operation of its
respective businesses. Each Loan Party shall, and shall cause each Subsidiary
to, conduct and operate the businesses of such Loan Party or such Subsidiary in
a manner that does not, to the knowledge of any Loan Party, infringe,
misappropriate, dilute, or otherwise violate any material IP Rights owned by any
other Person.

SECTION 8.20    Security Interests; Perfection, etc.. Each Loan Party shall, and
shall cause each Subsidiary (other than an Excluded Subsidiary) to, take all
necessary actions to ensure that the Guaranty and Security Agreement is
effective to create in favor of the Collateral Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable first priority (subject only to
Permitted Liens which, pursuant to the terms of this Loan Agreement, are
permitted to have priority over Collateral Agent’s Liens thereon) security
interest in the Collateral described therein and proceeds thereof.

SECTION 8.21    Material Contracts. Except upon the occurrence and during the
continuation of Chapter 11 Cases and except as would not reasonably be expected
to result in a Material Adverse Effect, each Loan Party shall, and shall cause
each of its Subsidiaries to, comply with all terms and conditions contained in
each Material Contract. Each Loan Party shall, and shall cause its Subsidiaries
to, use its commercially reasonable efforts to enforce all of their material
rights (including indemnification rights) under their Material Contracts and
other material Contractual Obligations, and pursue all material remedies
available to them in connection with the enforcement of any such rights, in each
case, in accordance with their reasonable business judgment.

 

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SECTION 8.22    Liens and Possession

(a)    Each Loan Party shall ensure that each Aircraft shall be used subject to
maintenance requirements, in charter or aerial work operations including but not
limited to the carriage of passengers and cargo or as set forth in any Disclosed
Sublease. The Loan Parties shall not permit an Aircraft to be used for the
carriage of any goods, materials, livestock or items of cargo which could
reasonably be expected to cause damage to the Aircraft which would not be
adequately covered by the Aircraft Insurances required hereby.

(b)    No Loan Party shall create or permit to arise or subsist any Lien (other
than Permitted Aircraft Liens) over an Aircraft or any part thereof or over any
rights derived from an Aircraft or any part thereof and, other than any
Disposition permitted pursuant to the terms hereof or any other Loan Document or
as permitted pursuant to a Disclosed Sublease, shall not sell or encumber, or
permit the sale or encumbrance of, an Aircraft or any part thereof.

(c)    Except pursuant to a Disclosed Sublease, no Loan Party shall lease or
sub-lease an Aircraft or any part thereof or otherwise allow any third party to
operate or possess an Aircraft, Airframe, any Engine or any Part thereof without
the prior written consent of Collateral Agent (acting reasonably) or as
otherwise permitted pursuant to the terms of a Loan Document. The Collateral
Agent consents to the continued subleasing of an Aircraft pursuant to the
Disclosed Subleases. Any sublease shall be expressly subject and subordinate to
the Loan Documents. The Collateral Agent may require such other documents as it
reasonably determines as a condition to its consent to any other requested
sublease.

(d)    Notwithstanding the above, the parties hereto acknowledge that in the
ordinary course of their operations, any of the Loan Parties or a Disclosed
Sublessee (as the case may be) (“Relevant Party”), that Relevant Party may, from
time to time, (i) remove any Engine(s) and install such Engine(s) on a leased
airframe or helicopter (“Leased Aircraft”), which is subject to an operating
lease agreement (“Operating Aircraft Lease”) between a Relevant Party, as
operator, and a third-party lessor (“Aircraft Lessor”) where such Relevant Party
is the operator under the Operating Lease, and (ii) remove any engine(s) on
Leased Aircraft (a “Leased Engine”) and install such Leased Engine(s) on an
Aircraft. Upon the earlier of (i) the occurrence of an Event of Default,
(ii) the expiration of the term of an Operating Aircraft Lease, and (iii) the
Maturity Date, where an Engine is installed on an Airframe or a Leased Engine is
installed on an Aircraft, the Borrower, upon request of the Collateral Agent
(acting in its sole discretion) will (x) obtain from the applicable Aircraft
Lessor and each other party who has an interest in the Leased Aircraft (such
other party, including any owner, other lessor, lender or security agent, an
“Interested Person”) an acknowledgment in writing that such Aircraft Lessor and
each Interested Person does not hold any right, title, or interest in and to the
Engine, (y) physically remove the Engine and any Leased Engine and place them on
an Aircraft or Leased Aircraft, respectively, or (z) request and use all
reasonable best efforts to procure that the Aircraft Lessor and each other
Interested Person enter into any documents (including without limitation a bill
of sale and form of substitution agreement) to effectuate the substitution of
the respective engines of record with the Aviation Authority, the International
Registry or any other applicable register, such that the Owner becomes the owner
of the Leased Engine free from any interest of an Interested Person and
similarly, the Aircraft Lessor (or its nominee) becomes the owner of the Engine.
In the event of (z) above, upon written request of the Loan Party, the
Collateral Agent, so long as there shall exist no Event of Default, shall
release from the respective Security Documents any Engine; provided however,
that prior to such release, the Loan Party shall have created and perfected a
first ranking security interest under the terms and conditions hereunder in the
substituted Leased Engine (being the same make and model or an improved make and
model and

 

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suitable for installation on the Airframe, that is free and clear of all Liens,
and which has a value at least equal to the Engine being replaced). Such
substituted Leased Engine (“Substituted Engine”) shall thereafter be deemed an
“Engine” and part of the Collateral for all purposes of this Loan Agreement. In
connection with the Substituted Engine, the Loan Parties shall (i) execute and
deliver for filing a supplement to the respective Security Documents subjecting
the Substituted Engine thereto, and (ii) register the corresponding interests on
the International Registry and any other registers considered necessary by the
Collateral Agent to perfect title to, or an interest in, such Substituted
Engine. Each Loan Party agrees to provide such information, including in respect
of an Interested Person, a Leased Aircraft or a Substituted Engine, as may be
reasonably requested by the Collateral Agent in connection with this
Section 8.22(d). The Collateral Agent may require such other documents as it
reasonably determines as a condition to its consent to any other requested lease
or sublease.

SECTION 8.23    Operation and Maintenance

(a)    Each Loan Party must keep the each Aircraft or procure that each Aircraft
is kept in good repair and condition (except for Reasonable Wear) and, in
accordance with the terms of the Aircraft Collateral Mortgage (including,
without limitation, Section 4.5.1 thereof), maintain or preserve the aircraft in
accordance with original equipment manufacturer standards and applicable
regulatory requirements (in the appropriate category for the nature of the
operations of that Aircraft without restrictions) and, if required by applicable
law, a certification as to maintenance for that Aircraft issued by or on behalf
of the Aviation Authority. No Loan Party shall use or permit the use of an
Aircraft in any manner contrary to any recommendation of the Manufacturers of
the Aircraft, Airframe, any Engine or any Part referred to in any mandatory
service bulletins issued, supplied or available by or through such Manufacturer,
or any applicable airworthiness directives issued by the applicable Aviation
Authority.

(b)    Upon the Collateral Agent’s request not more than once every twelve
(12) months each Loan Party shall provide, or cause to be provided, a copy (for
review on-site) of the then-current maintenance program in effect for an
Aircraft in a manner according to the operator’s usual standards and provide an
approved copy of the maintenance program from the relevant regulating authority.

(c)    Each Loan Party will be responsible for removing repairing, overhauling,
or replacing all parts and components that need to be removed, repaired,
overhauled, exchanged, or replaced for any other reason including (or procuring
the same), but not limited to, accidents, incidents, hot starts, overtorques,
overtemps, or overspeeds which occur, in accordance with the terms of the
Aircraft Collateral Mortgage. Any part at any time removed from the airframe or
any Engine shall remain the property of Owner and subject to the Loan Documents
and any security document no matter where located, until such time as such part
shall be replaced by a part that has been incorporated or installed in or
attached to such airframe or Engine and until ownership of such replacement part
shall have passed to Owner and be subject to a Security Document.

(d)    Except (x) as permitted pursuant to the Aircraft Collateral Mortgage
(y) as explicitly permitted by Section 8.22(d), or (z) as required upon the
occurrence of a Total Loss with respect to such Engine (which event shall be
governed by reference to Schedule 8.03), no Loan Party will, without the prior
written consent of the Collateral Agent, in any manner deliver, transfer or
relinquish possession of any Engine or install or permit any Engine to be
installed on any airframe other than the Airframe on which it is installed as at
the date of this Loan Agreement.

(e)    Each Loan Party shall keep, or procure that there are kept, the Aircraft
Documents in the condition required for the immediate redelivery and shall keep
as part thereof (i) accurate, complete and current records of all flights made
by each Aircraft, of all flight hours of the

 

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Airframe, each Engine and the Parts, all maintenance, modifications and repairs
carried out on the Aircraft and each Engine and every Part, the location of each
Engine and Part not installed on the Airframe and (ii) an up-to-date
airworthiness directive status list, service bulletin incorporation list,
rotable controlled, hard time and life limit components listings, modification
list and structural repair file in respect of the Aircraft. Aircraft Documents
for an Aircraft shall be kept and maintained in English and in such manner, form
and location as (x) the Aviation Authority or (y) the Manufacturer, whichever of
the higher standard of (x) or (y) requires. Except as required by applicable
Law, the Aircraft Documents shall be the property of Owner. Owner shall ensure
that such copies are stored and backed-up in accordance with the regulations of
the Aviation Authority. Owner shall ensure that such copies are stored with
reasonable care in accordance with applicable regulatory authority.

(f)    At its own cost and expense, each Loan Party shall ensure, or shall
procure, that each Aircraft is registered with the applicable Aviation Authority
in the name of Owner in accordance with the applicable Laws of the Country of
Registration with Owner’s and Collateral Agent’s interest (where possible) in
the Aircraft and the Lien of any Security Document (where possible) insofar as
they create and/or perfect a security interest in an Aircraft, and Owner’s and
Collateral Agent’s interest in the Aircraft, noted in the register to the extent
permitted. The Collateral Agent agrees to cooperate with each Loan Party as
relevant, at the expense of that Loan Party, to the extent necessary to maintain
such registration. The Loan Parties must not change, and must ensure no other
person changes, the Country of Registration of an Aircraft without Collateral
Agent’s prior written consent (not to be unreasonably withheld or delayed).

(g)    Each Loan Party must, or must procure, the maintenance and continued
installation, of the nameplates referred to in Section 8.27(a)(iv), as the same
may be replaced from time to time under this clause, and such nameplates shall
be replaced at the Collateral Agent’s cost within fifteen (15) Business Days
after receipt of notice from the Collateral Agent, to reflect the name of any
successor Owner, replacement Collateral Agent or any other person obtaining an
interest in the Aircraft as permitted under the Loan Documents. Except as above
provided or as required by applicable Law, no Loan Party will allow, and must
ensure that no other person permits, the name of any Person to be placed on an
Airframe or on any Engine as a designation that might be interpreted as a claim
of ownership or any Lien; provided, however, that nothing herein contained shall
prohibit the operator of an Aircraft from placing its customary colors and
insignia on the relevant Airframe or any Engine. Nameplates must meet all
regulatory requirements to be installed on the Aircraft.

(h)    Each Loan Party shall promptly on becoming aware of the same notify
Collateral Agent of any Total Loss with respect to an Aircraft.

(i)    The Loan Parties shall provide the Collateral Agent with a report within
ten (10) Business Days of each calendar month (commencing with the month after
the date of this Loan Agreement) with respect to the flight hours, cycles and
airworthiness condition and serviceability status of each Aircraft.

(j)    All maintenance, repair and servicing shall be conducted by Borrower or a
maintenance provider under a Maintenance Program in strict accordance with all
manufacturer’s manuals, flight and maintenance manuals, current manufacturer
recommendations, applicable overhaul manuals, service bulletins, applicable
maintenance and operations specifications, applicable operator’s manuals or
specifications approved by applicable regulatory authority.

(k)    No material alterations or modifications may be made to, or installed
upon, an Aircraft except (i) to achieve preservation in accordance with any
applicable original equipment manufacturer requirements, (ii) to comply with any
FAA (or other applicable Aviation Authority)

 

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requirements, (iii) as permitted by the Aircraft Collateral Mortgage or other
Loan Document or (iv) with the Collateral Agent’s consent (such consent not to
be unreasonably withheld or delayed), and if so permitted any alterations or
modifications added or done to such Aircraft shall:

(i)    not diminish, or impair the marketability, value, utility or
airworthiness of the applicable Aircraft or result in any change in the category
or status of that Aircraft for the purposes of any rules or regulations of the
Country of Registration or the Aviation Authority; and

(ii)    immediately become the property of Owner free of all Liens (other than
Permitted Aircraft Liens).

(l)    Each Loan Party will (i) ensure that the crew, engineers and maintenance
performer engaged in connection with the operation and maintenance of an
Aircraft have the qualifications and hold the licenses or certification required
by the Aviation Authority and applicable Law; (ii) obtain and maintain in full
force all certificates, licenses, permits and authorizations at any time
required for the use and operation of that Aircraft; and (iii) not abandon the
Aircraft or knowingly do or permit to be done anything which may expose an
Aircraft or any part of it to the risk of damage, destruction, arrest,
confiscation, seizure, forfeiture, impounding, detention or appropriation. Each
Aircraft shall be maintained at all times under a Maintenance Program.

(m)    Each Loan Party will ensure that any repairs to an Aircraft will be
performed in accordance with the provisions of the Maintenance Program.

(n)    With respect to each Aircraft for which a certificate of airworthiness is
not delivered to the Administrative Agent on the Closing Date, the Loan Parties
shall promptly obtain a certificate of airworthiness upon the completion of any
maintenance or modification work in respect of such Aircraft. At all times prior
to obtaining such certificate of airworthiness such Aircraft shall be maintained
in a condition where a certificate of airworthiness could be obtained if sought.

SECTION 8.24    Compliance

(a)    Each Loan Party acknowledges and agrees that it will not operate an
Aircraft, nor allow an Aircraft to be operated, in (i) any circumstances or
geographic location where the Aircraft is not covered by Insurance; (ii) any
country or jurisdiction for which exports or transactions are subject to
specific restrictions under any law or directive of the United States or the
United Nations Security Council or the Office of Foreign Assets Control,
including without limitation, The Trading With the Enemy Act, 50 U.S.C. App.
Section 1 et seq., the International Emergency Economic Powers Act, 50 U.S.C.
App. Section 1701 et seq., and the United States Export Administration Act, 50
U.S.C. App. Section 2401 et seq. The Loan Parties further agree that the
Aircraft and its parts/components may be subject to the United States Export
Administration Regulations, the Arms Export Control Act, or the International
Traffic in Arms Regulations. Any diversion contrary to applicable law is
prohibited, including transshipment to third countries.

(b)    Each Loan Party shall comply and procure compliance with all applicable
Laws, including without limitation, any mandatory rules, mandatory regulations,
mandatory codes, or mandatory directives (including Airworthiness Directives)
administered or promulgated by:

(i)    the Aviation Authority; or

(ii)    the manufacturers of the Aircraft and the Engines, Parts and components,
in each case which may then be applicable to (x) the Aircraft (including Laws
mandating

 

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insurance coverage) or (y) the use, maintenance and operation of the Aircraft as
an operator or owner thereof, and will procure that the Aircraft is not used for
any illegal purpose or any illegal manner or for the carriage of any item or
substance whose possession or carriage is illegal under any applicable Law.

(c)    Each Loan Party shall obtain and maintain in full force, and shall ensure
that each Disclosed Sublessee obtains and maintains in full force, all
certificates, licenses, permits and authorizations from time to time required
for the use and operation of the Aircraft.

SECTION 8.25    Quiet Enjoyment

None of Lenders nor any Agent (nor any person claiming by or through it) may
interrupt or interfere with the quiet use, possession and enjoyment of an
Aircraft by the Loan Parties, or a Disclosed Sublessee so long as no Event of
Default has occurred and is continuing, except as required by any applicable Law
binding on such party. The exercise by an Agent or Lender of its rights under
this Loan Agreement or any other Loan Document will not constitute such an
interruption.

SECTION 8.26    Aircraft Collateral Schedule

The parties agree that the Aircraft Collateral Schedule shall be updated from
time to time as required to ensure it remains correct in all regards, and where
required to reflect the addition to, or release from, collateral from the
operation of the Security Documents. Such amendment shall be effected by
delivery by the Agent of to the Loan Parties, the Lenders and the Collateral
Agent of a replacement schedule which shall, absent manifest error, be binding
on the parties.

SECTION 8.27    Post-Closing Obligations.

(a)    The Loan Parties must satisfy the following condition subsequent within
the timelines set out below in respect to of each Aircraft in respect of which
the Country of Registration is Australia:

(i)    evidence and assurances satisfactory to Collateral Agent that the
registration of the Aircraft with the Aviation Authority has been completed
within forty five (45) days after the date of this Loan Agreement, including the
provision of the relevant certificate of registration and certificate of
airworthiness from the relevant Aviation Authority;

(ii)    promptly after the date of this Loan Agreement, but no later than forty
five (45) days after such date, evidence satisfactory to the Collateral Agent
that the Maintenance Program has been approved by the applicable Aviation
Authority and complies with all requirements of the Aviation Authority and the
respective Manufacturer requirements which are applicable to each Aircraft;

(iii)    evidence of the affixing of nameplates (to be provided by and at the
Loan Parties’ sole cost and expense) in a prominent position in the cockpit or
cabin of each Aircraft, provided nameplate must meet regulatory requirements to
be installed on the aircraft and not in a position that would distract employees
or customers, within forty five (45) days of the date of this Loan Agreement
stating as follows (or such other similar language as requested by Collateral
Agent):

“THIS AIRCRAFT IS OWNED BY [OWNER] (“OWNER”), IS LEASED TO [DISCLOSED
SUBLESSEE], IS MORTGAGED TO BLUE TORCH FINANCE LLC

 

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AND SHALL NOT BE SUBLEASED OR OPERATED WITHOUT THE PRIOR WRITTEN CONSENT OF BLUE
TORCH FINANCE LLC”

(b)    The Loan Parties shall use commercially reasonable efforts to, promptly
after the date of this Loan Agreement, cause the release of all Liens, other
than Liens in favor of the Collateral Agent, in respect of the Specified
Engines. Upon confirmation of release of all such Liens in respect of the
Specified Engines, the Collateral Agent shall within a reasonable period of
time, at the expense of the Loan Parties, cause all Liens in respect of the
Aircraft with Registration Number N753P (S/N 760726) in favor of the Collateral
Agent to be released.

(c)    The Loan Parties shall, promptly after the date of this Loan Agreement,
but no later than sixty (60) days after such date, use commercially reasonable
efforts to provide to the Administrative Agent bills of sale evidencing the Loan
Parties’ acquisition of (i) each Airframe set forth on the Aircraft Collateral
Schedule and (ii) each Engine set forth on the Aircraft Collateral Schedule.

ARTICLE IX

NEGATIVE COVENANTS

The Loan Parties hereby covenant and agree that, on the Closing Date and
thereafter until the Loans, together with interest, Fees and all other
Obligations incurred hereunder (other than Unasserted Contingent Obligations),
are paid in full and all Commitments are terminated, in each case, in accordance
with the terms of this Loan Agreement:

SECTION 9.01    Limitation on Indebtedness. Each Loan Party will not, directly
or indirectly, create, incur, issue, assume, guarantee, suffer to exist or
otherwise become directly or indirectly liable, contingently or otherwise with
respect to any Indebtedness, except for:

(a)    Indebtedness in respect of the Obligations;

(b)    Indebtedness existing as of the Closing Date which is identified with
particularity (including amount) in Schedule 7.25 and any Permitted Refinancing
thereof;

(c)    Indebtedness (i) evidencing the deferred purchase price of newly acquired
property or incurred to finance the acquisition of equipment of such Loan Party
(pursuant to purchase money mortgages or otherwise, whether owed to the seller
or a third party) used in the ordinary course of business of such Loan Party;
provided that such Indebtedness is incurred within ninety (90) days of the
acquisition of such property, and (ii) consisting of Capitalized Lease
Obligations, in an aggregate amount for clause (i) and (ii) not to exceed
$30,000,000 at any time outstanding and, in each case, any Permitted Refinancing
thereof;

(d)    Guaranty Obligations of a Loan Party in respect of Indebtedness of a Loan
Party otherwise permitted hereunder, and Guaranty Obligations of a Subsidiary of
a Loan Party in respect of Indebtedness of a Loan Party;

(e)    non-recourse Indebtedness incurred by the Loan Parties to finance the
payment of insurance premiums of such Person;

(f)    Indebtedness owed to any Person providing worker’s compensation, health,
disability or other employee benefits or property, casualty or liability
insurance to the Loan Parties

 

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incurred in connection with such Person providing such benefits or insurance
pursuant to customary reimbursement or indemnification obligations to such
Person;

(g)    Indebtedness consisting of unsecured intercompany loans and advances made
by or among any Loan Parties; provided that (x) at any time that such
Indebtedness in an aggregate amount in excess of $100,000 is outstanding, each
Loan Party shall have executed and delivered to each other Loan Party one or
more demand notes (collectively, the “Intercompany Notes”) to evidence all such
intercompany Indebtedness owing at any time by such Loan Party to such other
Loan Party, which Intercompany Notes shall be in form and substance satisfactory
to the Administrative Agent and shall be pledged and delivered to the Collateral
Agent for the benefit of the Secured Parties pursuant to the Guaranty and
Security Agreement as additional collateral security for the Obligations,
(y) each Loan Party shall record all intercompany transactions on its books and
records in a manner satisfactory to the Administrative Agent and (z) the
obligations of each Loan Party under all Intercompany Notes shall be subject to
the Subordination Requirements;

(h)    Indebtedness of any Loan Party under Credit Facilities (including
reimbursement obligations with regard to letters of credit) incurred pursuant to
this clause (h) in an aggregate amount at any time outstanding not to exceed the
sum of (i) $150,000,000 plus (ii) the principal amount of Credit Facilities (and
any Permitted Refinancing thereof) which are incurred substantially concurrently
with, and for the sole purpose of, financing a repurchase of Term Loans pursuant
to and in accordance with Section 12.06(b), in an aggregate principal amount not
to exceed the principal amount of Term Loans so repurchased; provided that all
Indebtedness incurred under this clause (h) shall at all times be subject to the
Intercreditor Agreement or a replacement intercreditor agreement in
substantially the same form or which is otherwise acceptable to the Required
Lenders in their sole discretion;

(i)    unsecured Indebtedness (i) under the Indenture in an aggregate amount not
to exceed (A) $500,000,000 minus (B) the aggregate principal amount of such
Indebtedness that is repaid, repurchased, retired, settled, converted into
Qualified Capital Stock, discharged or canceled after the Closing Date and
(ii) constituting a Permitted Refinancing of the Indebtedness described in
subclause (i) of this Section 9.01(i) (x) which is effected pursuant to a
confirmed plan of reorganization in the Chapter 11 Cases, (y) which has terms
which require no principal repayments of principal prior to the date that is six
(6) months following the Maturity Date and (z) if such Indebtedness bears cash
interest payable at any time prior to the date that is six (6) months following
the Maturity Date, as to which the Borrower shall have delivered to the
Administrative Agent projections, ranging in time from such Permitted
Refinancing to the Maturity Date, prepared by the Borrower in good faith,
demonstrating to the reasonable satisfaction of the Administrative Agent
compliance through the period of such projections with the covenant described in
Section 9.13(b);

(j)    other Indebtedness in an aggregate amount that does not exceed $5,000,000
outstanding at any time;

(k)    obligations in respect of letters of credit in an aggregate face amount
not to exceed $40,000,000 outstanding at any time; and

(l)    additional unsecured Indebtedness of any Loan Party in an aggregate
amount not to exceed $50,000,000 outstanding at any time; provided that (w) the
proceeds of such Indebtedness may be used solely for working capital or the
liquidity of the Borrower and its Subsidiaries, and may not be used for the
modification refinancing, refunding, renewal or extension of any Indebtedness
existing at the time of the incurrence of the Indebtedness permitted pursuant to
this clause (l), (x) the Indebtedness permitted pursuant to this clause (l) has
terms which require no principal repayments of principal prior to the date that
is six (6) months following the Maturity Date, (y) such Indebtedness shall not
bear interest

 

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payable in cash at a rate in excess of 15% per annum and (z) at the time of
incurrence of such Indebtedness pursuant to this clause (l), on a pro forma
basis for such incurrence, the Secured Leverage Ratio shall not exceed
2.50:1.00.

SECTION 9.02    Limitation on Liens. Without limitation of the rights of the
Loan Parties under Section 8.22, each Loan Party will not, directly or
indirectly, create, incur, assume or suffer to exist any Lien upon any property
or assets of any kind (real or personal, tangible or intangible) of any such
Person (including its Capital Stock), whether now owned or hereafter acquired,
except for the following (collectively, “Permitted Liens”):

(a)    Liens securing payment of the Obligations;

(b)    Liens existing as of the Closing Date and listed on Schedule 9.02,
securing Indebtedness permitted under Section 9.01(b); provided that (i) no such
Lien shall encumber any additional property not encumbered as of the Closing
Date, (ii) the amount of Indebtedness secured by such Lien shall not be
increased from the amount outstanding on the Closing Date and (iii) the term of
such Indebtedness shall not be extended from that existing on the Closing Date
(provided that such Indebtedness may be permanently reduced subsequent to the
Closing Date);

(c)    Liens securing Indebtedness of the type permitted under Section 9.01(c);
provided that (i) such Lien is granted within ninety (90) days after such
Indebtedness is incurred, and (ii) such Lien secures only the assets that are
the subject of the Indebtedness referred to in Section 9.01(c);

(d)    Liens arising by operation of law in favor of carriers, warehousemen,
mechanics, materialmen and landlords incurred in the ordinary course of business
for amounts not yet overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been established on its books and which would not result in a breach
of Section 8.04;

(e)    Liens incurred or deposits made in the ordinary course of business in
connection with worker’s compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, bids, leases or other similar obligations (other than for
borrowed money) entered into in the ordinary course of business or to secure
obligations on surety, appeal or performance bonds;

(f)    judgment Liens in existence for less than thirty (30) days after the
entry thereof, or with respect to which execution has been stayed or the payment
of which is covered in full by insurance maintained with responsible insurance
companies, or which judgment Liens do not otherwise result in an Event of
Default under Section 10.01(i);

(g)    easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering in any
material respect with the value or use of the property to which such Lien is
attached;

(h)    Liens for Taxes, assessments or other governmental charges or levies not
yet due and payable, or that are being diligently contested in good faith by
appropriate proceedings where the execution or enforcement of such Lien has been
stayed and for which adequate reserves in accordance with GAAP shall have been
established on its books;

 

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(i)    Liens arising in the ordinary course of business by virtue of any
contractual, statutory or common law provision relating to banker’s Liens,
rights of set-off or similar rights and remedies covering deposit or securities
accounts (including funds or other assets credited thereto) or other funds
maintained with a depository institution or securities intermediary; provided
that the applicable provisions of Section 4.02(a)(iii) have been complied with
in respect of such deposit or securities accounts;

(j)    any interest or title of a lessor, licensor or sublessor under any lease,
license or sublease entered into by any such Loan Party in the ordinary course
of its business and covering only the assets so leased, or subleased;

(k)    Liens of sellers of goods to such Person arising under Article II of the
UCC or similar provisions of Applicable Law in the ordinary course of business,
covering only the goods sold or securing only the unpaid purchase price of such
goods and related expenses to the extent such Indebtedness is permitted
hereunder;

(l)    Liens on insurance policies and the proceeds thereof securing the
financing of premiums with respect thereto, to the extent permitted under
Section 9.01(e);

(m)    precautionary Uniform Commercial Code filings made by a lessor pursuant
to an operating lease of a Loan Party entered into in the ordinary course of
business;

(n)    Liens on “Working Capital Priority Collateral” and “Working Capital
Secondary Collateral” (as each such term is defined in the Intercreditor
Agreement as in effect on the Closing Date) that secure Indebtedness of any Loan
Party under Credit Facilities or any indenture incurred pursuant to and in
accordance with Section 9.01(h) and which are subject to the Intercreditor
Agreement or a replacement intercreditor agreement in substantially the same
form or which is otherwise acceptable to the Required Lenders in their sole
discretion;

(o)    Liens on cash or Cash Equivalents used to secure letters of credit
outstanding pursuant to Section 9.01(k); and

(p)    other Liens with respect to which the aggregate amount of the obligations
secured thereby does not exceed $1,000,000 at any time outstanding.

SECTION 9.03    Consolidation, Merger, etc.. Each Loan Party will not liquidate
or dissolve, consolidate with, or merge into or with, any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any
Person or any division of any Person; provided, however, that (a) any Loan Party
may liquidate or dissolve voluntarily into, and may merge with and into, the
Borrower, so long as the Borrower is the surviving entity, (b) any Guarantor may
liquidate or dissolve voluntarily into, and may merge with and into, any other
Guarantor, (c) the assets or Capital Stock of any Loan Party may be purchased or
otherwise acquired by the Borrower and (d) the assets or Capital Stock of any
Guarantor may be purchased or otherwise acquired by any Loan Party.

SECTION 9.04    Permitted Dispositions. Each Loan Party will not make a
Disposition, or enter into any agreement to make a Disposition, of such Loan
Party’s or such other Person’s assets (including Accounts and Capital Stock of
Subsidiaries) to any Person in one transaction or a series of transactions,
unless such Disposition either:

(a)    is in the ordinary course of its business and is of obsolete, worn out or
surplus property or property not presently used or useful in its business;

 

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(b)    is for fair market value and the following conditions are met:

(i)    the aggregate amount of Dispositions of Collateral during any fiscal year
does not exceed $20,000,000;

(ii)    immediately prior to and immediately after giving effect to such
Disposition, (x) the Borrower shall be in compliance with the covenant set forth
in Section 9.13(c) (for purposes of this Section 9.04(b)(ii), tested immediately
prior to and after giving effect to such Disposition) and (y) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;

(iii)    the Borrower applies any Net Disposition Proceeds arising therefrom
pursuant to Section 4.02(a)(ii); and

(iv)    the entirety of the consideration received for such sale, transfer,
lease, contribution or conveyance is received in cash;

(c)    is a sale of Inventory in the ordinary course of business;

(d)    is the leasing, as lessor, of real or personal property not presently
used or useful in such Person’s business and is otherwise in the ordinary course
of business;

(e)    is a sale or disposition of equipment or other assets, to the extent that
such equipment is exchanged for credit against the purchase price of similar
replacement equipment or assets or the proceeds of such Dispositions are
reasonably promptly applied to the purchase price of similar replacement
equipment, all in the ordinary course of business and in accordance with
Section 4.02(a)(ii);

(f)    is an abandonment, failure to renew, or other disposition in the ordinary
course of business of any IP Rights that are not material to the conduct of the
business of any Loan Party;

(g)    is otherwise permitted by Section 9.03;

(h)    is by any Loan Party to any Loan Party;

(i)    is the Disposition of any assets of PHI Air Medical, L.L.C., and
immediately prior to and immediately after giving effect to such Disposition,
the Borrower shall be in compliance with the covenant set forth in
Section 9.13(c) (to the extent then applicable);

(j)    is a sale or disposition pursuant to the terms of a Disclosed Existing
Sublease; or

(k)    is a Disposition in connection with the replacement of any Parts or
Engine in accordance with the terms of the Aircraft Collateral Mortgage.

SECTION 9.05    Investments. Each Loan Party will not purchase, make, incur,
assume or permit to exist any Investment in any other Person, except:

(a)    Investments existing on the Closing Date and listed on Schedule 9.05;

(b)    Investments in cash and Cash Equivalents;

 

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(c)    Investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of business;

(d)    Investments by way of contributions to capital or purchases of Capital
Stock by any Loan Party in any of its Subsidiaries that are Loan Parties;

(e)    Investments constituting (i) Accounts arising, (ii) trade debt granted,
or (iii) deposits made, in connection with the purchase price of goods or
services, in each case in the ordinary course of business;

(f)    Investments consisting of any deferred portion of the sales price
received by any Loan Party in connection with any Disposition permitted under
Section 9.04;

(g)    other Investments in an aggregate principal amount at any time not to
exceed $5,000,000;

(h)    the maintenance of deposit accounts in the ordinary course of business;
and

(i)    Guaranty Obligations permitted by Section 9.01(d).

SECTION 9.06    Restricted Payments. Each Loan Party will not make any
Restricted Payment, or make any deposit for any Restricted Payment, except
pursuant to final order entered in the Chapter 11 Cases, including any order
confirming a plan of reorganization in the Chapter 11 Cases.

SECTION 9.07    Payments and of Indebtedness; Cancellation of Indebtedness.

(a)    Except to the extent permitted by Section 9.06, each Loan Party will not,
and will not permit any of its Subsidiaries to, make any payment on account of
Indebtedness that has been contractually subordinated in right of payment to the
Obligations, if such payment is not permitted at such time in accordance with
the Subordination Requirements.

(b)    Each Loan Party will not forgive, cancel, settle or otherwise forfeit any
amount, in whole or in part, owing to it as of the Closing Date or at any time
thereafter other than in the ordinary course of business.

(c)    Except to the extent permitted by Section 9.06, each Loan Party will not,
and will not permit any of its Subsidiaries to, make any cash payment of
principal in respect of Indebtedness incurred under Section 9.01(i)(ii).

SECTION 9.08    Modification of Certain Agreements. Each Loan Party will not
amend, supplement, waive, otherwise modify, or forbear from exercising any
rights with respect to the terms or provisions of, or consent to any amendment,
supplement, waiver, other modification or forbearance from exercising any rights
with respect to the terms or provisions of:

(a)    any Material Contract governing indebtedness or any Organization
Document, in each case, (i) other than any amendment, supplement, waiver,
modification or forbearance that is not materially adverse to the Secured
Parties, taken as a whole, in their capacity as such, as reasonably determined
by the Administrative Agent and (ii) unless the Administrative Agent has
received at least five (5) Business Days’ prior written notice of such proposed
amendment, supplement, waiver, other modification or forbearance, and in each
case the terms thereof; or

 

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(b)    any document, agreement or instrument evidencing or governing any
Indebtedness that has been subordinated to the Obligations in right of payment
or any Liens that have been subordinated in priority to the Liens of the
Collateral Agent, unless such amendment, supplement, waiver, other modification
or forbearance is expressly permitted under the terms of the subordination
agreement applicable thereto.

SECTION 9.09    Sale and Leaseback. Each Loan Party will not directly or
indirectly, enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person and
the subsequent lease or rental of such property or other similar property from
such Person.

SECTION 9.10    Transactions with Affiliates. Each Loan Party will not enter
into or cause or permit to exist any arrangement, transaction or contract
(including for the purchase, lease or exchange of property or the rendering of
services) with any Affiliate except: (a) the Thirty Two Loan Agreement and any
Permitted Refinancing thereof (b) to the extent disclosed in writing in advance
to the Administrative Agent, on fair and reasonable terms no less favorable to
such Loan Party than such Person could obtain in an arm’s-length transaction
with a Person that is not an Affiliate and not involving payments to or from any
Loan Party in an aggregate amount in excess of $100,000, (c) any transaction
expressly permitted under Section 9.03, Section 9.05 or Section 9.06, and (d) so
long as it has been approved by an independent committee (provided such
committee is independent within the meaning of the relevant policy promulgated
by the New York Stock Exchange, as in effect as of the Funding Date) the
Borrower’s board of directors or other governing body to the extent required in
accordance with Applicable Law, (i) customary indemnifications of non-officer
directors of the Loan Parties and (ii) the payment of reasonable and customary
compensation and indemnification arrangements and benefit plans for officers and
employees of the Loan Parties in the ordinary course of business.

SECTION 9.11    Restrictive Agreements, etc.. Each Loan Party will not enter
into any agreement (other than a Loan Document) prohibiting or conflicting with
any right granted hereunder with respect to:

(a)    the creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired (other than documentation
related to Permitted Liens);

(b)    the ability of such Person to amend or otherwise modify any Loan
Document; or

(c)    the ability of such Person to make any payments, directly or indirectly,
to the Borrower, including by way of dividends, advances, repayments of loans,
reimbursements of management and other intercompany charges, expenses and
accruals or other returns on investments;

provided, however, that the foregoing prohibitions shall not apply to customary
restrictions of the type described in clause (a) above (which do not prohibit
the Loan Parties from complying with or performing the terms of this Loan
Agreement and the other Loan Documents) which are contained in any agreement,
(i) governing any Indebtedness permitted by Section 9.01(c) as to the transfer
of assets financed with the proceeds of such Indebtedness, (ii) for the creation
or assumption of any Lien on the sublet or assignment of any leasehold interest
of any Loan Party entered into in the ordinary course of business, (iii) for the
assignment of any contract entered into by any Loan Party in the ordinary course
of business or (iv) for the transfer of any asset pending the close of the sale
of such asset pursuant to a Disposition permitted under this Loan Agreement.

SECTION 9.12    Changes in Name, Form, Business and Fiscal Year. Each Loan Party
will not:

 

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(a)    engage in any business activity other than the business it is engaged in
as of the Closing Date, and any business reasonably related, supplemental,
complimentary, ancillary or incidental thereto;

(b)    modify or change its fiscal year or taxable year to end other than on
December 31 of each year;

(c)    modify or change its method of accounting in any material respect except
as may be required to conform to GAAP;

(d)    establish new business locations or change its business locations;

(e)    change its legal form;

(f)    change its jurisdiction of organization; or

(g)    change its name as it appears in official filings in its jurisdiction of
organization;

in the case of clauses (d), (e), (f) and (g), unless, at least thirty (30) days
prior thereto (or such other time period as agreed by the Administrative Agent),
written notice has been provided to the Administrative Agent and the
Administrative Agent has acknowledged that all actions required by the
Administrative Agent or the Collateral Agent, including those to continue the
perfection of any Liens, have been completed.

SECTION 9.13    Financial Covenants. The Loan Parties will not permit:

(a)    Minimum Liquidity. Liquidity, as of the last day of any calendar month,
to be less than $20,000,000.

(b)    Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the last day of any fiscal quarter of the Borrower, commencing with the first
full fiscal quarter ending following the Effective Date, to be less than the
Fixed Charge Coverage Ratio set forth below opposite such Test Period:

 

Test Period (if applicable)

   Fixed Charge Coverage Ratio  

On or prior to March 31, 2020

     0.0000:1.00  

June 30, 2020 through September 30, 2020

     0.1875:1.00  

December 31, 2020 through March 31, 2021

     0.3750:1.00  

June 30, 2021 through September 30, 2021

     0.9125:1.00  

December 31, 2021 and thereafter

     1.2000:1.00  

(c)    Secured Leverage Ratio. The Secured Leverage Ratio, as of the last day of
each Test Period set forth below, commencing with the first full fiscal quarter
ending following the Effective Date, to be greater than the Secured Leverage
Ratio set forth below opposite such Test Period:

 

Test Period (if applicable)

   Secured Leverage Ratio  

On or prior to September 30, 2020

     4.50:1.00  

December 31, 2020 through September 30, 2021

     4.25:1.00  

December 31, 2021 through December 30, 2022

     4.00:1.00  

December 31, 2022 and thereafter

     3.75:1.00  

 

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(d)    Total Appraisal Ratio. The Total Appraisal Ratio, as of the last day of
any calendar month, to be less than 4.00:1.00.

SECTION 9.14    Loan Party Indebtedness Subordination. Notwithstanding anything
in this Loan Agreement to the contrary, no Loan Party shall create, incur or
permit to remain outstanding any Indebtedness owing to any Loan Party or any
Subsidiary or Affiliate of any Loan Party in each case unless such Indebtedness
is expressly subordinated to the Obligations in writing in a manner and on terms
satisfactory to the Administrative Agent.

SECTION 9.15    Location of Aircraft.

(a)    The Borrower will not permit any Aircraft registered in the United States
of America to land or be shipped outside of the United States of America without
the prior written consent of the Administrative Agent.

(b)    The Borrower will not permit any Aircraft registered in any country other
than the United States of America to land or be shipped outside the country in
which it is registered unless (i) the country to which such Aircraft is landing
or being shipped is subject to the Cape Town Convention and (ii) the Agents
receive an opinion of counsel, reasonably satisfactory to the Agents acting at
the direction of the Lenders, that the security interest granted to the
Collateral Agent in respect of such Aircraft remains and/or will remain
perfected following such landing or shipment.

SECTION 9.16    Economic Sanctions/OFAC. The Borrower shall not (i) use, permit
the Borrower or any of its Subsidiaries to use, or permit any of its or any of
their respective directors, officers, employees, representatives or agents to
use, any proceeds of any Term Loans, directly or indirectly, or (ii) lend,
contribute or otherwise make available any proceeds of any Term Loans, directly
or indirectly, to any Person: (x) to fund, finance or facilitate any activity,
business or transaction of or with any Sanctioned Person or in any Sanctioned
Country, to the extent such activity, businesses or transaction would be
prohibited by Sanctions if conducted by a corporation incorporated in the United
States; or (y) in any manner that could reasonably be expected to result in a
violation of any Sanctions (including OFAC Sanctions) applicable to a Loan
Party, a Subsidiary of a Loan Party, or a Secured Party.

SECTION 9.17    Anti-Terrorism Laws; Foreign Corrupt Practices Act. No Loan
Parties shall, and no Loan Party shall permit and of its Subsidiaries to, fail
to comply with any Anti-Terrorism Law or other Law referred to in Section 7.30
or Section 7.32.

SECTION 9.18    Use of Proceeds. No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, use any portion of the Loan proceeds,
directly or indirectly, to purchase or carry Margin Stock or repay or otherwise
refinance Indebtedness of any Loan Party or others incurred to purchase or carry
Margin Stock, or otherwise in any manner which is in contravention of any Law or
in violation of this Loan Agreement.

SECTION 9.19    Acquisitions and Foreign Subsidiaries. Except for permitted
Investments, no Loan Party shall purchase or otherwise acquire or become
obligated for the purchase of all or substantially all of the assets or business
interests or a division or other business unit of any Person, or a majority of
the voting Capital Stock of any Person, or any business or going concern; and

SECTION 9.20    Stay, Extension or Usury Laws. The Loan Parties shall not at any
time, to the extent it is lawful, insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage

 

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of, any stay or extension law or any usury law or other law that would prohibit
or forgive any of the Loans and other Obligations hereunder, wherever such laws
may be enacted, now or at any time hereafter in force, or which may limit the
Loan Parties performance of this Loan Agreement; and, to the extent that it may
lawfully do so, each Loan Party expressly waives and shall waive all benefits or
advantages of any such law, unless agreed by both Parties.

ARTICLE X

EVENTS OF DEFAULT

SECTION 10.01    LISTING OF EVENTS OF DEFAULT. Each of the following events or
occurrences described in this Section 10.01 shall constitute an “Event of
Default”:

(a)    Non-Payment of Obligations. The Borrower shall default in the payment of:

(i)    any principal of any Loan when such amount is due; provided that no Event
of Default under this clause (a) shall result from a Lender declining a payment
in writing in accordance with Section 4.05; or

(ii)    any interest on any Loan and such default shall continue unremedied for
a period of three (3) Business Days after such amount is due; or

(iii)    any fee described in Article III or any other monetary Obligation, and
such default shall continue unremedied for a period of three (3) Business Days
after such amount is due.

(b)    Breach of Representation or Warranty. Any representation or warranty made
or deemed to be made by any Loan Party in any Loan Document (including any
certificate delivered pursuant to Article V or Article VI) is or shall be
incorrect in any material respect on or as of the date when made or deemed to
have been made (or, in the case of any representation or warranty that is
already qualified in the text thereof as to “materiality”, “Material Adverse
Effect”, any dollar-based threshold, or similar language, is or shall be
incorrect in any respect on or as of the date when made or deemed to have been
made).

(c)    Non-Performance of Certain Covenants and Obligations. Any Loan Party
shall default in the due performance or observance of any of its obligations
under, Section 8.01, Section 8.02, Section 8.09, Section 8.12, Section 8.16,
Section 8.20, Section 8.27 or Article IX, or any Loan Party shall default in the
due performance or observance of its obligations under any covenant applicable
to it under the Guaranty and Security Agreement.

(d)    [Reserved].

(e)    Non-Performance of Other Covenants and Obligations. Any Loan Party shall
default in the due performance and observance of any obligation contained in any
Loan Document executed by it (other than as specified in Sections 10.01(a)
through (d)), and such default shall continue unremedied for a period of fifteen
(15) Business Days after the occurrence thereof.

(f)    The Chapter 11 Cases initiated by the Loan Parties shall be dismissed or
converted to a case under Chapter 7 of the Bankruptcy Code.

 

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(g)    A trustee under Chapter 11 of the Bankruptcy Code or an examiner with
enlarged powers relating to the operation of the business (powers beyond those
set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code shall be appointed in the Chapter 11
Cases.

(h)    [Reserved].

(i)    Judgments. Any judgment, order or court-approved settlement for the
payment of money individually or in the aggregate in excess of $2,500,000
(exclusive of any amounts fully covered by insurance (less any applicable
deductible) and as to which the insurer has acknowledged its responsibility to
cover such judgment, order or court-approved settlement) shall be rendered
against any Loan Party or any Subsidiary of any Loan Party and such judgment,
order or court-approved settlement shall not have been paid, vacated or
discharged or stayed or bonded pending appeal within thirty (30) days after the
entry thereof or enforcement proceedings shall have been commenced by any
creditor upon such judgment, order or court-approved settlement.

(j)    Plans. One or more ERISA Events shall occur that results or could
reasonably be expected to result in a liability to or obligation of such Plan or
any of the Loan Parties or any Subsidiary of any of the Loan Parties
(individually or collectively) in excess of $2,500,000 in the aggregate.

(k)    [Reserved]

(l)    take any action authorizing, or in furtherance of, any of the foregoing.

(m)    Impairment of Security, etc. Any Loan Document or any Lien with respect
to more than $2,500,000 of the Collateral granted under any Loan Document shall,
in whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Loan Party thereto (other than
as the result of the action or inaction of the Administrative Agent), or any
Loan Party shall, directly or indirectly, contest, deny or limit in any manner
such effectiveness, validity, binding nature or enforceability; or, except as
expressly permitted under any Loan Document, any Lien with respect to more than
$2,500,000 of the Collateral securing any Obligation shall, in whole or in part,
cease to be a valid and perfected Lien (other than as the result of the action
or inaction of the Administrative Agent, the Collateral Agent or the Lenders),
or shall become subordinated to any Lien not securing any Obligation, or any
Loan Party or any Affiliate of any Loan Party shall assert that any Lien
securing any Obligation shall, in whole or in part, ceases to be a valid or
perfected Lien.

(n)    Change of Control. The occurrence of a Change of Control.

(o)    Restraint of Operations; Loss of Assets. If any Loan Party or any
Subsidiary of a Loan Party is enjoined, restrained or in any way prevented by
court order or other Governmental Authority from continuing to conduct all or
any material part of its business affairs, or if any material portion of any
Loan Party’s or any Loan Party’s Subsidiary’s assets is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any third Person and the same is not discharged before the earlier
of forty-five (45) days after the date it first arises or five (5) days prior to
the date on which such property or asset is subject to forfeiture by such Loan
Party or the applicable Subsidiary.

(p)    Invalidity of Subordination Provisions. The subordination provisions of
any agreement or instrument governing any Indebtedness required to be
subordinated to the Obligations pursuant to the terms hereof shall for any
reason be revoked or invalidated, or otherwise cease to be in full

 

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force and effect, or any Loan Party shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder, or the Obligations, for any reason shall not have the priority
contemplated by this Loan Agreement or such subordination provisions.

(q)    Airworthiness. The certificate of airworthiness with respect to an
Aircraft in the applicable Country of Registration (other than those subject to
a Disclosed Sublease) is not granted or is revoked, suspended, withdrawn or
terminated.

(r)    [RESERVED]

(s)    Seizure. An Aircraft is arrested, confiscated, seized, taken in
execution, impounded, forfeited or detained, in each case in exercise or
purported exercise of any possessory lien or other claim or is otherwise taken
from a Loan Party or applicable Disclosed Sublessee (otherwise than in
circumstances which constitute or would with the passage of time constitute a
Total Loss) and the Aircraft is not released within thirty (30) calendar days
thereof.

(t)    Disclosed Subleases. An event of default (howsoever described) occurs and
is continuing under a Disclosed Sublease as a result of any act or omission by
any Loan Party or any of their Subsidiaries.

SECTION 10.02    Remedies Upon Event of Default.

(a)    [Reserved]

(b)    If any Event of Default shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Administrative Agent may, and upon the
direction of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare all or any portion of the outstanding principal amount of
the Term Loans and other Obligations to be due and payable applicable to the
date such Event of Default occurs, and any commitments shall be terminated,
whereupon the full unpaid amount of such Term Loans and other Obligations that
shall be so declared due and payable shall be and become immediately due and
payable, in each case, without further notice, demand or presentment.

(c)    Upon the occurrence of any Event of Default, the Collateral Agent and its
representatives and agents, to the extent permitted by Law may:

(i)    take steps to effect the deregistration of the Aircraft with the Aviation
Authority and the export of the Aircraft from the Country of Registration;

(ii)    have the right to enter upon any premises where they reasonably believes
an Aircraft , the Airframe, any Engine, any Part or the Aircraft Documents to be
located, including any premises owned by a Loan Party or under a Loan party’s
control, and take immediate possession of and, at its sole option, remove the
same (and any engine or part which is not an Engine or Part but which is
installed on an Airframe, subject to the rights of the owner, lessor or secured
person thereof) with or without any judicial proceedings;

(iii)    not be liable, in conversion or otherwise, for the taking of any
personal property of a Loan Party or any other person which is in or attached to
an Aircraft, an Airframe, an Engine or Part or included among the Aircraft
Documents which is or are repossessed; provided, however, that it shall return
to the Loan or such other person at the Loan Party’s

 

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expense all such personal property belonging to the Loan Party or such other
person in a condition in which it was so taken from the Loan Party or such other
person; and

(iv)    not be liable or responsible, in any manner, for any inadvertent damage
or injury to any of Loan Party property in repossessing and holding an Aircraft,
an Airframe, any Engine, any Part or the Aircraft Documents, except for any
damage caused by or in connection with its gross negligence or willful
misconduct.

(d)    Upon the occurrence of any Event of Default, which is continuing, if
required by the Collateral Agent, each Loan Party shall make each Aircraft, each
Airframe, any Engine, any Part and the Aircraft Documents available at a place
designated by Collateral Agent within the Country of Registration for inspection
and repossession.

(e)    Without prejudice to the remedies otherwise available hereunder or under
any Loan Document or otherwise under applicable Law, the parties hereby agree
that:

(i)    The Collateral Agent may apply any and all remedies available to lessors
under the Cape Town Convention (including, without limitation, (i) the remedies
provided under Article IX of the Aircraft Protocol and (ii) obtaining from a
court speedy relief in the form of any one or more orders provided under the
Cape Town Convention);

(ii)    Article 13(2) of the Cape Town Convention shall not apply to this Loan
Agreement; and

(iii)    Collateral Agent may exercise the rights and remedies referred to in
the Loan Documents but so that if any provision of a Loan Document conflicts any
term of the Cape Town Convention which is not mandatory, the provisions of that
Loan Document shall prevail.

(f)    The Lenders, the Administrative Agent and the Collateral Agent shall have
all other rights and remedies available at law or in equity or pursuant to this
Loan Agreement or any other Loan Document. The rights and remedies of the
Lenders under this Loan Agreement, the other Loan Documents, and all other
agreements shall be cumulative. No exercise by the Lender Group of one right or
remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver. No delay by the Lender
Group shall constitute a waiver, election, or acquiescence by it.

ARTICLE XI

THE AGENTS

SECTION 11.01    Appointments.

(a)    Each Lender and each other Secured Party hereby appoints Blue Torch
Finance LLC, a Delaware limited liability company, as its Administrative Agent
under and for purposes of each Loan Document, and hereby authorizes the
Administrative Agent to act on behalf of such Secured Party under each Loan
Document and, in the absence of other written instructions from the Lenders
pursuant to the terms of the Loan Documents received from time to time by the
Administrative Agent, to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof, together with such powers as may be incidental thereto.

 

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(b)    Each Lender and each other Secured Party hereby appoints Blue Torch
Finance LLC, a Delaware limited liability company, as (x) its Collateral Agent
under and for purposes of each Loan Document, and hereby authorizes the
Collateral Agent to act on behalf of such Secured Party under each Loan Document
and, in the absence of other written instructions from the Lenders pursuant to
the terms of the Loan Documents received from time to time by the Collateral
Agent, to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Collateral Agent by the terms hereof and
thereof, together with such powers as may be incidental thereto and (y) its
nominee for the purposes of section 153 of the PPSA, and authorizes the
Collateral Agent to act on its behalf, in connection with any registration under
the PPSA of any security interest in its favor in respect of any Loan Document
or item of Collateral. The Collateral Agent hereby acknowledges that it holds
(i) the sum of $10.00, (ii) all right, title and interest of the Collateral
Agent under the Loan Documents (other than, in the case of other Loan Documents,
those held in a personal capacity) including all money recovered under them
(whether on enforcement or otherwise) and (iii) all other property acquired by
the Collateral Agent and intended to be held for the benefit of a Lender or
other Secured Party on the trust established under this deed (such property
referred to in (i), (ii) and (iii), the “Trust Fund”) and will hold the Trust
Fund on trust for each Lender and each other Secured Party from time to time in
accordance with the terms of this Loan Agreement and each other Loan Document.
The trust established under this document commences on the date of this document
and, unless terminated at an earlier date, terminates on the eightieth
anniversary of the date of this Loan Agreement.

(c)    Each Lender and each other Secured Party hereby directs the
Administrative Agent and Collateral Agent to execute and deliver the Loan
Documents (including any intercreditor agreements and subordination agreements
contemplated hereby and, in each case, any amendments, supplements and other
modifications thereto not prohibited by the terms of the Loan Agreement) on
behalf of such Secured Party, in all cases in such form as the applicable Agent
shall determine. Upon execution and delivery of the Loan Documents by an Agent,
each Secured Party shall be bound by the terms and conditions thereof. Without
limiting the foregoing, the Administrative Agent is hereby expressly authorized
to execute and deliver any and all such documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the terms and conditions of
this Loan Agreement and the other Loan Documents. For purposes of determining
compliance with, and satisfaction of, the conditions specified in Article V,
each Lender that has signed this Loan Agreement (or an Assignment and
Acceptance, as applicable) shall be deemed to have consented to, approved,
accepted and be satisfied with, each document or other matter required
thereunder to be consented to, approved by or otherwise satisfactory or
acceptable to such Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the Closing Date specifying such
Lender’s objection thereto.

(d)    Each Lender and each other Secured Party hereby irrevocably designates
and appoints each Agent as the agent of such Lender. Notwithstanding any
provision to the contrary elsewhere in this Loan Agreement, (i) each Agent is
acting solely on behalf of the Secured Parties and with duties that are entirely
administrative in nature, notwithstanding the use of the terms “Administrative
Agent,” “Collateral Agent,” “Agent,” and “agent,” which terms are used for title
purposes only, and (ii) no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender or other Secured Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Loan Agreement or any other Loan Document or otherwise exist against any Agent.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
each Loan Party, the Administrative Agent, the Collateral Agent and each Secured
Party hereby agree that (i) no Secured Party shall have any right individually
to realize upon any of the Collateral or to enforce the Guaranty and Security
Agreement or any other Security Documents, it being understood and agreed that
all powers, rights and remedies hereunder or thereunder may be exercised solely
by the Administrative Agent and Collateral Agent, on behalf of the Secured
Parties, in accordance

 

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with the terms hereof or thereof, as applicable, and (ii) in the event of a
foreclosure by the Administrative Agent or the Collateral Agent on any of the
Collateral pursuant to a public or private sale or other disposition, any Agent
or any Lender may be the purchaser or licensor of any or all of such Collateral
at any such sale or other disposition and each Agent as agent for and
representative of the Secured Parties (but not any Lender or Lenders in its or
their respective individual capacities), shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations (including Obligations owed to any other Secured Party) as a
credit on account of the purchase price for any Collateral payable by such Agent
at such sale or other disposition, the Lenders hereby agreeing that they may not
exercise any right to credit bid at any public or private foreclosure sale or
other disposition of Collateral unless instructed to do so by the applicable
Agent in writing.

SECTION 11.02    Delegation of Duties. Each Agent may execute any of its duties
under this Loan Agreement and the other Loan Documents by or through agents or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in fact selected by it with
reasonable care.

SECTION 11.03    Exculpatory Provisions. Neither an Agent nor any of their
respective officers, directors, employees, agents, attorneys in fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Loan Agreement or
any other Loan Document (including that any Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Bankruptcy Code), except to the extent that any of the
foregoing are found by a final, non-appealable order of a court of competent
jurisdiction to have resulted from its or such Person’s (as applicable) own
gross negligence or willful misconduct, or (b) responsible in any manner to any
of the Lenders or any other Secured Party for any recitals, statements,
representations or warranties made or deemed made by or on behalf of any Loan
Party or any officer thereof in this Loan Agreement or any other Loan Document
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection with, this
Loan Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Loan Agreement
or any other Loan Document or for any failure of any Loan Party or other Person
to perform its obligations hereunder or thereunder. The Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Loan Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

SECTION 11.04    Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
the Loan Parties), independent accountants and other experts selected by such
Agent. The Agents may deem and treat the payee of any note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agents. Each Agent shall be fully
justified in failing or refusing to take any action under this Loan Agreement or
any other Loan Document unless it shall first receive such advice or concurrence
of Required Lenders (or, if so specified by this Loan Agreement, all or other
requisite Lenders) as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
The Agents shall in all cases be fully protected in acting, or in refraining
from acting, under

 

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this Loan Agreement and the other Loan Documents in accordance with a request of
the Required Lenders (or, if so specified by this Loan Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans and all
other Secured Parties.

SECTION 11.05    Notice of Default. No Administrative Agent shall be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
unless the Administrative Agent has received written notice from a Lender or the
Borrower referring to this Loan Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default”. The Collateral
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Collateral Agent has received notice from
a Lender or the Borrower referring to this Loan Agreement, describing such
Default or Event of Default, and stating that such notice is a “notice of
default”. In the event that an Agent receives such a notice, such Agent shall
give notice thereof to the other Agent and the Lenders. Each Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this Loan
Agreement, all Lenders or any other instructing group of Lenders specified by
this Loan Agreement); provided that unless and until the applicable Agent shall
have received such directions, such Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as such Agent shall deem advisable in the best
interests of the Secured Parties.

SECTION 11.06    Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys in fact or Affiliates have made any
representations or warranties to such Lender and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
Affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Secured Party. Each Lender represents to the Agents
that such Lender has, independently and without reliance upon any Agent or any
other Lender or any other Secured Party, and based on such documents and
information as it has deemed appropriate, made its own appraisal of, and
investigation into, the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their Affiliates and made
its own decision to enter into this Loan Agreement and make its Loans hereunder.
Each Lender also represents that it will, independently and without reliance
upon any Agent or any other Lender or any other Secured Party, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Loan Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their Affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by any Agent
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender or any other Secured Party with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys in fact or Affiliates.

SECTION 11.07    Indemnification by Lenders. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Loan Parties
and without limiting the obligation of the Loan Parties to do so), ratably
according to their respective Total Credit Exposure in effect on the date on
which indemnification is sought under this Section 11.07 (or, if indemnification
is sought after the date upon which the Commitments shall have terminated and
the Loans shall have been paid in full, ratably in accordance with such Total
Credit Exposure immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or

 

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disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans) be imposed on, incurred by, or asserted against,
such Agent in any way relating to or arising out of, the Commitments, this Loan
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by such Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final,
non-appealable order of a court of competent jurisdiction to have resulted from
such Agent’s gross negligence or willful misconduct. The agreements in this
Section 11.07 shall survive the payment of the Loans and all other amounts
payable hereunder.

SECTION 11.08    Agents in their Individual Capacities. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party, and any Affiliate of any Loan Party, all
as though such Agent were not an Agent. With respect to its Loans made or
renewed by it, each Agent shall have the same rights and powers under this Loan
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms “Lender”, “Lenders”, “Secured
Party” and “Secured Parties” shall include each Agent in its individual
capacity.

SECTION 11.09    Successor Agents.

Either Agent may resign as Agent upon thirty (30) days’ written notice to the
Lenders, the other Agent and the Borrower; provided that either Agent may resign
as an Agent immediately upon written notice to the Lenders, the other Agent and
the Borrower if a Default or Event of Default has occurred and is continuing. If
either Agent shall resign as such Agent in its applicable capacity under this
Loan Agreement and the other Loan Documents, then Required Lenders shall appoint
from among the Lenders a successor agent, which shall be a bank with an office
in the United States or an Affiliate of any such bank with an office in the
United States, which successor agent shall (unless an Event of Default shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld, delayed, conditioned or burdened),
whereupon such successor agent shall succeed to the rights, powers and duties of
such Agent in its applicable capacity, and the term “Administrative Agent” or
“Collateral Agent”, as applicable, shall thereafter mean such successor agent
effective upon such appointment and approval, and the former Agent’s rights,
powers and duties as Agent in its applicable capacity shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the other parties to this Loan Agreement or any holders of the Loans. If no
successor agent has accepted appointment as such Agent in its applicable
capacity by the date upon which such retiring Agent’s notice of resignation is
effective in accordance with the first sentence of this Section 11.09, such
retiring Agent’s resignation shall nevertheless become effective on the
applicable date and the Lenders shall assume and perform all of the duties of
such Agent hereunder until such time, if any, as Required Lenders appoint a
successor agent as provided for above. After any retiring Agent’s resignation as
the Administrative Agent or the Collateral Agent, as applicable, the provisions
of this Article XI shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was an Agent under this Loan Agreement and the other
Loan Documents.

SECTION 11.10    Agents Generally. Except as expressly set forth in this Loan
Agreement or any other Loan Document, no Agent shall have any duties or
responsibilities hereunder in its capacity as such.

SECTION 11.11    Restrictions on Actions by Secured Parties; Sharing of
Payments.

 

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(a)    Each of the Lenders agrees that it shall not, without the express written
consent of the Collateral Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of the Collateral Agent, set off
against the Obligations, any amounts owing by such Lender to any Loan Party or
any of their respective Subsidiaries or any deposit accounts of any Loan Party
or any of their respective Subsidiaries now or hereafter maintained with such
Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by the Collateral Agent or the
Collateral Agent otherwise consents in writing, take or cause to be taken any
action, including the commencement of any legal or equitable proceedings,
judicial or otherwise, to enforce any Loan Document or any right or remedy
against any Loan Party or to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral. The provisions of this
Section 11.11(a) are for the sole benefit of the Secured Parties and shall not
afford any right to, or constitute a defense available to, any Loan Party or
other Person.

(b)    Subject to Section 12.09(b), if at any time or times any Lender receives
(i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or
any payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from the Administrative Agent pursuant to the
terms of this Loan Agreement, or (ii) payments from the Administrative Agent in
excess of such Lender’s pro rata share of all such distributions by the Agents,
then in each such case such Lender promptly shall (A) turn the same over to the
Collateral Agent, in kind, and with such endorsements as may be required to
negotiate the same to the Collateral Agent, or in immediately available funds,
as applicable, for the account of all of the applicable Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Loan Agreement, or (B) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other applicable
Lenders so that such excess payment received shall be applied ratably as among
the applicable Lenders in accordance with their pro rata shares; provided that
to the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

SECTION 11.12    Agency for Perfection. The Collateral Agent hereby appoints
each other Secured Party as its agent and bailee and as sub-agent for the other
Secured Parties (and each Secured Party hereby accepts such appointment) for the
purpose of perfecting all Liens with respect to the Collateral, including with
respect to assets which, in accordance with Article 8 or Article 9, as
applicable, of the Uniform Commercial Code of any applicable state can be
perfected by possession or control. Should any Secured Party obtain possession
or control of any such Collateral, such Secured Party shall notify the
Collateral Agent thereof and, promptly upon the Collateral Agent’s request
therefor, shall deliver possession or control of such Collateral to the
Collateral Agent and take such other actions as agent or sub-agent in accordance
with the Collateral Agent’s instructions to the extent, and only to the extent,
so authorized or directed by the Collateral Agent.

SECTION 11.13    Credit Bid. Each Loan Party, each Lender and the Collateral
Agent each hereby irrevocably authorizes the Administrative Agent or its
designee, based upon the written instruction of Required Lenders, to bid and
purchase for an amount approved by Required Lenders (either directly or through
one or more acquisition vehicles) all or any portion of the Collateral at any
sale thereof conducted (i) by any Agent under the provisions of the UCC,
including pursuant to Sections 9-610 or 9-620 of the UCC, (ii) under the
provisions of the Bankruptcy Code, including Sections 363, 365 and 1129 of the
Bankruptcy Code, or (iii) by any Agent (whether by judicial action or otherwise,
including a foreclosure sale) in accordance with Applicable Law (any such sale
described clauses (i), (ii) or (iii), a “Collateral Sale”), and in connection
with any Collateral Sale, the Administrative Agent or its designee may (with the
consent of Required Lenders) accept non-cash consideration, including debt and
equity securities issued

 

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by such acquisition vehicle under the direction or control of any Agent and the
Administrative Agent may (with the consent of Required Lenders) offset all or
any portion of the Obligations against the purchase price for such Collateral.

SECTION 11.14    One Lender Sufficient. This Loan Agreement shall be and shall
remain in full force and effect, and all agency provisions shall be and shall
remain effective, notwithstanding the fact that from time to time (including on
the Closing Date) there may be only one Lender hereunder and the fact that such
Lender may be the same Person that is serving as the Administrative Agent or the
Collateral Agent hereunder.

ARTICLE XII

MISCELLANEOUS

SECTION 12.01    Amendments and Waivers.

(a)    Neither this Loan Agreement nor any other Loan Document other than the
Fee Letter, nor any terms hereof or thereof, may be amended, supplemented or
modified except in accordance with the provisions of this Section 12.01.

(b)    The Required Lenders may (with a copy to the Administrative Agent), or
with the consent of the Required Lenders, the Administrative Agent may, from
time to time, (a) enter into with the relevant Loan Party or Loan Parties
written amendments, supplements or other modifications hereto and to the other
Loan Documents and (b) waive, on such terms and conditions as the Required
Lenders or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Loan Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that:

(i)    without the prior written consent of each Lender directly and adversely
affected thereby, no such amendment, supplement, other modification or waiver
shall:

(A)    reduce or forgive any portion of any Loan, or extend the final expiration
date of any Lender’s Commitment, or extend the final scheduled maturity date of
any Loan, or reduce the stated interest rate on any Loan; provided that only the
consent of the Required Lenders shall be necessary to waive any obligation of
the Borrower to pay interest at the “default rate” or amend Section 2.05(c),

(B)    reduce or forgive any portion, or extend the date for the payment, of any
interest or fee payable hereunder (other than as a result of waiving the
applicability of any post-default increase in interest rates and other than as a
result of a waiver or amendment of any mandatory prepayment of Loans (which
shall not constitute an extension, forgiveness or postponement of any date for
payment of principal, interest or fees)),

(C)    [reserved],

(D)    amend or modify any provisions of Section 4.02(b), Section 11.11(b),
Section 12.09(a) or any other provision that provides for the pro rata nature of
disbursements by or payments to Lenders, or

 

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(E)    amend, modify or waive any provision of this Section 12.01, or amend or
otherwise modify the term “Required Lenders”;

(ii)    no such amendment, supplement, other modification or waiver shall
consent to the assignment or transfer by any Loan Party of its rights and
obligations under any Loan Document to which it is a party (except as permitted
pursuant to Section 9.03, without the prior written consent of each Lender;

(iii)    no such amendment, supplement, other modification or waiver shall
increase the aggregate amount of any Commitment of any Lender without the prior
written consent of such Lender;

(iv)    no such amendment, supplement, other modification or waiver shall amend,
modify or waive any provision of Article XI without the prior written consent of
then-current Collateral Agent and the Administrative Agent; or

(v)    no such amendment, supplement, other modification or waiver shall without
the prior written consent of each Lender, release all or substantially all of
the Guarantors under the Guaranty and Security Agreement (except as expressly
permitted by the Guaranty and Security Agreement), or release all or
substantially all of the Collateral under the Guaranty and Security Agreement
and the Mortgages (except as expressly permitted thereby and by Section 12.20).

(c)    Notwithstanding anything in Section 12.01(b) to the contrary, the
Administrative Agent and the Loan Parties, without the consent of any Lenders or
any other Loan Parties, may amend, modify or supplement this Loan Agreement or
any other Loan Document (i) solely to correct mistakes or typographical errors
or cure ambiguities, inconsistencies or omissions herein or therein so long as
(x) such amendment, modification or supplement does not materially and adversely
affect the rights of any Lender or (y) the Lenders shall have received at least
five (5) Business Days’ prior written notice thereof and the Administrative
Agent shall not have received, within five (5) Business Days following the date
of such notice to the Lenders, a written notice from the Required Lenders
stating that the Required Lenders object to such amendment, modification or
supplement and (ii) to effect the granting, perfection, protection, expansion or
enhancement of any security interest of the Secured Parties in any Collateral or
additional property to become Collateral for the benefit of the Secured Parties
or as required by local law to give effect to or protect any such security
interests in any property or so that the security interests therein comply with
the Loan Documents or Applicable Law or in each case otherwise enhance the
rights or benefits of any Agent or any Lender under any Loan Document.

SECTION 12.02    Notices and Other Communications.

(a)    Subject to Section 12.02(c) below, all notices and other communications
provided for in, or otherwise given under or in connection with, this Loan
Agreement or any other Loan Document, shall be in writing and shall be delivered
either by hand, by overnight courier service, by certified or registered mail,
by telefacsimile or by email (in portable document format (“pdf”) or tagged
image file format (“TIFF”)) as follows:

 

  (i)

if to any Loan Party, to it at:

PHI, Inc.

2001 SE Evangeline Thruway

Lafayette, LA 70508

 

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Attention: Trudy McConnaughhay

Facsimile No.: 337-235-1357

Email: Tmcconnaughhay@phihelico.com

with a copy (which shall not constitute notice) to:

DLA Piper LLP (US)

1251 Avenue of the Americas

27th Floor

New York, NY 10020

Attention: Thomas R. Califano, Esq.

Facsimile No.: 212-884-8690

Email: Thomas.Califano@dlapiper.com

 

  (ii)

if to the Administrative Agent or the Collateral Agent, to it at:

Blue Torch Finance LLC

c/o Blue Torch Capital LP

430 Park Avenue, Suite 1202

New York, NY 10022

Email: BlueTorchAgency@cortlandglobal.com

with a copy to:

Proskauer Rose LLP

One International Place

Boston, Massachusetts 20110

Attention: Stephen A. Boyko, Esq.

Facsimile No.: (617) 526-9899

Email: sboyko@proskauer.com

 

  (iii)

if to the Initial Blue Torch Lender, to it at:

BTC Holdings Fund I, LLC

c/o Blue Torch Capital LP

430 Park Avenue, Suite 1202

New York, NY 10022

Attention: Gary Manowitz and Ian MacWilliams

Facsimile No.: 19722000339@tls.ldsprod.com and (972) 200-0339

Email: operations@bluetorchcapital.com, gmanowitz@bluetorchcapital.com,
bluetorch.loanops@seic.com, and imacwilliams@seic.com

with a copy to:

SEI – Blue Torch Capital Loan Ops

1 Freedom Valley Drive

Oaks, Pennsylvania 19456

Facsimile No.: (469) 709-1839

Email: bluetorch.loanops@seic.com

 

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with a copy to:

Proskauer Rose LLP

One International Place

Boston, Massachusetts 20110

Attention: Stephen A. Boyko, Esq.

Facsimile No.: (617) 526-9899

Email: sboyko@proskauer.com

(iv)    if to any other Lender, to it at its address, facsimile number or email
address set forth in the Assignment and Acceptance by which such Lender becomes
a party hereto, as applicable.

(b)    Any party hereto may change its address, facsimile number or email
address for notices and other communications hereunder by notice delivered to
all of the other parties hereto in accordance with Section 12.02(a) above.

(c)    All notices and other communications given to any party hereto in
accordance with the provisions of this Loan Agreement shall be deemed to have
been given (i) in the case of notices and other communications delivered by hand
or overnight courier service, upon actual receipt thereof, (ii) in the case of
notices and other communications delivered by certified or registered mail, upon
the earlier of actual delivery and the third Business Day after the date
deposited in the U.S. mail with postage prepaid and properly addressed, (iii) in
the case of notices and other communications delivered by telefacsimile, upon
receipt by the sender of an acknowledgment or transmission report generated by
the machine from which the telefacsimile was sent indicating that the
telefacsimile was sent in its entirety to the recipient’s telefacsimile number
and (iv) in the case of notices and other communications delivered by email,
upon receipt by the sender of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, a return email or other
written acknowledgement); provided, however, that in each case, if a notice or
other communication would be deemed to have been given in accordance with the
foregoing at any time other than during the recipient’s normal business hours on
a Business Day for such recipient, such notice or other communication shall be
deemed given on the next succeeding Business Day for such recipient.

(d)    Each Loan Party and each Secured Party acknowledges and agrees that the
use of electronic transmission in general, and email in particular, is not
necessarily secure and that there are risks associated with the use thereof,
including risks of interception, disclosure and abuse, and each indicates it
assumes and accepts such risks by hereby authorizing the use of electronic
transmission.

(e)    The Agents and the Lenders shall be entitled to rely and act upon any
notices purportedly given by or on behalf of any Loan Party even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.

(f)    Each Loan Party acknowledges, understands and agrees that: (a) some or
all of the Lenders from time to time borrow funds from one or more lenders
pursuant to loan agreements with notice provisions that are strictly enforced by
such lenders; and (b) the provisions in this Loan Agreement and the other Loan
Documents requiring delivery of notices and governing delivery of such notices
(i) are of the essence of this Loan Agreement and such other Loan Documents, and
without such provisions the Lenders would not enter into this Loan Agreement,
(ii) require technical compliance in all respects, not just notice in fact,
whether or not there is any prejudice to a Lender or any other Person, and
(iii) will not be waived, amended or adjusted in any way in the absence of
reasons deemed compelling by the Lenders

 

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in their sole and absolute discretion (compelling reasons shall not include the
desire of a Loan Party to save money), which discretion shall be subject to no
standard of reasonableness or review and shall be evidenced only by a formal
written instrument (and not by an email or series of emails).

SECTION 12.03    No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

SECTION 12.04    Survival of Representations and Warranties. All representations
and warranties made hereunder and in the other Loan Documents shall survive the
execution and delivery of this Loan Agreement and the making of the Loans
hereunder.

SECTION 12.05    Payment of Expenses and Taxes; Indemnification. The Borrower
and each other Loan Party agrees: (a) to pay or reimburse each Agent and each
Lender for all their reasonable and documented costs, fees and expenses incurred
in connection with the development, negotiation, preparation, execution,
delivery and administration of, and any amendment, supplement, or other
modification to, and any waiver of any provision of, and any consent under, this
Loan Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including without limitation such
costs, fees and expenses related to due diligence, lien searches and filing fees
and such costs, fees and expenses in relation to any payoff letter or other
termination agreement and associated lien releases, and including the reasonable
fees, disbursements and other charges of internal and external counsel to the
Agents and internal and external tax professionals, accounting professionals,
and other consultants and advisors, in all cases whether or not the Closing Date
occurs and whether or not the transactions contemplated hereby are consummated;
(b) to pay to each Agent and each Lender the allocated, reasonable and
documented costs, fees and expenses of internal counsel to thereto in connection
with any amendment, supplement, modification, waiver or consent delivered
hereunder, in addition to any other applicable fee that may be payable in
connection with any such amendment, supplement, modification, waiver or consent;
(c) to pay or reimburse each Agent and each Lender for all of their properly
documented costs, fees and expenses incurred thereby and by their Affiliates in
connection with the enforcement or preservation of any rights under this Loan
Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, in connection with any workout, restructuring
or negotiations in respect thereof, in connection with any action to protect,
collect, sell, liquidate or dispose of any Collateral, and in connection with
any litigation, arbitration or other contest, dispute, suit, or proceeding
relating to any of the foregoing, including in each case the fees, disbursements
and other charges of internal and external counsel to each Agent, internal and
external counsel to each Lender, and internal and external tax professionals,
accounting professionals, and other consultants and advisors of each Agent and
of each Lender; (d) to pay, indemnify, and hold harmless each Agent and each
Lender from any and all Other Taxes (without duplication of amounts referenced
in Section 4.04), if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Loan
Agreement, the other Loan Documents and any such other documents; (e) to pay or
reimburse each Agent and each Lender for all reasonable fees, costs and expenses
incurred in exercising their rights under Section 8.02 and Section 8.16 and to
pay and reimburse each Lender for all reasonable fees and expenses incurred in
exercising its rights under Section 8.17; and (f) to pay, indemnify and hold
harmless each Agent, each Lender, each other Secured Party, and the respective
Related Parties of each of them, from and against

 

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any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, and reasonable and documented costs, expenses and
disbursements of any kind or nature whatsoever, including reasonable and
documented fees, disbursements and other charges of internal and external
counsel, with respect to the negotiation, execution, delivery, enforcement,
performance and administration of this Loan Agreement, the other Loan Documents
and any such other documents, including any of the foregoing relating to (x) any
Environmental Claim that relates to any Loan Party or any property owned or
leased by any Loan Party, the violation of, noncompliance with or liability
under, any Environmental Law by any Loan Party or any property owned or leased
by any Loan Party or any actual or alleged presence of Hazardous Materials on
any property owned or leased by any Loan Party or resulting from any Loan Party
in connection with the operations of any Loan Party, Subsidiary of any Loan
Party or any of their Real Property and (y) liabilities, obligations, losses,
damages, penalties, actions, judgments or suits with respect to or arising
directly or indirectly in any manner or for any cause or reason whatsoever out
of an Aircraft, an Airframe, any Engine or engine installed on an Aircraft, any
Part, any Aircraft Documents, the capacity, age, airworthiness, value,
durability, description, specific configuration, design, workmanship, materials,
manufacture, construction, testing, delivery, import to the initial or any other
Country of Registration, export (including, without limitation, any export at
re-delivery following an Event of Default), ownership, registration, possession,
control, use, operation (including, without limitation, airport charges),
leasing, sub-leasing, insurance, maintenance, repair, refurbishment, condition
(whether of an Aircraft, any Engine, any part or the Aircraft Documents),
performance, fitness for any particular use or purpose or suitability of any
Aircraft or any part thereof, service, overhaul, modification, change,
alteration, loss, damage, removal, storage or re-delivery of, in or to an
Aircraft or the Aircraft Insurances, or otherwise in connection with an
Aircraft, or relating to loss or destruction of or damage to any property, or
death or injury of, or other loss of whatsoever nature suffered by, any person
caused by, relating to, or arising from or out of (in each case whether directly
or indirectly and whether arising on or prior to the date hereof) any of the
foregoing matters (all the foregoing in this clause (f), collectively, the
“Indemnified Liabilities”); provided, however, that the Loan Parties shall have
no obligation under this clause (f) to any Agent, any Lender, any other Secured
Party, or any Related Party of any of them, for Indemnified Liabilities arising
from (A) the gross negligence or willful misconduct of the party to be
indemnified, as determined by a final, non-appealable order of a court of
competent jurisdiction or (B) any Claim resulting from one party to be
indemnified against any other party to be indemnified and that does not involve
an act or omission of Borrower, any Guarantor or any of their respective
Subsidiaries or Affiliates. The agreements in this Section 12.05 shall survive
repayment of the Loans and all other amounts payable hereunder and the other
Loan Documents and the termination of this Loan Agreement. To the fullest extent
permitted by Applicable Law, no Loan Party shall assert, and each Loan Party
hereby waives, any claim against any Agent, any Lender, any other Secured Party,
and the Related Parties of each of them, on any theory of liability, for any
general or consequential damages, or direct or indirect damages, in each case of
any kind, and in each case whether special, reliance, punitive, compensatory,
benefit of the bargain, “cover”, expectancy, exemplary, incidental, “lost
profits”, or similar or other damages (including, but not limited to, damages
resulting from loss of profits, revenue or business opportunity, business impact
or anticipated savings) or multiples of damages, other than direct, foreseeable,
actual out-of-pocket damages, arising out of, in connection with, or as a result
of, this Loan Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or the use of the proceeds thereof. No Lender, no Agent, no other Secured Party,
and no Related Party of any of them shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Loan Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby, in the absence of
the willful misconduct or gross negligence of such Person as determined by a
final, non-appealable order of a court of competent jurisdiction.

SECTION 12.06    Successors and Assigns; Participations and Assignments.

 

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(a)    This Loan Agreement shall inure to the benefit of the respective
successors and permitted assigns of the parties hereto and of the Related
Parties and other indemnified Persons hereunder and their respective successors
and permitted assigns, and the obligations and liabilities assumed in this Loan
Agreement by the parties hereto shall be binding upon their respective
successors and permitted assignees, except that (i) except as permitted under
Section 9.03, no Loan Party may assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender, and
any attempted assignment or transfer by any Loan Party without such consent
shall be null and void, and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section 12.06.
Nothing in this Loan Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants (to the extent provided in
paragraph (c) of this Section 12.06) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Lenders and the other
Secured Parties) any legal or equitable right, remedy or claim under or by
reason of this Loan Agreement. Notwithstanding anything to the contrary herein,
(a) any Lender shall be permitted to pledge or grant a security interest in all
or any portion of such Lender’s rights hereunder including, but not limited to,
any Loans (without the consent of, or notice to or any other action by, any
other party hereto) to secure the obligations of such Lender or any of its
Affiliates to any Person providing any loan, letter of credit or other extension
of credit to or for the account of such Lender or any of its Affiliates and
(b) the Agents shall be permitted to pledge or grant a security interest in all
or any portion of their respective rights hereunder or under the other Loan
Documents, including, but not limited to, rights to payment (without the consent
of, or notice to or any other action by, any other party hereto), to secure the
obligations of such Agent or any of its Affiliates to any Person providing any
loan, letter of credit or other extension of credit to or for the account of
such Agent or any of its Affiliates.

(b)    Subject to the conditions set forth in Section 12.06(b)(i) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Loan Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it); provided that, except in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
(x) such Lender shall have provided the Borrower with at least five (5) Business
Days’ prior written notice of the proposed assignment or participation,
including the amount thereof and the proposed assignee or participant, and
(y) the Borrower shall have the right for five (5) Business Days following such
notice provide an irrevocable written offer to purchase all of the rights and
obligations that will be the subject of such proposed assignment or
participation (so long as (A) such purchase is made at par value as to such
rights and obligations, (B) such purchase is actually consummated within five
(5) Business Days of the Borrower providing such irrevocable written offer and
(C) the Borrower, immediately upon consummating such purchase, permanently
cancels such rights and obligations (which rights and obligations include, for
the avoidance of doubt, the Loans such Lender proposed to assign or participate
and the Liens securing such Loans); and

(i)    Assignments by Lenders shall be subject to the following additional
conditions:

(A)    except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund, or an assignment of the entire remaining amount of the
assigning Lender’s Commitments or Loans, the amount of the (i) Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $500,000, unless the Administrative
Agent otherwise consents, which consent shall not be unreasonably withheld,
delayed, conditioned or burdened; provided, however, that contemporaneous
assignments to a single assignee made by affiliated Lenders or related Approved
Funds, and contemporaneous assignments by a

 

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single assignor to affiliated Lenders or related Approved Funds, shall in each
case be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;

(B)    each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Loan
Agreement as to the Loans or Commitments so assigned; provided that this
paragraph shall not be construed to prohibit the assignment of a proportionate
part of all the assigning Lender’s rights and obligations in respect its
Commitments or Loans;

(C)    the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and all requested “know your customer”
documentation required by regulatory authorities under applicable anti-money
laundering rules and regulations, including, without limitation, the Patriot
Act; provided that only one such fee shall be payable in connection with
simultaneous assignments to two or more Approved Funds; and

(D)    no assignments may be made (i) to a Permitted Holder or an Affiliate of a
Permitted Holder, (ii) except as described in proviso to Section 12.06(b)(i)
above (and to the extent immediately and permanently canceled), to a Loan Party
or an Affiliate of a Loan Party or (iii) to any natural person, and any such
assignment described in the foregoing clauses (i) through (iii) shall be null
and void.

(ii)    Subject to acceptance and recording thereof pursuant to
Section 12.06(b)(iv), from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Loan Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this Loan
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender’s rights and obligations under this Loan Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.06, 2.07, 4.04 and 12.05 to the extent of any amounts
owed to such Lender under any of such provisions). Any assignment or transfer by
a Lender of rights or obligations under this Loan Agreement that does not comply
with this Section 12.06 shall be treated for purposes of this Loan Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.06(c).

(iii)    The Administrative Agent, acting solely as a non-fiduciary agent of the
Borrower for tax purposes and solely with respect the actions described in this
Section 12.06(b)(iii), shall maintain at one of its offices in the United States
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The Register
shall contain the name and address of each Lender and the lending office through
which each Lender acts under this Loan Agreement. The entries in the Register
shall be conclusive absent manifest error, and the Loan Parties, the Agents and
the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Loan
Agreement, notwithstanding notice to the contrary. The Register, as in effect at
the close of business on the preceding Business Day, shall be available for
inspection by the Borrower and any Lender (and any other Person to the extent
necessary to cause

 

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the Loans to be maintained in “registered form” within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Code) at any reasonable time and from
time to time on any Business Day upon reasonable prior written notice; provided
that no Lender shall, in such capacity, have access to or be otherwise permitted
to review any information in the Register other than information with respect to
such Lender unless otherwise agreed by the Administrative Agent in its sole
discretion. This Section 12.06(b)(iii) shall be construed such that the Loans
are at all times maintained in “registered form” within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Code.

(iv)    Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the processing fee, any requested
“know-your-customer” documents, and any written consent to such assignment
required by Section 12.06(b)(i), the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Loan Agreement
unless and until it has been recorded in the Register as provided in this
paragraph.

(c)    Any Lender may, without the consent of the Borrower or the Agents, sell
participations to one or more banks or other entities (each, a “Participant”) in
all or a portion of such Lender’s rights and obligations under this Loan
Agreement (including all or a portion of its Commitments and the Loans owing to
it); provided that (A) such Lender’s obligations under this Loan Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (C) the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Loan Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Loan Agreement and to approve any amendment, modification or
waiver of any provision of this Loan Agreement or any other Loan Document;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in Sections 12.01(b)(i), 12.01(b)(ii),
12.01(b)(iii) or 12.01(b)(iv). Subject to Section 12.06(c)(i), the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.06,
2.07 and 4.04 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.06(b). To the extent permitted by
Applicable Law, each Participant also shall be entitled to the benefits of
Section 12.09(b) as if it were a Lender; provided that such Participant agrees
to be subject to Section 12.09(a) as if it were a Lender.

(i)    A Participant shall not be entitled to receive any greater payment under
Sections 2.06, 2.07 or 4.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Section 4.04 so long as the documentation required by Section 4.04(f) is
delivered by the participant to the participating Lender.

(ii)    Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain at one of its offices
in the United States a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in such Lender’s Loans or other obligations under the
Loan Documents (the “Participant Register”). The entries in each Participant
Register shall be conclusive absent manifest error, and the applicable Lender
shall treat each person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Loan Agreement
notwithstanding any notice to the contrary. No Lender shall have any obligation
to disclose all or any portion of the Participant Register (including the
identity of any

 

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Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under United States Treasury Regulations Section 5f.103-1(c).
The Administrative Agent shall have no responsibility for maintaining any
Participant Register, and any notices or other documents required to be
delivered by the Loan Parties shall be deemed to be delivered to a Participant
upon actual delivery to the Lender that sold the participation to such
Participant.

(d)    Nothing herein is intended to prevent, impair, limit or otherwise
restrict the ability of a Lender to collaterally assign or pledge all or any
portion of its interests in the Loans and the other rights and benefits under
the Loan Documents to an unaffiliated third party lender of such Lender (each
such Person, a “Collateral Assignee”); provided that unless and until the
Borrower receives notification from a Collateral Assignee of such assignment
directing payments to be made to such Collateral Assignee, any payment made by
the Borrower for the benefit of such Lender in accordance with the terms of the
Loan Documents shall satisfy the Borrower’s obligations thereunder to the extent
of such payment. Any such Collateral Assignee, upon foreclosure of its security
interests in the Loans pursuant to the terms of such assignment and in
accordance with Applicable Law, shall succeed to all the interests of or shall
be deemed to be a Lender, with all the rights and benefits afforded thereby, and
such transfer shall not be deemed to be a transfer for purposes of and otherwise
subject to the provisions of this Section 12.06. Notwithstanding the foregoing,
each Lender shall remain responsible for all obligations and liabilities arising
hereunder or under any other Loan Document, and, except as otherwise expressly
set forth in any applicable pledge or assignment, nothing herein is intended or
shall be construed to impose any obligations upon or constitute an assumption by
a Collateral Assignee thereof.

SECTION 12.07    Replacements of Lenders under Certain Circumstances.

The Administrative Agent, at the Borrower’s sole cost and expense, shall be
permitted to replace any Lender or any Participant that (i) requests
reimbursement for amounts owing pursuant to Section 12.06, Section 2.08, or
Section 4.04 if such Lender has declined or is unable to designate a different
lending office in accordance with Section 2.08, or (ii) is affected in the
manner described in Section 2.06(a)(iii) and as a result thereof any of the
actions described in such Section 2.06(a)(iii) is required to be taken; provided
that (A) such replacement does not conflict with any Applicable Law, (B) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (C) all Loans and other amounts (including any applicable fees, but
excluding any disputed amounts) owing to such replaced Lender pursuant to this
Loan Agreement shall be paid or purchased at par, (D) the replacement bank or
institution (if not already a Lender), and the terms and conditions of such
replacement, shall be reasonably satisfactory to the Administrative Agent, and
the withholding of consent by the Administrative Agent to any Loan Party or any
Affiliate of a Loan Party becoming a replacement Lender shall be deemed to be
reasonable and not unreasonable, (E) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 12.06 (except
that such replaced Lender shall not be obligated to pay any processing and
recordation fee required pursuant thereto), (F) any such replacement shall not
be deemed to be a waiver of any rights that the Borrower, any Agent or any other
Lender shall have against the replaced Lender, and (G) in the case of any such
assignment resulting from a claim for compensation under Section 12.06 or
payments required to be made pursuant to Section 4.04, such assignment will
result in a reduction in such compensation or payments thereafter. A Lender
shall not be required to make any such assignment or delegation if prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

 

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SECTION 12.08    Securitization. The Loan Parties acknowledge that the Lenders
and their Affiliates may (i) pledge all or a portion of the Loans as collateral
security for loans to such Lenders or their Affiliates, (ii) sell all or a
portion of the Loans to a third party, (iii) issue direct or indirect interests
in the Loans to their controlled Affiliates or (iv) otherwise securitize all or
a portion of the Loans (any transaction described in clauses (i) through (iv), a
“Securitization”), and that the Lenders and their Affiliates may seek to have
such loans to such Lenders or their Affiliates, such sold Loans, such direct or
indirect interests or such securitization rated by Moody’s, S&P or one or more
other rating agencies (each, a “Rating Agency”). The Loan Parties shall
reasonably cooperate with the Lenders and their Affiliates to effect any and all
Securitizations and to obtain a public or unpublished loan rating or a corporate
rating from any Rating Agency requested by any Lender, including, without
limitation, if so requested by a Lender, by (i) meeting with representatives of
such Rating Agency and discussing its business and affairs with such
representatives to the extent required to obtain such rating, (ii) amending this
Loan Agreement and the other Loan Documents, and executing such additional
documents, as reasonably requested by such Lenders, in connection with any
Securitization and (iii) providing such information as may be reasonably
requested by such Lenders, in connection with the rating of the Obligations or
any Securitization; provided that (a) the Loan Parties shall not be required to
incur any out-of-pocket costs or expenses in connection with any action taken at
the request of a Lender pursuant to this Section 12.08 unless such Lender
reimburses the Loan Parties for such costs and expenses and (b) the Loan Parties
shall not be required to take any action at the request of a Lender pursuant to
this Section 12.08 that would (x) add any new, expand the scope of any existing,
representations and warranties made or to be made by the Loan Parties or their
Subsidiaries, (y) impose any additional covenants, events of default or
obligations on the Loan Parties or their Subsidiaries or (z) impose any new, or
expand any existing, conditions on the ability to draw Loans under this Loan
Agreement or take other actions otherwise permitted under this Loan Agreement
and the other Loan Documents. No Securitization shall (i) release any Lender
from any of its obligations hereunder, (ii) restrict or limit an Agent’s
discretion in connection with any amendment, supplement, waiver or other
modification of any of the terms of this Loan Agreement or any other Loan
Document or (iii) substitute any pledgee, secured party or any other party to
such Securitization for such Lender as a party hereto, and no change in
ownership of the Loans may be effected, in each case except pursuant to
Section 12.06.

SECTION 12.09    Adjustments; Set-Off.

(a)    If any Lender at any time receives any payment of all or part of its
Loans or interest thereon, or receives any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to Insolvency
Proceedings or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender’s Term Loans or interest thereon, such recipient Lender shall purchase
for cash from the other Lenders a participating interest in such portion of each
such other Lender’s Loans, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such recipient Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the other Lenders; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such recipient Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The foregoing provisions of this Section 12.09 shall not apply to
payments made and applied in accordance with the terms of this Loan Agreement
and the other Loan Documents.

(b)    After the occurrence and during the continuance of an Event of Default,
to the extent consented to by the Administrative Agent, in addition to any
rights and remedies of the Lenders provided by law, each Lender shall have the
right, without prior notice to the Borrower or any other Loan Party, any such
notice being expressly waived by the Loan Parties to the extent permitted by
Applicable Law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated

 

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maturity, by acceleration or otherwise), to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower, as the case may be. Each Lender agrees promptly to notify the Borrower
and the Agents after any such set-off and application made by such Lender;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

SECTION 12.10    Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and signed and delivered by facsimile or other
electronic means. The effectiveness of any such documents and signatures shall
have the same force and effect as manually signed originals and shall be binding
on all Loan Parties, the Agents and the Lenders.

SECTION 12.11    Counterparts. Any number of counterparts of this Loan Agreement
and the other Loan Documents, including facsimiles and other electronic copies,
may be executed by the parties hereto. Each such counterpart shall be, and shall
be deemed to be, an original instrument, but all such counterparts taken
together shall constitute one and the same agreement.

SECTION 12.12    Severability. All provisions of this Loan Agreement are
severable, and the unenforceability or invalidity of any of the provisions of
this Loan Agreement shall not affect the validity or enforceability of the
remaining provisions of this Loan Agreement. Should any part of this Loan
Agreement be held invalid or unenforceable in any jurisdiction, the invalid or
unenforceable portion or portions shall be removed (and no more) only in that
jurisdiction, and the remainder shall be enforced as fully as possible (removing
the minimum amount possible) in that jurisdiction. In lieu of such invalid or
unenforceable provision, the parties hereto will negotiate in good faith to add
as a part of this Loan Agreement a legal, valid and enforceable provision as
similar in terms to such invalid or unenforceable provision as may be possible.

SECTION 12.13    Integration. This Loan Agreement and the other Loan Documents
contain the entire agreement of the parties with respect to the subject matter
hereof and thereof and supersede all prior negotiations, agreements and
understandings with respect thereto, both written and oral. This Loan Agreement
may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten or oral agreements between the
parties. By executing and delivering this Loan Agreement, each Loan Party hereby
fully and irrevocably releases and agrees not to assert in any manner any and
all claims which such Loan Party may have at law or in equity in relation to all
prior written and oral discussions and understandings relating to this Loan
Agreement, the other Loan Documents, the subject matter hereof and thereof, and
the incurrence of the Term Loans hereunder. When this Loan Agreement or any
other Loan Document refers to a party’s “sole discretion”, such phrase means
that party’s sole and absolute discretion as to process and result, which shall
be final for all purposes hereunder, to be exercised (to the fullest extent the
law permits) for any reason, subject to no standard of reasonableness or review
and part of no claim before any court, arbitrator or other tribunal or forum or
otherwise.

SECTION 12.14    GOVERNING LAW. THIS LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS
(EXCEPT AS MAY OTHERWISE BE PROVIDED THEREIN), AND THE VALIDITY, INTERPRETATION,
CONSTRUCTION, AND PERFORMANCE HEREOF AND THEREOF SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ANY CLAIM BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR
TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH
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JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS REQUIRING
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

SECTION 12.15    Waiver of Certain Rights. Each Loan Party irrevocably and
unconditionally waives, to the maximum extent not prohibited by Applicable Law,
all rights of rescission, setoff, counterclaims, and other defenses in
connection with the repayment of the Obligations.

SECTION 12.16    Acknowledgments. Each Loan Party hereby acknowledges that:

(a)    it has been advised by counsel of its choice in the negotiation,
execution and delivery of this Loan Agreement and the other Loan Documents, such
counsel has reviewed this Loan Agreement and the other Loan Documents, this Loan
Agreement and the other Loan Documents (including, without limitation,
Section 12.14, Section 12.15 and Article XIII hereof) are the result of such
advice and review, and neither this Loan Agreement nor any other Loan Document
shall be construed against an Agent or any Lender merely because of such Agent’s
or such Lender’s involvement in the preparation of any such document;

(b)    neither any Agent nor any Lender has any fiduciary relationship with or
duty to any Loan Party arising out of or in connection with this Loan Agreement
or any of the other Loan Documents, and the relationship between any Agent and
any Lender, on one hand, and each Loan Party, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor;

(c)    no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Agents and the Lenders or among the Loan Parties and the Agents and the Lenders;
and

(d)    this Loan Agreement does not give rise now or in the future to an agency
or partnership relationship between any Loan Party on the one hand and any
Agent, any Lender or any of their respective Affiliates on the other hand.

SECTION 12.17    [Reserved].

SECTION 12.18    Confidentiality. Each Agent and each Lender shall use
commercially reasonable efforts to hold all non-public information relating to
any Loan Party or any Subsidiary of any Loan Party obtained pursuant to the
requirements of this Loan Agreement (“Confidential Information”) confidential in
accordance with its customary procedure for handling confidential information of
this nature and, in the case of a Lender that is a bank, in accordance with safe
and sound banking practices; provided, however, that in any event any Agent or
Lender may disclose Confidential Information:

(a)    as such Person reasonably believes is required by Law (including, without
limitation, SEC rules and regulations);

(b)    pursuant to legal process or as is otherwise required or requested by any
court, securities exchange, or any other judicial, governmental, supervisory or
regulatory board or agency, or representative thereof (including, without
limitation, the SEC);

 

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(c)    in connection with, and following, the enforcement of any rights or
exercise of any remedies by any Agent or Lender under this Loan Agreement or any
other Loan Document, or any action or proceeding relating to this Loan Agreement
or any other Loan Document;

(d)    to such Agent’s or Lender’s Affiliates, and to such Agent’s, Lender’s and
Affiliates’ directors, officers, employees, agents, attorneys, accountants and
other professional advisors, auditors, investors, potential investors, financing
sources and potential financing sources;

(e)    in connection with:

(i)    the establishment of any special purpose funding vehicle with respect to
the Loans,

(ii)    any prospective assignment of, or participation in, its rights and
obligations pursuant to Section 12.06, to prospective assignees or Participants,
as applicable; provided that such prospective assignees or Participants agree to
treat such information as confidential substantially in accordance with the
terms of this Section 12.18 as if such prospective assignees or Participants
were Agents or Lenders hereunder; and

(iii)    any actual or proposed credit facility for loans, letters of credit or
other extensions of credit to or for the account of such Agent or Lender or any
of its Affiliates, to any Person providing or proposing to provide such loan,
letter of credit or other extension of credit or any agent, trustee or
representative of such Person;

(f)    to any Rating Agency;

(g)    any Securitization permitted under Section 12.08; and

(h)    to any other Person with the consent of the Borrower.

Notwithstanding the foregoing, (A) each of the Agents, the Lenders and any
Affiliate thereof is hereby expressly permitted by the Loan Parties to refer to
any Loan Party and any of their respective Subsidiaries in connection with any
promotion or marketing undertaken by such Agent, Lender or Affiliate and, for
such purpose, such Agent, Lender or Affiliate may utilize any trade name,
trademark, logo or other distinctive symbol associated with such Loan Party or
such Subsidiary or any of their businesses and (B) no Agent or Lender shall have
any obligation to keep information confidential if such information: (i) is or
becomes public or known to participants in the Borrower’s industry from a source
other than an Agent, a Lender or an Agent’s or a Lender’s legal or financial
advisors; (ii) is, was or becomes known on a non-confidential basis to or
discovered by an Agent, Lenders or any of their legal or financial advisors
independently from communications by or on behalf of any Loan Party; provided
that the source of such information was not actually known by the disclosing
Agent, Lender or advisor to be bound by a confidentiality agreement with (or
subject to any other contractual, legal or fiduciary obligation of
confidentiality to) the relevant Loan Party; or (iii) is independently developed
by an Agent or a Lender without use of such confidential information.

SECTION 12.19    Press Releases, etc.. Each Loan Party will not, and will not
permit any of its Affiliates or its or its Affiliates’ respective officers,
directors, shareholders or employees to, directly or indirectly, (i) publish or
permit to be published any press release or other similar public disclosure or
announcements (including any marketing materials) regarding this Loan Agreement,
the other Loan Documents or the incurrence of the Term Loans hereunder, without
the prior written consent of the Administrative Agent, which consent shall not
be unreasonably withheld, or (ii) publish or permit to be

 

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published any Agent’s or Lender’s name or logo, or otherwise refer to any Agent
or Lender or any of its Affiliates, in connection with this Loan Agreement, the
other Loan Documents or the incurrence of the Term Loans hereunder, without the
prior written consent of such Agent or Lender, as applicable.

SECTION 12.20    Releases of Guaranties and Liens.

(a)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, the Collateral Agent is hereby irrevocably authorized by each
Secured Party (without requirement of notice to or consent of any Secured Party
except as expressly required by Section 12.01) to take any action requested by
the Borrower having the effect of releasing any Collateral or guarantee
obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 12.01 or (ii) under the circumstances described in
Section 12.20(b).

(b)    At such time as the Loans and the other Obligations (other than
Unasserted Contingent Obligations) shall have been paid in full, (i) following a
written request therefor from the Borrower and at the Borrower’s sole cost and
expense, the Collateral Agent shall terminate the Security Documents and release
the Collateral from the Liens created by the Security Documents, and (ii) all
obligations of the Collateral Agent under the Security Documents shall terminate
without delivery of any instrument or performance of any act by any Person.

(c)    Upon request by the Collateral Agent at any time, the Required Lenders
will confirm in writing the Collateral Agent’s authority to release its interest
in particular types or items of property, or to release any guarantee
obligations pursuant to this Section 12.20. In each case as specified in this
Section 12.20, the Collateral Agent will (and each Lender irrevocably authorizes
the Collateral Agent to), at the Borrower’s sole cost and expense, execute and
deliver to the applicable Loan Party such documents as such Loan Party may
reasonably request to evidence the release of such item of Collateral or
guarantee obligation from the assignment and security interest granted under the
Security Documents, in each case in accordance with the terms of the Loan
Documents and this Section 12.20.

SECTION 12.21    USA Patriot Act. Each Lender hereby notifies each Loan Party
that, pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies the Loan Parties, which
information includes the name and address of each Loan Party and other
information that will allow such Lender to identify each Loan Party in
accordance with the Patriot Act. Each Loan Party agrees to provide all such
information to the Lenders upon request by any Agent at any time, whether with
respect to any Person who is a Loan Party on the Closing Date or who becomes a
Loan Party thereafter.

SECTION 12.22    No Fiduciary Duty. Each Loan Party, on behalf of itself and its
Subsidiaries, agrees that in connection with all aspects of the transactions
contemplated hereby and by the other Loan Documents and any communications in
connection herewith and therewith, the Loan Parties, their respective
Subsidiaries and Affiliates, on the one hand, and the Agents, the Lenders, the
other Secured Parties, and all of their respective Affiliates, on the other
hand, will have a business relationship that does not create, by implication or
otherwise, any fiduciary duty on the part of the Agents the Lenders or their
respective Affiliates, and no such duty will be deemed to have arisen in
connection with any such transactions or communications.

SECTION 12.23    Reliance on Certificates. Notwithstanding anything to the
contrary herein, the Secured Parties shall be entitled to rely and act upon any
certificate, notice or other document delivered

 

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by or on behalf of any Person purporting to be an Authorized Officer of a Loan
Party, and shall have no duty to inquire as to the actual incumbency or
authority of such Person.

SECTION 12.24    No Waiver. A Secured Party’s failure to insist at any time upon
strict compliance with this Loan Agreement or with any of the terms of this Loan
Agreement or any continued course of such conduct on its part will not
constitute or be considered a waiver by such Secured Party of any of its rights
or privileges. A waiver or consent, express or implied, of or to any breach or
default by any party in the performance by that party of its obligations with
respect to this Loan Agreement is not a waiver or consent of or to any other
breach or default in the performance by that party of the same or any other
obligations of that party.

SECTION 12.25    The Borrower as the Loan Parties’ Representative. Each Loan
Party (other than the Borrower) hereby irrevocably appoints the Borrower as the
borrowing agent and attorney-in-fact for all Loan Parties, which appointment is
coupled with an interest and shall remain in full force and effect unless and
until the Administrative Agent (i) in its sole discretion shall have consented
in writing to the revocation of such appointment and (ii) received prior written
notice signed by the Loan Parties that such appointment has been revoked and
that another Loan Party has been appointed. Each Loan Party hereby irrevocably
appoints and authorizes the Borrower (a) to provide the Agents and the Lenders
with all notices with respect to all Loans and other extensions of credit
obtained for the benefit of the Borrower and all other notices and instructions
under this Loan Agreement and the other Loan Documents, (b) amend, supplement or
otherwise modify any term or condition of this Loan Agreement and the other Loan
Documents in accordance with Section 12.01(b) without any requirement that such
Loan Party also sign any documents or instruments to effectuate any such
amendment, supplement or waiver, and (c) to take such action as the Borrower
deems appropriate on such Loan Party’s behalf to exercise such powers as are
reasonably incidental thereto to carry out the purposes of this Loan Agreement
and the other Loan Documents. Each Loan Party acknowledges that the handling of
this Loan Agreement, the other Loan Documents and the Collateral in a combined
fashion, as more fully set forth herein and in the other Loan Documents, is done
solely as an accommodation to the Loan Parties in order to utilize the
collective borrowing powers of the Loan Parties in the most efficient and
economical manner and at their request, and that no Agent or Lender shall incur
liability to any Loan Party as a result thereof. Each Loan Party expects to
derive substantial benefit, directly or indirectly, from the handling of this
Loan Agreement, the other Loan Documents and the Collateral in a combined
fashion because the successful operation of each Loan Party is dependent on the
continued successful performance of the integrated group. To induce the Agents
and Lenders to do so, and in consideration thereof, each Loan Party hereby
jointly and severally agrees to indemnify each Agent and each Lender against,
and hold each Agent and each Lender harmless from, any and all liability,
expense, loss or claim of damage or injury made against any Agent or Lender by
any Loan Party or by any third party whosoever, arising from or incurred by
reason of (x) the handling of this Loan Agreement, the other Loan Documents and
the Collateral as provided herein, or (y) an Agent or a Lender relying on any
instructions of the Borrower, except that the Loan Parties will have no
liability to any Agent or Lender pursuant to this Section 12.25 with respect to
any liability that has been finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Agent or such Lender, as applicable.

SECTION 12.26    Intercreditor Agreements. Notwithstanding any other provision
contained herein, this Loan Agreement is subject in all respects to the
provisions of the Intercreditor Agreement. In the event of any conflict or
inconsistency between the provisions of this Loan Agreement and such
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.

SECTION 12.27    Acknowledgement and Consent to Bail-in of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Lender

 

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that is an EEA Financial Institution arising under any Loan Document, to the
extent such liability is unsecured, may be subject to the write-down and
conversion powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any Lender that is an EEA Financial Institution; and

(b)    the effects of any Bail-in Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Loan Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

SECTION 12.28    Funding Losses. The Borrower agrees to reimburse each Lender
and to hold each Lender harmless from any documented loss or expense (but
excluding lost profits) which such Lender may sustain or incur as a direct
consequence of:

(a)    the failure of the Borrower to make any payment or mandatory prepayment
of principal of any LIBOR Rate Loan as and when due hereunder (including
payments made after any acceleration thereof);

(b)    the failure of the Borrower to borrow, continue or convert a Loan after
the Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation;

(c)    the failure of the Borrower to make any prepayment after the Borrower has
given a notice in accordance with Section 4.01(a)(i);

(d)    the prepayment (including pursuant to Section 4.02) of a LIBOR Rate Loan
on a day which is not the last day of the Interest Period with respect thereto;
or

(e)    the conversion pursuant to Section 2.09 of any LIBOR Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period;

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained; provided
that, with respect to the expenses described in clauses (d) and (e) above, such
Lender shall have notified Agent of any such expense within two (2) Business
Days of the date on which such expense was incurred. Solely for purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section 12.28 and under Section 2.06(a)(ii): each LIBOR Rate Loan that is made
by a Lender (and each related reserve, special deposit or similar requirement)
shall be conclusively deemed to have been funded at the LIBOR Rate used in
determining the interest rate for

 

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such LIBOR Rate Loan by a matching deposit or other borrowing in the interbank
Eurodollar market for a comparable amount and for a comparable period, whether
or not such LIBOR Rate Loan is in fact so funded.

SECTION 12.29    PPSA.

(a)    If a Loan Document or Disclosed Sublease (or a transaction in connection
with it) is or contains a PPSA Security Interest for the purposes of the PPSA
(and the PPSA applies to that PPSA Security Interest), each Loan Party agrees to
do (and shall procure that any Disclosed Sublessee shall do) anything (including
but not limited to obtaining consents, signing and producing documents,
procuring that documents are completed and signed and supplying information)
within its reasonable control and which the Collateral Agent requests and
reasonably considers necessary for the purposes of:

(i)    ensuring that the PPSA Security Interest is enforceable, perfected and
otherwise effective; or

(ii)    enabling the Collateral Agent to apply for any registration, complete
any financing statement or give any notification, in connection with the PPSA
Security Interest; or

(iii)    enabling the Collateral Agent to exercise rights in connection with the
PPSA Security Interest.

(b)    Each Loan party agrees to cause any financing statements required of it
pursuant to this section to be registered at such times as reasonably directed
by the Collateral Agent.

(c)    Unless otherwise provided, all costs and expenses of the Collateral Agent
pursuant to the requirements of this Section shall be at the Loan Parties’
expense and the Loan parties agree to pay or reimburse the reasonable costs of
the Collateral Agent in connection therewith.

(d)    The Collateral Agent need not give any notice under the PPSA (including a
notice of verification statement) unless the notice is required by the PPSA and
the requirement to give it cannot be excluded or has not been excluded by this
section.

(e)    The Loan Parties and the Collateral Agent agree that each the Collateral
Agent and the Loan Parties Obligor and the Security Trustee are not required to,
and must not without the other party’s consent, disclose any information of the
kind referred to in section 275(4) of the Australian PPSA unless section 275(7)
of the Australian PPSA applies.

(f)    If a Loan Party is requested or required to do anything under this
section by the Collateral Agent, it will be at the Loan Party’s cost.

(g)    Each Loan Party agrees that the following provisions of the Australian
PPSA do not apply to the Loan Documents to the extent that the PPSA permits the
parties to contract out of such provisions: (i) Section 95 to the extent that it
requires a secured party to give a notice to a grantor (ii) Section 96; (iii)
Section 121(4); (iv) Section 125; (v) Section 130 to the extent it requires a
secured party to give notice to a grantor; (vi) Section 132(3)(d); (vii)
Section 132(4); (viii) Section 142; and (ix) Section 143.

SECTION 12.30    Cape Town Convention.

(a)    General. The parties agree and confirm that:

 

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(i)    For the purposes of this Section references to Articles are to articles
of the Cape Town Convention;

(ii)    default for the purposes of Article 17 shall mean the occurrence of any
Event of Default that is continuing;

(iii)    commercially reasonable manner for the purposes of Article 19 means a
manner that the Lender believes (acting reasonably) is in accordance with
standard practice in the international aviation market;

(iv)    the Collateral Agent and the Lenders will have the benefit of Article 7;

(v)    without prejudice to the provisions of Article 16, the Collateral Agent
will have the rights and remedies available to secured parties under the
Convention Treaty (including, but not limited to the rights and remedies of a
creditor and/or chargee under Articles 8, 9, 10, 12 and 13 of the Convention,
and Articles IX and XIII of the Protocol and as an assignee under Article 34 of
the Convention); and

(vi)    the application of Article 33(4) will be excluded to the extent
permitted by applicable law applicable to International Interests arising under
the Loan Documents.

(b)    Registration

(i)    For the purposes of Article 33 each Loan Party consents to:

(A)    registering International Interests or Prospective International
Interests in each Airframe and each Engine that are, or will be, constituted
pursuant to each Aircraft Collateral Mortgage and each other Loan Document;

(B)    if a Loan Party acquires title to a replacement engine in accordance with
the provisions of this Loan Agreement (or otherwise), registering International
Interests or Prospective International Interests in each such engine.

(ii)    The parties agree to co-operate with each other and act in good faith in
order to effect and maintain the registrations contemplated under this section
(including entering into such documents as may be requested by the Collateral
Agent, acting reasonably); and

(iii)    each of Loan party hereby agrees that, except as contemplated by this
Loan Agreement, it will not consent to the registration of any International
Interests or Prospective International Interests (or any assignment of an
International Interests or a Prospective International Interests) in any
Airframe, any Engine or any engine referred to in Section 12.30(b)(i)(B) without
the prior written consent of the Collateral Agent (which consent may be withheld
in its absolute discretion).

ARTICLE XIII

JURISDICTION; VENUE, SERVICE OF PROCESS; JURY TRIAL WAIVER

SECTION 13.01    JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED

 

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STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN IN THE STATE OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THE LOANS, THIS LOAN AGREEMENT, THE NOTES, 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, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH 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. NOTWITHSTANDING ANYTHING TO THE CONTRARY, NOTHING IN THIS LOAN
AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS AND LENDERS MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THE LOANS, THIS LOAN AGREEMENT,
THE NOTES, OR ANY OTHER LOAN DOCUMENT AGAINST THE LOAN PARTIES OR THEIR
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

SECTION 13.02    VENUE. EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOANS, THIS LOAN
AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT IN ANY STATE OR FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE STATE OF NEW YORK. 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 13.03    SERVICE OF PROCESS. EACH PARTY TO THIS LOAN AGREEMENT
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER AND AT THE ADDRESSES
PROVIDED FOR NOTICES IN SECTION 12.02 BY MAIL. NOTHING IN THIS LOAN AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS LOAN AGREEMENT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW.

SECTION 13.04    JURY TRIAL WAIVER. EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND
ANY RIGHTS UNDER OR IN CONNECTION WITH THE LOANS, THIS LOAN AGREEMENT, THE NOTES
OR ANY OTHER LOAN DOCUMENT, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN
CONNECTION WITH OR RELATED TO THE LOANS, THIS LOAN AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY ACKNOWLEDGES THAT IT
HAD THE OPPORTUNITY TO REVIEW THIS JURY TRIAL WAIVER WITH ITS LEGAL COUNSEL AND
THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A JURY TRIAL. THIS SECTION
12.29(D) IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS GRANTING ANY
FINANCIAL ACCOMMODATIONS TO THE LOAN PARTIES.

SECTION 13.05    NO LIMIT OF CERTAIN RIGHTS. . No provision of, nor the exercise
of any rights under, Section 13.01 or Section 13.02 shall limit the right of any
Agent or any other Secured Party to (i) foreclose against any real or personal
property collateral through judicial foreclosure, by the

 

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exercise of a power of sale under a deed of trust, mortgage or other security
agreement or instrument, pursuant to applicable provisions of the UCC, or
otherwise pursuant to applicable Law, (ii) exercise self help remedies including
but not limited to set-off and repossession, or (iii) request and obtain from a
court having jurisdiction, any provisional or ancillary remedies and relief
including but not limited to injunctive or mandatory relief or the appointment
of a receiver.

[signatures begin on next page]

 

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IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered
this Loan Agreement as of the date first above written.

 

THE BORROWER:     PHI, INC.,     a Louisiana corporation     By  

/s/ Trudy P. McConnaughhay

    Name:   Trudy P. McConnaughhay     Title:   Chief Financial Officer and
Secretary GUARANTORS:     PHI TECH SERVICES, INC., a Louisiana corporation    
By  

/s/ Trudy P. McConnaughhay

    Name:   Trudy P. McConnaughhay     Title:   Chief Financial Officer and
Secretary     PHI AIR MEDICAL, L.L.C, a Louisiana limited liability company    
By  

/s/ Trudy P. McConnaughhay

    Name:   Trudy P. McConnaughhay     Title:   Chief Financial Officer and
Secretary     PHI HELIPASS, L.L.C., a Louisiana limited liability company     By
 

/s/ Trudy P. McConnaughhay

    Name:   Trudy P. McConnaughhay     Title:   Chief Financial Officer and
Secretary     AM EQUITY HOLDINGS, L.L.C., a Louisiana limited liability company
    By  

/s/ Trudy P. McConnaughhay

    Name:   Trudy P. McConnaughhay     Title:   Chief Financial Officer and
Secretary

 

Signature Page to Loan Agreement

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

ADMINISTRATIVE AGENT AND COLLATERAL AGENT:     BLUE TORCH FINANCE LLC     By  

/s/ Kevin Genda

    Name:   Kevin Genda     Title:   CEO

 

Signature Page to Loan Agreement

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LENDERS:     BTC HOLDINGS FUND I LLC,     as a Lender     By: Blue Torch Credit
Opportunities Fund I LP, its sole member     By: Blue Torch Credit Opportunities
GP LLC, its general partner     By  

/s/ Kevin Genda

    Name:   Kevin Genda     Title:   CEO

 

Signature Page to Loan Agreement

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

SC BTC PRIVATE DEBT FUND LP,

as a Lender

 

By: Blue Torch Capital LP, acting solely in its capacity as Investment Advisor
to the Manager of SC BTC Private Debt Fund LP

By  

/s/ Kevin Genda

Name:   Kevin Genda Title:   CEO

 

Signature Page to Loan Agreement

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Schedule 1.01 – Term Loan Commitments

 

Lenders

   Term Loan
Commitment
(Principal Amount)      Pro
Rata Portion  

BTC Holdings Fund I LLC

   $ 60,000,000.00        85.71 % 

SC BTC Private Debt Fund LP

   $ 10,000,000.00        14.29 %    

 

 

    

 

 

 

Total

   $ 70,000,000.00        100.00 %    

 

 

    

 

 

 

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Schedule 1.02 – Excluded Subsidiaries

Energy Risk, Ltd.

Petroleum Helicopters Angola Limitada

PHI Air Europe, Ltd.

PHI Americas Limited

Sky Leasing, L.L.C.

Vertilease, L.L.C.

Leasing Source, L.L.C.

MDHL, L.L.C.

Helicopter Leasing, L.L.C.

PHI International HoldCo Private Limited

HNZ Singapore Private Limited

Petroleum Helicopters Australia Pty Limited

HNZ Australia Holdings Pty Limited

HNZ Australia Pty Limited

PHI-HNZ Australia Pty Limited

PHI Air Medical LLC Branch (Saudi Arabia)

Personnel Outsourcing, Ltd.

PHI NZ HoldCo Limited

HNZ New Zealand Limited

Helicopter Management, L.L.C.

Helex, L.L.C.

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

Schedule 7.08 – Litigation

(i) Lawsuits that may affect the legality, validity, or enforceability of any
Loan Document or the incurrence of the Term Loans;

None.

(ii) Lawsuits with amount of damages claimed in excess of $1,000,000:

 

  •  

Edward Nieto v. PHI Air Medical, L.L.C, et. al., Alburquerque District Court,
Case No. D-202-CV-201702496. Suit filed by hospital and crew member following a
University of New Mexico Hospital roof landing. Suit is currently on-going.
Reserve of $1.1 million has been set aside by the company’s aviation insurance.
The company’s deductible is $0.

 

  •  

Norman M. Hammer et. al v. PHI, Inc., Vermillion Parish District Court, Case No.
101867-A. Suit filed by three passengers following a hard landing in a coastal
marsh area in Louisiana. Suit is currently on-going. Reserve of $1.7 million has
been set aside by the company’s aviation insurance. The company’s deductible is
$0.

(iii) Lawsuits that specific performance or injunctive relief is sought:

None.

(iv) Lawsuits that Material Adverse Effects may be reasonably affected:

None.

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

Schedule 7.09 – Capitalization and Subsidiaries

 

Holder

  

Subsidiary Name

   Jurisdiction   

Stock Certificate #

   Authorized
# of Shares    Par
Value    # of
Shares
Issued      # of
Shares
Owned      %
Ownership  

PHI, Inc.

   PHI Air Medical, L.L.C.    Louisiana    n/a - Limited Liability Company     
1,000        1,000        100.0 % 

PHI, Inc.

   PHI Tech Services, Inc.    Louisiana    No Certificate    100    $10.00 per
share      100        100        100.0 % 

PHI, Inc.

   AM Equity Holdings, L.L.C.    Louisiana    n/a - Limited Liability Company   
  1,000        1,000        100.0 % 

PHI, Inc.

   PHI Helipass, L.L.C.    Louisiana    n/a - Limited Liability Company     
1,000        1,000        100.0 % 

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

Schedule 7.15 – Real Property

(a) Material owned Real Property

PHI, INC.: 38963 Highway 23, Buras, Louisiana 70041

 

(b) Material Leased Property

 

Lessor

  

Lessee

  

Property Description

London-Corbin Airport Board    PHI Air Medical, Inc.    Hangar in 566 Hal Rogers
Drive, London, KY, 40744 MANASSAS FBO LLC, d/b/a APP Jet Center Manassas    PHI
Air Medical, Inc.    Hangar in 9990 Wakeman Drive, Manassas, VA 20110 Astin
Aviation CLL, LLC    PHI Air Medical, L.L.C    Hangar #1259 and office space,
Easterwood airport, College Station, TX Joe G. Mims and Margaret M. Mims Family
Limited Partnership, LTD (then Kelly Scott Shaw)    PHI Air Medical, L.L.C   
Hangar in 451 Blue Sky Parkway, Lexington, Fayette County, KY Holley Aviation   
PHI Air Medical, L.L.C    Hangar in Clyde A. Thomas Regional Airport, 1800
Rodney Hitch Boulevard, Morehead, KY 40351 Victoria Regional Airport    PHI Air
Medical, L.L.C    Hangar in Victoria Regional Airport, 437 Hangar Drive South,
Victoria, TX 77904 Gregg County    PHI Air Medical, L.L.C.    Hangar #18, Lot #9
East Texas Regional Airport, Gregg County, TX Dixie Chopper Business Center   
PHI Air Medical, L.L.C.    Hangar #2, 102 Ballard Ln. Greencastle, IN 46135
Maryland Department of Transportation    PHI Air Medical, L.L.C.    Hangar #405,
Martin State Airport, Baltimore, MD City of McKinney    PHI Air Medical, L.L.C.
   Hangar #405, with the Office Facility attached to Hangar #405, and helipad in
McKinney National Airport, Industrial Blvd, McKinney, TX Southwest Airport
Services, d/b/a Landmark Aviation    PHI Air Medical, L.L.C.    Hangar “G”,
Ellington Airport, Houston, TX

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

Burke Lakefront Services Co. d/b/a Signature Flight Support    PHI Air Medical,
L.L.C.    Hangar 1601 at Burke Lakefront Airport in Cleveland, OH 44114 Cherry
Hill Rentals, LLC    PHI Air Medical, L.L.C.    Hangar in 1017 “A” Avenue West,
Freeman Municipal Airport, Seymour, IN Palestine Jet Center, LLC    PHI Air
Medical, L.L.C.    Hangar in 1278 CR 421, Palestine, TX 75803 Rush Memorial
Hospital    PHI Air Medical, L.L.C.    Hangar in 1300 North Main Street,
Rushville, IN MPG East, Inc.    PHI Air Medical, L.L.C.    Hangar in 1405 West
Bravo Taxiway, Unit A2,, Payson, AZ City of Sierra Vista    PHI Air Medical,
L.L.C.    Hangar in 1800 Airport Avenue, Sierra Vista, AZ JDS Pump-N-Go, LLC   
PHI Air Medical, L.L.C.    Hangar in 2676 Industrial Row, Troy, MI 48084 Cutter
Aviation Deer Valley, Inc.    PHI Air Medical, L.L.C.    Hangar in 2800 N. 44th
Street, #800, Phoenix, AZ 85008 Scott McGriff LP
dba MLP Property Management    PHI Air Medical, L.L.C.    Hangar in 36549 State
Hwy 64, Wills Point, TX 75169 Helicopter Transport Services, LLC    PHI Air
Medical, L.L.C.    Hangar in 701 Wilson Point Road at the Martin State Airport,
Middle River, MD 21220 Augusto Martins    PHI Air Medical, L.L.C.    Hangar in
8744 Luscomb Dr, Show Low, AZ 85901 MANASSAS FBO LLC    PHI Air Medical, L.L.C.
   Hangar in APP Jet Center Manassas, 9990 Wakeman Drive, Manassar, VA, 20110
SKY Helicopters    PHI Air Medical, L.L.C.    Hangar in DeSoto Heliport, 150
Danieldale Rd, Desoto, TX 75115 Tri-State Aero, Inc.    PHI Air Medical, L.L.C.
   Hangar in Evansville Regional Airport, Evansville, IN Cherry Hill Aviation,
LLC    PHI Air Medical, L.L.C.    Hangar in Freeman Municipal Airport, 1059 A
Avenue Wester, Seymour, IN Hinds Community College District    PHI Air Medical,
L.L.C.    Hangar in John Bell Williams Airport, Bolton, MS Maryland Department
of Transportation    PHI Air Medical, L.L.C.    Hangar in Martin State Airport,
Baltimore, MD

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

Navarro County Aircraft Services    PHI Air Medical, L.L.C.    Hangar in
Northeast Corner of Building No. 6, Corsicana Municipal Airport, 9000 Old
Navarro Rd., Corsicana, TX 75109 Colorado County, Texas    PHI Air Medical,
L.L.C.    Hangar in Robert R. Wells Jr. Airport, Columbus, TX City of Socorro,
New Mexico    PHI Air Medical, L.L.C.    Hangar in Socorro Municipal Airport
Plat, Socorro, NM Tri-Cities Airport Authority    PHI Air Medical, L.L.C.   
Hangar in Tri-Cities Regional Airport, TN/VA Muhlenberg County Airport    PHI
Air Medical, L.L.C.    Hangar Space and rotary landcraft landing area at 400
Airport Road, Greenville, KY 42345 Swift Aviation Services, Inc.    PHI Air
Medical, L.L.C.    Hangar Space at 2710 East Old Tower Road, Phoenix, AZ
Ponderosa Aviation, Inc.    PHI Air Medical, L.L.C.    Hangar Space at 4500 East
Aviation Way, Safford, AZ 85546 Cotton Belt Aviation    PHI Air Medical, L.L.C.
   Hangar Space No. 538 at 538 Airport Road, Greenwood, MS 38930 Board of
Aviation Commissioners    PHI Air Medical, L.L.C.    Hangar Space, Ground Space
and Living Quarters at 272 Airport Road, Anderson, IN 46017 Galaxy Holdings LLC
   PHI Air Medical, L.L.C.    Hangars located at the Lone Star Executive
Airport, Montgomery County, TX City of Casa Grande    PHI Air Medical, L.L.C.   
Landing at 510 E. Florence Blvd., Casa Grande, AZ, 85122 Mike and Marianne
Gepner    PHI Air Medical, L.L.C.    Landing at 525 Union Chapel, Cedar Creek,
TX 78612 City of Safford    PHI Air Medical, L.L.C.    Landing at Safford
Regional Airport, 4275 E. Aviation Way, Safford, AZ. Presbyterian Properties,
Inc.    PHI Air Medical, L.L.C.    Landing in 2400 Unser Blvd. SE, Rio Rancho,
New Mexico Denton Regional Medical Center    PHI Air Medical, L.L.C.    Landing
in Denton Regional Medical Center located in Denton County, TX County of
Tuolumne    PHI Air Medical, L.L.C.    Parking Space in front of 10713 Airport
Road, Columbia, CA 95310 Shannon Airport, LLC    PHI Air Medical, L.L.C.   
Hangar at 3376 Shannon Airport Circle, Fredericksburg, VA

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

JW Jetcorp Ltd dba Jet Center of Tyler    PHI Air Medical, L.L.C.    Tyler
Pounds Field Regional Airport, 229 Airport Drive, Tyler, TX 75704 Shenandoah
Valley Regional Airport Commission    PHI Air Medical, L.L.C.    Hangar in
Shenandoah Valley Regional Airport, Weyers Case, VA Buckeye Valley Fire District
   PHI Air Medical, L.L.C.    Helipad located at Buckeye Valley Fire District,
25206 West MC 85, Buckeye Arizona 85326-5220 Lafayette Aviation, Inc.    PHI Air
Medical, L.L.C. d/b/a Air Evac Services    Hangar 8 at 1650 Aviation Drive, West
Lafayette, IN 47906 Tri-Cities Airport Authority    PHI Air Medical, L.L.C.
d/b/a Air Evac Services    Hangar in Tri-Cities Regional Airport, TN/VA
Signature Flight Support Corporation    PHI, Inc.    Hangar 3 at the Corpus
Christi International Airport, Corpus Christi, TX Helicopter Transport Services,
LLC    PHI, Inc.    Hangar in Martin State Airport, Baltimore, MD Morehead Rowan
County    PHI, Inc.    Hangar N. B end 1, Morehead-Rown County Airport, Rowan
County, KY Houma Terrebonne Airport Commission    PHI, Inc.    Landing in 3616
Thunderbird Road, Houma, LA. Houma-Terrebonne Airport Commission    PHI, Inc.   
Landing in Rounds Road, Houma, LA. Houma-Terrebonne Airport Commission    PHI,
Inc.    Landing in the Houma-Terrebonne Airport, Houma, LA Union Pacific
Railroad Company    PHI, Inc.    Parking Space at 100 Johnston Street,
Lafayette, LA.

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

Schedule 7.19 – Security Filings and Filing Offices

Lafayette Parish Clerk of Court, Lafayette, LA

Jefferson Parish Clerk of Court, Jefferson, LA

Federal Aviation Administration, Oklahoma City, OK

International Registry-Dublin, Dublin, Ireland

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

Schedule 7.23 - Brokers

None.

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

Schedule 7.24 - Property Insurance

 

Coverage

  

Primary / Lead Carrier

  

Participants / Excess Carriers

  

Limit ($M)

  

Premium ($K)

  

Deductible ($K)

Excess Spares    Lloyd’s (thru Energy Risk Ltd)    None    150    110    10
Property    Zurich    None    50    413    100 Excess Flood    Lloyd’s   
Evanston, James River, Alterra    25    82    100 Professional Liability -
Domestic & Foreign    Cap Specialty (Domestic), QBE (Foreign)    Cap Specialty,
Axis, Endurance, Beasley    31    417    50 Pollution/Environmental    Beazley
   None    10    53    100 Cyber Liability    Lloyd’s    None    10    65    100
Foreign Master    Chubb    None    1    303    —   Auto    Starr    None    1   
186    1 Workers’ Comp    CV Starr    None    Statutory    695    500 Excess
WC/Auto Liability/Foreign    CV Starr    None    25    60    —   D&O    QBE   
Hartford, Travelers, Navigators, Houston Casualty, C N A    70    351    500
Fiduciary    QBE    Chubb    20    32    10 Crime    Great American    Zurich   
15    18    100 EPL    Chubb    None    10    63    150 Aviation Hull/Liab/War
   Allianz    Swiss Re, Global, Allianz, W Brown, Old Republic, CV Starr, AIG,
Great American    35/200/35    7,511    RIM: 2.5% Hull Val, Maximum 250; RNIM: 1
Excess Aviation Liability    QBE    None    100    76   

 

 

Notes:

RIM: Rotors in Motion

RNIM: Rotors Not in Motion

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

Schedule 7.25 – Existing Indebtedness

1. Letters of Credit:

 

Bank

  

Beneficiary

  

Policy

   Current Amount  

UBS

   ACE Insurance    Workman’s Compensation Policy    $ 1,141,269.00  

UBS

   Saudi Red Crescent Authority    Performance Guaranty    $ 9,184,505.00  

UBS

   Starr Indemnity and Liability Co.    Workman’s Compensation Policy    $
1,750,000.00  

Whitney

   Texas Department of State Health Services    EMS License    $ 100,000.00  

Whitney

   ANZ    Performance Guaranty    $ 7,605,000.00           

 

 

 

Total Outstanding

         $ 19,780,774.00           

 

 

 

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

Schedule 7.33 – Disclosed Subleases

 

MSN

  

Registration
Number

  

Segment

  

Aircraft
Location

  

Aircraft
Type

  

Disclosed Sublessee

760634    N784P    Oil & Gas    Canada    S-76    Helijet (Third Party Lease)
760643    N786P    Oil & Gas    Canada    S-76    Helijet (Third Party Lease)
760675    N790P    Oil & Gas    Canada    S-76    Helijet (Third Party Lease)
920055    CGNYZ    Oil & Gas    Canada    S-92    Canadian Helicopters Ltd.
(Third Party Lease) 920096    CGNZH    Oil & Gas    Canada    S-92    Canadian
Helicopters Ltd. (Third Party Lease) 920121    N926RH    Oil & Gas    Canada   
S-92    Canadian Helicopters Ltd. (Third Party Lease) 920016    VHPPH    Oil &
Gas    Australia    S-92    HNZ Australia Pty Ltd (Intercompany) (as lessee and
registered operator) 920028    VHISV    Oil & Gas    Australia    S-92   

Petroleum Helicopters Australia Pty Ltd (Intercompany) (as sublessor)

 

HNZ Australia Pty Ltd (Intercompany) (as sublessee and registered operator)

920037    VHIPQ    Oil & Gas    Australia    S-92    HNZ Australia Pty Ltd
(Intercompany) (as lessee and registered operator) 920038    VHIPE    Oil & Gas
   Australia    S-92   

Petroleum Helicopters Australia Pty Ltd (Intercompany) (as sublessor)

 

HNZ Australia Pty Ltd (Intercompany) (as sublessee and registered operator)

920073    VH-IPZ    Oil & Gas    Australia    S-92    HNZ Australia Pty Ltd
(Intercompany) (as lessee and registered operator) 920104    VHIPK    Oil & Gas
   Australia    S-92   

Petroleum Helicopters Australia Pty Ltd (Intercompany) (as sublessor)

 

HNZ Australia Pty Ltd (Intercompany) (as sublessee and registered operator)

920116    VHIPX    Oil & Gas    Australia    S-92   

Petroleum Helicopters Australia Pty Ltd (Intercompany) (as sublessor)

 

HNZ Australia Pty Ltd (Intercompany) (as sublessee and registered operator)

920161    VHISP    Oil & Gas    Australia    S-92   

Petroleum Helicopters Australia Pty Ltd (Intercompany) (as sublessor)

 

HNZ Australia Pty Ltd (Intercompany) (as sublessee and registered operator)

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

Schedule 7.34 – Affiliate Transactions

None.

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

Schedule 7.35 – Collective Bargaining Agreements

1. The Company’s pilot workforce is operating under an expired collective
bargaining agreement (the “CBA”) with the Office & Professional Employees
International Union – Local 108 (the “Union”). After expiration of the
then-existing CBA, the negotiations between the Debtors and the Union faltered
and, as a result, the CBA has been in “self-help” since August 28, 2006.

2. Approximately 100 of our Australian pilots and ground staff are covered by
Enterprise agreements that are scheduled to expire between February 27, 2018 and
19 February 2023. Two unions form part of the bargaining representation for
these agreements, however, the level of union membership is unknown and remains
confidential. The HNZ Australia PTY LTD Helicopter pilots’ Enterprise Agreement
2014 expired on 27 February 2018. Agreement in-principle has been reached with
the union and delegates, with the voting process commencing shortly with no
concerns. We are also a party to a Collective agreement covering a limited
number of our New Zealand pilots, which expires on September 21, 2019.

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

Schedule 8.03 – Aircraft Insurances

 

1.

Insurance Requirements.

 

  (a)

Each Loan Party shall maintain, or cause to be maintained, in respect of the
each Aircraft (i) aircraft third party liability insurance and aircraft
passenger liability insurance covering property damage, baggage, cargo and mail
and bodily injury and public liability, aviation premises, and products legal
liability for a combined single limit of not less than $80M (or its currency
equivalent) any one occurrence but in the annual aggregate in respect of
products legal liability and including war and allied risks in accordance with
the Extended Coverage Endorsement (AVN 52E) (or its successor) for a combined
single sub-limit (bodily injury/property damage) of not less than $80M (or its
currency equivalent) any one occurrence and in the annual aggregate
(ii) all–risk aircraft hull and engine insurance (including spares coverage) in
an amount which is not less than the Approved Value for that Aircraft and
(iii) hull war risk insurance and allied perils as per Lloyd’s form LSW555D or
the market standard wording as applicable if such forms are no longer applicable
in amounts not less than Approved Value in respect of loss of or damage to that
Aircraft.

 

  (b)

All Aircraft Insurances shall be primary and be in a form and substance and with
insurance carriers reasonably satisfactory to the Collateral Agent and shall
name the Owner, each Agent, each Lender and each of their officers, directors,
agents, employees, shareholders, subsidiaries, Affiliates (and each of such
subsidiaries’ and affiliate’s officers, directors, agents, shareholders and
employees, contractors, successors, assigns and all other Indemnitees (the
“Additional Insureds”) as contract parties, and with the Collateral Agent named
as loss payee in respect of the Aircraft Insurances carried in accordance with
Clauses 1(a)(ii) and (iii) above (provided that the Lenders and Agents shall
only be contract parties in respect of the Aircraft Insurances carried in
accordance with Clause 1(a)(i) above).

 

  (c)

All Aircraft Insurances shall:

 

  (i)

contain a waiver of subrogation endorsement and breach of warranty coverage (on
both the hull and liability coverages), and shall provide for at least thirty
(30) days prior written notice to Collateral Agent before cancellation, lapse
for non-payment of premium or adverse material change in any policy (or at least
seven (7) days or such lesser period as is otherwise customarily available in
respect of war and allied perils insurance);

 

  (ii)

insure the Additional Insureds and each of them regardless of any act or
omission or breach or violation by a Loan party or any other Person of any
warranties, declarations or conditions in such policies;

 

  (iii)

waive any right of set-off against a Loan Party or any other person, as the case
may be, other than in respect of unpaid premiums;

 

  (iv)

operate on a worldwide basis in respect of any ferry flights, shipment to the
Country of Registration from maintenance, spares, premises and products
liability, and otherwise within the Country of Registration (including its
territorial waters out to 200 nautical miles); and

 

  (v)

in respect of any reinsurance, if applicable, shall:

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

  (A)

contain a “cut-through” clause in a form satisfactory to Collateral Agent
(acting reasonably);

 

  (B)

provide for payment to be made even if the insurers which issue the primary
Aircraft Insurances are solvent or bankrupt, have been liquidated or dissolved
or have not made a payment under the relevant original Insurance policy; and

 

  (C)

be on the same terms as the primary insurance.

 

  (d)

The liability insurance shall include a severability of interest clause
providing that such policy shall operate in the same manner as if there were a
separate policy covering each insured and shall not be subject to any offset by
any other insurance carried by any person.

 

  (e)

The Aircraft Insurances shall incorporate the terms and conditions of Airline
Finance/Lease Contract Endorsement AVN67B (“AVN67B”) or any subsequent successor
thereto. To the extent any provision of AVN67B conflicts or is otherwise
inconsistent with the insurance requirements under this Lease, then (so long as
it shall be general industry practice to insure helicopters that are financed or
leased on the basis of AVN67B or any subsequent successor thereto) such
conflicting or inconsistent provisions of AVN67B (or its successor) shall
prevail and shall be deemed to satisfy the insurance requirements under this
Lease.

 

  (f)

Any expenses of adjusting or collecting insurance proceeds shall be borne by
Loan Parties.

 

2.

Insurance Covenants.

Each Loan Party shall:

 

  (a)

ensure that all applicable requirements relating to the insurance of each
Aircraft which are from time to time imposed by the Laws of the Country of
Registration or any country to, from or over which the Aircraft may be flown are
complied with;

 

  (b)

ensure that the terms and conditions of the Aircraft Insurances are complied
with and shall not do or agree to any act or omission which:

 

  (i)

invalidates or may invalidate the Aircraft Insurances;

 

  (ii)

renders or may render void or voidable the whole or any part of any of the
Aircraft Insurances; or

 

  (iii)

brings any particular liability within the scope of an exclusion or exception to
the Aircraft Insurances;

 

  (c)

on request provide Collateral Agent with:

 

  (i)

evidence that the insurance premiums have been paid in accordance with the terms
of the relevant insurance policy; and

 

  (ii)

any other insurance related information or assistance in respect of the Aircraft
Insurances that Collateral Agent may reasonably require; provided that a Loan
party shall not be obliged to disclose information which is commercially
sensitive or subject to confidentiality restrictions;

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

  (d)

be responsible for any deductible under the Aircraft Insurances; and

 

  (e)

annually on the anniversary of the Aircraft Insurances renewal date, shall
furnish to the Collateral Agent the certificates evidencing the Aircraft
Insurances are in force.

 

3.

Total Loss.

 

  (a)

On the earlier of the date in respect of an Aircraft (the “Total Loss Payment
Date”) that is:

 

  (i)

ninety (90) days from the date of a Total Loss with respect to the Airframe
and/or the Aircraft; and

 

  (ii)

one Business Day after final receipt of any insurance proceeds relating to such
Total Loss,

 

  (b)

Upon a Total Loss with respect to only an Engine, the Loan Parties shall
(i) give the Collateral Agent prompt written notice of any Total Loss with
respect to an Engine, and (ii) by the earlier of ninety (90) days after the
occurrence of such Total Loss or as soon as possible thereafter, but in any
event no more than seventy-two hours after the receipt by of the applicable
insurance proceeds, if any, duly convey to Owner title to an engine, of the same
make and model number as the Engine suffering the Total Loss. Such engine shall
be the same make and model or an improved make and model and suitable for
installation on the Airframe as the Engine suffering the Total Loss, shall be
free and clear of all Liens, and be in as good an operating condition as, and
have a value and useful life at least equal to, the Engine suffering the Total
Loss, assuming such Engine was in the condition and repair required by the terms
hereof immediately prior to the occurrence of such Total Loss, and the
installation thereof is performed by a properly Aviation Authority certified
mechanic with respect to an aircraft of the type of the Helicopter. The Loan
Parties shall furnish to the Collateral Agent such documents to evidence such
conveyance, and take such other related actions, as the Collateral Agent shall
request, including (with respect to a replacement engine) taking such other
action as may be required by the Collateral Agent so as to cause Owner to have a
legal, valid and continuing, ownership interest and first priority,
International Interest vested in Owner in such engine, as evidenced on the
registry of the Aviation Authority, the International Registry (in each case if
applicable) and any other recording office, and to ensure that such replacement
Engine is subject to an Aircraft Collateral Mortgage.

 

  (c)

In the event of a claim for damage to an Aircraft of less than $1M, payment of
insurance proceeds shall be made directly to the Owner and shall be applied by
the Owner to the expeditious repair of the Aircraft. Where a claim for damage
exceeds $1M, but is not in connection with a Total Loss with respect to the
Airframe and/or Aircraft, payment of insurance proceeds shall be made to the
Owner, who shall apply the same to the expeditious repair of the relevant
Aircraft or, where the Aircraft has been repaired in accordance with the terms
of the Loan Documents, to the reimbursement of the cost of the repair.

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

4.

Failure to Insure.

 

  (a)

If a Lease Party fails to procure that the Aircraft Insurances in respect of an
Aircraft are maintained as required by this Loan Agreement, the Collateral Agent
may:

 

  (i)

at any time while that failure is continuing, require the Aircraft (i) to be
immediately grounded and/or (ii) to remain at, or to proceed to and remain at,
any location designated by Collateral Agent until the failure is remedied or
change addressed to its satisfaction;

 

  (ii)

pay the premiums due or effect and maintain insurances satisfactory to it; and

 

  (iii)

otherwise remedy that failure in any manner that it considers appropriate
(including, without limitation, by effecting an “owner’s interest” policy),

in each case without prejudice to its right to treat such failure as an Event of
Default.

 

  (b)

The Loan Parties shall immediately reimburse the Collateral Agent for any
amounts paid by it under paragraph (a) above, together with interest at the
[overdue rate] from the date of payment through the date of reimbursement.

 

5.

Continuance of Liability Cover. The Loan Parties shall procure that liability
insurances are maintained for the benefit of the Additional Insureds (as well as
any Lender or Agent that has ceased to be a Lender or Agent) for two (2) years
following the full and final repayment of the Obligations.

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

Schedule 8.26 – Aircraft Collateral Schedule

 

LOGO [g705769page049.jpg]

Project Papa 3/13/2019 Collateral Summary - O&G, Technical Services and
Corporate Aircraft Confidential | Subject to NDA YEAR OF COUNTRY OF NO. OF
MARKET LIQUIDATION NO MSN REG BUILD AGE OWNER SEGMENT LOCATION REGISTRATION
MANUFACTURER CATEGORY TYPE CONFIG. ENGINES Make and Model Engine Serial Number
Serial Number Location NOTES Leased Status VALUE ($MM) (1) VALUE ($MM) (1)
INCLUDED IN COLLATERAL POOL 1 445 N327PH 2006 13 PHI, Inc. Oil & Gas U.S. U.S.
Airbus Helicopters Light EC135 Offshore 2 Pratt PW206B2 PCE-BJ1084 PCE-BJ1358
GOM - - 2.5 1.8 2 450 N328PH 2006 13 PHI, Inc. Oil & Gas U.S. U.S. Airbus
Helicopters Light EC135 Offshore 2 Pratt PW206B2 PCE-BJ0261 PCE-BJ1359 GOM - -
2.8 2.0 3 2044 N232PH 2006 13 PHI, Inc. Corporate U.S. U.S. Bombardier Fixed
Wing Learjet 40 Passenger/Utility 2 Honeywell TFE731-20BR-1B P-116682C P-116683C
Lafayette - - 2.3 1.8 4 2907 N4031L 1996 23 PHI, Inc. Tech Services Antarctica
U.S. Airbus Helicopters Light AS350 Passenger/Utility 1 Turbomeca Arriel 1D1
9301 Antarctica - - 0.8 0.7 5 2919 N4036H 1996 23 PHI, Inc. Tech Services
Antarctica U.S. Airbus Helicopters Light AS350 Passenger/Utility 1 Turbomeca
Arriel 1D1 9353 Antarctica - - 0.8 0.7 6 20120 N343PH 2017 2 PHI, Inc. Oil & Gas
U.S. U.S. Airbus Helicopters Light H145 Offshore 2 Turbomeca Arriel 2E 60254
60419 GOM - - 8.0 6.0 7 20122 N393PH 2017 2 PHI, Inc. Oil & Gas U.S. U.S. Airbus
Helicopters Light H145 Offshore 2 Turbomeca Arriel 2E 60041 60257 GOM Engine
60041 - presently deemed “2L” collateral - 8.0 6.0 8 30953 N227PH 1979 40 PHI,
Inc. Tech Services Antarctica U.S. Bell Helicopter Textron Medium Bell 212
Offshore 2 Pratt PT6-3B CPPS62506 CPPS62999 Antarctica - - 1.5 1.2 9 31106
N226PH 1980 39 PHI, Inc. Tech Services U.S. U.S. Bell Helicopter Textron Medium
Bell 212 Offshore 2 Pratt PT6-3B CPPS61845 CPPS63019 Lafayette - - 1.6 1.3 10
31140 N5736J 1980 39 PHI, Inc. Tech Services Antarctica U.S. Bell Helicopter
Textron Medium Bell 212 Passenger/Utility 2 Pratt PT6-3B CPPS62016 CPPSTB0040
Antarctica - - 1.9 1.6 11 31304 N3208H 1988 31 PHI, Inc. Tech Services
Antarctica U.S. Bell Helicopter Textron Medium Bell 212 Passenger/Utility 2
Pratt PT6-3B CPPS61990 CPPS62243 Antarctica - - 2.1 1.8 12 41254 N140PH 2010 9
PHI, Inc. Oil & Gas U.S. U.S. AgustaWestland Medium AW139 Offshore 2 Pratt
PTG-67C PCE-KB0919 PCE-KB0924 GOM - - 10.1 8.6 13 41280 N146PH 2011 8 PHI, Inc.
Oil & Gas U.S. U.S. AgustaWestland Medium AW139 Offshore 2 Pratt PTG-67C
PCE-KB0643 PCE-KB1067 GOM - - 9.5 8.1 14 41300 N148PH 2012 7 PHI, Inc. Oil & Gas
U.S. U.S. AgustaWestland Medium AW139 Offshore 2 Pratt PTG-67C PCE-KB0939
PCE-KB1088 GOM - - 9.5 8.1 15 41303 N149PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S.
AgustaWestland Medium AW139 Offshore 2 Pratt PTG-67C PCE-KB0406 PCE-KB0812 GOM -
- 11.0 9.3 16 41312 N151PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S. AgustaWestland
Medium AW139 Offshore 2 Pratt PTG-67C PCE-KB0657 PCE-KB0843 GOM Both engines
presently deemed “2L” collateral - 10.8 9.2 17 41316 N152PH 2012 7 PHI, Inc. Oil
& Gas U.S. U.S. AgustaWestland Medium AW139 Offshore 2 Pratt PTG-67C PCE-KB1200
PCE-KB1209 GOM - - 9.7 8.2 18 41317 N153PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S.
AgustaWestland Medium AW139 Offshore 2 Pratt PTG-67C PCE-KB1221 PCE-KB1226 GOM -
- 9.5 8.0 19 51345 N236PB 1990 29 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 206 Offshore 1 RollsRoyce C30 CAE895845 Lafayette Held for
sale; not in operation - 0.9 0.8 20 51506 N230PB 1991 28 PHI, Inc. Oil & Gas
U.S. U.S. Bell Helicopter Textron Light Bell 206 Offshore 1 RollsRoyce C30
CAE895594 Lafayette Held for sale; not in operation - 0.9 0.8 21 51529 N233BH
1991 28 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 206
Offshore 1 RollsRoyce C30 CAE895129 Lafayette Held for sale; not in operation -
1.0 0.8 22 51540 N231BB 1991 28 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 206 Offshore 1 RollsRoyce C30 CAE895985 Lafayette Held for
sale; not in operation - 1.0 0.8 23 52033 N228PB 1994 25 PHI, Inc. Oil & Gas
U.S. U.S. Bell Helicopter Textron Light Bell 206 Offshore 1 RollsRoyce C30
CAE895529 Lafayette Held for sale; not in operation - 1.3 1.1 24 53003 N407PH
1996 23 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407
Offshore 1 RollsRoyce C47 CAE848039 GOM - - 1.1 0.9 25 53038 N417PH 1996 23 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE848519 GOM - - 1.1 0.9 26 53114 N447PH 1997 22 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847493 GOM - - 1.4 1.2 27 53121 N457PH 1997 22 PHI, Inc. Oil & Gas U.S. U.S.
Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847017 GOM -
- 1.3 1.1 28 53198 N406PH 1997 22 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE848413 GOM - - 1.0 0.9 29
53199 N612PH 1997 22 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Bell 407 Offshore 1 RollsRoyce C47 CAE847613 GOM Will be reconfigured and
transferred to Air Medical in the future - 1.1 0.9 30 53228 N408PH 1997 22 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE847687 GOM - - 1.2 1.1 31 53266 N719PH 1998 21 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847015 GOM Will be reconfigured and transferred to Air Medical in the future
- 1.3 1.1 32 53327 N440PH 1998 21 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE848171 GOM - - 1.1 1.0 33
53378 N490PH 1999 20 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Bell 407 Offshore 1 RollsRoyce C47 CAE848438 GOM - - 1.3 1.2 34 53386 N491PH
1999 20 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407
Offshore 1 RollsRoyce C47 CAE847420 GOM - - 1.0 0.9 35 53390 N415PH 1999 20 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE848018 GOM - - 1.2 1.0 36 53396 N494PH 1999 20 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE848011 GOM - - 1.2 1.0 37 53397 N495PH 1999 20 PHI, Inc. Oil & Gas U.S. U.S.
Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847497 GOM -
- 1.1 1.0 38 53398 N496PH 1999 20 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847180 GOM - - 1.0 0.9 39
53399 N498PH 1999 20 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Bell 407 Offshore 1 RollsRoyce C47 CAE847084 GOM - - 1.0 0.9 40 53421 N433PH
2000 19 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407
Offshore 1 RollsRoyce C47 CAE847434 GOM - - 1.1 1.0 41 53435 N454PH 2000 19 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE847507 GOM - - 1.3 1.1 42 53457 N452PH 2000 19 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847431 GOM - - 1.3 1.1 43 53461 N455PH 2000 19 PHI, Inc. Oil & Gas U.S. U.S.
Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847458 GOM -
- 1.0 0.9 44 53622 N438PH 2004 15 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847494 GOM - - 1.6 1.4 45
53636 N410PH 2005 14 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Bell 407 Offshore 1 RollsRoyce C47 CAE847568 GOM - - 1.3 1.1 46 53637 N411PH
2005 14 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407
Offshore 1 RollsRoyce C47 CAE848482 GOM - - 1.5 1.3 47 53640 N418PH 2005 14 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE847617 GOM - - 1.5 1.3 48 53675 N422PH 2005 14 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847626 GOM - - 1.5 1.3 49 53682 N424PH 2006 13 PHI, Inc. Oil & Gas U.S. U.S.
Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847733 GOM -
- 1.6 1.4 50 53684 N425PH 2006 13 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847303 GOM - - 1.5 1.3 51
53747 N420PH 2007 12 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Bell 407 Offshore 1 RollsRoyce C47 CAE900006 GOM - - 1.5 1.3 52 53749 N421PH
2007 12 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407
Offshore 1 RollsRoyce C47 CAE848476 GOM - - 1.6 1.4 53 53862 N412PH 2008 11 PHI,
Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE895364 GOM - - 1.7 1.5 54 53863 N427PH 2008 11 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847216 GOM Aircraft is reconfigured and transferred to Air Medical - 1.7 1.5
55 53870 N430PH 2008 11 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron
Light Bell 407 Offshore 1 RollsRoyce C47 CAE844125 GOM - - 1.8 1.5 56 53999
N439PH 2010 9 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell
407 Offshore 1 RollsRoyce C47 CAE847103 GOM - - 1.8 1.6 57 54081 N441PH 2011 8
PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1
RollsRoyce C47 CAE847208 GOM - - 2.0 1.7 58 54089 N442PH 2011 8 PHI, Inc. Oil &
Gas U.S. U.S. Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47
CAE847543 GOM - - 1.9 1.7 59 54090 N443PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S.
Bell Helicopter Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847671 GOM -
- 2.0 1.8 60 54096 N445PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter
Textron Light Bell 407 Offshore 1 RollsRoyce C47 CAE847731 GOM - - 2.2 1.9 61
54111 N448PH 2012 7 PHI, Inc. Oil & Gas U.S. U.S. Bell Helicopter Textron Light
Be

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LOGO [g705769page050.jpg]

Project Papa 3/13/2019 Collateral Summary - O&G, Technical Services and
Corporate Aircraft Confidential | Subject to NDA YEAR OF COUNTRY OF NO. OF
MARKET LIQUIDATION NO MSN REG BUILD AGE OWNER SEGMENT LOCATION REGISTRATION
MANUFACTURER CATEGORY TYPE CONFIG. ENGINES Make and Model Engine Serial Number
Serial Number Location NOTES Leased Status VALUE ($MM) (1) VALUE ($MM) (1) 83
920096 CGNZH 2008 11 PHI, Inc. Oil & Gas Canada Canada Sikorsky Heavy S-92
Offshore 2 GE CT7-8A 947297(PHI) 947715 (Capital One) Canada - Aircraft Dry
leased to Canadian Helicopters Ltd (Third Party Lease) 19.2 13.4 84 920104 VHIPK
2009 10 PHI, Inc. Oil & Gas Australia Australia Sikorsky Heavy S-92 Offshore 2
GE CT7-8A 947597(PHI) 947631 (ECN) Australia - Aircraft Dry Leased to HNZ
Australia (Intercompany Lease) 19.4 13.6 85 920116 VHIPX 2009 10 PHI, Inc. Oil &
Gas Australia Australia Sikorsky Heavy S-92 Offshore 2 GE CT7-8A 947456(PHI)
947439(PHI) Australia - Aircraft Dry Leased to HNZ Australia (Intercompany
Lease) 20.0 14.0 86 920118 N925PH 2009 10 PHI, Inc. Oil & Gas U.S. U.S. Sikorsky
Heavy S-92 Offshore 2 GE CT7-8A 947282 (GE Loaner) 947483(PHI) AEX - - 17.6 12.3
87 920121 N926RH 2009 10 PHI, Inc. Oil & Gas Canada U.S. Sikorsky Heavy S-92
Offshore 2 GE CT7-8A 947916 (GE Loaner) 947337(PHI) Canada - Aircraft Dry leased
to Canadian Helicopters Ltd (Third Party Lease) 20.1 14.1 88 920161 VHISP 2011 8
PHI, Inc. Oil & Gas Australia Australia Sikorsky Heavy S-92 Offshore 2 GE CT7-8A
947553(PHI) 947588(PHI) Australia - Aircraft Dry Leased to HNZ Australia
(Intercompany Lease) 20.5 14.4 89 920178 N935PH 2012 7 PHI, Inc. Oil & Gas U.S.
U.S. Sikorsky Heavy S-92 Offshore 2 GE CT7-8A 947800 (BB&T) 947679 (Bank of
America) GOM - - 21.0 14.7 90 BY-178 N332P 2013 6 PHI, Inc. Corporate U.S. U.S.
Hawker Beechcraft Fixed Wing King Air 200 Passenger/Utility 2 Pratt PT6A-52
PCE-RX0500 PCE-RX0501 Lafayette - - 3.3 2.6 Total $486.4 $369.0 Additional
Pledged Owned Engines The 12 engines shown to the right represent those on which
the Company has agreeed to pledge a first priority security position to Blue
Torch Capital, LP Lessor Owned Engine PHI Owned Replacement # Make and Model
Engine Serial Number Serial Number 1 GE CT7-8A 947514 (GE Loaner) 947504
(Overhaul/Repair) 2 GE CT7-8A 947720 (Wells Fargo) 947592 (Overhaul/Repair) 3 GE
CT7-8A 947914 (GE Loaner) 947583 (Overhaul/Repair) 4 GE CT7-8A 947344 (GE
Loaner) 947479 (Overhaul/Repair) 5 GE CT7-8A 947472 (GE Loaner) 947245
(Overhaul/Repair) 6 GE CT7-8A 947715 (Capital One) 947574 (Other PHI Owned) 7 GE
CT7-8A 947631 (ECN) 947295 (Other PHI Owned) 8 GE CT7-8A 947282 (GE Loaner)
947254 (Other PHI Owned) 9 GE CT7-8A 947916 (GE Loaner) 947262 (Other PHI Owned)
10 GE CT7-8A 947800 (BB&T) 947203 (Other PHI Owned) 11 GE CT7-8A 947679 (Bank of
America) 947227 (Other PHI Owned) 12 GE CT7-8A 947600 (Other PHI Owned)
Temporary Collateral 91 760726 N753P 2008 11 PHI Air Medical, L.L.C. Air Medical
U.S. U.S. Sikorsky Medium S-76 EMS 2 Turbomeca Arriel 2S2 42238 4229TEC
Cleveland Temporary collateral until “2L” issue is solved on above engines - 5.0
3.8 Note: Company will require ability to move assets geographically for
business purposes (1) Oil & Gas, Corporate and Technical Services market values
based solely on Ascend desktop valuation report as of November 27, 2018. Market
Values shown represent “Adjusted Half-Life” values while liquidation values
assume a forced sale on an “as-is, where-is” basis with a limited marketing
period

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

Schedule 9.02 – Liens

1. Liens in connection with the following Letters of Credit:

 

Bank

  

Beneficiary

  

Policy

   Current Amount  

UBS

   ACE Insurance    Workman’s Compensation Policy    $ 1,141,269.00  

UBS

   Saudi Red Crescent Authority    Performance Guaranty    $ 9,184,505.00  

UBS

   Starr Indemnity and Liability Co.    Workman’s Compensation Policy    $
1,750,000.00  

Whitney

   Texas Department of State Health Services    EMS License    $ 100,000.00  

Whitney

   ANZ    Performance Guaranty    $ 7,605,000.00           

 

 

 

Total Outstanding

         $ 19,780,774.00           

 

 

 

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

Schedule 9.05 – Investments

None.

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

EXHIBIT A

FORM OF TERM LOAN NOTE

 

$[                    ]    [                    ], 20[    ]

FOR VALUE RECEIVED, the undersigned, PHI, INC., a Louisiana corporation (the
“Borrower”), hereby unconditionally promises to pay to the order of
[                    ], a [                    ] [                    ], or its
successors or assigns (the “Holder”), in lawful money of the United States and
in immediately available funds, the principal amount of
[                        ] AND [    ]/100 DOLLARS ($[                    ]), or,
if less, the aggregate unpaid principal amount of the Term Loan of the Holder
outstanding under the Loan Agreement (each as defined below) and evidenced by
this Term Loan Note. All capitalized terms used but not otherwise defined in
this Term Loan Note (as amended, amended and restated, supplemented or otherwise
modified, renewed or replaced from time to time, this “Note”) have the meanings
given to them in the Loan Agreement.

The Borrower shall repay the principal amount of this Note and interest due
thereon, at the applicable per annum interest rate or default rate specified in
the Loan Agreement and, if applicable, with the applicable Prepayment Premium,
at the times and places specified in, and otherwise in accordance with, the
terms of the Loan Agreement.

The Holder is authorized to endorse on the schedules annexed hereto and made a
part hereof or on a continuation thereof which shall be attached hereto and made
a part hereof, (a) the date and amount of the Term Loan, (b) the date and amount
of each payment or prepayment of principal with respect thereto, and (c) the
interest rate and Interest Period applicable to the Term Loan. Each such
endorsement shall constitute prima facie evidence (absent manifest error) of the
existence and amounts of the obligations hereunder and the accuracy of the
information so endorsed, provided that the failure to make any such endorsement,
or any error in any such endorsement, shall not affect the obligations of the
Borrower in respect of the Term Loan.

This Note is one of the “Notes” referred to in the Loan Agreement dated as of
March 13, 2019 among the Borrower, the Subsidiaries of the Borrower that are
Guarantors or become Guarantors thereunder pursuant thereto, the Lenders from
time to time party thereto, BLUE TORCH FINANCE, LLC, a Delaware limited
liability company, as administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, the “Administrative
Agent”) and as collateral agent for the Secured Parties (in such capacity,
together with its successors and permitted assigns in such capacity, the
“Collateral Agent”, and together with the Administrative Agent, each an “Agent”
and collectively the “Agents”) (as amended, amended and restated, supplemented
or otherwise modified, renewed or replaced from time to time, the “Loan
Agreement”).

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

This Note and the Term Loan evidenced hereby are subject to, and should be
construed in accordance with, the provisions of the Loan Agreement, are subject
to optional and mandatory prepayment in whole or in part as provided in the Loan
Agreement, may be accelerated prior to maturity upon the terms set forth in the
Loan Agreement, and are entitled to the benefits of, and is guaranteed and
secured pursuant to, the Guaranty and Security Agreement and the other Security
Documents.

All payments of principal and interest under or otherwise in respect of this
Note shall be made without counterclaim, set-off, rights of rescission, or any
other defense of any kind whatsoever. All parties now and hereafter liable with
respect to this Note, whether as maker, principal, surety, guarantor, endorser
or otherwise, hereby waive, to the fullest extent permitted by applicable law,
presentment, demand, protest, notice of dishonor and all other demands, protests
and notices of any kind.

This Note may be transferred pursuant to and in accordance with the registration
and other provisions of Section 12.06 of the Loan Agreement (“Successors and
Assigns; Participations and Assignments”).

No failure or delay by the Holder in exercising any power or right hereunder
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. Neither this Note nor any provision
hereof may be waived, amended, modified or supplemented, nor shall any departure
herefrom or therefrom be consented to, except pursuant to a written agreement
entered into between the Borrower and the Holder in the manner provided in
Section 12.01 of the Loan Agreement (“Amendments and Waivers”).

THIS NOTE AND THE VALIDITY, INTERPRETATION, CONSTRUCTION, AND PERFORMANCE HEREOF
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ANY
CLAIM HEREUNDER (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING
OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
REQUIRING APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH
THIS NOTE, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THIS NOTE. THE BORROWER FURTHER AGREES THAT THE TERMS AND PROVISIONS
OF ARTICLE XIII OF THE LOAN AGREEMENT (“JURISDICTION; VENUE, SERVICE OF PROCESS;
JURY TRIAL WAIVER”) ARE HEREBY INCORPORATED HEREIN BY REFERENCE, AND SHALL APPLY
TO THIS NOTE MUTATIS MUTANDIS AS IF FULLY SET FORTH HEREIN.

* * *

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

IN WITNESS WHEREOF, the Borrower has duly executed and delivered this Note as of
the date first above written.

 

PHI, INC., a Louisiana corporation By  

 

Name:   Title:  

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

Schedule A to Note

TERM LOAN AND REPAYMENTS OF TERM LOAN

 

Date   Amount of Term
Loan   Date and Amount of
Principal of Term
Loan Repaid   Unpaid Principal
Balance of Term
Loan   Applicable
Interest Rate
and Interest
Period   Notation
Made By

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

EXHIBIT B

FORM OF GUARANTY AND SECURITY AGREEMENT

GUARANTY AND SECURITY AGREEMENT dated as of March 13, 2019 (as amended, amended
and restated, supplemented or otherwise modified, renewed or replaced from time
to time, this “Agreement”) among the parties identified as “Grantors” on the
signature pages hereto and such other parties as may become Grantors after the
date hereof pursuant to Section 8.13 hereof (individually a “Grantor”, and
collectively, jointly and severally, the “Grantors”) and BLUE TORCH FINANCE LLC,
a Delaware limited liability company (“Blue Torch”), as collateral agent for the
benefit of the Lenders and the other Secured Parties (in such capacity, together
with its successors and assigns in such capacity, the “Collateral Agent”).

Introductory Statement

WHEREAS, pursuant to the Loan Agreement dated as of March 13, 2019 (as amended,
restated, amended and restated, supplemented or otherwise modified, renewed or
replaced from time to time, the “Loan Agreement”) among the Borrower, the other
Guarantors from time to time party thereto, the Lenders from time to time party
thereto, Blue Torch as Administrative Agent and the Collateral Agent (the
Collateral Agent together with the Administrative Agent, each an “Agent” and
collectively the “Agents”), the Lenders have severally agreed to make Loans to
the Borrower upon and subject to the terms and conditions set forth therein; and

WHEREAS, each Grantor (other than the Borrower) has agreed to guarantee the
payment and performance of the Borrower’s obligations and liabilities under the
Loan Agreement and the other Loan Documents as more fully set forth therein and
herein; and

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each of the other Grantors, and each Guarantor either is a parent
company of the Borrower or is a Subsidiary of the Borrower; and

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the Loans and other financial accommodations under the Loan Agreement;
and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective Loans to the Borrower under the Loan Agreement that the
Grantors shall have executed this Agreement and delivered this Agreement to the
Collateral Agent for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and the agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, and to induce
the Agents and the Lenders to enter into the Loan Agreement, to induce the
Lenders to make their respective Loans to the Borrower thereunder, and to induce
the Agents to act in their respective agency capacities thereunder, and
intending to be legally bound, each Grantor hereby agrees with the Collateral
Agent, for the benefit of the Secured Parties, as follows:

 

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

SECTION 1. DEFINED TERMS

1.1. Definitions.

(a) Uppercase terms used but not otherwise defined herein have the meanings
given to them in the Loan Agreement. The following terms have the meanings given
to them in the UCC: Account, Certificated Security, Chattel Paper, Commercial
Tort Claim, Commodity Account, Commodity Contract, control, Document, Electronic
Chattel Paper, Farm Product, Fixtures, General Intangible, Goods, Instrument,
Inventory, Investment Company Security, Letter-of-Credit Right, Payment
Intangible, Securities Account, Securities Entitlement, Uncertificated Security
and Supporting Obligation. All other uppercase terms used herein but not
otherwise defined herein or in the Loan Agreement have the meanings given to
them in the UCC.

(b) The following terms have the following meanings:

“Administrative Agent” has the meaning given to such term in the Introductory
Statement hereto.

“Agent” and “Agents” have the respective meanings given to such terms in the
Introductory Statement hereto.

“Agreement” has the meaning given to such term in the preamble hereto.

“Aircraft Security Agreement” means that certain aircraft security agreement,
dated as of the date hereof, by and among the PHI, Inc., as grantor and the
Collateral Agent, as secured party.

“Assumption Agreement” means an Assumption Agreement substantially in the form
attached hereto as Annex I, with such changes thereto to which the Collateral
Agent may agree in its sole discretion.

“Blue Torch” has the meaning given to such term in the preamble hereto.

“Borrower” has the meaning given to such term in the preamble hereto.

“Collateral” has the meaning given to such term in Section 3 hereof.

“Collateral Account” means any Deposit Account subject to an Account Control
Agreement pursuant to Section 4.02(a)(iii) of the Loan Agreement, that is
established by the Collateral Agent as provided in Section 6.1 or Section 6.4
hereof.

 

2

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

“Collateral Agent” has the meaning given to such term in the preamble hereto.

“Deposit Account” has the meaning given to such term in the UCC and, in any
event, includes any demand, time, savings, passbook or similar account
maintained with a depositary institution.

“Equipment” means (a) any “equipment”, as defined in Section 9-102(a)(33) of the
UCC, (b) all machinery, equipment, furnishings and Fixtures, and (c) any and all
additions, substitutions, and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment, and
accessories installed thereon or affixed thereto (in each case, regardless of
whether characterized as equipment under the UCC).

“Excluded Property” has the meaning given to such term in the final paragraph of
Section 3 hereof.

“Fraudulent Transfer Laws” has the meaning given to such term in Section 2.1(c)
hereof.

“Grantor Insolvency Events” has the meaning given to such term in
Section 8.16(a) hereof.

“Grantors” has the meaning given to such term in the preamble hereto.

“Guaranty” means the guaranty of the Guaranteed Obligations made by the
Guarantors pursuant to Section 2 hereof.

“Guaranteed Obligations” has the meaning given to such term in Section 2.1(a)
hereof.

“Insolvency Proceeding” has the meaning given to such term in the Loan
Agreement.

“Intercompany Debt” means, with respect to each Grantor, all indebtedness,
liabilities, and other obligations of any other Grantor owing to such Grantor in
respect of any and all loans or advances made by such Grantor to such other
Grantor whether now existing or hereafter arising, and whether due or to become
due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, including all fees and all other amounts payable by any other
Grantor to such Grantor under or in connection with any documents or instruments
related thereto, and including all claims for contribution pursuant to
Section 2.2 hereof.

“Intercompany Note” means any promissory note evidencing any Intercompany Debt.

“Investment Property” means, collectively, (a) all “investment property”, as
defined in Section 9-102(a)(49) of the UCC, and (b) whether or not constituting
“investment property” as so defined, all Securities (all Certificated Securities
and Uncertificated Securities), Securities Accounts, Securities Entitlements,
Commodity Contracts, Commodity Accounts and Pledged Notes; provided that,
notwithstanding anything herein or in the definition of “investment property” in
Section 9-102(a)(49) to the contrary, for purposes of this Agreement,
“Investment Property” shall not include the Capital Stock of any Subsidiary of
the Borrower.

 

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“Issuers” means, collectively, each issuer of any Investment Property.

“Loan Agreement” has the meaning given to such term in the Introductory
Statement hereto.

“Material Electronic Chattel Paper” has the meaning given to such term in
Section 5.11 hereof.

“Pledged”, when used in connection with any type of asset, means, at any time,
an asset of such type that is included or required to be included (or that
creates rights that are included or required to be included) in the Collateral
at such time pursuant to the terms of this Agreement.

“Pledged Notes” means all promissory notes listed on Schedule I hereto, all
Intercompany Notes at any time issued to any Grantor, and all other promissory
notes issued to or held by any Grantor, in each case to the extent required to
be pledged pursuant to the Loan Agreement.

“Pledged Stock” means the shares of Capital Stock listed on Schedule I hereto,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect (other than any Capital Stock which constitutes Excluded Property).

“Proceeds” means all “proceeds”, as defined in Section 9-102(a)(64) of the UCC,
and, in any event, includes all dividends or other income from the Investment
Property, collections thereon or distributions or payments with respect thereto.

“Receivable” means any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including any
Account).

“Secured Obligations” means (a) in the case of the Borrower, the “Obligations”
as defined in the Loan Agreement, and (b) in the case of the Guarantors, the
Guaranteed Obligations.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder. “Termination Date” means the date on which
the Loans and the other Secured Obligations (other than Unasserted Contingent
Obligations) shall have been finally paid in full in cash in accordance with the
terms of the Loan Agreement and the other Loan Documents.

“Selected Engines” means the engines described on Schedule VII hereto.

 

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“Unasserted Contingent Obligations” means, at any time, Secured Obligations for
indemnifications, reimbursements, costs, damages and other liabilities in
respect of which no assertion of liability (whether oral or written) and no
claim or demand for payment or indemnification (whether oral or written) has
been made as of such time.

1.2. Other Definitional Provisions.

(a) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms. Where the context requires,
terms relating to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

SECTION 2. GUARANTY

2.1. Guaranty.

(a) To induce the Lenders to make the Loans and to induce each other Secured
Party to make credit available to or for the benefit of one or more Grantors,
each Guarantor hereby, jointly and severally, absolutely, unconditionally and
irrevocably, guarantees, as primary obligor and not merely as surety, the full
and punctual payment when due, whether at stated maturity or earlier, by reason
of acceleration, mandatory prepayment or otherwise in accordance with any Loan
Document, of all Obligations of the Borrower and of the other Guarantors,
whether existing on the date hereof or hereafter incurred, created or arising
and whether or not from time to time reduced or extinguished or hereafter
increased or incurred, whether or not recovery may be or hereafter may become
barred by any statute of limitations, and whether enforceable or unenforceable
as against the Borrower or any of the other Guarantors, now or hereafter in
effect, or due or to become due, including, without limitation, all principal,
interest (including interest accruing at the then applicable rate provided in
the Loan Agreement after the maturity thereof and interest accrued or accruing
at the then applicable rate provided in the Loan Agreement upon the commencement
or during the pendency of any Insolvency Proceeding, regardless of whether such
interest or a claim for post-filing or post-petition interest is allowed or
allowable in such Insolvency Proceeding), and all other monetary obligations of
the Borrower and of the other Guarantors arising under, out of, in respect of or
in connection with the Loan Agreement, the Notes or any of the other Loan
Documents, including but not limited to fees, costs, expenses and indemnities,
in all cases whether primary or secondary, direct or indirect, absolute or
contingent, liquidated or unliquidated, due or to become due, or now existing or
hereafter incurred (collectively, the “Guaranteed Obligations”).

(b) Each Guarantor’s Guaranty hereunder constitutes a continuing guaranty of
payment and not of collection, and a debt of each Guarantor for its own account.
Accordingly, neither an Agent nor any of the other Secured Parties shall be
obligated or required before enforcing this Guaranty against any Guarantor, to:
(i) pursue any right or remedy any of them may have against the Borrower, any
other Guarantor or any other Person or commence any suit or other proceeding
against the Borrower, any other Guarantor or any other Person in any court

 

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or other tribunal; (ii) make any claim in a liquidation, bankruptcy or other
Insolvency Proceeding of or in respect of the Borrower, any other Guarantor or
any other Person; (iii) make demand of the Borrower, any other Guarantor or any
other Person; or (iv) enforce or seek to enforce or realize upon any collateral
security held by the Collateral Agent or any other Secured Party which may
secure any of the Guaranteed Obligations.

(c) Any term or provision of this Agreement or any other Loan Document to the
contrary notwithstanding, the maximum aggregate amount for which any Guarantor
shall be liable under this Guaranty shall not exceed the maximum amount for
which such Guarantor can be liable without rendering the obligations of such
Guarantor under this Guaranty or any other Loan Document, as it relates to such
Guarantor, subject to avoidance under Applicable Laws relating to fraudulent
conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act, Section 548 of Title 11 of the United
States Code, and any applicable provisions of comparable Applicable Laws)
(collectively, the “Fraudulent Transfer Laws”). Any analysis of the provisions
of this Guaranty for purposes of the Fraudulent Transfer Laws shall take into
account the right of contribution established in Section 2.2 hereof and, for
purposes of such analysis, give effect to any discharge of intercompany debt as
a result of any payment made under this Guaranty. Notwithstanding the foregoing,
this Section 2.1(c) is intended solely to preserve the rights of the Collateral
Agent and the other Secured Parties hereunder to the maximum extent that would
not cause the obligations of any Guarantor hereunder to be subject to avoidance
under the Fraudulent Transfer Laws, and no Guarantor or any other Person shall
have any right or claim under this Section 2.1(c) or otherwise as against the
Collateral Agent or any other Secured Party that would not otherwise be
available to such Person under the Fraudulent Transfer Laws.

(d) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing this Guaranty or affecting the rights and remedies of any Secured
Party hereunder.

(e) This Guaranty shall remain in full force and effect until the Termination
Date occurs, notwithstanding that from time to time during the term of the Loan
Agreement no Guaranteed Obligations may be outstanding.

(f) No payment made by the Borrower, any of the Guarantors, any other guarantor
or any other Person or received or collected by any Secured Party from the
Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder, and each Guarantor shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Guaranteed Obligations or any payment received or collected
from such Guarantor in respect of the Guaranteed Obligations), remain liable for
the Guaranteed Obligations up to the maximum liability of such Guarantor
hereunder until the Termination Date occurs.

 

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2.2. Right of Contribution. Each Guarantor hereby agrees that, to the extent
that a Guarantor shall have paid any portion of the Guaranteed Obligations
exceeding the greater of (i) the amount of the value actually received by such
Guarantor and its Subsidiaries from the Loans and other Obligations and (ii) the
amount such Guarantor would otherwise have paid if such Guarantor had paid the
aggregate amount of the Guaranteed Obligations (excluding the amount thereof
repaid by the Borrower) in the same proportion as such Guarantor’s net worth on
the date enforcement is sought hereunder bears to the aggregate net worth of all
the Guarantors on such date, then such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor’s right of
contribution shall be subject to the terms and conditions of Sections 2.1
and 2.3 hereof. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Guarantor to any Secured Party, and each
Guarantor shall remain liable to the Secured Parties for the full amount
guaranteed by such Guarantor hereunder. This Section 2.2 is for the benefit of
the Collateral Agent, the other Secured Parties, and the Guarantors, and may be
enforced by any one or more of them in accordance with the terms hereof.

2.3. No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any set-off or application of funds of any Guarantor by any Secured Party, no
Guarantor shall (a) be entitled to be subrogated to any of the rights of any
Secured Party against the Borrower or any other Guarantor or any collateral
security or guaranty or right of offset held by any Secured Party for the
payment of the Obligations, (b) seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor under this Guaranty, or (c) assert any right, claim or
cause of action, including, without limitation, any claim of subrogation,
contribution or indemnification that such Guarantor has against the Borrower or
any other Loan Party, in all cases until the Termination Date occurs. If any
amount is paid to any Guarantor on account of such subrogation rights at any
time prior to the Termination Date, such amount shall be held by such Guarantor
in trust for the benefit of the Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
against the Obligations, whether matured or unmatured, as the Collateral Agent
may determine in accordance with Sections 4.02(b) and 4.02(c) of the Loan
Agreement.

2.4. Actions with Respect to Guaranteed Obligations.

(a) Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the Guaranteed
Obligations made by any Secured Party may be rescinded by such Secured Party and
any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Secured Party, and the Loan Agreement and the other Loan Documents, and any
other documents executed and delivered in connection therewith may be amended,
amended and restated, supplemented or otherwise modified or terminated, in whole
or in part, as the Collateral Agent (or the Required Lenders or all Lenders, as
the case may be) may deem

 

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advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by any Secured Party for the payment of the Guaranteed
Obligations may be sold, exchanged, waived, surrendered or released. No Secured
Party shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Guaranteed Obligations or for this
Guaranty or any property subject thereto.

(b) Without limiting the foregoing, the Collateral Agent or any Secured Party
may, at any time and from time to time, without the consent of, or notice to,
any Guarantor, and without discharging any Guarantor from any of its obligations
hereunder, take any and all actions described in Section 2.5 hereof and may
otherwise: (i) amend, modify, alter or supplement the terms of any of the
Guaranteed Obligations in accordance with the terms of the Loan Agreement or any
of the applicable Loan Documents, including, but not limited to, extending or
shortening the time of payment of any of the Guaranteed Obligations or changing
the interest rate that may accrue on any of the Guaranteed Obligations;
(ii) amend, modify, alter or supplement the Loan Agreement or any of the other
Loan Documents in accordance with the terms of the Loan Agreement or such other
Loan Documents; (iii) sell, exchange, release or otherwise deal with all, or any
part, of any collateral securing all or any portion of the Guaranteed
Obligations; (iv) release any other Loan Party or other Person liable in any
manner for the payment or collection of any or all of the Guaranteed
Obligations; (v) exercise, or refrain from exercising, any rights against the
Borrower, any other Guarantor or any other Person; and (vi) apply any sum, by
whomsoever paid or however realized, to the Guaranteed Obligations in such order
as the Secured Parties shall elect.

2.5. Guaranty Absolute and Unconditional.

(a) Each Guarantor, to the fullest extent permitted by Applicable Law, waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations, notice of or proof of reliance by any Secured Party upon this
Guaranty, and notice of acceptance of this Guaranty. The Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Guaranty and all
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Secured Parties, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon this Guaranty.

(b) Each Guarantor, to the fullest extent permitted by Applicable Law, waives
diligence, presentment, protest, demand for payment, dishonor, and notice of
default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Obligations, notice of any kind to which such Guarantor may be
entitled, and any other act or thing, or omission or delay to do any other act
or thing, which in any manner or to any extent might vary the risk of such
Guarantor or which otherwise might operate to discharge such Guarantor from any
of its Guaranteed Obligations.

(c) Each Guarantor waives, to the fullest extent permitted by Applicable Law,
any right such Guarantor may now have or hereafter acquire to revoke, rescind,
terminate or limit (except as expressly provided herein) this Guaranty or any of
its obligations hereunder.

 

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(d) Each Guarantor understands and agrees that, to the fullest extent permitted
by Applicable Law, this Guaranty shall be construed as a continuing, absolute
and unconditional guarantee of payment without regard to (i) the validity or
enforceability of the Loan Agreement or any other Loan Document, any of the
Guaranteed Obligations or any other collateral security therefor or guaranty or
right of offset with respect thereto at any time or from time to time held by
any Secured Party, (ii) any defense, set-off or counterclaim which may at any
time be available to or be asserted by the Borrower, any other Guarantor or any
other Person against any Secured Party (other than the defense of payment in
full in cash), or (iii) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower with respect to any Obligations, or of such Guarantor under this
Guaranty, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, any Secured Party may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as it may have
against the Borrower, any other Guarantor or any other Person or against any
collateral security or guaranty for the Guaranteed Obligations or any right of
offset with respect thereto, and any failure by any Secured Party to make any
such demand, to pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor or any other Person or to realize upon
any such collateral security or guaranty or to exercise any such right of
offset, or any release of the Borrower, any other Guarantor or any other Person
or any such collateral security, guaranty or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Party against any Guarantor. For the purposes
hereof, “demand” shall include the commencement and continuance of any legal
proceedings.

(e) Each Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the documents evidencing such
Guaranteed Obligations, regardless of any Applicable Law now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Collateral Agent or any other Secured Party with respect thereto. The liability
of each Guarantor under this Guaranty shall be absolute, irrevocable and
unconditional in accordance with its terms and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including without limitation, the following (whether or not such Guarantor
consents thereto or has notice thereof), and each Guarantor hereby irrevocably
waives, to the fullest extent permitted by applicable law, any defenses it may
now have or hereafter acquire in any way relating to, any or all of the
following:

(i) (x) any change in the amount, interest rate, due date or other term of all
or any portion of the Guaranteed Obligations, (y) any change in the time, place
or manner of payment of all or any portion of the Guaranteed Obligations, or
(z) any amendment, release, consent to the departure from, or other indulgence
with respect to, or any waiver, renewal, extension, addition, or supplement to,
or deletion from, or any other action or inaction under or in respect of, the
Loan Agreement, any of the other Loan Documents or any other documents,
instruments or agreements relating to all or any portion of the Guaranteed
Obligations or any other instrument or agreement referred to therein or
evidencing all or any portion of the Guaranteed Obligations or any assignment or
transfer of any of the foregoing;

 

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(ii) any lack of validity or enforceability of the Loan Agreement, any of the
other Loan Documents, or any other document, instrument or agreement referred to
therein or evidencing all or any portion of the Guaranteed Obligations or any
assignment or transfer of any of the foregoing;

(iii) any furnishing to the Collateral Agent or any other Secured Party of any
security for all or any portion of the Guaranteed Obligations, or any sale,
exchange, release or surrender of, or realization on, any collateral securing
all or any portion of the Guaranteed Obligations;

(iv) any settlement or compromise of all or any portion of the Guaranteed
Obligations, any security therefor, or any liability of any other party with
respect to all or any portion of the Guaranteed Obligations, or any
subordination of the payment of all or any portion of the Guaranteed Obligations
to the payment of any other liability of the Borrower or any other Loan Party;

(v) any Insolvency Proceeding relating to such Guarantor, the Borrower, any
other Loan Party or any other Person, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such Insolvency
Proceeding;

(vi) any act or failure to act by the Borrower, any other Loan Party or any
other Person which may adversely affect such Guarantor’s subrogation rights, if
any, against the Borrower to recover payments made under this Guaranty;

(vii) any release, amendment or waiver of, or consent to any departure from, any
guaranty of all or any portion of the Guaranteed Obligations;

(viii) any pledge, exchange, release or non-perfection or impairment of any
security interest or other Lien on any Collateral or other collateral securing
in any way all or any portion of the Guaranteed Obligations;

(ix) any application of sums paid by the Borrower, any other Guarantor or any
other Person with respect to the liabilities of the Borrower to the Collateral
Agent or any other Secured Party, regardless of what liabilities of the Borrower
remain unpaid;

(x) any defect, limitation or insufficiency in the borrowing power of the
Borrower or any Guarantor or in the exercise thereof;

(xi) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect of this Agreement, the Loan Agreement or any other
Loan Document; or

 

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(xii) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, a Guarantor hereunder (other than the final
payment in full in cash and performance in full of the Obligations (other than
Unasserted Contingent Obligations)), including the failure by either
Administrative Agent or any Secured Party to provide copies of any notice
delivered to the Borrower or any Guarantor in accordance with the terms of any
of the Loan Documents.

2.6. Inability to Accelerate Loans. If any Agent or any other Secured Party is
prevented under Applicable Law or otherwise from demanding or accelerating
payment of any of the Guaranteed Obligations by reason of any automatic stay or
otherwise, to the extent such demand or acceleration is permitted under the Loan
Agreement or another applicable Loan Document, the Agents and the other Secured
Parties shall be entitled to receive from each Guarantor, upon demand therefor,
the sums which otherwise would have been due had such demand or acceleration
been permitted and occurred.

2.7. Acknowledgment of Waivers and Losses of Defenses.

(a) Each Guarantor acknowledges that certain provisions of this Guaranty operate
as waivers of rights that each Guarantor would otherwise have under Applicable
Law. Other provisions permit the Secured Parties to: (i) take actions that the
Secured Parties would otherwise not have a right to take; (ii) fail to take
actions that the Secured Parties would otherwise have an obligation to take; or
(iii) take actions that may prejudice the Guarantors’ rights and obligations
under this Guaranty and against the Borrower. In the absence of these
provisions, each Guarantor might have defenses against its obligations under
this Guaranty. These defenses might permit each Guarantor to avoid some or all
of its obligations under this Guaranty.

(b) Each Guarantor intends by the waivers and other provisions of this Guaranty,
including the acknowledgment set forth in this Section 2.7, to be liable to the
greatest extent permitted by Applicable Law for all of the Guaranteed
Obligations and all other Obligations. Each Guarantor intends to have this
liability even if the terms of the Loan Documents change or if such Guarantor
does not have any rights against the Borrower.

(c) Each Guarantor acknowledges that: (i) it understands the seriousness of the
provisions of this Guaranty; (ii) it and has had a full opportunity to consult
with counsel of its choice; and (iii) it has consulted with counsel of its
choice or has decided not to avail itself of that opportunity.

2.8. Reinstatement.

This Guaranty shall remain in full force and effect and continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be reduced, restored or returned by any Secured Party (whether as a
“voidable preference”, “fraudulent conveyance”, “fraudulent transfer” or
otherwise) upon the commencement of, or otherwise in relation to, any Insolvency
Proceeding of or in respect of the Borrower or any other Loan Party, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer,

 

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official or designee for, the Borrower or any Guarantor or any substantial part
of the property of the Borrower or any Guarantor, or otherwise, all as though
such payments had not been made. In the event that any payment, or any part
thereof, of any of the Guaranteed Obligations is rescinded or otherwise reduced,
restored or returned by any Secured Party, the Guaranteed Obligations shall be
reinstated to the extent of the payment so rescinded, reduced, restored or
returned and shall be reduced only by the amount paid and not so rescinded,
reduced, restored or returned. If claim is ever made on the Collateral Agent or
any other Secured Party for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guaranteed Obligations, and the
Collateral Agent or such other Secured Party repays all or part of such amount
by reason of (i) any judgment, decree or order of any court or administrative
body of competent jurisdiction or (ii) any settlement or compromise of any such
claim effected by the Collateral Agent or such other Secured Party with any such
claimant (including the Borrower or a trustee in bankruptcy for the Borrower),
then and in such event each Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding on such Guarantor
notwithstanding any revocation hereof or the cancellation of the Loan Agreement,
any of the other Loan Documents or any other instrument evidencing any liability
of the Borrower, and such Guarantor shall be and remain liable to the Collateral
Agent or such other Secured Party for the amounts so repaid or recovered to the
same extent as if such amount had never originally been paid to the Collateral
Agent or such other Secured Party.

2.9. Payments.

Each Guarantor hereby guarantees that payments hereunder will be paid to the
Collateral Agent in Dollars, without counterclaim, set-off, rights of rescission
or deduction, pursuant to Section 4.03(c) of the Loan Agreement.

SECTION 3. GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, collaterally assigns and transfers to the
Collateral Agent for the benefit of the Secured Parties, and hereby grants to
the Collateral Agent for the benefit of the Secured Parties, a Lien on and a
security interest in all of such Grantor’s right, title and interest in all of
the following property of such Grantor, wherever located, whether 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 “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Collateral Accounts;

(d) all Documents;

(e) all Equipment;

(f) all General Intangibles;

 

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(g) all Instruments;

(h) all Inventory;

(i) all Investment Property;

(j) all Letter-of-Credit Rights;

(k) all Supporting Obligations;

(l) all insurance policies maintained by any Grantor relating to anything other
than Aircraft;

(m) all Goods;

(n) the Selected Engines; provided that the parties hereto acknowledge and agree
that the provisions of the Aircraft Security Agreement shall remain in full
force and effect as provided for therein with respect thereto;

(o) all books and records pertaining to the Collateral; and

(p) to the extent not otherwise included, all Proceeds, Payment Intangibles,
Supporting Obligations and products of any and all of the foregoing and all
collateral security and guaranties given by any Person with respect to any of
the foregoing.

Notwithstanding the foregoing, “Collateral” shall not include the following:
(i) motor vehicles and other assets subject to certificates of title;
(ii) letter of credit rights with a value of less than $1,000,000 in the
aggregate; (iii) Deposit Accounts other than Collateral Accounts; (iv) IP
Rights; (v) any rights or interests in any lease, license, contract, or
agreement, as such or the assets subject thereto if under the terms of such
lease, license, contract, or agreement, or Applicable Law with respect thereto,
the valid grant of a Lien therein or in such assets to Collateral Agent is
prohibited and such prohibition has not been or is not waived or the consent of
the other party to such lease, license, contract, or agreement or any applicable
Governmental Authority has not been or is not otherwise obtained or under
Applicable Law such prohibition cannot be waived; provided, however, the
foregoing exclusions shall in no way be construed (x) to apply if any such
prohibition would be rendered ineffective under the UCC (including Sections
9-406, 9-407 and 9-408 thereof) or other Applicable Law (including the United
States bankruptcy code) or principles of equity, (y) so as to limit, impair or
otherwise affect the Collateral Agent’s unconditional continuing Liens upon any
rights or interests of any Grantor in or to the Proceeds thereof (including
proceeds from the sale, license, lease or other disposition thereof), including
monies due or to become due under any such lease, license, contract, or
agreement (including any Accounts or other Receivables), unless such Proceeds or
other amounts would otherwise be excluded from Collateral pursuant to the terms
of this paragraph, or (z) to apply at such time as the condition causing such
prohibition shall be remedied and, to the extent severable, “Collateral” shall
include any portion of such lease, license, contract, agreement or assets
subject thereto that does not result in such prohibition; (vi) any permitted

 

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lease, license or other agreement or any property subject to a purchase money
security interest or similar arrangement to the extent that a grant of a
security interest therein would violate or invalidate such lease, license or
agreement or purchase money arrangement or create a right of termination in
favor of any other party thereto (other than Borrower or a Guarantor) after
giving effect to the applicable anti-assignment provisions of the Uniform
Commercial Code, the assignment of which is expressly deemed effective under the
Uniform Commercial Code notwithstanding such prohibition, and other than
proceeds and receivables thereof; (vii) any fee simple interests in Real
Property with an individual fair market value of less than $2,500,000; and
(viii) those assets as to which the Collateral Agent and Borrower reasonably
agree that the cost of obtaining such a security interest therein are excessive
in relation to the benefit to the Secured Parties of the security to be afforded
thereby (the foregoing, the “Excluded Property”).

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into the Loan Agreement and to
induce the Lenders to make their respective Loans and other financial
accommodations to the Borrower thereunder, each Grantor hereby represents and
warrants to each Secured Party that:

4.1. Representations in the Loan Agreement.

All representations and warranties set forth in Article VII of the Loan
Agreement are hereby incorporated herein by reference and are true and correct
in all material respects (without duplication of any materiality qualifier
contained therein) as of the date on which such representations and warranties
are made or deemed made pursuant to the Loan Agreement, and each Secured Party
shall be entitled to rely on each of them as if they were fully set forth
herein.

4.2. Other Representations.

(a) Each Guarantor acknowledges and agrees that the Secured Parties shall have
no obligation to investigate the financial condition or affairs of any other
Loan Party for the benefit of such Guarantor nor to advise such Guarantor of any
fact respecting, or any change in, the financial condition or affairs of any
other Loan Party that might become known to any Secured Party at any time,
whether or not such Secured Party knows or believes or has reason to know or
believe that any such fact or change is unknown to such Guarantor, or might (or
does) materially increase the risk of such Guarantor as guarantor, or might (or
would) affect the willingness of such Guarantor to continue as a guarantor of
the Guaranteed Obligations.

(b) It is in the best interests of each Guarantor to execute this Agreement and
provide the Guaranty inasmuch as such Guarantor will derive substantial direct
and indirect benefits from the Loans and other financial accommodations made to
the Borrower by the Secured Parties pursuant to the Loan Documents, and each
Guarantor agrees that the Secured Parties are relying on this representation in
agreeing to make Loans and other financial accommodations to the Borrower.

 

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4.3. Title; No Other Liens.

Such Grantor has title to, and good and valid rights to, the Collateral of such
Grantor. Except for Permitted Liens, such Grantor owns each such item of
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice or record of a Lien with respect to all or any
part of the Collateral, in each case which has been authorized by any Grantor,
is on file or of record in any public office, except such as have been filed in
favor of the Collateral Agent, for the benefit of the Secured Parties, pursuant
to this Agreement, such as are expressly permitted by the terms of the Loan
Agreement or such filings for which termination statements have been delivered
to the Collateral Agent. No Collateral owned by any Grantor will be in the
possession or under the control of any other Person having a claim thereto or
security interest therein; provided, however, that any Grantor may, in the
ordinary course of its business, grant non-exclusive licenses to third parties
to use Intellectual Property owned or developed by a Grantor. For purposes of
this Agreement and the other Loan Documents, such licensing activity shall not
constitute a “Lien” on such Intellectual Property.

4.4. Perfected Priority Liens.

Upon completion of the filings and other actions specified on Schedule II hereto
(which, in the case of all filings and other documents referred to on Schedule
II hereto, have been delivered to the Collateral Agent in completed and duly
executed form), the security interests granted pursuant to this Agreement will
constitute valid and perfected security interests in all of the Collateral in
which a security interest may be perfected by the filing of a financing
statement under the UCC in favor of the Collateral Agent, for the benefit of the
Secured Parties, as collateral security for the Secured Obligations, enforceable
in accordance with the terms hereof against all creditors of each Grantor and
any Persons purporting to purchase any Collateral from any Grantor and are prior
to all other Liens on the Collateral, except for Permitted Liens which, pursuant
to the terms of the Loan Agreement, are permitted to have priority over
Collateral Agent’s Liens thereon as collateral security for the Secured
Obligations.

4.5. Perfection Certificate; Jurisdiction of Organization; Chief Executive
Office.

Each Grantor has delivered to the Collateral Agent a Perfection Certificate
signed by such Grantor. Each Grantor represents and warrants to the Secured
Parties as follows: (a) such Grantor’s exact legal name is that indicated on the
Perfection Certificate and on the signature page hereof; (b) such Grantor is an
organization of the type, and is organized in the jurisdiction, set forth in the
Perfection Certificate; (c) [reserved]; (d) the Perfection Certificate
accurately sets forth such Grantor’s chief executive office, as well as such
Grantor’s mailing address, if different; and (e) all other information set forth
on the Perfection Certificate pertaining to such Grantor is accurate and
complete in all material respects.

4.6. Receivables.

(a) No amount in excess of $1,000,000 payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent.

(b) The amounts represented by such Grantor to the Secured Parties from time to
time as owing to such Grantor in respect of the Receivables will at such times
be accurate in all material respects.

 

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(c) None of the Receivables are owed to such Grantor by obligors that are
Governmental Authorities.

(d) Each Receivable is, or at the time it arises will be: (i) a bona fide, valid
and legally enforceable indebtedness of the obligor thereunder in accordance
with its terms, arising out of or in connection with the sale, lease or
performance of goods or services by the applicable Grantor, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law); and (ii) subject to no material offsets, discounts,
counterclaims, contra accounts or any other defense of any kind and character,
other than warranties and discounts customarily given by the Grantors in the
ordinary course of business consistent with customary business practice and
other than warranties or refunds provided by Applicable Law, in each case except
as would not have a material adverse effect on the value of all Receivables
taken as a whole.

4.7. Contracts.

No amount in excess of $1,000,000 payable to such Grantor under or in connection
with any contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Collateral Agent.

4.8. [Reserved].

4.9. [Reserved]

4.10. Inventory and Equipment; Books and Records. As of the Closing Date, the
Inventory and the Equipment of each Grantor (other than (a) Inventory or
Equipment in transit and (b) Inventory and Equipment with a fair market value
less than $1,000,000 which may be located at other locations within the United
States) and books and records concerning the Collateral are kept at the
locations listed on Schedule VI hereto. As of the Closing Date hereof, no bill
of lading, warehouse receipt or other document or instrument of title is
outstanding with respect to any Collateral other than Inventory in transit in
the ordinary course of business or to a

4.11. Instruments and Tangible Chattel Paper.

No amounts payable under or in connection with any of the Collateral are
evidenced by any Intercompany Notes, Instruments or Tangible Chattel Paper
(other than promissory notes issued in connection with extensions of trade
credit in the ordinary course of business). Each Intercompany Note, each
Instrument and each item of Tangible Chattel Paper owned by a Grantor and
required to be delivered to the Collateral Agent from time to time pursuant to
Section 5.2 hereof has been properly endorsed, assigned and delivered to the
Collateral Agent and, if necessary, is accompanied by an instrument of transfer
or assignment duly executed in blank.

 

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SECTION 5. COVENANTS

Each Grantor covenants and agrees with the Secured Parties that, from and after
the date of this Agreement until the Termination Date:

5.1. Covenants in Loan Agreement. Each Grantor hereby agrees and covenants
(a) to do each of the things set forth in the Loan Agreement that a Loan Party
agrees and covenants to do and/or that a Loan Party agrees and covenants to
cause its Subsidiaries and/or any Guarantor to do, and (b) not to do each of the
things set forth in the Loan Agreement that a Loan Party agrees and covenants
not to do and/or that a Loan Party agrees and covenants to cause its
Subsidiaries and/or any Guarantor not to do, in each case, fully as though such
Guarantor was a party thereto, and such agreements and covenants are
incorporated herein by this reference, mutatis mutandis

5.2. Delivery of Instruments and Chattel Paper. Without limiting Section 5.5
hereof, if any amount in excess of $1,000,000 in the aggregate for all such
Collateral, payable under or in connection with any of the Collateral, shall be
or become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper shall promptly, and in
any event within five (5) Business Days of such Collateral arising(or such later
date as may be agreed by the Collateral Agent), being acquired or being so
evidenced, be delivered to the Collateral Agent, together with such
endorsements, notations and applicable transfer instruments with respect
thereto, in each case as the Collateral Agent may reasonably request, duly
endorsed in a manner reasonably satisfactory to the Collateral Agent, to be held
in trust for the benefit of the Secured Parties, as Collateral under this
Agreement.

5.3. Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interest in the Collateral created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.4 hereof, and shall defend such security interest against
the claims and demands of all Persons whomsoever.

(b) Such Grantor shall furnish to the Collateral Agent and the other Secured
Parties from time to time statements and schedules further identifying and
describing such Grantor’s Collateral and such other reports in connection with
such Grantor’s Collateral as the Collateral Agent may reasonably request, all in
reasonable detail and in form and substance reasonably satisfactory to the
Collateral Agent.

(c) At any time and from time to time, upon the written request of the
Collateral Agent and at the sole expense of such Grantor, such Grantor will
promptly, and in any event within fifteen (15) Business Days (or such later date
as may be agreed by the Collateral Agent), duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby, and
(ii) without limitation of Section 5.5(c) hereof, in the case of Investment
Property, , Securities Entitlements, Letter-of-Credit Rights and any other
relevant Collateral, taking any actions necessary to enable the Collateral Agent
to obtain “control” (within the meaning of the UCC) with respect thereto.

 

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5.4. Changes in Locations, Name, etc. Unless a Grantor shall have given the
Collateral Agent at least fifteen (15) Business Days prior written notice (or
such later date as may be agreed by the Collateral Agent), such Grantor will
not:

(a) change the location of its chief executive office or sole place of business
from that referred to in Section 4.5 hereof;

(b) change its legal name, jurisdiction of organization, type of organization,
organizational identification number, identity or corporate structure; or

(c) permit any Inventory or Equipment (other than (a) Inventory or Equipment in
transit in the ordinary course of business and (b) Inventory and Equipment with
a fair market value of less than $1,000,000 (in the aggregate for all Grantors)
which may be located at other locations within the United States) and books and
records concerning the Collateral to be kept at a location other than those
listed on Schedule VI hereto.

5.5. Receivables.

(a) During the continuance of an Event of Default, such Grantor will not
(i) grant any extension of the time of payment of any Receivable,
(ii) compromise or settle any Receivable for less than the full amount thereof,
(iii) rescind or cancel any obligations evidenced by any Receivable or otherwise
release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable, or
(v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.

(b) Such Grantor shall keep and maintain at its own cost and expense complete
records of each Receivable of such Grantor, with at least such specificity and
in a manner at least as comprehensive and detailed as is prudent and customary
for businesses engaged in such Grantor’s industry and of similar size as such
Grantor, including records of all payments received, all credits granted
thereon, all merchandise returned, and all other documentation relating thereto.
Upon the Collateral Agent’s demand made at any time after the occurrence and
during the continuance of any Event of Default, and at such Grantor’s sole cost
and expense, such Grantor shall deliver to the Collateral Agent or its designee
all tangible evidence of any Receivables, including all documents evidencing
Receivables and any books and records relating thereto (copies of which evidence
and books and records may be retained by such Grantor). Upon the occurrence and
during the continuance of an Event of Default, without the consent of any
Grantor, the Collateral Agent may transfer a full and complete copy of any
Grantor’s books, records, credit information, reports, memoranda and all other
writings relating to the Receivables to and for use by any Person that has
acquired or is contemplating acquiring an interest in the Receivables or the
Collateral Agent’s security interest therein.

(c) [Reserved].

(d) [Reserved].

 

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(e) Such Grantor shall promptly inform the Collateral Agent in writing of any
disputes with any obligor under any Receivable and of any claimed offset and
counterclaim in respect of any Receivable that may be asserted with respect
thereto involving, in each case, $100,000 or more, where such Grantor reasonably
believes that the likelihood of payment by such account debtor is materially
impaired, indicating in detail the reason for the dispute, all claims relating
thereto and the amount in controversy.

(f) Notwithstanding anything herein to the contrary, until the release or
avoidance of the liens granted to the Lender under and with respect to the
Thirty Two Loan Agreement, the provisions of this Section 5.5 shall only apply
to those Receivables relating to the Aircraft Priority Collateral (as defined in
the Intercreditor Agreement) and, following such release of avoidance, the
provisions of this Section 5.5 shall apply to all Receivables.

5.6. Collateral in the Possession of a Bailee. If any Collateral having a fair
market value in excess of $5,000,000 in the aggregate for all bailees, is now or
at any time hereafter, in the possession of a bailee, such Grantor shall
promptly, but in any event within five (5) Business Days (or such later date as
may be agreed by the Collateral Agent), notify the Collateral Agent thereof in
writing and, at the Collateral Agent’s request and option, such Grantor shall
use commercially reasonable efforts to obtain an acknowledgement from the
bailee, in form and substance reasonably satisfactory to the Collateral Agent,
that the bailee holds such Collateral in trust for the benefit of the Collateral
Agent and such bailee’s agreement to comply, without further consent of such
Grantor, at any time with instructions of the Collateral Agent as to such
Collateral. The Collateral Agent agrees with the Grantors that the Collateral
Agent shall not give any such instructions unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by any of the Grantors with respect to the bailee.

5.7. Electronic Chattel Paper. If any Grantor, now or at any time hereafter,
holds or acquires an interest in any Electronic Chattel Paper, any electronic
document or any “transferable record”, as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction having a value of more than $1,000,000 in the aggregate
for all such assets (“Material Electronic Chattel Paper”), such Grantor shall
promptly (and in any event within five (5) Business Days after obtaining any
such asset (or such later date as may be agreed by the Collateral Agent)) notify
the Collateral Agent thereof in writing and, at the request and option of the
Collateral Agent, shall promptly take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control, under Section 9-105
of the UCC or the Uniform Commercial Code of any other relevant jurisdiction, of
such Material Electronic Chattel Paper, control, under Section 7-106 of the UCC
or the Uniform Commercial Code of any other relevant jurisdiction, of such
electronic document or control, under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Collateral Agent agrees with each
Grantor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for such Grantor to
make alterations to the Electronic Chattel Paper, electronic document or

 

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transferable record permitted under UCC Section 9-105, UCC Section 7-106, or, as
the case may be, Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions Act
for a party in control to make without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by such Grantor with respect to such Electronic Chattel Paper,
electronic document or transferable record.

5.8. Notices of Certain Events. Such Grantor will promptly, and in any event
within five (5) Business Days (or such later date as may be agreed by the
Collateral Agent), give written notice to the Collateral Agent, addressed to the
Collateral Agent and the other Secured Parties, in reasonable detail, of:

(a) any Lien (other than Permitted Lien) on any of such Grantor’s Collateral
which would adversely affect the ability of the Collateral Agent in any material
respect to exercise any of its rights or remedies hereunder or under any of the
other Security Documents; and

(b) the occurrence of any other event which would reasonably be expected to have
a material adverse effect on the security interests created hereby or under any
of the other Security Documents.

5.9. [Reserved].

5.10. Further Assurances; Pledge of Instruments. At the sole expense of such
Grantor, such Grantor shall promptly duly execute and deliver any and all such
further instruments and documents and take such further action as the Collateral
Agent may reasonably request to obtain the full benefits of this Agreement and
of the rights and powers granted herein, which shall in any case include, but
shall not be limited to: (a) using commercially reasonable efforts if requested
by the Collateral Agent to secure all consents and approvals necessary or
appropriate for the grant of a security interest to the Collateral Agent in any
lease, license, contract or agreement held by such Grantor or in which such
Grantor has any right or interest (or with respect to which such Grantor has any
right or interest in the assets subject to such lease, license, contract or
agreement) not heretofore assigned; (b) authorizing the filing of and delivering
and causing to be filed any financing or continuation statements under the UCC
with respect to the security interests granted hereby; (c) at the Collateral
Agent’s reasonable request, transferring such Grantor’s Collateral to the
Collateral Agent’s possession (if a security interest in such Collateral can be
perfected by possession); and (e) upon the Collateral Agent’s reasonable
request, executing and delivering or causing to be delivered written notice to
insurers of the Collateral Agent’s security interest in, or claim in or under,
any policy of insurance (including unearned premiums). Such Grantor also hereby
authorizes the Collateral Agent to file any such financing or continuation
statement without the signature of such Grantor.

5.11. No Perfection. Notwithstanding anything in this Section 5 to the contrary,
the Administrative Agent and the Borrower may reasonably agree that the cost to
perfect any security interest in any Collateral granted herein or in any other
Loan Document is excessive in relation to the benefit to the Secured Parties to
be afforded thereby. If the Administrative Agent

 

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and the Borrower so agree, no further actions to obtain perfection, on the part
of any Grantor or the Collateral Agent, shall be required. However, if the
Administrative Agent reasonably determines that such cost becomes reasonable in
relation to such benefit, the Administrative Agent may require the Grantors to
take further steps to obtain perfection, in accordance with the provisions
herein.

SECTION 6. REMEDIAL PROVISIONS

6.1. Certain Matters Relating to Receivables.

(a) Upon the occurrence and during the continuance of an Event of Default, or if
the Collateral Agent believes that any information as to Receivables provided by
any Grantor is incorrect, (i) the Collateral Agent shall have the right to make
test verifications of the Receivables in any manner and through any medium that
it considers advisable, and each Grantor shall furnish all such assistance and
information as the Collateral Agent may require, and shall reimburse the
Collateral Agent for any and all expenses incurred by the Collateral Agent, in
connection with such test verifications, and (ii) upon the Collateral Agent’s
reasonable request and at the expense of the relevant Grantor, such Grantor
shall promptly cause independent public accountants or others satisfactory to
the Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables and any other information required by the Loan Agreement.

(b) If requested by the Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall forthwith (and, in any event, within two
(2) Business Days (or such later date as may be agreed by the Collateral Agent))
be deposited by such Grantor in the exact form received, duly endorsed by such
Grantor to the Collateral Agent if requested, in a Collateral Account maintained
under the sole dominion and control of the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties as
provided in Sections 6.4 and 6.5 hereof, and (ii) until so turned over, shall be
held by such Grantor in trust for the benefit of the Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit. Notwithstanding anything herein
to the contrary, until the release or avoidance of the liens granted to the
Lender under and with respect to the Thirty Two Loan Agreement, the provisions
of this Section 6.1(b) shall only apply to those Receivables relating to the
Aircraft Priority Collateral (as defined in the Intercreditor Agreement) and,
following such release or avoidance, the provisions of this Section 6.1(b) shall
apply to all Receivables.

(c) At the Collateral Agent’s request at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall promptly
deliver to the Collateral Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including all original orders, invoices and shipping receipts.

 

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6.2. Communications with Obligors; Grantors Remain Liable.

(a) At any time after the occurrence and during the continuance of an Event of
Default, upon notice to the applicable Grantor, the Collateral Agent in its own
name or in the name of the applicable Grantor may at any time communicate with
obligors under the Receivables and parties to any contract that constitutes
Collateral to verify with them to the Collateral Agent’s satisfaction the
existence, amount and terms of any Receivables.

(b) At any time after the occurrence and during the continuance of an Event of
Default, upon the request of the Collateral Agent, each Grantor shall promptly
notify obligors on the Receivables and parties to any contract that constitutes
Collateral that the Receivables and such contracts have been assigned to the
Collateral Agent for the benefit of the Secured Parties and that payments in
respect thereof shall be made directly to the Collateral Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and each contract that constitutes
Collateral to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. No Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or any
contract that constitutes Collateral by reason of or arising out of this
Agreement or the receipt by any Secured Party of any payment relating thereto,
nor shall any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or any contract that constitutes Collateral, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times. From and
after the occurrence and during the continuance of an Event of Default and upon
notice thereof by the Collateral Agent to the Grantors, the Collateral Agent
shall have the sole and exclusive authority to enforce all contracts that
constitute Collateral and no Grantor shall take any action under any such
contract, including amending, waiving, extending, terminating or cancelling any
such contract, or taking any action in furtherance thereof, without the prior
written consent of the Collateral Agent in each instance.

(d) At any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may, in its sole discretion, in its name or in the
name of any Grantor, or otherwise: (i) demand, sue for, collect or receive any
money or property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed necessary with respect to any
of the Collateral, but shall be under no obligation to do so; or (ii) extend the
time of payment, arrange for payment in installments, or otherwise modify the
term of, or release, any of the Collateral, without thereby incurring
responsibility to, or discharging or otherwise affecting any liability of, any
Grantor, other than to discharge a Grantor in so doing with respect to
liabilities of such Grantor to the extent that the liabilities are paid or
repaid. At any time after the occurrence and during the continuance of an Event
of Default, the Collateral Agent may make such payments and take such actions as
the Collateral Agent, in its sole discretion, deems necessary to protect its
Liens and security interests in the Collateral or the

 

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value thereof, and the Collateral Agent is hereby unconditionally and
irrevocably authorized (without limiting the general nature of the authority
hereinabove conferred) to pay, purchase, contest or compromise any Liens which
in the judgment of the Collateral Agent appear to be equal to, prior to or
superior to its Liens and security interests in the Collateral and any Liens not
created by this Agreement.

6.3. Proceeds To Be Turned Over to Collateral Agent.

In addition to the rights of the Secured Parties specified in Section 6.1 hereof
with respect to payments of Receivables, if an Event of Default shall have
occurred and be continuing, and the Collateral Agent shall so notify the
relevant Grantor, all Collections thereon shall be held by such Grantor in trust
for benefit of the Secured Parties, segregated from other funds of such Grantor,
and shall, forthwith (and in any event within three (3) Business Days (or such
later date as may be agreed by the Collateral Agent)) upon receipt by such
Grantor, be turned over to the Collateral Agent in the exact form received by
such Grantor (duly endorsed by such Grantor to the Collateral Agent, if so
requested by the Collateral Agent). All Proceeds received by the Collateral
Agent hereunder shall be held by the Collateral Agent in a Collateral Account
maintained under the sole dominion and control of the Collateral Agent. All
Proceeds, while held by the Collateral Agent in a Collateral Account (or by such
Grantor in trust for the benefit of the Secured Parties), shall continue to be
held as Collateral under this Agreement and shall not constitute payment thereof
until applied as provided in Section 6.5 hereof.

6.4. Application of Proceeds.

If an Event of Default shall have occurred and be continuing, at the Collateral
Agent’s election, the Collateral Agent may, at any such time, apply all or any
part of the Proceeds of Collateral, whether or not held in any Collateral
Account, in payment of the Secured Obligations in the manner set forth in
Section 4.02(c) of the Loan Agreement.

6.5. UCC and Other Remedies.

If an Event of Default shall have occurred and be continuing, the Collateral
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any of the Secured
Obligations, all rights and remedies of a secured party under the UCC or any
other Applicable Law. Without limiting the generality of the foregoing, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Secured Party or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem advisable, for cash
or on credit, or for future delivery, without assumption of any credit risk. Any
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or

 

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equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent’s request during the existence of an Event of Default, to
assemble the Collateral, or any part thereof, and make it available to the
Collateral Agent at places that the Collateral Agent shall reasonably select,
whether at such Grantor’s premises or elsewhere. The Collateral Agent shall
apply the proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable out-of-pocket costs and expenses of every kind incurred
in connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Secured
Parties hereunder, including reasonable and documented attorneys’ fees and
disbursements, to the payment in whole or in part of the Secured Obligations in
accordance with Section 6.5 hereof, and only after such application and after
the payment by the Collateral Agent of any other amount required by any
provision of law, including Section 9-615(a)(3) of the UCC, need the Collateral
Agent account for the surplus, if any, to any Grantor. Each Grantor hereby
acknowledges that the Secured Obligations arose out of a commercial transaction,
and agrees that, if an Event of Default shall have occurred and shall be
continuing, the Collateral Agent shall have the right to an immediate writ of
possession without notice of a hearing. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall have the right to the
appointment of a receiver for the properties and assets of each Grantor, and
each Grantor hereby consents to such rights and such appointment and hereby
waives any objection such Grantor may have thereto or the right to have a bond
or other security posted by Collateral Agent. To the extent permitted by
Applicable Law, each Grantor waives all claims, damages and demands it may
acquire against any Secured Party arising out of the exercise by them of any
rights hereunder, except to the extent arising out of the gross negligence, or
willful misconduct of such Secured Party as determined by a final, nonappealable
judgment by a court of competent jurisdiction. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least ten (10) days before such sale
or other disposition.

6.6. [Reserved].

6.7. Waiver; Deficiency.

Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral or any portion thereof are insufficient
to pay the Secured Obligations and the fees and disbursements of any attorneys
employed by any Secured Party to collect such deficiency.

SECTION 7. THE COLLATERAL AGENT

7.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby irrevocably appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, until the Termination
Date, as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such Grantor
or in its own name, for the purpose of carrying out the terms of this Agreement,
to take any and all action deemed appropriate by the Collateral Agent, and to
execute any and all documents and instruments that may be necessary or desirable
to accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent the
power and right, on behalf of such Grantor, without notice to or further assent
by such Grantor, to do any or all of the following, in each case at the
Collateral Agent’s sole option:

 

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(i) in the name of such Grantor or its own name, or otherwise, receive, take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Receivable or any
contract that constitutes Collateral or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the purpose
of collecting any and all such moneys due under any Receivable, any contract
that constitutes Collateral or with respect to any other Collateral whenever
payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Secured Parties’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;

(iii) discharge Liens levied or placed on or threatened against any of the
Collateral, effect any repairs to any of the Collateral and obtain any insurance
called for by the terms of this Agreement, the Loan Agreement or any other Loan
Document and pay all or any part of the premiums therefor and the costs thereof,
which amounts shall constitute Secured Obligations;

(iv) execute, in connection with any sale provided for in Sections 6.5 or 6.7
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral, or any part thereof;

(v) (1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand
for, collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or arising out
of any Collateral; (3) sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) cause any mail to be transferred to the Collateral
Agent’s own offices and to receive and open all mail addressed to such Grantor
for the purposes of removing any items referred to in clause (i) above;
(5) commence and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (6) defend
any suit, action or proceeding brought against such Grantor with respect to any
Collateral; (7) settle, compromise, compound, adjust or defend any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Agent may deem appropriate; (8) perform any
obligations of any Grantor under any contract that constitutes Collateral; and
(10) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do, at
the Collateral Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do;

 

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(vi) take all actions and execute all documents in respect of contracts that
constitute Collateral and Pledged Stock contemplated by Sections 6.2 and 6.3
hereof; and

(vii) execute and deliver any and all agreements, documents and other
instruments required to be executed and delivered by a Grantor pursuant to the
terms hereof or the terms of the Loan Agreement or any other Loan Document.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein or in any other Loan Document, the Collateral Agent, at its
option, but without any obligation so to do, may perform or comply, or otherwise
cause performance or compliance, with such agreement.

(c) Each Grantor agrees to pay on demand in cash costs and expenses of the
Collateral Agent incurred in connection with all actions undertaken pursuant to
this Section 7.1, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor.

(d) Each Grantor hereby ratifies all actions taken by the Collateral Agent and
its officers and agents pursuant to this Section 7.1. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Termination Date.

7.2. Duty of Collateral Agent.

The Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the UCC or otherwise, shall be to deal with the Collateral in the same manner
as the Collateral Agent deals with similar property for its own account. No
Secured Party or any of their respective officers, directors, employees or
agents shall (i) be liable for failure to demand, collect or realize upon any of
the Collateral, or for any delay in doing so, or (ii) be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person, or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Agent and
the other Secured Parties hereunder are solely to protect the interests of the
Collateral Agent and the other Secured Parties in the Collateral and shall not
impose any duty upon the Collateral Agent or any other Secured Party to exercise
any such powers. Each of the Collateral Agent and the other Secured Parties
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and none of the Collateral Agent, any other Secured
Party or any of their respective officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except in
the case of such Person’s own gross negligence or willful misconduct as finally
determined in a non-appealable order of a court of competent jurisdiction.

 

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7.3. Financing Statements.

Each Grantor authorizes the Collateral Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral, without the signature of such Grantor, in such form (if no
signature is required) and in such offices as the Collateral Agent determines
appropriate to perfect the security interests of the Collateral Agent under this
Agreement. Each Grantor authorizes the Collateral Agent to use the collateral
description “all personal property”, “all assets” or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC or the Uniform Commercial Code of any
other applicable state, in any such financing statements.

7.4. Authority of Collateral Agent.

Each Grantor acknowledges that the rights and responsibilities of the Collateral
Agent under this Agreement with respect to any action taken by the Collateral
Agent or the exercise or non-exercise by the Collateral Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Secured
Parties, be governed by the Loan Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8. MISCELLANEOUS

8.1. Amendments and Waivers.

None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 12.01 of
the Loan Agreement (“Amendments and Waivers”).

8.2. Notices.

All notices, requests, demands and other communications to or upon the
Collateral Agent or any Grantor hereunder shall be (i) in writing,
(ii) delivered and deemed received in accordance with the procedures set forth
in Section 12.02 of the Loan Agreement (“Notices and Other Communications”), and
(iii) addressed to the parties at the address, facsimile number or email address
provided in Section 12.02 of the Loan Agreement. Any party hereto may change its
address, facsimile number or email address for notices and other communications
hereunder by notice to all of the other parties hereto in accordance with the
foregoing.

8.3. No Waiver by Course of Conduct; Cumulative Remedies.

No Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of any Secured Party, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by any Secured Party
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which such Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

 

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8.4. Successors and Assigns.

This Agreement shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Collateral Agent and the other Secured
Parties and their successors and permitted assigns; provided, that no Grantor
may assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.

8.5. Set-Off.

Each Grantor hereby irrevocably authorizes the Agents and each other Secured
Party at any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon any amount becoming due and payable by
such Grantor hereunder or under any other Loan Document (whether at the stated
maturity, by acceleration or otherwise), to set off, appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Secured
Party to or for the credit or the account of such Grantor, or any part thereof
in such amounts as such Agent or such Secured Party may elect, against and on
account of the obligations and liabilities of such Grantor to such Agent or such
Secured Party hereunder and claims of every nature and description of such Agent
or such Secured Party against such Grantor, in any currency, whether arising
hereunder, under the Loan Agreement, any other Loan Document or otherwise, as
such Agent or such Secured Party may elect, whether or not any Secured Party has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. Each Secured Party, or the Collateral
Agent on such Secured Party’s behalf, shall notify such Grantor promptly of any
such set-off and the application made by such Secured Party of the proceeds
thereof; provided, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Secured Party under
this Section 8.5 are in addition to other rights and remedies (including other
rights of set-off) that such Secured Party may have.

8.6. Counterparts.

Any number of counterparts of this Agreement, including facsimiles and other
electronic copies, may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all such
counterparts taken together shall constitute one and the same agreement. This
Agreement may be transmitted and signed and delivered by facsimile or other
electronic means. The effectiveness of any such documents and signatures shall
have the same force and effect as manually signed originals and shall be binding
on all parties.

8.7. Severability.

All provisions of this Agreement are severable, and the unenforceability or
invalidity of any of the provisions of this Agreement shall not affect the
validity or enforceability of the remaining provisions of this Agreement. Should
any part of this Agreement be held invalid or unenforceable in any jurisdiction,
the invalid or unenforceable portion or portions shall be removed (and no more)
only in that jurisdiction, and the remainder

 

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shall be enforced as fully as possible (removing the minimum amount possible) in
that jurisdiction. In lieu of such invalid or unenforceable provision, the
parties hereto will negotiate in good faith to add as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such invalid or
unenforceable provision as may be possible.

8.8. Section Headings.

The Section headings used in this Agreement are for convenience of reference
only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

8.9. Integration.

This Agreement and the other Loan Documents contain the entire agreement of the
parties with respect to the subject matter hereof and thereof and supersede all
prior negotiations, agreements and understandings with respect thereto, both
written and oral. This Agreement may not be contradicted or supplemented by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten or oral agreements between the parties. When this
Agreement or any other Loan Document refers to a party’s “sole discretion”, such
phrase means that party’s sole and absolute discretion as to process and result,
which shall be final for all purposes hereunder, to be exercised (to the fullest
extent the law permits) as arbitrarily and capriciously as that party may wish,
for any reason, subject to no standard of reasonableness or review and part of
no claim before any court, arbitrator or other tribunal or forum or otherwise.

8.10. GOVERNING LAW. THIS AGREEMENT AND THE VALIDITY, INTERPRETATION,
CONSTRUCTION, AND PERFORMANCE HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND ANY CLAIM BY ANY PARTY HERETO AGAINST ANY OTHER
PARTY HERETO (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT
OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
REQUIRING APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

8.11. WAIVER. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW, ALL RIGHTS OF RESCISSION,
SETOFF, COUNTERCLAIMS, AND OTHER DEFENSES IN CONNECTION WITH THE REPAYMENT OF
THE GUARANTEED OBLIGATIONS (OTHER THAN THE DEFENSE OF PAYMENT IN FULL IN CASH).

8.12. Acknowledgements.

Each party hereto hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party, and that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation hereof or
thereof;

 

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(b) no Secured Party has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the
Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor;

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties; and

(d) notwithstanding anything herein to the contrary, any inability of (x) any
Loan Party to take action required hereunder, or (y) the Agent to exercise the
rights or remedies described herein, in each case, due solely to the pendency of
the automatic stay during the Chapter 11 Cases shall not constitute an Event of
Default hereunder.

8.13. Additional Grantors and Guarantors.

Each Subsidiary of any Loan Party that is required to become a party to this
Agreement pursuant to Section 8.10 of the Loan Agreement (“Additional
Collateral, Guarantors and Grantors”) shall become a Grantor and a Guarantor for
all purposes of this Agreement upon execution and delivery by such Subsidiary of
an Assumption Agreement.

8.14. Releases of Guaranty and Liens.

(a) Notwithstanding anything to the contrary contained herein or in any other
Loan Document, the Collateral Agent is hereby irrevocably authorized by each
Secured Party (without requirement of notice to or consent of any Secured Party
except as expressly required by Section 12.01 of the Loan Agreement) to take any
action requested by the Grantor having the effect of releasing any Collateral or
Guaranteed Obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 12.01 of the Loan Agreement, or (ii) under the
circumstances described in Section 8.14(b) hereof.

(b) On the Termination Date, (i) the Collateral shall automatically be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of each Grantor
hereunder shall automatically terminate, all without delivery of any instrument
or performance of any act by any Person, and all rights to the Collateral shall
revert to the Grantors, and (ii) all obligations of the Collateral Agent under
this Agreement and the other Security Documents shall terminate without delivery
of any instrument or performance of any act by any Person.

(c) Upon request by the Collateral Agent at any time, the Required Lenders will
confirm in writing the Collateral Agent’s authority to release its interest in
particular types or items of property, or to release any Guaranteed Obligations
pursuant to this Section 8.14. In each case as specified in this Section 8.14,
the Collateral Agent will (and each Lender irrevocably authorizes the Collateral
Agent to), at the Loan Parties’ expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under this Agreement and the other Security Documents or such Guaranteed
Obligations, as applicable, in each case in accordance with the terms of the
Loan Documents and this Section 8.14.

 

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8.15. Subordination.

Notwithstanding any provision of this Agreement to the contrary, and except as
otherwise provided by Applicable Law, all rights of the Grantors to indemnity,
contribution, reimbursement or subrogation under Applicable Law or otherwise
shall be fully subordinated to the final payment in full in cash of the Secured
Obligations (other than Unasserted Contingent Obligations). No failure on the
part of the Borrower or any other Grantor to make the payments required under
Applicable Law or otherwise shall in any respect limit the obligations and
liabilities of any Grantor with respect to its obligations hereunder, and each
Grantor shall remain liable for the full amount of the obligations of such
Grantor hereunder. Each Grantor hereby agrees that all Indebtedness owed to it
by any other Grantor shall be fully subordinated to the final payment in full in
cash of the Secured Obligations (other than Unasserted Contingent Obligations).

8.16. Intercompany Debt Subordination.

(a) As to each Grantor, all payments on account of an Intercompany Debt shall be
subject, subordinate, and junior, in right of payment and exercise of remedies,
to the extent and in the manner set forth herein, to the prior final payment, in
full, in cash of the Secured Obligations (other than Unasserted Contingent
Obligations). As to each Grantor, in the event of any payment or distribution of
assets of any other Grantor of any kind or character, whether in cash, property,
or securities, upon any Insolvency Proceeding or other dissolution, winding up,
or total or partial liquidation or reorganization, readjustment, arrangement, or
similar proceeding relating to such other Grantor or its property, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership,
arrangement, or similar proceedings or upon an assignment for the benefit of
creditors, or upon any other marshaling or composition of the assets and
liabilities of such other Grantor, or otherwise, (such events, collectively, the
“Grantor Insolvency Events”): (i) all amounts owing on account of the Secured
Obligations shall first be paid in full before any payment on account of an
Intercompany Debt is made; and (ii) to the extent permitted by Applicable Law,
any payment on account of an Intercompany Debt to which such Grantor would be
entitled except for the provisions hereof, shall be paid or delivered by the
trustee in bankruptcy, receiver, assignee for the benefit of creditors, or other
liquidating agent making such payment or distribution directly to the Collateral
Agent for the benefit of the Secured Parties for application to the payment of
the Secured Obligations in accordance with sub-clause (i), after giving effect
to any concurrent payment or distribution or provision therefor to the Secured
Parties or the Collateral Agent for the benefit thereof in respect of such
Secured Obligations.

(b) So long as no Event of Default has occurred and is continuing, each Grantor
may make, and each other Grantor shall be entitled to accept and receive,
payments not prohibited under the Loan Agreement in respect of any Intercompany
Debt; provided that upon the occurrence and during the continuance of any Event
of Default, at the election of the Collateral Agent, no Grantor shall make, and
no other Grantor shall accept or receive, any payment on account of any
Intercompany Debt.

 

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(c) In the event that, notwithstanding the provisions of Sections 8.16(a) and
(b) above, any payment on account of any Intercompany Debt shall be received in
contravention of Sections 8.16(a) or (b) above by any Grantor before all Secured
Obligations are finally paid in full, such payment on account of Intercompany
Debt shall be held in trust for the benefit of the Secured Parties and shall be
paid over or delivered to the Collateral Agent for application to the payment in
full in cash of all Secured Obligations remaining unpaid to the extent necessary
to give effect to such Sections 8.16(a) and (b) above, after giving effect to
any concurrent payments or distributions to the Collateral Agent in respect of
the Secured Obligations.

WAIVER OF JURY TRIAL; DISPUTE RESOLUTION; JURISDICTION; VENUE; SERVICE OF
PROCESS.EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS AGREEMENT, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN
CONNECTION WITH OR RELATED TO THIS AGREEMENT. EACH PARTY FURTHER AGREES THAT THE
TERMS AND PROVISIONS OF ARTICLE XIII OF THE LOAN AGREEMENT (“JURISDICTION;
VENUE, SERVICE OF PROCESS; JURY TRIAL WAIVER”) ARE HEREBY INCORPORATED HEREIN BY
REFERENCE, AND SHALL APPLY TO THIS AGREEMENT MUTATIS MUTANDIS AS IF FULLY SET
FORTH HEREIN.

8.17. Marshaling.

Neither the Collateral Agent nor any other Secured Party shall be required to
marshal any present or future collateral security (including but not limited to
the Collateral) or other assets for or against, or other assurances of payment
of, the Obligations or any of them or to resort to such collateral security,
other assets or other assurances of payment in any particular order, and all of
the rights and remedies of the Secured Parties hereunder and of the Secured
Parties in respect of such collateral security, other assets and other
assurances of payment shall be cumulative and in addition to all other rights
and remedies, however existing or arising. To the extent that it lawfully may,
each Guarantor hereby agrees that it will not invoke any law relating to the
marshaling of collateral which might cause delay in or impede the enforcement of
the Collateral Agent’s rights and remedies under this Agreement or under any
other instrument creating or evidencing any of the Obligations or under which
any of the Obligations is outstanding or by which any of the Obligations is
secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, each Guarantor hereby irrevocably waives the benefits of all such
laws.

[signatures begin on next page]

 

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IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered
this Agreement as of the date first above written.

 

GRANTORS:

 

       PHI INC., a Louisiana corporation   By  

 

  Name:     Title:     PHI TECH SERVICES, INC., a Louisiana corporation   By  

 

  Name:     Title:     PHI AIR MEDICAL, L.L.C, a Louisiana limited liability
company   By  

 

  Name:     Title:     PHI HELIPASS, L.L.C., a Louisiana limited liability
company   By  

 

  Name:     Title:  

[Signature Page to Guaranty and Security Agreement]

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COLLATERAL AGENT:   BLUE TORCH FINANCE LLC, as Collateral Agent        By  

 

  Name:     Title:  

[Signature Page to Guaranty and Security Agreement]

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SCHEDULE II

FILINGS AND OTHER ACTIONS

UCC Filings:

 

Grantor

 

Jurisdictions

Other Actions:

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SCHEDULE VI

INVENTORY AND EQUIPMENT

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ANNEX I

FORM OF ASSUMPTION AGREEMENT

ASSUMPTION AGREEMENT (this “Assumption Agreement”) dated as of
[                        ], 201[    ] made by
[                                ], a [                                ] (the
“Additional Grantor”), in favor of Blue Torch Finance LLC, a Delaware limited
liability company (“Blue Torch”), as collateral agent for the Secured Parties
(in such capacity, together with its successors and assigns in such capacity,
the “Collateral Agent”). All uppercase terms used but not otherwise defined
herein have the meanings given to them in the Guaranty and Security Agreement
(as defined below) or the Loan Agreement (as defined below), as the context may
require.

Introductory Statement

WHEREAS, pursuant to the Loan Agreement dated as of March 13, 2019 (as amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
“Loan Agreement”) among PHI, INC., a Louisiana corporation (the “Borrower”), the
other Guarantors from time to time party thereto, the Lenders from time to time
party thereto, Blue Torch as Administrative Agent and the Collateral Agent, the
Lenders have agreed to make Loans to the Borrower on and subject to the terms
and conditions set forth therein; and

WHEREAS, in connection with the Loan Agreement, the Loan Parties (other than the
Additional Grantor) and the Collateral Agent (for the benefit of the Secured
Parties) have entered into the Guaranty and Security Agreement dated as of
March 13, 2019 (as amended, supplemented or otherwise modified, renewed or
replaced from time to time, the “Guaranty and Security Agreement”); and

WHEREAS, the Loan Agreement requires that the Additional Grantor become a party
to the Guaranty and Security Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guaranty and Security
Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the
Additional Grantor hereby agrees as follows:

1. Guaranty and Security Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.13 of the Guaranty
and Security Agreement (“Additional Grantors and Guarantors”), hereby becomes a
party to the Guaranty and Security Agreement as a Guarantor and a Grantor
thereunder with the same force and effect as if originally named therein as a
Guarantor and a Grantor and, without limiting the generality of the foregoing,
hereby (a) pledges, collaterally assigns and transfers to the Collateral Agent
for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent for the benefit of the

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

Secured Parties, a Lien on and a security interest in all of its right, title
and interest in and to all of its personal property and other assets, wherever
located, whether now owned or at any time hereafter acquired by the Additional
Grantor therein or in which the Additional Grantor now has or at any time in the
future may acquire any right, title or interest, including without limitation
the Collateral described in clauses (a) through (q) of Section 3 of the Guaranty
and Security Agreement, but excluding any Excluded Property, as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Secured
Obligations, (b) jointly and severally, unconditionally and irrevocably,
guarantees to the Collateral Agent, for the benefit of the Secured Parties and
their respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Guaranteed Obligations, and
(c) expressly assumes all obligations and liabilities of a Guarantor and a
Grantor under the Guaranty and Security Agreement. The information set forth in
Annex 1-A hereto is hereby added to the information set forth in Schedule[s]
[        ], [        ] and [        ] to the Guaranty and Security Agreement.
The Additional Grantor hereby represents and warrants that, with respect to the
Additional Grantor, each of the representations and warranties contained in
Section 4 of the Guaranty and Security Agreement is true and correct in all
material respects (without duplication of any materiality qualifier therein) on
and as the date hereof (after giving effect to this Assumption Agreement) as if
made on and as of such date.

2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT AND THE VALIDITY, INTERPRETATION,
CONSTRUCTION, AND PERFORMANCE HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND ANY CLAIM BY ANY PARTY HERETO AGAINST ANY OTHER
PARTY HERETO (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT
OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
REQUIRING APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

3. WAIVER OF JURY TRIAL; DISPUTE RESOLUTION; JURISDICTION; VENUE; SERVICE OF
PROCESS. THE ADDITIONAL GRANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS ASSUMPTION AGREEMENT, OR (II) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS ASSUMPTION AGREEMENT. EACH
PARTY FURTHER AGREES THAT THE TERMS AND PROVISIONS OF SECTION 8.17 OF THE
GUARANTY AND SECURITY AGREEMENT (“WAIVER OF JURY TRIAL; DISPUTE RESOLUTION;
JURISDICTION; VENUE; SERVICE OF PROCESS”) ARE HEREBY INCORPORATED HEREIN BY
REFERENCE, AND SHALL APPLY TO THIS AGREEMENT MUTATIS MUTANDIS AS IF FULLY SET
FORTH HEREIN.

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

4. Miscellaneous. The terms and provisions of Sections 8.1, 8.2, 8.4, 8.6, 8.7,
8.8 and 8.9 of the Guaranty and Security Agreement (“Amendments and Waivers”;
“Notices”; “Successors and Assigns”; “Counterparts”; “Severability”; “Section
Headings”; “Integration”) are hereby incorporated herein by reference, and shall
apply to this Assumption Agreement mutatis mutandis as if fully set forth
herein. This Assumption Agreement shall constitute a “Loan Document” for all
purposes of the Loan Agreement and the other Loan Documents.

5. No Novation or Release. Nothing in this Assumption Agreement shall be
construed to release any other Grantor at any time party to the Guaranty and
Security Agreement from its obligations and liabilities thereunder or otherwise
affect any of such other Grantor’s obligations or liabilities under any Loan
Document.

[signatures begin on next page]

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

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR]

By  

 

Name:   Title:  

 

ACKNOWLEDGED:

BLUE TORCH FINANCE LLC,

as Collateral Agent

By  

 

Name:   Title:  

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Annex 1-A

[Insert Information To Be Added to the Applicable

Guaranty and Security Agreement Schedules]

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

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

[        ], 20[        ]

This compliance certificate (this “Certificate”) is delivered pursuant to
Section 8.01(e) of the Loan Agreement (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”), dated as of March 13, 2019 among PHI, INC., a Louisiana corporation
(the “Borrower”), the direct and indirect subsidiaries of the Borrower that are
Guarantors or become Guarantors thereunder pursuant to Section 8.10 thereof, the
Lenders from time to time party thereto, BLUE TORCH FINANCE LLC, a Delaware
limited liability company, as administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, the
“Administrative Agent”) and Collateral Agent (together with Administrative
Agent, each an “Agent” and collectively the “Agents”). Unless otherwise defined
herein, capitalized terms used herein and in the attachments hereto shall have
the meanings provided in the Loan Agreement.

The undersigned Authorized Officer of the Borrower hereby certifies, in such
capacity and not in any individual capacity, that (i) the financial information
attached hereto as Exhibit A and delivered with this Certificate in accordance
with subsection [8.01(b)] [8.01(c)][8.01(d)]1 of the Loan Agreement presents
fairly in all material respects the financial condition, results of operations
and cash flows of the Consolidated Companies in accordance with GAAP at the
respective dates of such information and for the respective periods covered
thereby, subject in the case of unaudited financial information, to changes
resulting from normal year-end audit adjustments and to the absence of
footnotes, and (ii) as of the date hereof [no Default or Event of Default had
occurred and is continuing] [a Default/an Event of Default has occurred and set
forth on Attachment 1 are the details specifying such Default or Event of
Default and the actions taken or to be taken with respect thereto]. The Borrower
hereby further certifies, on behalf of the Loan Parties, that as of
[                                    ] [        ], 20[        ] (the
“Computation Date”):

(1) Liquidity, as of the Computation Date, is not less than $[        ].

(2) [The Fixed Charge Coverage Ratio on the last day of the Test Period ending
on the Computation Date was [                ] to 1.00, as computed on
Attachment 3 hereto. The Fixed Charge Coverage Ratio for such period must be
greater than or equal to [                ] to 1.00 pursuant to Section 9.13(b)
of the Loan Agreement.].

(3) [The Secured Leverage Ratio on the last day of the Test Period ending on the
Computation Date was [            ] to 1.00, as computed on Attachment 5 hereto.
The Secured Leverage Ratio for such period must be less than or equal to
[                ] to 1.00 pursuant to Section 9.13(c) of the Loan Agreement.]
2.

 

1 

To include 8.01(b) for compliance certificates delivered in connection with
monthly financial statement, 8.01(c) for compliance certificates delivered in
connection with quarterly financial statements, and 8.01(d) for compliance
certificates delivered in connection with annual financial statements.

2 

To be included solely to the extent attaching quarterly financial statements and
annual financial statements under 8.01(c) or 8.01(d), respectively.

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

(4) Total Appraisal Ratio, as of the Computation Date, is not less than
$[            ].

(5) [Attachment 6 hereto contains changes as of the Computation Date in the
identity of the Subsidiaries from those listed on Schedule 7.09 of the Loan
Agreement, or from the most recently delivered Compliance Certificate, as
applicable.][There has been no change in the identity of the Subsidiaries
[listed on Schedule 7.09 to the Loan Agreement since the Closing Date][since
most recently delivered Compliance Certificate.]]

(6) [Attachment 7 hereto contains (i) an updated Schedule 7.15 of the Loan
Agreement (if applicable), and (ii) a written supplement substantially in the
form of Schedules 2 and 6, as applicable, to the Guaranty and Security Agreement
with respect to any additional assets and property acquired by any Loan Party
after the Closing Date or the previous Computation Date (as the case may be)
through the Computation Date, all in reasonable detail].

To the extent there is any inconsistency between the language in the Attachments
and the language in the Loan Agreement, the language in the Loan Agreement
controls.

[Remainder of page intentionally left blank]

 

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

The foregoing information is true, complete and correct in all material respects
as of the Computation Date.

 

PHI, INC. By    

 

Name:   Title:  

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

[Attachment 1

(to _/_/_

Compliance Certificate)

DETAILS SPECIFYING DEFAULT OR EVENT OF DEFAULT

AND THE ACTION TAKEN OR TO BE TAKEN WITH RESPECT THERETO]3

  

 

3 

This attachment is only to be used if a Default or Event of Default is occurring
or continuing during the time that the Compliance Certificate is completed.

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

Attachment 2

(to _/_/_

Compliance Certificate)

CONSOLIDATED ADJUSTED EBITDA

For The Test Period Ending On The Computation Date

(with respect to the Consolidated Companies, without duplication)

 

1.   Consolidated Net Income of Consolidated Companies

   $ ________  

2.   Consolidated Net Income of the Consolidated Companies during the Test
Period

   $ ________  

3.   Consolidated Interest Expense during the Test Period

   $ ________  

4.   provisions for Taxes based on income or profits or capital, including,
without limitation, state franchise, excise and similar taxes, foreign taxes and
withholding taxes of such Person paid or accrued during such period, including
any penalties and interest relating to any tax examinations

   $ ________  

5.   total depreciation expense

   $ ________  

6.   total amortization expense

   $ ________  

7.   other non-cash charges and expenses reducing Consolidated Net Income
(excluding any such non-cash item to the extent that it represents an accrual or
reserve for potential cash items in any future period or amortization of a
prepaid cash item that was paid in a prior period)

   $ ________  

8.   fees and expenses incurred in connection with the negotiation, execution
and delivery of the Loan Agreement and the other Loan Documents (excluding any
capitalized amounts)

   $ ________  

9.   reasonable out-of-pocket fees and expenses paid in connection with
(a) Investments and other non-ordinary course transactions that have been
consummated and (b) failed acquisitions, other Investments, and other
non-ordinary course transactions that have not been (and will not be)
consummated, in an aggregate amount, solely with respect to this clause (9), not
to exceed $1,000,000 in the aggregate during any trailing twelve-month period

   $ ________  

10.  earn-out obligations and contingent consideration obligations (including to
the extent accounted for as performance and retention bonuses, compensation or
otherwise) and adjustments thereof and purchase price adjustments paid or
accrued in accordance with GAAP to the extent permitted under the Loan Documents

   $ ________  

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

11.  fees paid to the Administrative Agent and the Lenders to the extent not
included above

   $ ________  

12.  non-recurring expenses and fees in  connection with the Chapter 11 Cases,
including, but not limited to, professional fees, severance payments and
retention bonus payments

   $ ________  

13.  the amount of any restructuring charge or provision (whether or not
classified as a restructuring charge or provision under GAAP), integration cost
or other business optimization expense or cost, including any one-time costs
incurred in connection with acquisitions or divestitures after the Closing Date,
any recruiting expenses and costs related to the closure and/or consolidation of
facilities and to exiting lines of business and any reconstruction,
recommissioning or reconfiguring of fixed assets for alternative use; provided
that any amounts described by this Item 13 shall be reasonably expected to be
incurred within twelve (12) months and the aggregate amount added back for
actions to be taken will not exceed in any period 5% of Consolidated Adjusted
EBITDA, determined on a pro forma basis

   $ ________  

14.  any other non-cash 
expenses or charges including any write-offs or write downs reducing Consolidated Net Income for the
Test Period (provided that if any such non-cash expenses or charges represent an
accrual or reserve for potential cash items in any future period, (1) the
Borrower may determine not to add back such non-cash expense or charge in the
current period and (2) to the extent the Borrower does decide to add back such
non-cash expense or charge, the cash payment in respect thereof in such future
period shall be subtracted from Consolidated Adjusted EBITDA to such extent, and
excluding amortization of a prepaid cash item that was paid in a prior period)

   $ ________  

15.  realized foreign exchange losses resulting from the impact of foreign
currency changes on the valuation of assets or liabilities on the balance sheet
of such Person and its Restricted Subsidiaries

   $ ________      $ ________      $ ________   15.1.  to the extent reducing
Consolidated Net Income, the sum of, without duplication, Items 2 through 14:   
$________  

16.  amounts for other non-cash gains increasing Consolidated Net Income for
such period (excluding any such non-cash gain to the extent it represents the
reversal of an accrual or reserve for potential cash items in any prior period)

   $ ________  

17.  extraordinary gains received during the Test Period

   $ ________  

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

17.1.  to the extent increasing Consolidated Net Income, the sum of, without
duplication Items 15 and 16

   $ ________  

18.  Consolidated Adjusted EBITDA equals Item 1 plus Item 14.1 minus Item 16.14

   $ ________  

 

 

4 

Notwithstanding the foregoing, for all purposes under the Loan Agreement,
Consolidated Adjusted EBITDA shall be deemed to equal (i) $10,683,533.51 for the
fiscal quarter ended September 30, 2018 and (ii) $11,149,298.28 for the fiscal
quarter ended December 31, 2018.

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

Attachment 3

(to _/_/_

Compliance Certificate)

FIXED CHARGE COVERAGE RATIO

For The Test Period Ending On The Computation Date

(with respect to the Consolidated Companies, without duplication)

 

1.   Consolidated Adjusted EBITDA (from Item 17 in Attachment 2)

   $ ________  

2.   Consolidated Capital Expenditures (from Item 3.1 in Attachment 4)

   $ ________  

2.1  Item 1 minus Item 2 equals

   $ ________  

3.   cash interest expense (including on Capitalized Lease Obligations) (net of
cash interest income)

   $ ________  

4.   regularly scheduled principal amortization (including on Capitalized Lease
Obligations) (after giving effect to any mandatory or voluntary prepayments) and
payments at maturity

   $ ________  

5.   cash income Taxes (net of any Tax refund or benefit)

   $ ________  

5.1  Item 3 plus Item 4 plus Item 5 equals

   $ ________  

Fixed Charge Coverage Ratio equals the ratio of Item 2.1 to Item 5.1

      [_]:1.005       

Minimum Fixed Charge Coverage Ratio6

     [_]:1.00  

In Compliance?

     [Yes][No]  

 

 

 

5 

Provided, that for purposes of calculating the Fixed Charge Coverage Ratio for
any Test Period ending on or prior to the first period for which four full
fiscal quarters have elapsed since the Closing Date, the amounts calculated
pursuant to Items 3, 4 and 5 for the relevant Test Periods shall equal such
actual amounts from the Closing Date to and including the last day of the
relevant Test Period, multiplied by a fraction equal to (x) 365 divided by
(y) the number of days actually elapsed from the Closing Date to such date of
determination.

6 

As provided in Section 9.13(b) (“Fixed Charge Coverage Ratio”) of the Loan
Agreement.

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

Attachment 4

(to _/_/_

Compliance Certificate)

CONSOLIDATED CAPITAL EXPENDITURES

For The Test Period Ending On The Computation Date

(with respect to the Consolidated Companies)

 

1.   The sum of, without duplication, all expenditures made, directly or
indirectly, by the Consolidated Companies during the Test Period, determined on
a consolidated basis in accordance with GAAP, that are or should be reflected as
additions to property, plant or equipment or similar items reflected in the
consolidated statement of cash flows of the Consolidated Companies, or have a
useful life of more than one year

   $ ________  

2.   Expenditures made in connection with the acquisition, replacement,
substitution, improvement, expansion or restoration of assets to the extent
financed:

  

2.1 from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored

   $ ________  

2.2 with cash awards of compensation arising from the taking by eminent domain
or condemnation of the assets being replaced

   $ ________  

2.3 with cash proceeds of Dispositions that are reinvested in accordance with
the Loan Agreement

   $ ________  

2.4 with proceeds of landlord financed leasehold improvements

   $ ________  

2.5 to the extent financed with the Net Equity Proceeds of an equity issuance by
the Borrower to the extent not prohibited by the Loan Agreement

   $ ________  

3.   expenditures made to fund the purchase price for assets acquired permitted
Investments in all or substantially all of the equity or assets of another
Person or business unit or division

   $ ________  

3.1 Item 1 minus the sum of Items 2 and 3 equals

   $ ________  

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

Attachment 5

(to _/_/_

Compliance Certificate)

SECURED LEVERAGE RATIO

For The Test Period Ending On The Computation Date

(with respect to the Consolidated Companies)

 

1.   all indebtedness for borrowed money and all indebtedness evidenced by
bonds, debentures, notes, loan agreements or other similar instruments on which
interest charges are customarily paid or accrued

   $ ________  

2.   the maximum amount (after giving effect to any prior drawings or reductions
which may have been reimbursed) of all letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds, performance
bonds and similar instruments issued or created by or for the account of the
Consolidated Companies

   $ ________  

3.   net Hedging Obligations of such Person

   $ ________  

4.   all obligations from installment purchases of property or services or
representing the deferred purchase price for property or services, other than
trade accounts payable in the ordinary course of business (but including any
earn-out or similar obligations)

   $ ________  

5.   obligations secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) a Lien on property
owned or being purchased by a Consolidated Company (including obligations
arising under conditional sales or other title retention agreements and
mortgage, industrial revenue bond, industrial development bond and similar
financings), whether or not such indebtedness shall have been assumed by the
Consolidated Companies or is limited in recourse

   $ ________  

6.   all Attributable Indebtedness

   $ ________  

7.   all obligations of such Person in respect of Disqualified Capital Stock

   $ ________  

8.   all Guaranty Obligations of such Person in respect of any of the foregoing

   $ ________  

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

9.   invoiced trade payables more than one hundred and twenty (120) days past
due unless such amount either (i) is unpaid as a result of the Chapter 11 Cases
or (ii) is subject to a good faith dispute by such Person and adequate reserves
in respect thereof have been established on the balance sheet of such Person in
accordance with GAAP7

   $ ________  

9.1.   The sum of Items 1 through 9 above equals

   $ ________  

10.1.  Secured Leverage Ratio equals the ratio of (1) Item 9.1 above to
(2) Consolidated Adjusted EBITDA (from Item 17 in Attachment 2)

     [__]:1.00  

Required Secured Leverage Ratio 8

     [__]:1.00  

In Compliance?

     [Yes][No]  

 

 

 

7 

Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, except to the extent such Person’s liability for such Indebtedness is
otherwise limited and only to the extent such Indebtedness would constitute
Funded Debt. The amount of any net Hedging Obligations on any date shall be
deemed to be the Swap Termination Value thereof as of such date. The amount of
Indebtedness of any Person for purposes of clause (e) above shall be deemed to
be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness
and (y) the fair market value of the property encumbered thereby as determined
by such Person in good faith.

8 

As provided in Section 9.13(c) (“Maximum Secured Leverage Ratio”) of the Loan
Agreement.

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

[Attachment 6

(to _/_/_

Compliance Certificate)

CHANGES IN IDENTITY OF THE SUBSIDIARIES]

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

[Attachment 7

(to _/_/_

Compliance Certificate)

UPDATES/SUPPLEMENTS TO CERTAIN SCHEDULES]

(i) [Attached is an updated [Schedule 7.15] of the Loan Agreement; and]

(ii) [Attached is a written supplement substantially in the form of Schedules 2
and 6, as applicable, to the Guaranty and Security Agreement with respect to any
additional assets and property acquired by any Loan Party after the Closing Date
or the previous Computation Date (as the case may be), all in reasonable
detail.]

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

Exhibit A

(to _/_/_

Compliance Certificate)

[MONTHLY][QUARTERLY][YEARLY] FINANCIAL STATEMENTS

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

EXHIBIT D

FORM OF PERFECTION CERTIFICATE

[            ], 20[    ]

Reference is made to the Loan Agreement dated as of March 13, 2019 (as extended,
renewed, amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Loan Agreement”), by and among PHI, Inc., a
Louisiana corporation (“Borrower”), each Subsidiary Guarantor from time to time
party thereto, each Lender from time to time party thereto, and Blue Torch
Finance LLC as Administrative Agent. All capitalized terms used in this
Perfection Certificate (this “Certificate”) shall have the meanings ascribed to
such terms in the Loan Agreement. This Certificate is a Loan Document.

I, [                                         ], hereby certify that I am the
duly elected and qualified [                            ] of Borrower, and that,
as such, I am authorized to execute this Certificate on behalf of the Loan
Parties.

This Certificate is delivered pursuant to the Loan Agreement and I do hereby
certify to Administrative Agent and the Lenders that, as of the date hereof:

1. Names.

(a) Set forth below is (i) the exact corporate or other legal name of Borrower
and each Guarantor as it appears in their respective Certificate/Articles of
Incorporation/Formation, (ii) the jurisdiction of their respective organization
and (iii) a list of jurisdictions where each Loan Party is foreign qualified, if
any:

 

Loan Party

 

Jurisdiction of Organization

(b) Set forth below is each other corporate or other legal name of Borrower,
each Guarantor and each of their respective Subsidiaries has had during the last
five (5) years, together with the date of the relevant change:

(c) Except as set forth below, none of Borrower, any Guarantor nor any of their
respective Subsidiaries has changed its identity or corporate or organizational
structure in any way within the past five (5) years:

(d) The following are all other names (including trade names and assumed names)
used by Borrower, any Guarantor and any of their respective Subsidiaries at any
time during the past five (5) years:

 

Loan Party

 

Trade Names / DBAs

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

(e) The following is a list of names of the other entities (i) from which
Borrower, each Guarantor and each of their respective Subsidiaries acquired
assets or (ii) with which Borrower, each Guarantor and each of their respective
Subsidiaries merged, in any such case, during the past five (5) years:

2. Owned and Leased Property.

(a) All locations of real property (i) owned by Borrower, any Guarantor or any
of their respective Subsidiaries are set forth on Schedule I attached hereto and
(ii) leased by Borrower, any Guarantor or any of their respective Subsidiaries
are set forth on Schedule II attached hereto.

(b) Attached hereto are copies of (i) any legal descriptions, title commitments,
title policies and surveys and (ii) all leases of real property, which have not
been previously delivered to Administrative Agent.

3. Current Locations.

(a) The following is a list of chief executive office, principal place of
business and headquarters of Borrower, each Guarantor and each of their
respective Subsidiaries (including counties, states and zip codes):

 

Loan Party

 

Chief Executive Office Address

 

County

(b) Other than the chief executive office, principal place of business and
headquarters set forth above, a list of all other locations where Borrower or
any Guarantor maintains any books or records, owns any assets or conducts any
business can be found in Schedule III.

(c) A list of names and addresses of third parties who have possession or
control of the assets which constitute Collateral of Borrower or any Guarantor
can be found in Schedule IV.

4. Federal Employer Identification and State Organization Number. The following
is a list of the federal employer identification number and state organization
number for Borrower, each Guarantor and each of their respective Subsidiaries:

 

Loan Party

 

FEIN

 

Organizational ID

5. Helicopters and Aircraft.

(a) A description of all helicopters and aircraft to be pledged as Collateral by
the Borrower or any Guarantor, is set forth on Schedule V attached hereto.

 

2

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

6. Spare Parts.

(a) A description of all spare parts to be pledged as Collateral by the Borrower
or any Guarantor, is set forth on Schedule VI attached hereto.

[Signature Page Follows]

 

3

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IN WITNESS WHEREOF, this Certificate has been executed by the undersigned as of
the date first above written.

 

[_______], a [state of organization/incorporation] [corporate form]

By:

   

 

Name:    

 

Title:    

 

Perfection Certificate

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SCHEDULE I

Owned Real Property

Common Address (including county, state and zip code)

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SCHEDULE II

Leased Real Property

 

Lessor and Address of Leased Real Property

  

Description of Lease

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SCHEDULE III

Intellectual Property

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SCHEDULE IV

Litigation

 

(a)

Lawsuits pending or threatened with estimated damages.

 

(b)

Infringement actions or challenges to ownership of patents, trademarks, service
marks or copyrights.

 

(c)

Consent decrees, judgments, orders and injunctions.

 

(d)

Settlement agreements.

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SCHEDULE V

Helicopters

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SCHEDULE VI

Spare Parts

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EXHIBIT E

FORM OF ASSIGNMENT AND ACCEPTANCE

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 among
PHI, INC., a Louisiana corporation (the “Borrower”), the Subsidiaries of the
Borrower that are Guarantors or become Guarantors thereunder pursuant to
Section 8.10 thereof, the Lenders from time to time party thereto, BLUE TORCH
FINANCE, LLC, a Delaware limited liability company, as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, the “Administrative Agent”) and as collateral agent for the Secured
Parties (in such capacity, together with its successors and permitted assigns in
such capacity, the “Collateral Agent”, and together with the Administrative
Agent, each an “Agent” and collectively the “Agents”) (as amended, restated,
amended and restated, supplemented or otherwise modified, renewed or replaced
from time to time, the “Loan Agreement”). Capitalized terms used but not
otherwise defined herein have the meanings given to them in the Loan Agreement.

The Assignor identified on Schedule l hereto (the “Assignor”) and the Assignee
identified on Schedule l hereto (the “Assignee”) agree as follows:

1. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), the percentage interest identified on Schedule 1 hereto
in and to all of the Assignor’s rights and obligations under the Loan Agreement
with respect to the Loan or Loans described on Schedule 1 hereto, in the
respective principal amounts for such Loan or Loans as set forth on Schedule 1
hereto (the “Assigned Interest”).

2. The Assignor: (a) makes no representation or warranty and assumes no
responsibility or liability with respect to (i) any statement, representation or
warranty made in, pursuant to, or otherwise in connection with the Loan
Agreement or any other Loan Document, (ii) with respect to the execution,
delivery, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other agreement, document
or instrument executed, delivered or otherwise furnished pursuant thereto or
(iii) with respect to the attachment, perfection or priority of any Lien granted
by the Borrower or any other Loan Party in favor of the Collateral Agent or any
Lender or otherwise with respect to the Collateral, other than that the Assignor
is the legal and beneficial owner of the Assigned Interest, has not created any
adverse claim upon the Assigned Interest, and that the Assigned Interest is free
and clear of any such adverse claim created by the Assignor; (b) makes no
representation or warranty and assumes no responsibility or liability with
respect to the financial condition of the Borrower, any of its Subsidiaries or
any other Loan Party or the performance or observance by the Borrower, any of
its Subsidiaries or any other Loan Party of any of their respective obligations
under the Loan Agreement or any other Loan Document or any other agreement,
document or instrument executed, delivered or otherwise furnished pursuant
hereto or thereto; (c) attaches the Note(s), if any, held by the Assignor
evidencing the Assigned Interest (“Notes”); and (d) requests that the
Administrative Agent (i) exchange the attached Notes for a new Note or

 

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Notes payable to the order of the Assignee and (ii) if the Assignor has retained
any interest in the Loans, exchange the attached Notes for a new Note or Notes
payable to the order of the Assignor, in each case in amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Effective Date).

3. The Assignee: (a) represents and warrants that the Assignee has the necessary
power and authority, and has taken all actions necessary, to execute and deliver
this Assignment and Acceptance and perform the obligations of the Assignee
hereunder; (b) represents that the Assignee [is/is not] already a Lender, [is/is
not] an Affiliate of a Lender, and [is an Approved Fund of [                ]/is
not an Approved Fund]; (c) confirms that the Assignee has received copies of the
Loan Agreement and any other Loan Document requested by the Assignee, together
with copies of the most recent financial statements delivered pursuant to
Sections 8.01(a), 8.01(b), 8.01(c) and 8.01(d) of the Loan Agreement and such
other documents and information as the Assignee has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (d) designates on Schedule 1 hereto the Assignee’s address,
facsimile number and email address for notices and other communications under
the Loan Agreement and the other Loan Documents; (e) if applicable, attaches two
properly completed Forms W-8BEN, or W-8 BEN-E in the case of an entity, and
W-8ECI or successor form prescribed by the Internal Revenue Service of the
United States, certifying that the Assignee is entitled to receive all payments
under the Loan Agreement without deduction or withholding of any United States
federal income taxes; (f) agrees that the Assignee will, independently and
without reliance upon the Assignor, any Agent or any other Lender and based upon
such documents and information as the Assignee deems appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Agreement, the other Loan Documents or any other agreement, document or
instrument executed, delivered or otherwise furnished pursuant hereto or
thereto; (g) appoints and authorizes each Agent to take such action as agent on
behalf of the Assignee and to exercise such powers and discretion under the Loan
Agreement, the other Loan Documents and each other agreement, document or
instrument executed, delivered or otherwise furnished pursuant thereto as are
delegated to such Agent by the terms thereof, together with such powers as are
incidental thereto; (h) agrees that the Assignee will be bound by the provisions
of the Loan Agreement and the other Loan Documents and will perform in
accordance with its respective terms all the obligations which by the terms
thereof are required to be performed by the Assignee as a Lender, including, if
the Assignee is organized under the laws of a jurisdiction outside the United
States, its obligations pursuant to Section 4.04 of the Loan Agreement (“Taxes”)
and (i) represents that the Assignee is not the Sponsor, an Affiliate of the
Sponsor, a Loan Party or an Affiliate of any Loan Party.

4. The effective date of this Assignment and Acceptance shall be the “Effective
Date of Assignment” identified on Schedule 1 hereto (the “Effective Date”).
Following the execution of this Assignment and Acceptance by the Assignor and
the Assignee, the Assignor and the Assignee shall deliver it to each
Administrative Agent (together with a processing and recordation fee of $3,500
to the Payment Agent, to the extent required by Section 12.06(b)(ii)(C) of the
Loan Agreement) for acceptance by the Payment Agent and recording by the
Administrative Agents pursuant to the terms of the Loan Agreement, effective as
of the Effective Date (which shall not, unless otherwise agreed to by the
Payment Agent, be earlier than five (5) Business Days after the date of such
acceptance by the Payment Agent and recording by the Administrative Agents).

 

2

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5. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued prior to
the Effective Date and to the Assignee for amounts which have accrued on and
after the Effective Date.

6. From and after the Effective Date, (a) the Assignee shall be a party to the
Loan Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof, and (b) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Agreement.

7. Each party hereto agrees that the terms and provisions of Sections 12.01
(“Amendments and Waivers”), 12.02 (“Notices and Other Communications”), 12.10
(“Effectiveness of Facsimile Documents and Signatures”), 12.11 (“Counterparts”),
12.12 (“Severability”), and 12.13 (“Integration”) of the Loan Agreement are
hereby incorporated herein by reference, and shall apply to this Assignment and
Acceptance mutatis mutandis as if fully set forth herein.

8. THIS ASSIGNMENT AND ACCEPTANCE AND THE VALIDITY, INTERPRETATION,
CONSTRUCTION, AND PERFORMANCE HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND ANY CLAIM BY ANY PARTY HERETO AGAINST ANY OTHER
PARTY HERETO (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT
OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
REQUIRING APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

9. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS ASSIGNMENT AND ACCEPTANCE, OR (II) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS ASSIGNMENT AND ACCEPTANCE.
EACH PARTY FURTHER AGREES THAT THE TERMS AND PROVISIONS OF ARTICLE XIII OF THE
LOAN AGREEMENT (“JURISDICTION; VENUE, SERVICE OF PROCESS; JURY TRIAL WAIVER”)
ARE HEREBY INCORPORATED HEREIN BY REFERENCE, AND SHALL APPLY TO THIS ASSIGNMENT
AND ACCEPTANCE MUTATIS MUTANDIS AS IF FULLY SET FORTH HEREIN.

[signatures begin on next page]

 

3

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered as of the date first above written.

 

ASSIGNOR:     ASSIGNEE: [                                ]    
[                                ] By  

                    

    By  

                    

Name:       Name:   Title:       Title:  

 

CONSENTED: [                                ], as Administrative Agent1 By  

                    

Name:   Title:   [PHI, INC.] 2 By  

                    

Name:   Title:   ACCEPTED: [                                ], as Administrative
Agent By  

                    

Name:   Title:  

 

 

1 

Include to the extent required by Section 12.06 of the Loan Agreement.

2 

Include to the extent required by Section 12.06 of the Loan Agreement.

 

4

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Schedule 1

to Assignment and Acceptance

 

Name of Assignor: Name of Assignee: Effective Date of Assignment:

 

Loan

   Percentage
of
Assignor’s
Loan
Assigned     Percentage
of All
Lenders’
Loan
Assigned     Principal
Amount of Loan
Assigned (Face)      Principal
Amount of Loan
Assigned
(Outstanding)  

Term Loan

     _____ %      _____ %    $ __________      $ __________  

Address, facsimile number and email address for notices and other communications
under the Loan Agreement and the other Loan Documents:

[Assignee]

____________________

____________________

Attention: _______________

Facsimile No.: _______________

Email: _______________

 

5

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EXHIBIT F

FORM OF NOTICE OF CONVERSION/CONTINUATION

Blue Torch Finance LLC,

as Administrative Agent under

the Loan Agreement referred to below

c/o Blue Torch Capital LP

430 Park Avenue, Suite 1202

New York, NY 10022

Email: BlueTorchAgency@cortlandglobal.com

_________ __, 20__

 

  Re:

PHI, INC., a Louisiana corporation

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 among
PHI, INC., a Louisiana corporation (the “Borrower”), the Subsidiaries of the
Borrower that are Guarantors or become Guarantors thereunder pursuant to
Section 8.10 thereof, the Lenders from time to time party thereto, BLUE TORCH
FINANCE, LLC, a Delaware limited liability company, as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, the “Administrative Agent”) and as collateral agent for the Secured
Parties (in such capacity, together with its successors and permitted assigns in
such capacity, the “Collateral Agent”, and together with the Administrative
Agent, each an “Agent” and collectively the “Agents”) (as amended, amended and
restated, supplemented or otherwise modified, renewed or replaced from time to
time, the “Loan Agreement”). Capitalized terms used but not otherwise defined
herein have the meanings given to them in the Loan Agreement.

Borrower, hereby gives you irrevocable notice, pursuant to Section 2.09(a) of
the Loan Agreement of its request for the following:

 

  (i)

[a continuation, on                 ,         , as LIBOR Rate Loans having an
Interest Period of          months, of [Term Loans] in an aggregate outstanding
principal amount of $                     that have an Interest Period ending on
the proposed date for such continuation;

 

  (ii)

a conversion, on                 ,         , to LIBOR Rate Loans having an
Interest Period of          months of [Term Loans] in an aggregate outstanding
principal amount of $                ; and

 

  (iii)

a conversion, on                 ,         , to Base Rate Loans, of [Term Loans]
in an aggregate outstanding principal amount of $                .]1

 

1 

Include requests as applicable

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

In connection herewith, the undersigned hereby certifies that, except as set
forth on Schedule A attached hereto, no Event of Default will have occurred and
be continuing on the date of the proposed conversion or continuation set forth
above after giving effect to any Loan to be made on the date for such proposed
conversion or continuation.

 

PHI, INC., as Borrower By:  

 

  Name:   Title:

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

Schedule A

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

EXHIBIT G

NOTICE OF BORROWING

Date: [            ]

 

To:

Blue Torch Finance LLC

c/o Blue Torch Capital LP

430 Park Avenue, Suite 1202

New York, NY 10022

Electronic Mail: BlueTorchAgency@cortlandglobal.com

Ladies and Gentlemen:

Reference is made to that certain Loan Agreement, to be dated as of March 13,
2019 (as amended, restated, supplemented or otherwise modified in writing from
time to time, the “Loan Agreement”), PHI, INC., a Louisiana corporation
(“Borrower”), the Subsidiaries of the Borrower that are Guarantors or become
Guarantors thereunder, the Lenders from time to time party thereto and Blue
Torch Finance LLC, as Administrative Agent. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement.

The undersigned hereby gives you notice pursuant to Section 2.02(a) of the Loan
Agreement, conditional upon the occurrence of the closing date on March 13,
2019, that it hereby requests an extension of Term Loans to be made on the terms
set forth below:

 

  1.

On [            ] (a Business Day).

 

  2.

In the aggregate principal amount of $[            ].

 

  3.

Such Loans will be at [            ] borrowing, with an Interest Period of
[            ].

[The remainder of this page is intentionally left blank.]

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PHI, INC. By:  

 

  Name:   Title:

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EXHIBIT H-1

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among PHI, INC., a LOUISIANA CORPORATION
(“Borrower”), the other Loan Parties party thereto, the Lenders from time to
time party thereto, and BLUE TORCH FINANCE LLC as administrative agent and
collateral agent for the Lenders (in such capacities, together with its
successors and assigns in such capacities, “Agent”).

Pursuant to the provisions of Section 4.04(f) of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “ten percent
shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (iv) it is not a “controlled foreign corporation” related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Agent and Borrower with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform Borrower and
Agent, and (2) the undersigned shall have at all times furnished Borrower and
Agent with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF LENDER] By:  

 

Name:   Title:  

Date: ________ __, 20[    ]

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EXHIBIT H-2

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among PHI, INC., a LOUISIANA CORPORATION
(“Borrower”), the other Loan Parties party thereto, the Lenders from time to
time party thereto, and BLUE TORCH FINANCE LLC as administrative agent and
collateral agent for the Lenders (in such capacities, together with its
successors and assigns in such capacities, “Agent”).

Pursuant to the provisions of Section 4.04(f) of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a “ten percent shareholder” of the Borrower within the meaning
of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF PARTICIPANT]

By:

   

 

Name:   Title:  

Date: ________ __, 20[    ]

 

2

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EXHIBIT H-3

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among PHI, INC., a LOUISIANA CORPORATION
(“Borrower”), the other Loan Parties party thereto, the Lenders from time to
time party thereto, and BLUE TORCH FINANCE LLC as administrative agent and
collateral agent for the Lenders (in such capacities, together with its
successors and assigns in such capacities, “Agent”).

Pursuant to the provisions of Section 4.04(f) of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a “bank” extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a “ten percent shareholder” of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS
Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or
IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Lender and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF PARTICIPANT]

By:

   

 

Name:   Title:  

Date: ________ __, 20[    ]

 

3

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EXHIBIT H-4

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan Agreement dated as of March 13, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among PHI, INC., a LOUISIANA CORPORATION
(“Borrower”), the other Loan Parties party thereto, the Lenders from time to
time party thereto, and BLUE TORCH FINANCE LLC as administrative agent and
collateral agent for the Lenders (in such capacities, together with its
successors and assigns in such capacities, “Agent”).

Pursuant to the provisions of Section 4.04(f) of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Loan
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a “ten percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Agent and Borrower with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS
Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or
IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform Borrower and Agent, and
(2) the undersigned shall have at all times furnished Borrower and Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF LENDER]

By:

   

 

Name:   Title:  

Date: ________ __, 20[    ]

 

4