Exhibit 10.4

 

CREDIT AGREEMENT

 

Dated as of January 24, 2006

 

Among

 

NORTHWEST AIRLINES, INC.,

 

as Borrower,

 

THE LENDERS PARTY HERETO

 

and

 

AIRBUS FINANCIAL SERVICES,

 

as Administrative Agent

 

in respect of one

 

Airbus A330-223 Aircraft

 

Manufacturer’s Serial Number 0718

 

FAA Registration No. N858NW

 

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TABLE OF CONTENTS

 

 

PAGE

 

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

1

 

 

SECTION 1.1.   Certain Defined Terms

1

 

 

SECTION 1.2.   Terms Defined in Mortgage

13

 

 

SECTION 1.3.   Computation of Time Periods

13

 

 

SECTION 1.4.   Accounting Terms

13

 

 

ARTICLE II AMOUNT AND TERMS OF THE LOAN

13

 

 

SECTION 2.1.   The Loan

13

 

 

SECTION 2.2.   Making the Loan

13

 

 

SECTION 2.3.   Fees

14

 

 

SECTION 2.4.   [Intentionally Omitted]

14

 

 

SECTION 2.5.   Repayment

14

 

 

SECTION 2.6.  (a)   Interest

15

 

 

SECTION 2.7.   Interest Rate and Period Determination

16

 

 

SECTION 2.8.   Prepayments

16

 

 

SECTION 2.9.   Increased Costs

17

 

 

SECTION 2.10.   Illegality

17

 

 

SECTION 2.11.   Payments and Computations

17

 

 

SECTION 2.12.   Taxes

19

 

 

SECTION 2.13.   Sharing of Payments, Etc

21

 

 

SECTION 2.14.   Use of Proceeds

22

 

 

SECTION 2.15.   Lender Cooperation

22

 

 

SECTION 2.16.   Replacement of Lenders

22

 

 

SECTION 2.17.   Airbus Lenders

22

 

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PAGE

 

 

SECTION 2.18.   Funding Arrangements

22

 

 

ARTICLE III CONDITIONS TO MAKING THE LOAN

23

 

 

SECTION 3.1.   Conditions Precedent to the Loan

23

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES

27

 

 

SECTION 4.1.   Representations and Warranties of the Borrower

27

 

 

ARTICLE V COVENANTS OF THE BORROWER

31

 

 

SECTION 5.1.   Affirmative Covenants

31

 

 

SECTION 5.2.   Compliance with Mortgage

33

 

 

SECTION 5.3.   Maintenance of Office

33

 

 

SECTION 5.4.   Negative Covenants

33

 

 

ARTICLE VI EVENTS OF DEFAULT

33

 

 

SECTION 6.1.   Events of Default

33

 

 

ARTICLE VII THE AGENTS

36

 

 

SECTION 7.1.   Authorization and Action

36

 

 

SECTION 7.2.   Each Agent’s Reliance, Etc

37

 

 

SECTION 7.3.   The Agents and Their Affiliates

37

 

 

SECTION 7.4.   Lender Credit Decision

38

 

 

SECTION 7.5.   Indemnification

38

 

 

SECTION 7.6.   Successor Agent

38

 

 

ARTICLE VIII MISCELLANEOUS

39

 

 

SECTION 8.1.   Amendments, Etc

39

 

 

SECTION 8.2.   Notices, Etc

39

 

 

SECTION 8.3.   No Waiver; Remedies

39

 

 

SECTION 8.4.   Costs and Expenses

40

 

 

SECTION 8.5.   Right of Setoff

41

 

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PAGE

 

 

SECTION 8.6.   Binding Effect

41

 

 

SECTION 8.7.   Assignments and Participations

41

 

 

SECTION 8.8.   Confidentiality

46

 

 

SECTION 8.9.   Certain Agreements and Representations of Lenders

46

 

 

SECTION 8.10.   GOVERNING LAW

47

 

 

SECTION 8.11.   Execution in Counterparts

47

 

 

SECTION 8.12.   Jurisdiction, Etc

47

 

 

SECTION 8.13.   WAIVER OF JURY TRIAL

48

 

 

SECTION 8.14.   Severability

48

 

 

SECTION 8.15.   Headings

48

 

 

SECTION 8.16.   Interpretation of Term Sheet

48

 

 

SECTION 8.17.   Quiet Enjoyment

48

 

 

SECTION 8.18.   Concerning Clause (i)(y) of Section 3.6(a)(I) of the Mortgage

49

 

iii

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Schedules

 

 

 

 

 

 

 

Schedule I

-

 

List of Lending Offices

 

 

 

 

Schedule II

-

 

Approved Commercial Banks

 

 

 

 

Schedule III

-

 

Principal Payment Schedule

 

 

 

 

Schedule IV

-

 

Approved Countries for Re-registration

 

 

 

 

Schedule V

-

 

AL Subleases

 

 

 

 

Exhibits

 

 

 

 

 

 

 

Exhibit A

-

 

Form of Promissory Note

 

 

 

 

Exhibit B

-

 

Form of Notice of Loan

 

 

 

 

Exhibit C

-

 

Form of Assignment and Acceptance

 

 

 

 

Exhibit D-1

-

 

Form of Opinion of Associate General Counsel of the Borrower

 

 

 

 

Exhibit D-2

-

 

Form of Opinion of Cadwalader, Wickersham & Taft LLP, Special Counsel for the
Borrower

 

 

 

 

Exhibit D-3

-

 

Form of Opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, Special
Aviation Counsel for the Agent

 

 

 

 

Exhibit E

-

 

Form of Confidentiality Agreement

 

iv

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CREDIT AGREEMENT

 

Dated as of January 24, 2006

 

NORTHWEST AIRLINES, INC., a Minnesota corporation (the “Borrower”), the lender
or lenders party to this Agreement from time to time (each, a “Lender”) and
AIRBUS FINANCIAL SERVICES, an Irish limited liability company formerly known as
Airbus Industrie Financial Services (“AFS”), as Administrative Agent (as
hereinafter defined) for the Lenders hereunder agree as follows:

 

WHEREAS, the Borrower and AVSA, S.A.R.L., a société à responsabilité limitée
organized and existing under the laws of the Republic of France (together with
its successors, “AVSA”), have entered into the Airbus A330 Purchase Agreement,
which covers, among other matters, the sale by AVSA and the purchase by the
Borrower of certain Airbus A330 aircraft;

 

WHEREAS, the Borrower and AVSA have agreed pursuant to the A330 Financing Letter
Agreement, dated as of the date hereof (the “Letter Agreement”), to certain
additional terms and conditions regarding the financing of the Airbus A330
Aircraft to be delivered under the Airbus A330 Purchase Agreement, including the
responsibility of AVSA to arrange specified financing alternatives for up to ten
of the Airbus A330 Aircraft to be delivered under the Airbus A330 Purchase
Agreement, including the Aircraft;

 

WHEREAS, on September 14, 2005 (the “Petition Date”), the Borrower and certain
of its Affiliates commenced Chapter 11 cases by filing voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, Chapter
11 Case No. 05-17930 (ALG) (the “Case”);

 

WHEREAS, on the basis of the foregoing and subject to the terms and conditions
of this Agreement, the Initial Lender is prepared to make the Loan in the amount
of the Financed Amount for the Aircraft;

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto in such capacity agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1.   Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Administrative Agent” means AFS or such other agents as may from time to time
become party hereto in such capacity pursuant to Section 7.6.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term “control” (including the

 

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terms “controlling,” “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 5% or more
of the Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.

 

“AFS” has the meaning given to it in the preamble hereto.

 

“AFS Term Loan” means the financing pursuant to the Amended and Restated Loan
Agreement, dated as of March 29, 1996, between the Borrower and AFS, as amended
or otherwise modified from time to time (the “AFS Term Loan Agreement”), and the
Other Financing Documents related to such financing.

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

“Agent” or “Agents” means, individually or collectively, as the case may be, the
Administrative Agent and the Collateral Agent under (and as defined in) the
Mortgage.

 

“Airbus” means Airbus S.A.S., a société par actions simplifiée organized and
existing under the laws of the Republic of France (or any person or any entity
that succeeds to substantially all of the business and operations thereof).

 

“Airbus A319 Aircraft” means an Airbus model A319-114 aircraft to be delivered,
or delivered, as the context may require, pursuant to the Airbus A319 Purchase
Agreement.

 

“Airbus A319 Purchase Agreement” means that certain Airbus A319-100 Purchase
Agreement dated as of September 19, 1997, together with all exhibits and letter
agreements relating thereto, between AVSA and the Borrower as originally
executed and as modified, amended or supplemented in accordance with the terms
thereof.

 

“Airbus A330 Aircraft” means an Airbus model A330-223 or A330-323 aircraft to be
delivered, or delivered, as the context may require, pursuant to the Airbus A330
Purchase Agreement.

 

“Airbus A330 Purchase Agreement” means that certain Airbus A330 Purchase
Agreement dated as of December 21, 2000, together with all exhibits and letter
agreements relating thereto, between AVSA and the Borrower as originally
executed and as modified, amended or supplemented in accordance with the terms
thereof.

 

“Airbus Documentation” means the Loan Documents, the Airbus Purchase
Agreements and the Other Financing Documents and any amendment of or supplement
to any of the foregoing and any other document, instrument or agreement entered
into by the Borrower or any of its Affiliates with Airbus or any of its
Affiliates pursuant to the Term Sheet.

 

“Airbus Finance Company Limited” means Airbus Finance Company Limited, an Irish
limited liability company.

 

2

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“Airbus Financings” means the 2005 A319 Financings, the 2005 A330 Financings,
the Committed A330 Financings, the AL Subleases and the AFS Term
LoanCONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

 

“Airbus Leasing IV” means Airbus Leasing IV, Inc., a Delaware corporation
formerly known as A.I. Leasing IV, Inc.

 

“Airbus Lender” means Airbus, AFS, Airbus Finance Company Limited, Airbus
Leasing IV or any of their Affiliates.

 

“Airbus North America” means Airbus North America Customer Service, Inc., a
Delaware corporation.

 

“Airbus Purchase Agreements” means the Airbus A319 Purchase Agreement and the
Airbus A330 Purchase Agreement.

 

“Aircraft” means the Airframe (or any Replacement Airframe), together with the
two Engines delivered in connection therewith or any Replacement Engines
substituted for any of said Engines, whether or not any of such initial or
substitute Engines may from time to time be installed on the Airframe or may be
installed on any other airframe or any other aircraft.

 

“Airframe” means (A) the Airbus A330 Aircraft (excluding the Engines or engines
from time to time installed thereon) identified in the Mortgage and (B) any and
all Parts (other than Engines or engines) so long as the same shall be
incorporated or installed in or attached to such Airframe.

 

“AL Subleases” means the ten (10) A320-200 sublease agreements between the
Borrower as sublessee and Airbus Leasing IV, as sublessor, as described in
Schedule V hereto.

 

“Alternate Rate” has the meaning given to it in Section 2.7(b).

 

“Applicable Date” has the meaning given to it in Section 2.12(b)(1).

 

“Applicable Margin” means (a) during the pendency of the Case and prior to the
Consummation Date, CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT% per annum, and (b) on and after the Consummation Date, the lesser of
(i) the NWA Market Margin, determined as of the Consummation Date, and (ii)
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT % per
annum, in each case reduced (x) by CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT % per annum, if the Borrower satisfies all of the
Post-Consummation Conditions by the end of the CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A

 

3

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REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT) day period after the Consummation Date, such reduction
to be effective on the Interest Payment Date immediately following the
satisfaction of the Post-Consummation Conditions, and (y) by CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT% per annum, if
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, such
reduction to be effective on the Consummation Date. For the avoidance of doubt,
the reductions described in sub-clauses (x) and (y) of clause (b)(ii) of the
preceding sentence may be cumulative and are not mutually exclusive.

 

“Applicable Rate” means, for any Interest Period, the highest of (x) the sum of
the Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time during such Interest Period, (y) until the occurrence
of an Initial Lender Sell-Down, the Initial Lender’s cost of funds for a loan
transaction of the same principal amount with the same tenor and on the same
terms and with the same collateral security as the Loan (as certified in writing
by the Initial Lender for such Interest Period) plus CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT% per annum and (z) the
Eurodollar Rate for such Interest Period plus CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT % per annum.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit VIII hereto.

 

“Avion” means Avion Capital Limited, an Irish company.

 

“AVSA” has the meaning given to it in the recitals hereto.

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

 

“Bankruptcy Code” means Title 11 of the United States Code, as amended, or any
subsequent legislation that amends, supplements or supersedes such provisions.

 

“Bankruptcy Court” means the United States Bankruptcy Court, Southern District
of New York.

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to (a) the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the preceding Business Day) by
the Federal Reserve Bank of New York, or if such rate is not so published for
any day that is a Business Day, the

 

4

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average of the quotations for such day for such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.

 

 “BFE” means all buyer furnished equipment, if any, installed or loaded on the
Aircraft on the date of its purchase and financing hereunder.

 

“BFE Cost” means the total cost invoiced to the Borrower for the BFE as such
cost is certified to the Administrative Agent pursuant to Section 3.1(f).

 

“Borrower” has the meaning given to it in the preamble hereto.

 

“Business Day” means (i) for all purposes other than as covered by clause (ii)
below, any day except Saturday, Sunday and any day which shall be in New York,
New York, Dublin, Ireland or Minneapolis, Minnesota a legal holiday or a day on
which banking institutions are authorized or required by law or other government
action to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, the Loan if it bears
interest based upon the Eurodollar Rate, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the interbank Eurodollar market.

 

“Business Plan” means the business plan of the Borrower, as presented to Airbus
during December, 2005, in the binder entitled Business Restructuring Plan – Bank
Meeting, together with the Long Range Planning Model (Summary Version) 2005,
each dated November 1, 2005, covering a period through to at least December 31,
2010.

 

“Case” has the meaning given to it in the recital hereto.

 

“Cash Equivalents” means cash and items classified as cash equivalents for
purposes of GAAP.

 

“Certificated Air Carrier” means a Citizen of the United States holding a
carrier operating certificate issued by the Secretary of Transportation pursuant
to Chapter 447 of Title 49, United States Code, for aircraft capable of carrying
ten or more individuals or 6,000 pounds or more of cargo.

 

“Change in Law” has the meaning given to it in Section 2.12(b)(1).

 

“Citizen of the United States” has the meaning given to it in Section
40102(a)(15) of Title 49 of the United States Code.

 

“Claim” has the meaning ascribed to such term in Section 101(5) of the
Bankruptcy Code.

 

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

 

“Collateral” has the meaning given to it in the Mortgage.

 

5

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“Committed A330 Financings” means the financings of up to ten Airbus A330
Aircraft described in the Letter Agreement on the terms and conditions described
therein, including the financing of the Aircraft contemplated by this Agreement.

 

“Confidential Information” means any information that the Borrower furnishes to
the Agent or any Lender in writing designated as confidential, but does not
include any such information (i) that is or becomes generally available to the
public or (ii) that is or becomes available to the Agent or such Lender from a
source other than the Borrower, unless the Agent or Lender has the actual
knowledge (without being obligated to conduct any investigation) that such
information has been made available by such source in breach of a
confidentiality agreement which such source is bound by with respect to such
information.

 

“Consummation Date” means the date of substantial consummation (as defined in 11
U.S.C. §1101) of a Plan of Reorganization in the Case, but not later than the
effective date of such a plan that is confirmed by the Court.

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Default” means any event which, with the giving of notice, lapse of time, or
both, would become an Event of Default.

 

“Eligible Assignee” has the meaning given to it Section 8.7(a).

 

“Engine” means (A) each of the two Pratt & Whitney model PW4168A engines
installed on the Aircraft at the time of delivery to the Borrower of the
Aircraft, as further specified in the Mortgage, whether or not from time to time
installed on the Aircraft or installed on any other aircraft and (B) any
Replacement Engine that may from time to time be substituted for such engine;
together, in each case, with any and all Parts incorporated or installed in or
attached thereto.

 

“Engine Manufacturer” means Pratt & Whitney.

 

“Engine Manufacturer Financing Commitment” means the commitment by the Engine
Manufacturer to finance the Airbus A330 Aircraft to be delivered in CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

 

“Engine Manufacturer Financings” means any existing or future lease, loan, trade
receivable, or other extension of credit between the Engine Manufacturer or any
of its Affiliates, on the one hand, and the Borrower or any of its Affiliates,
on the other hand, whether such lease, loan, trade receivable, or other
extension of credit is direct or is indirect through a lease, structured
financing or otherwise, including, without limitation, the financings of the
Airbus A330 Aircraft pursuant to the Engine Manufacturer Financing Commitment.

 

6

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“Eurodollar Rate” means, with respect to the Loan for any Interest Period, the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the British
Bankers’ Association quotation that appears on Page 3750 of the Telerate screen
(or otherwise on such screen or on such other screen, page or service as may
replace the Telerate screen) as of 11:00 A.M., London time, two Business Days
prior to the beginning of the applicable Interest Period as the rate for dollar
deposits to be delivered on the first day of such Interest Period and maintained
for such Interest Period. In the event that such rate does not so appear on the
Telerate Screen (or otherwise as aforesaid), the “Eurodollar Rate” for purposes
of this definition shall be the arithmetic average (rounded to the nearest 1/100
of 1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by each Reference Bank in London for dollar deposits with maturities
comparable to the applicable Interest Period determined as of 11:00 A.M. (London
time) on the date which is two Business Days prior to the commencement of such
Interest Period. If any one or more of the Reference Banks shall not furnish
such timely information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent shall determine
such interest rate on the basis of timely information furnished by the remaining
Reference Bank or Reference Banks.

 

“Event of Default” has the meaning given to it in Section 6.1.

 

“FAA” means the United States Federal Aviation Administration, and any agency or
instrumentality of the United States government succeeding to its functions.

 

“Final Order” shall mean the Order Authorizing Debtor Northwest Airlines, Inc.
to (I) Obtain Postpetition Financing and Grant Security Interests and Liens With
Respect Thereto, (II) Assume Certain Amended Sublease and Purchase Agreements,
(III) Use Cash Collateral to Purchase and Lease Aircraft, (IV) Implement All
Other Aspects of Term Sheet and (V) File Agreements Under Seal, entered by the
Bankruptcy Court on December 22, 2005.

 

“Financed Amount” means $ CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.

 

“Funding Date” has the meaning given to it in Section 2.2.

 

 “GAAP” has the meaning given to it in Section 1.4.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Indemnified Party” has the meaning given to it in Section 8.4(b).

 

7

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“Initial Lender” means AFS, as the initial lender under this Agreement.

 

“Initial Lender Sell-Down” has the meaning given to it in Section 8.7(j).

 

“Interest Payment Date” means the twenty-fourth (24th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day
after such twenty-fourth (24th) day.

 

“Interest Period” means (a) in the case of the Interest Period beginning on the
Funding Date, the period of one month commencing on the Funding Date and ending
on (but excluding) the first Interest Payment Date after the Funding Date, (b)
in the case of each succeeding Interest Period (other the Interest Period
described in clause (c) of this definition), the period commencing on the
Interest Payment Date at the beginning of each Interest Period and ending on
(but excluding) the next succeeding Interest Payment Date, and (c) in the case
of the Interest Period that includes the final Principal Payment Date, the
period beginning on the Interest Payment Date at the beginning of such Interest
Period and ending on (but excluding) such final Principal Payment Date.

 

“Lenders” has the meaning given to it in the preamble hereto.

 

“Lending Offices” means with respect to any Lender, the office of such Lender
specified opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.

 

“Letter Agreement” has the meaning given to it in the recitals hereto.

 

“Letter Agreement Aircraft” means the “Aircraft” that are specified in the
Letter Agreement as being eligible for financing with an “A330 Financing,” each
as defined in the Letter Agreement.

 

“Lien” means any lien (statutory or otherwise), security interest or other
charge or encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained security title
of a conditional vendor and any easement, right of way or other encumbrance on
title to real property.

 

“Liquid Assets” means Cash Equivalents and short term investments that may be
classified, in accordance with GAAP, as unrestricted on the Consolidated balance
sheet of the Borrower

 

“Loan” means the Loan made pursuant to this Agreement.

 

“Loan Documents” means this Agreement, the Notes, the Mortgage and any other
agreement or instrument entered into or delivered by the Borrower pursuant to
any of the foregoing.

 

“Manufacturer” means Airbus.

 

8

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“Moody’s” means Moody’s Investors Services, Inc.

 

“Mortgage” means the Mortgage and Security Agreement dated as of January 24,
2006, between the Borrower and the Collateral Agent named therein, as
supplemented, modified or amended from time to time.

 

“NAC” means Northwest Airlines Corporation, a Delaware corporation.

 

“Note” means a promissory note of the Borrower payable to the order of a Lender,
in substantially the form of Exhibit A hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from the Loan.

 

“Notice of Loan” has the meaning given to it in Section 2.2.

 

“NWA Market Margin” means the margin over the Eurodollar Rate at which the
Borrower could borrow in a bank loan transaction of the same principal amount
with the same tenor and on the same terms and with the same collateral security
as the Loan, determined pursuant to Section 2.6(b) hereof.

 

“Obligations” means the Borrower’s obligation to make the due and punctual
payment of (i) the principal and interest from time to time due on the Notes
(including interest at the rate specified herein after the occurrence of an
Event of Default), (ii) all sums payable by the Borrower under the Mortgage and
(iii) all other sums payable by the Borrower to the Lenders under Sections 2.9,
2.12, 2.17, 2.18 and 8.4 of, or elsewhere under, this Agreement and the other
Loan Documents.

 

“Officer’s Certificate” means, as to any company, a certificate signed by the
Chairman, the Vice Chairman, the President, any Executive Vice President, any
Director, any Senior Vice President, any Vice President, any Assistant Vice
President, the Treasurer or any Assistant Treasurer, the Secretary, or any
Assistant Secretary of such company.

 

“Overpaid Lender” has the meaning given to it in Section 2.13.

 

“Other Financing Documents” means, with respect to any Airbus Financing, the
agreements and instruments entered into by the Borrower in connection with such
Airbus Financing or, with respect to any Pooled Airbus Financing, the agreements
and instruments entered into by the Borrower in connection with such Pooled
Airbus Financing.

 

“Other Purchase Agreements” means any agreement for the purchase of aircraft
between the Borrower or any of its Affiliates and AVSA or any of its Affiliates,
other than the Airbus A319 Purchase Agreement and the Airbus A330 Purchase
Agreement.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

 

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“Parts” means any and all appliances, parts, instruments, appurtenances,
accessories, furnishings, seats, buyer furnished equipment, and other equipment
of whatever nature (other than (a) complete Engines or engines, (b) any items
leased by the Borrower from a third party and (c) cargo containers) which may
from time to time be incorporated or installed in or attached to the Airframe or
either Engine.

 

“Person” means an individual, partnership, corporation, a business trust, joint
stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.

 

“Petition Date” has the meaning given to it in the recitals hereto.

 

“Plan of Reorganization” means a plan in the Case under chapter 11 of the
Bankruptcy Code.

 

“Pooled Airbus Financing” means, at any time that any Person or Persons other
than an Airbus Lender hold more than 50% of the then outstanding principal of
the Notes, any Airbus Financing in which such Person or Persons hold more than
50% of the then outstanding principal amount of such Airbus Financing or all of
the leasehold of any such Airbus Financing that is an AL Sublease, provided that
such Person or Persons acquired its or their interest in the Notes and in such
Airbus Financing in the same Pooled Sell-Down.

 

“Pooled Sell-Down” means the acquisition, from one or more Airbus Lenders, in
one or more transactions, or from a single Pooled Sell-Down Lender, in a single
transaction or in a series of related transactions, of more than 50% of the then
outstanding principal amount of the Notes and more than 50% of the then
outstanding principal amount of one or more Airbus Financings (other than Airbus
Financings that are AL Subleases) and/or all of the leasehold interests in one
or more Airbus Financings that are AL Subleases.

 

“Pooled Sell-Down Lender” means a Person or Persons other than an Airbus Lender
that hold more than 50% of the then outstanding principal amount of the Notes
and one or more Pooled Airbus Financings (other than Pooled Airbus Financings
that are AL Subleases) and/or all of the leasehold interests in one or more
Pooled Airbus Financings that are AL Subleases.

 

“Post-Consummation Conditions” means the following conditions:

 

(a) the Borrower shall, not later than the end of the CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT) day period commencing on the Consummation
Date, have obtained concessions from its labor force (including management)
which, in the case of concessions from unionized employees shall not terminate
earlier than CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR

 

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CONFIDENTIAL TREATMENT, which with respect to all employees may take the form
of, among other things, wage reductions or benefit reductions, and which are
reasonably valued by the Chief Financial Officer or Treasurer of Borrower in an
annualized amount of not less than $CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT, evidenced by a certificate of the Chief Financial
Officer or Treasurer of the Borrower as to such valuation (which, if delivered
to any Affiliate of Airbus in connection with any Airbus Financing that is not a
Pooled Airbus Financing, shall be deemed to have been delivered in connection
herewith);

 

(b) the Borrower shall have aggregate Liquid Assets in the amount of at least $
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, as
evidenced on a Consolidated balance sheet filed with the Securities and Exchange
Commission prior to the end of such CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT) day period or as certified in writing by the Chief Financial Officer
or Treasurer of the Borrower, and

 

(c) the Borrower shall (i) have a corporate credit rating of at least
“CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT” issued by
Standard & Poor’s or “CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT” by Moody’s prior to the end of such CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT) day period or (ii) have received equity investments of
at least $CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT after
December 7, 2005 and prior to the end of such CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT) day period.

 

“Potential Competitor” has the meaning given to it in Section 8.7(a).

 

“Pratt & Whitney” means Pratt & Whitney, a division of United Technologies
Corporation, a Delaware corporation.

 

“Principal Payment Date” has the meaning given to it in Section 2.5.

 

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“Reference Banks” means CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT, CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT and CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

 

“Register” has the meaning given to it in Section 8.7(c).

 

“Required Lenders” means Lenders holding not less than 66⅔% of the aggregate
outstanding principal amount of the Loan.

 

“Standard & Poor’s” Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Taxes” has the meaning given to it in Section 2.12.

 

“Term Sheet” means the NWA Restructuring Term Sheet, dated December 7, 2005,
among the Borrower, Airbus, AVSA, AFS, Airbus Leasing IV, Airbus Finance Company
Limited and Airbus North America.

 

“Transportation Code” means Title 49 of the United States Code, comprising those
provisions formerly referred to as the Federal Aviation Act of 1958, as amended
or any subsequent legislation that amends, supplements or supersedes such
provisions.

 

“2005 A319 Financings” means the financings of two A319 Airbus Aircraft pursuant
to two Credit Agreements, each dated as of December 23, 2005, among Borrower,
certain lenders and AFS, as Administrative Agent thereunder.

 

“2005 A330 Financings” means the financings of two A330 Airbus Aircraft pursuant
to two Credit Agreements, dated as of June 21, 2005 and September 12, 2005,
respectively, among Borrower, certain lenders and Airbus Finance Company
Limited, as Administrative Agent thereunder.

 

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“U.C.C.” means the Uniform Commercial Code as enacted in the State of New York,
except to the extent that such Uniform Commercial Code provides that the Uniform
Commercial Code of another state is applicable.

 

“United States Income Tax” has the meaning given to it in Section 2.12(b)(1).

 

“Voting Stock” means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

 

SECTION 1.2.   Terms Defined in Mortgage. Terms for which meanings are provided
in any Mortgage are, unless otherwise defined herein, used in this Agreement
with such meanings.

 

SECTION 1.3.   Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean to
but excluding.”

 

SECTION 1.4.   Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles in the United States (“GAAP”) consistent with those applied in the
preparation of the financial statements referred to in Section 4.1(a)(v).

 

ARTICLE II

AMOUNT AND TERMS OF THE LOAN

 

SECTION 2.1.   The Loan. The Initial Lender agrees, on the terms and conditions
hereinafter set forth, to make the Loan to the Borrower on a Business Day in an
amount equal to the Financed Amount.

 

SECTION 2.2.   Making the Loan. The Loan shall be made on notice, given not
later than 5:00 P.M. (New York time) on the fourth Business Day prior to the
proposed date of the Loan, by the Borrower to the Administrative Agent, which
shall give prompt notice thereof to the Initial Lender. Such notice of the Loan
(the “Notice of Loan”) shall be by telephone, confirmed immediately in writing,
or telecopier or telex, in substantially the form of Exhibit B-1 hereto,
specifying therein (i) the requested date of the Loan (which shall not be a
legal holiday in Toulouse, France, Dublin, Ireland, or New York, New York), (ii)
the aggregate amount of the Loan, (iii) the date of delivery to the Borrower of
the Aircraft to be financed with the Loan, if other than the requested date of
the Loan, and (iv) identifying information for the Aircraft to be financed. The
“Funding Date” of the Loan shall be the date on which the Loan is made. The
Initial Lender shall, before 11:00 A.M. (New York time) on the date specified in
the Notice of Loan, make available for the account of its Lending Office to the
Administrative Agent at the account of the Administrative Agent at CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT and ABA routing
number CONFIDENTIAL MATERIAL OMITTED AND

 

13

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FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT), in same day funds, the amount of the Loan,
provided that, if the Funding Date does not occur on such date, the Borrower
shall indemnify the Lender to the extent provided in Section 2.18, and provided,
further, the Funding Date shall not occur later than January 31, 2006. After the
Administrative Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower by transfer to AVSA at such account as
AVSA may direct.

 

SECTION 2.3.   Fees. No commitment, arrangement or like fees shall be payable by
the Borrower in connection with this Agreement or any of the other Loan
Documents.

 

SECTION 2.4.   [Intentionally Omitted]

 

SECTION 2.5.   Repayment. The Borrower shall repay to the Administrative Agent
for the ratable account of each Lender the principal amount of the Loan in
consecutive quarterly installments of principal on the Interest Payment Dates
occurring in each April, July, October and January (each such Interest Payment
Date also being referred to as a “Principal Payment Date”), commencing on the
Principal Payment Date in CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT and ending with a payment of all unpaid principal on the
Principal Payment Date in CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT, as set forth on Schedule III, provided, that if the
Consummation Date occurs prior to the Principal Payment Date in CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, then
notwithstanding the scheduled principal payments in Schedule III for any
Principal Payment Dates after the CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT anniversary of the Consummation Date, the unpaid
principal amount of the Notes shall be due and payable in full on the first
Principal Payment Date after the CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT) anniversary of the Consummation Date, and provided, further, that the
amounts of the quarterly installments of principal payable on each Principal
Payment Date, which are based on a mortgage style amortization of the initial
principal amount of the loan at an assumed interest rate of CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT % per annum over
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
(CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT) quarterly
payments in arrears to an agreed amount ending on the CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT) anniversary of the Funding Date, shall not
be affected

 

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by any change in the Applicable Rate pursuant to the definition thereof or by
the acceleration of the final Principal Payment Date pursuant to the preceding
proviso.

 

SECTION 2.6.   (a)  Interest. The Borrower shall pay interest on the unpaid
principal amount of the Loan from the Funding Date until the Loan shall be paid
in full, payable in arrears, on the last day of each Interest Period (each such
date, an “Interest Payment Date”), at an interest rate per annum equal to the
Applicable Rate, except as otherwise provided in Section 2.6(b), 2.7(b) or 2.10.
The Applicable Rate shall be adjusted from time to time as provided in the
definition thereof.

 

(B)  APPLICABLE RATE. THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE AGENT AT
LEAST FIFTEEN (15) BUSINESS DAYS PRIOR TO THE EXPECTED CONSUMMATION DATE OF (X)
SUCH EXPECTED CONSUMMATION DATE AND (Y) THE BANK THAT IT HAS NOMINATED FROM
AMONG THE BANKS LISTED IN SCHEDULE II FOR PURPOSES OF DETERMINING THE NWA MARKET
MARGIN. THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER OF THE BANK THAT IT
HAS NOMINATED FOR SUCH PURPOSES FROM AMONG THE BANKS LISTED IN SCHEDULE II NOT
LATER THAN THE SECOND (2ND) BUSINESS DAY FOLLOWING ITS RECEIPT OF THE FOREGOING
NOTICE FROM THE BORROWER. IF THE TWO BANKS SO NOMINATED HAVE NOT REACHED
AGREEMENT ON THE NWA MARKET MARGIN WITHIN FIVE (5) BUSINESS DAYS AFTER THE
FOREGOING NOMINATION BY THE ADMINISTRATIVE AGENT, THE BORROWER AND THE
ADMINISTRATIVE AGENT SHALL NOMINATE A THIRD BANK FROM AMONG THE BANKS LISTED ON
SCHEDULE II TO DETERMINE THE NWA MARKET MARGIN, AND THE NWA MARKET MARGIN SHALL
BE THE AVERAGE OF THE TWO CLOSEST RATES FOR THE NWA MARKET MARGIN SELECTED FROM
AMONG THE RATES SPECIFIED BY THE THREE BANKS, IN EACH CASE AS CALCULATED BY THE
ADMINISTRATIVE AGENT. IF THE NWA MARKET MARGIN HAS NOT BEEN DETERMINED IN
ACCORDANCE WITH THE PRECEDING THREE SENTENCES OF THIS SECTION 2.6(B) BY THE
CONSUMMATION DATE, THE NWA MARKET MARGIN SHALL BE DEEMED TO BE THE PERCENTAGE
SPECIFIED IN CLAUSE (B)(II) OF THE DEFINITION OF “APPLICABLE MARGIN” UNTIL SUCH
TIME AS THE NWA MARKET MARGIN HAS BEEN DETERMINED AS PROVIDED HEREIN OR AS
OTHERWISE AGREED BY THE BORROWER AND THE ADMINISTRATIVE AGENT. UPON (I)  RECEIPT
OF THE DETERMINATION OF THE TWO BANKS NOMINATED BY THE BORROWER AND THE
ADMINISTRATIVE AGENT, (II) THE ADMINISTRATIVE AGENT’S CALCULATION OF THE
APPLICABLE AVERAGE OF THE RATES OF THE THREE BANKS OR (III) THE AGREEMENT OF THE
BORROWER AND THE ADMINISTRATIVE AGENT AS TO THE NWA MARKET MARGIN, AS
APPLICABLE, THE ADMINISTRATIVE AGENT SHALL PROVIDE TO THE BORROWER, THE LENDERS
AND THE COLLATERAL AGENT A WRITTEN NOTICE CONTAINING THE NWA MARKET MARGIN, THE
APPLICABLE MARGIN AND THE APPLICABLE RATE, EFFECTIVE AS OF THE CONSUMMATION DATE
OR, IF THE NWA MARKET MARGIN HAS NOT BEEN DETERMINED BY THE CONSUMMATION DATE,
EFFECTIVE AS OF THE FIRST INTEREST PAYMENT DATE AFTER THE NWA MARKET MARGIN HAS
BEEN DETERMINED OR AGREED IN ACCORDANCE WITH THIS SECTION 2.6(B). SUCH NOTICE
SHALL BE CONCLUSIVE AND BINDING ON THE PARTIES, ABSENT MANIFEST ERROR BY THE
ADMINISTRATIVE AGENT IN ITS PREPARATION.

 

(C)  DEFAULT INTEREST. UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT UNDER SECTION 6.1(A), THE BORROWER SHALL PAY INTEREST ON (I)
THE OVERDUE PORTION OF THE UNPAID PRINCIPAL AMOUNT OF THE LOAN, PAYABLE IN
ARREARS ON THE DATES SPECIFIED IN PARAGRAPH (A) ABOVE AT A RATE PER ANNUM EQUAL
AT ALL TIMES TO CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT% PER ANNUM ABOVE THE RATE PER ANNUM REQUIRED TO BE PAID ON THE LOAN
PURSUANT TO PARAGRAPH (A) ABOVE AND (II) TO THE FULLEST EXTENT PERMITTED BY LAW,
THE AMOUNT OF ANY INTEREST OR OTHER AMOUNT PAYABLE HEREUNDER THAT IS NOT PAID
WHEN DUE, FROM THE DATE SUCH AMOUNT SHALL BE DUE UNTIL SUCH AMOUNT SHALL BE PAID
IN FULL, PAYABLE IN ARREARS ON THE DATE SUCH

 

15

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AMOUNT SHALL BE PAID IN FULL AND ON DEMAND, AT A RATE PER ANNUM EQUAL AT ALL
TIMES TO CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT% PER
ANNUM ABOVE THE THEN APPLICABLE RATE OF INTEREST.

 

SECTION 2.7.   Interest Rate and Period Determination

 

(a)  The interest rate for each Interest Period shall be established by the
Administrative Agent. The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent from time to time and the rate, if any, furnished by each
Reference Bank and used by the Administrative Agent for the purpose of
determining the Eurodollar Rate.

 

(b)  In the event that, prior to the first day of any Interest Period, the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the market generally, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Administrative
Agent shall give telecopy or telephonic notice thereof to the Borrower and the
Lenders as soon as practicable thereafter. During the next thirty days, the
Borrower and the Administrative Agent shall negotiate a mutually satisfactory
interest rate to be substituted for the Eurodollar Rate. If a substituted
interest rate is agreed upon, it shall be effective from the first day of the
applicable Interest Period. If the Borrower and the Administrative Agent fail to
agree upon a substituted interest rate, then, so long as an Airbus Lender holds
any of the Notes, the applicable interest rate for the Loan shall be equal to
the Applicable Rate specified in clause (y) of the definition thereof and, at
any other time, the Base Rate will be substituted for the Eurodollar Rate in the
definition of Applicable Rate. The replacement interest rate determined pursuant
to this paragraph (b) shall herein be referred to as the “Alternate Rate”.

 

(C)  THE LENDERS AGREE TO AN INTEREST PERIOD OF A SPECIFIED NUMBER OF DAYS TO BE
AGREED WITH AND AT THE REQUEST OF THE BORROWER IN THE EVENT THE BORROWER
REQUESTS SUCH AN ACCOMMODATION IN CONNECTION WITH A REFINANCING AND PREPAYMENT
OF THE LOAN.

 

SECTION 2.8.   Prepayments . (a)  So long as no Event of Default shall have
occurred and be continuing, either on the date notice is given pursuant to this
Section 2.8(a) or the date of prepayment,  Borrower may, upon at least ten (10)
Business Days’ notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment (unless the giving of ten Business
Days notice as aforesaid is not practicable, in which event the Borrower agrees
to give such shorter notice as is practicable but in any event not to be less
than three Business Days), and if such notice is given the Borrower shall prepay
the outstanding principal amount of the Loan in whole but not in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that, in the event of any such prepayment of the
Loan while interest thereon is based on the Eurodollar Rate, the Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to Section
8.4(c). The Loan, if prepaid pursuant to this Section 2.8, may not be
re-borrowed.

 

(B)  IF AN EVENT OF LOSS OCCURS WITH RESPECT TO THE AIRCRAFT AND THE BORROWER
ELECTS NOT TO SUBSTITUTE ANOTHER AIRCRAFT FOR THE AIRCRAFT IN ACCORDANCE WITH
THE MORTGAGE, THE BORROWER SHALL PREPAY THE OUTSTANDING PRINCIPAL AMOUNT OF THE
LOAN IN WHOLE, TOGETHER WITH ACCRUED

 

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INTEREST TO THE DATE OF SUCH PREPAYMENT AND ALL OTHER OBLIGATIONS THEN DUE AND
PAYABLE; PROVIDED THAT (X) THE DATE OF PREPAYMENT SHALL NOT BE LATER THAN THE
EARLIER OF THE THIRD BUSINESS DAY FOLLOWING RECEIPT OF INSURANCE PROCEEDS IN
RESPECT OF THE AIRCRAFT (BUT IN NO EVENT EARLIER THAN 30 DAYS AFTER THE
OCCURRENCE OF SUCH EVENT OF LOSS) OR THE FIRST BUSINESS DAY FOLLOWING THE 120TH
DAY AFTER THE OCCURRENCE OF SUCH EVENT OF LOSS, (Y) THE DATE OF SUCH PREPAYMENT
SHALL BE NOTIFIED BY THE BORROWER TO THE ADMINISTRATIVE AGENT AT LEAST TWO
BUSINESS DAYS PRIOR THERETO AND (Z) IF INTEREST ON THE LOAN IS BASED UPON THE
EURODOLLAR RATE AT THE TIME OF SUCH PREPAYMENT, THE BORROWER SHALL BE OBLIGATED
TO REIMBURSE THE LENDERS IN RESPECT THEREOF PURSUANT TO SECTION 8.4(C).

 

SECTION 2.9.  Increased Costs . If, due to either (i) the introduction after the
date of this Agreement of or any change after the date of this Agreement in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) issued after the date of this
Agreement, (1) there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining the Loan (excluding for purposes of
this Section 2.9 any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the rate of
taxation of overall net income of such Lender or (2) any Lender determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender’s commitment to lend hereunder and other commitments of this type, then
the Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate, in the
case of clause (1) above, such Lender for such increased cost or, in the case of
clause (2) above, such Lender or such corporation in the light of such
circumstances. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.

 

SECTION 2.10.   Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that the
introduction after the date of this Agreement of or any change after the date of
this Agreement in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Lending Office to perform its obligations
hereunder to make, fund or maintain its portion of the Loan bearing interest
based upon the Eurodollar Rate as contemplated herein, then:  (i) such Lender
shall notify the Administrative Agent and the Borrower of the same (ii) such
portion of the Loan will convert into a Loan bearing interest at the Alternate
Rate (as determined pursuant to Section 2.7(b) except that only the Affected
Lender shall be involved), and (iii) the obligation of such Lender to make, fund
and maintain its portion of the Loan based upon the Eurodollar Rate shall be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

 

SECTION 2.11.   Payments and Computations. (a)  The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York time)
on the

 

17

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day when due in U.S. dollars to the Administrative Agent at CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, account name Airbus
Financial Services, account number CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT (or to such other account as shall be designated by the
Administrative Agent from time to time) in same day funds. The Administrative
Agent will promptly thereafter but in no event later than 3:00 P.M. (New York
time) on the date such funds are received by the Administrative Agent from the
Borrower cause to be distributed like funds relating to the payment of principal
or interest ratably (other than amounts payable pursuant to Section 2.9, 2.12,
2.16, 2.17, 2.18 or 8.4(c) and amounts reflecting different prevailing interest
rates on the Loan) to the Lenders for the account of their respective Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.7(d), from and after the effective
date specified in such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

 

(b)  The Borrower hereby authorizes each Lender (other than an Airbus Lender),
if and to the extent payment owed to such Lender is not made when due hereunder
or under any Note held by such Lender, to charge from time to time against any
or all of the Borrower’s accounts with such Lender any amount so due.

 

(c)  All computations of interest based on the Eurodollar Rate or the Alternate
Rate shall be made by the Administrative Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the Interest Period for which such interest
is payable. Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

(d)  Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest; provided, however, that, if
such extension would cause payment of interest on or principal of the Loan to be
made in the next following calendar month, such payment shall be made on the
immediately preceding Business Day.

 

(e)  Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due to such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
such Lender shall

 

18

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repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Eurodollar Rate or the Alternate Rate
as the case may be.

 

SECTION 2.12.   Taxes. (a)  All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority or any political subdivision or taxing authority thereof
or therein (all such taxes, levies, imposts, duties, charges, fees, deductions
and withholdings being hereinafter called “Taxes”). If any Taxes are required to
be withheld from any amounts payable to the Agent or any Lender hereunder or
under the Notes, the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the Notes. In
addition, the Borrower shall pay any Other Taxes to the appropriate taxing
authority in accordance with applicable law. Whenever any Taxes or Other Taxes
are payable by the Borrower, as promptly as possible thereafter the Borrower
shall send to the Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any Taxes or
Other Taxes which are subject to indemnification hereunder when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such failure.
Each Lender agrees to use reasonable efforts to initially fund the Loan and to
change its applicable lending office, as the case may be, if to do so (i) would
reduce amounts payable by the Borrower to such Lender pursuant to this
subsection, (ii) would not result in the incurrence by such Lender of additional
costs or expenses (unless the Borrower agrees to pay such costs and expenses)
and (iii) would not, in the reasonable judgment of such Lender, be
disadvantageous to such Lender for material regulatory, competitive or internal
management reasons. The agreements of the Borrower in this subsection shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder and under the other Loan Documents.

 

(B)  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY HEREIN, THE BORROWER SHALL
HAVE NO LIABILITY TO PAY OR INDEMNIFY ANY LENDER OR THE AGENT WITH RESPECT TO
ANY OF THE FOLLOWING TAXES OR OTHER TAXES:

 

(1)  ANY TAXES OR OTHER TAXES IMPOSED BY THE UNITED STATES FEDERAL GOVERNMENT OR
ANY STATE OR LOCAL GOVERNMENT OR TAXING AUTHORITY THEREIN THAT IS IMPOSED ON,
BASED ON, OR MEASURED BY NET OR GROSS INCOME, OR THAT IS A FRANCHISE TAX
(IMPOSED IN LIEU OF A TAX ON NET OR GROSS INCOME) OR A BRANCH PROFITS TAX
(INCLUDING ANY SUCH TAXES OR OTHER TAXES COLLECTED BY MEANS OF WITHHOLDING)
(HEREIN REFERRED TO AS “UNITED STATES INCOME TAXES”), OTHER THAN A UNITED STATES
INCOME TAX THAT IS PAYABLE BY MEANS OF WITHHOLDING SOLELY AS A RESULT OF (A) THE
ENACTMENT AFTER THE DATE OF EXECUTION AND DELIVERY OF THIS AGREEMENT (THE
“APPLICABLE DATE”) OF AN AMENDMENT TO THE CODE OR THE REGULATIONS THEREUNDER OR
(B) RATIFICATION AFTER THE APPLICABLE

 

19

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DATE OF ANY PROTOCOL OR OTHER AMENDMENT TO ANY UNITED STATES INCOME TAX
CONVENTION IN EFFECT ON THE APPLICABLE DATE OR (C) THE RATIFICATION AFTER THE
APPLICABLE DATE OF ANY NEW UNITED STATES INCOME TAX CONVENTION (ANY OF (A), (B)
OR (C), A “CHANGE IN LAW”); PROVIDED, HOWEVER, THAT THE BORROWER SHALL HAVE NO
LIABILITY FOR ANY UNITED STATES INCOME TAXES ON PAYMENTS TO OR FOR THE BENEFIT
OF ANY LENDER THAT IS NOT AFS THAT IS IN EXCESS OF THE UNITED STATES INCOME
TAXES THAT WOULD BE IMPOSED ON SUCH PAYMENT IF MADE TO AFS;

 

(2)  ANY TAXES OR OTHER TAXES IMPOSED AS A RESULT OF A TRANSFER OR DISPOSITION
BY A LENDER OR AGENT INCLUDING, WITHOUT LIMITATION, OF ALL OR ANY PORTION OF ITS
INTEREST IN THE AIRCRAFT, OR ANY OTHER COLLATERAL OR ANY NOTE OR THE LOAN
(INCLUDING SALE OF PARTICIPATIONS IN SUCH NOTE OR THE LOAN) UNLESS SUCH TRANSFER
OR DISPOSITION SHALL OCCUR PURSUANT TO THE EXERCISE OF REMEDIES DURING THE
CONTINUATION OF AN EVENT OF DEFAULT OR PURSUANT TO A CHANGE OF LENDING OFFICE
THAT IS REQUIRED UNDER SECTION 2.15;

 

(3)  ANY TAXES OR OTHER TAXES, WITH RESPECT TO THE LOAN, IMPOSED WITH RESPECT TO
EVENTS OCCURRING OR MATTERS ARISING AFTER THE REPAYMENT OF THE LOAN;

 

(4)  ANY TAXES OR OTHER TAXES TO THE EXTENT SUCH TAXES OR OTHER TAXES ARE
IMPOSED AS A RESULT OF A PRESENT, FORMER, OR FUTURE CONNECTION BETWEEN ANY
LENDER OR AGENT OR AFFILIATE AND THE JURISDICTION IMPOSING SUCH TAXES OR OTHER
TAXES (OTHER THAN A CONNECTION ARISING SOLELY FROM THE AGENT OR SUCH LENDER
HAVING EXECUTED, DELIVERED, PERFORMED ITS OBLIGATIONS, RECEIVED A PAYMENT UNDER
OR ENFORCED THIS AGREEMENT OR ANY RELATED DOCUMENT OR THE NOTES) OR ANY
POLITICAL SUBDIVISION OR TAXING AUTHORITY THEREOF OR THEREIN;

 

(5)  ANY TAXES OR OTHER TAXES TO THE EXTENT IMPOSED AS A RESULT OF A LENDER’S
FAILURE (I) TO COMPLY WITH THE REQUIREMENTS OF SUBSECTION (C) HEREUNDER OR (II)
TO PROVIDE ANY OTHER NECESSARY EXEMPTION CERTIFICATES OR OTHER REQUIRED
DOCUMENTATION THAT IS REQUIRED BY LAW, TREATY, OR REGULATION AS A CONDITION TO
THE ALLOWANCE OF ANY REDUCTION IN THE RATE OF SUCH TAXES OR OTHER TAXES;
PROVIDED, HOWEVER, THAT IN THE CASE OF BOTH (I) AND (II) THE LENDER IS LEGALLY
ENTITLED TO COMPLY WITH SUCH REQUIREMENTS;

 

(6)  ANY TAXES OR OTHER TAXES TO THE EXTENT ARISING OUT OF OR CAUSED BY, OR TO
THE EXTENT SUCH TAXES OR OTHER TAXES WOULD NOT HAVE BEEN INCURRED BUT FOR, THE
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SUCH LENDER OR AGENT OR THE INACCURACY
OR BREACH OF ANY REPRESENTATION, COVENANT OR AGREEMENT BY SUCH LENDER OR AGENT
IN THIS AGREEMENT OR ANY RELATED DOCUMENT; AND

 

(7)  ANY EXCISE TAX IMPOSED ON ANY LENDER UNDER SECTION 4975 OF THE CODE AS A
RESULT OF THE USE BY SUCH LENDER OF THE ASSETS OF AN “EMPLOYEE BENEFIT PLAN” (AS
DEFINED IN SECTION 3(3) OF ERISA) TO MAKE THE LOAN.

 

(C)  EACH LENDER THAT IS NOT INCORPORATED UNDER THE LAWS OF THE UNITED STATES OF
AMERICA OR A STATE THEREOF AGREES THAT, ON OR BEFORE THE FIRST INTEREST PAYMENT
DATE AFTER THE DATE ON WHICH SUCH LENDER BECOMES A LENDER HEREUNDER, IT WILL
DELIVER TO THE BORROWER AND THE AGENT TWO DULY COMPLETED COPIES OF UNITED STATES
INTERNAL REVENUE SERVICE (“IRS”) FORM W-8BEN, OR W-8ECI OR OTHER APPLICABLE
FORM, AS THE CASE MAY BE, CERTIFYING THAT IT IS ENTITLED TO RECEIVE PAYMENTS
UNDER THIS AGREEMENT WITHOUT DEDUCTION OR WITHHOLDING OF ANY UNITED STATES
FEDERAL INCOME TAXES OR AT A REDUCED RATE. EACH SUCH LENDER ALSO AGREES TO
DELIVER TO THE

 

20

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BORROWER AND THE AGENT TWO FURTHER COPIES OF THE SAID IRS FORM W-8BEN OR W-8ECI
OR OTHER OR SUCCESSOR APPLICABLE FORMS OR OTHER MANNER OF CERTIFICATION, AS THE
CASE MAY BE, ON OR BEFORE THE DATE THAT ANY SUCH FORM EXPIRES OR BECOMES
OBSOLETE OR AFTER THE OCCURRENCE OF ANY EVENT REQUIRING A CHANGE IN THE MOST
RECENT FORM PREVIOUSLY DELIVERED BY IT TO THE BORROWER, AND SUCH EXTENSIONS OR
RENEWALS THEREOF AS MAY REASONABLY BE REQUESTED BY THE BORROWER OR THE AGENT.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS PARAGRAPH, A LENDER SHALL NOT BE
REQUIRED TO DELIVER ANY FORM PURSUANT TO THIS PARAGRAPH THAT SUCH LENDER IS NOT
LEGALLY ABLE TO DELIVER.

 

(D)  THE BORROWER SHALL DULY FILE IRS FORMS 1042 AND 1042S OR APPROPRIATE
SUCCESSOR FORMS ANNUALLY WITH RESPECT TO ALL INTEREST PAYMENTS HEREUNDER AS
REQUIRED BY THE CODE AND APPLICABLE IRS REGULATIONS AND PROCEDURES AND SHALL
PROVIDE THE AGENT WITH COPIES OF THE FORMS SO FILED.

 

(E)  IF THE ADMINISTRATIVE AGENT OR ANY LENDER RECEIVES A REFUND IN RESPECT OF
TAXES OR OTHER TAXES PAID BY THE BORROWER, WHICH IN THE GOOD FAITH JUDGMENT OF
SUCH LENDER IS ALLOCABLE TO SUCH PAYMENT, IT SHALL PROMPTLY PAY SUCH REFUND,
TOGETHER WITH ANY OTHER AMOUNTS PAID BY THE BORROWER IN CONNECTION WITH SUCH
REFUNDED TAXES OR OTHER TAXES, TO THE BORROWER, NET OF ALL OUT-OF-POCKET
EXPENSES OF SUCH LENDER INCURRED IN OBTAINING SUCH REFUND, PROVIDED, HOWEVER,
THAT THE BORROWER AGREES TO PROMPTLY RETURN SUCH REFUND TO THE ADMINISTRATIVE
AGENT OR THE APPLICABLE LENDER AS THE CASE MAY BE, IF IT RECEIVES NOTICE FROM
THE ADMINISTRATIVE AGENT OR APPLICABLE LENDER THAT SUCH ADMINISTRATIVE AGENT OR
LENDER IS REQUIRED TO REPAY SUCH REFUND UNLESS SUCH REPAYMENT IS DUE TO EVENTS
DESCRIBED IN SECTION 2.12(B)(5) HEREOF.

 

(F)  IF A WRITTEN CLAIM IS MADE AGAINST ANY LENDER OR THE ADMINISTRATIVE AGENT
FOR ANY TAXES OR OTHER TAXES, SUCH LENDER OR ADMINISTRATIVE AGENT, AS THE CASE
MAY BE, SHALL PROMPTLY NOTIFY THE BORROWER IN WRITING OF SUCH CLAIM, AND UPON
WRITTEN REQUEST OF BORROWER SHALL, AT THE BORROWER’S SOLE COST AND EXPENSE,
CONTEST THE VALIDITY OR AMOUNT OF SUCH CLAIM OR PERMIT THE BORROWER, TO CONTEST
THE VALIDITY OR AMOUNT OF SUCH CLAIM, PROVIDED, HOWEVER, THAT THE LENDER OR
ADMINISTRATIVE AGENT SHALL NOT BE REQUIRED AND BORROWER SHALL NOT BE PERMITTED
TO CONTEST SUCH CLAIM UNLESS (I) THE BORROWER SHALL PROVIDE TO THE LENDER AN
OPINION OF THE VICE PRESIDENT TAX OF THE BORROWER REASONABLY SATISFACTORY TO
SUCH LENDER STATING THAT A REASONABLE BASIS EXISTS TO CONTEST SUCH CLAIM AND
(II) THE BORROWER AGREES TO INDEMNIFY THE LENDER FOR ANY ADDITIONAL TAXES,
INTEREST, PENALTIES OR OTHER EXPENSES INCURRED AS A RESULT OF SUCH CONTEST.

 

SECTION 2.13.   Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loan (other than amounts due to such Lender
pursuant to Section 2.9, 2.12, 2.16, 2.18 or 8.4(c) or on account of differing
rates of interest on portions of the Loan) in excess of its ratable share of
payments on account of the Loan obtained by all the Lenders (such Lender, the
“Overpaid Lender”), such Overpaid Lender shall forthwith (x) notify the
Administrative Agent of such overpayment (and the Administrative Agent shall
notify the Lenders thereof) and (y) pay to the other Lenders such amounts in
cash as shall be necessary to cause such Overpaid Lender to share the excess
payment ratably with each of them, and the Overpaid Lender, upon such payment to
each other Lender, shall be deemed to have purchased a participation in such
other Lender’s Loan in an amount equal to such payment; provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
Overpaid Lender, such payment to and purchase from each Lender shall be
rescinded and such

 

21

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Lender shall repay to the Overpaid Lender such payment to the extent of such
recovery together with an amount equal to such Lender’s ratable share (according
to the proportion of (i) the amount of such Lender’s required repayment to (ii)
the total amount so recovered from the Overpaid Lender) of any interest or other
amount paid or payable by the Overpaid Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so deemed to have purchased a
participation from another Lender pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights to obtain payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.

 

SECTION 2.14.   Use of Proceeds. The proceeds of the Loan shall be available
(and the Borrower agrees that it shall use such proceeds) solely in connection
with the purchase of the Aircraft.

 

SECTION 2.15.   Lender Cooperation. Each Lender agrees that, as promptly as
practicable after it becomes aware of the occurrence of any event or the
existence of a condition which would cause the provisions of Section 2.9 or
Section 2.10 to be applicable to such Lender, it will, to the extent not
inconsistent with such Lender’s internal policies, use reasonable efforts to
make, fund or maintain the Loan through another lending office of such Lender if
as a result thereof the additional monies which would otherwise be required to
be paid in respect of the Loan pursuant to Section 2.9 would be materially
reduced or the illegality or other adverse circumstances which would otherwise
exist pursuant to Section 2.10 would cease to exist, and if, as reasonably
determined by such Lender, the making, funding or maintaining of the Loan
through such other lending office would not otherwise materially adversely
affect the Loan or such Lender.

 

SECTION 2.16.   Replacement of Lenders. The Borrower may, upon written notice to
the Administrative Agent (which shall promptly notify the affected Lender),
arrange for another institution (which may be a Lender) to purchase, in
accordance with Section 8.7, the portion of the Loan made by an affected Lender.
For purposes of this Section 2.16, “affected Lender” shall mean a Lender which
has asserted claims against the Borrower under or sought rights or remedies
provided by Section 2.9, 2.10 or 2.12.

 

SECTION 2.17.   Airbus Lenders. The Borrower acknowledges and agrees that AFS or
another Airbus Lender may obtain the funds necessary for it to make the Loan (in
whole or in part) from banks or other institutional lenders who, as a condition
to providing such funds, may require an Airbus Lender to enter into covenants of
a nature not substantially different from those described in Section 2.9. The
Borrower agrees to pay on demand to AFS or any other Airbus Lender an amount
equal to any amount AFS or any other Airbus Lender is required to pay under any
such covenant as a result of costs so imposed on AFS or another Airbus Lender
which are of general application. Any such Airbus Lender shall provide the
Borrower with a statement in reasonable detail of such costs.

 

SECTION 2.18.   Funding Arrangements. If the Loan is not made on the date
requested in the applicable Notice of Loan by reason of the failure of the
Borrower to accept delivery of the Aircraft upon valid tender by AVSA under the
Airbus A330 Purchase Agreement, the Borrower agrees to pay to the Initial
Lender, promptly after demand by the Initial Lender, an

 

22

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amount equal to the cost of funds arranged by the Initial Lender to make the
Loan, less earnings from Permitted Investments (as defined in the Mortgage) by
the Initial Lender of such funds, for the period from the date of the requested
borrowing of the Loan as set forth in the applicable Notice of Loan to the
earlier of (x) the Funding Date of the Loan and (y) one month after such
requested date of borrowing.

 

ARTICLE III

CONDITIONS TO MAKING THE LOAN

 

SECTION 3.1.   Conditions Precedent to the Loan. The obligation of the Initial
Lender to make the Loan shall be subject to the following conditions precedent.

 

(I)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE FOLLOWING ITEMS,
EACH DATED THE FUNDING DATE, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT, AND THE STATEMENTS CONTAINED IN THE OFFICER’S CERTIFICATE
DESCRIBED IN CLAUSE (II) SHALL BE TRUE:

 

(I)            ONE NOTE TO THE ORDER OF THE INITIAL LENDER IN RESPECT OF THE
LOAN;

 

(II)           AN OFFICER’S CERTIFICATE OF THE BORROWER STATING THAT:

 

(x)  the representations and warranties made by the Borrower and contained in
the Loan Documents relating to the Loan are correct in all material respects on
and as of the date of the Loan before and after giving effect to the Loan and to
the application of the proceeds therefrom, as though made on and as of such
date, and

 

(y)  no Default or Event of Default has occurred and is continuing.

 

(III)          CERTIFIED COPIES OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF
THE BORROWER APPROVING THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE
PURCHASE AND FINANCING OF THE AIRCRAFT, AND OF ALL DOCUMENTS EVIDENCING OTHER
NECESSARY CORPORATE ACTION AND GOVERNMENTAL APPROVALS, IF ANY, TO AUTHORIZE THE
EXECUTION OF THE LOAN DOCUMENTS AND THE PERFORMANCE OF THE BORROWER’S
OBLIGATIONS THEREUNDER;

 

(IV)          A CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY OF THE
BORROWER CERTIFYING THE NAMES AND TRUE SIGNATURES OF THE OFFICERS OF THE
BORROWER AUTHORIZED TO SIGN THE LOAN DOCUMENTS AND THE OTHER DOCUMENTS TO BE
DELIVERED HEREUNDER AND THEREUNDER;

 

(V)           A FAVORABLE OPINION OF AN ASSOCIATE GENERAL COUNSEL OF THE
BORROWER, SUBSTANTIALLY IN THE FORM OF EXHIBIT D-1 HERETO;

 

(VI)          A FAVORABLE OPINION OF CADWALADER, WICKERSHAM & TAFT LLP, SPECIAL
COUNSEL FOR THE BORROWER, SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 HERETO; AND

 

(VII)         A FAVORABLE OPINION OF DAUGHERTY, FOWLER, PEREGRIN, HAUGHT &
JENSON, A PROFESSIONAL CORPORATION, SPECIAL AVIATION COUNSEL FOR THE
ADMINISTRATIVE AGENT,

 

23

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SUBSTANTIALLY IN THE FORM OF EXHIBIT D-3 HERETO AND ADDRESSED TO THE
ADMINISTRATIVE AGENT AND THE INITIAL LENDER.

 

(B)  THE FOLLOWING DOCUMENTS SHALL HAVE BEEN DULY AUTHORIZED, EXECUTED AND
DELIVERED BY THE RESPECTIVE PARTIES THERETO, SHALL EACH BE REASONABLY
SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT AND SHALL BE IN
FULL FORCE AND EFFECT AND COPIES (OR AN EXCERPT IN THE CASE OF THE PURCHASE
AGREEMENT DESCRIBED IN CLAUSE (I) BELOW) SHALL HAVE BEEN DELIVERED TO THE
ADMINISTRATIVE AGENT AND ITS COUNSEL:

 

(I)            A COPY OF CLAUSES 12 AND 13 OF THE AIRBUS A330 PURCHASE AGREEMENT
IN RESPECT OF THE AIRCRAFT, CERTIFIED BY AN AUTHORIZED REPRESENTATIVE OF THE
BORROWER TO BE TRUE AND CORRECT AND NOT TO HAVE BEEN TERMINATED, AMENDED OR
WAIVED BY THE BORROWER IN RESPECT OF THE AIRCRAFT;

 

(II)           A BILL OF SALE COVERING THE AIRCRAFT EXECUTED BY AVSA IN FAVOR OF
THE BORROWER, DATED THE DATE OF DELIVERY OF THE AIRCRAFT;

 

(III)          A BILL OF SALE FOR THE AIRCRAFT ON AC FORM 8050-2 OR SUCH OTHER
FORM AS MAY BE APPROVED BY THE FAA ON THE DATE OF DELIVERY OF THE AIRCRAFT
EXECUTED BY AVSA IN FAVOR OF THE BORROWER AND DATED SUCH DATE;

 

(IV)          A CONSENT AND AGREEMENT, RELATING TO THE COLLATERAL AGENT’S LIEN
ON THE CONTRACT RIGHTS PURSUANT TO THE MORTGAGE, EXECUTED BY AVSA AND AIRBUS IN
FAVOR OF THE BORROWER, DATED THE DATE OF DELIVERY OF THE AIRCRAFT;

 

(V)           A WRITTEN ASSUMPTION BY THE BORROWER OF THE AIRBUS A330 PURCHASE
AGREEMENT AND A WRITTEN CONFIRMATION BY AVSA THAT AMENDMENT NO. 9 THERETO HAS
BEEN EXECUTED AND DELIVERED BY THE BORROWER;

 

(VI)          A WRITTEN ASSUMPTION BY THE BORROWER OF THE AIRBUS A319 PURCHASE
AGREEMENT AND A WRITTEN CONFIRMATION BY AVSA THAT AMENDMENT NO. 19 THERETO HAS
BEEN EXECUTED AND DELIVERED BY THE BORROWER

 

(VII)         AMENDMENTS TO THE AI SUBLEASES EFFECTING THE MODIFICATIONS SET
FORTH IN THE TERM SHEET RELATING TO THE AI SUBLEASES;

 

(VIII)        AN AMENDMENT TO THE AFS TERM LOAN EFFECTING THE MODIFICATIONS SET
FORTH IN THE TERM SHEET RELATING TO THE AFS TERM LOAN;

 

(IX)           AMENDMENTS TO THE 2005 A330 FINANCINGS, EFFECTING THE
MODIFICATIONS SET FORTH IN THE TERM SHEET RELATING TO THE 2005 A330 FINANCINGS.

 

(C)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A COPY OF THE MORTGAGE,
TOGETHER WITH:

 

(I)            ACKNOWLEDGMENT COPIES OR STAMPED RECEIPT COPIES OF PROPER
FINANCING STATEMENTS, DULY FILED UNDER THE U.C.C. IN ALL JURISDICTIONS THAT THE
ADMINISTRATIVE AGENT

 

24

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MAY DEEM NECESSARY OR DESIRABLE IN ORDER TO PERFECT THE SECURITY INTERESTS
CREATED BY THE MORTGAGE;

 

(II)           EVIDENCE OF THE COMPLETION OF ALL RECORDINGS AND FILINGS OF OR
WITH RESPECT TO THE MORTGAGE THAT THE ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR
DESIRABLE IN ORDER TO PERFECT THE SECURITY INTEREST CREATED BY THE MORTGAGE;

 

(III)          AT THE BORROWER’S COST, AN INDEPENDENT INSURANCE BROKER’S REPORT
(INCLUDING CONFIRMATION OF COVERAGE) AND EVIDENCE OF FAA INSURANCE FOR WAR RISK
COVERAGE, EACH IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT, AS TO DUE COMPLIANCE WITH THE TERMS OF SUCH MORTGAGE
RELATING TO INSURANCE WITH RESPECT TO THE AIRCRAFT; AND

 

(IV)          EVIDENCE THAT ALL OTHER ACTIONS NECESSARY OR, IN THE REASONABLE
OPINION OF THE ADMINISTRATIVE AGENT, DESIRABLE TO PERFECT AND PROTECT THE
SECURITY INTERESTS CREATED BY THE MORTGAGE HAVE BEEN TAKEN (INCLUDING ALL FAA
FILINGS).

 

(D)  THE BORROWER HAS (SUBJECT TO THE FILING OF AN APPROPRIATE BILL OF SALE WITH
THE FAA) GOOD TITLE TO THE AIRCRAFT, FREE AND CLEAR OF LIENS OTHER THAN
PERMITTED LIENS.

 

(E)  THE AIRCRAFT HAS BEEN DULY CERTIFIED BY THE FAA AS TO TYPE AND
AIRWORTHINESS AND THE ADMINISTRATIVE AGENT HAS RECEIVED A COPY OF SUCH
CERTIFICATION (IT BEING AGREED THAT IF A COPY OF SUCH CERTIFICATION IS NOT
AVAILABLE AT THE TIME OF BORROWING OF THE LOAN, SUCH COPY MAY BE DELIVERED
WITHIN FIVE (5) BUSINESS DAYS THEREAFTER WITHOUT WAIVING COMPLIANCE BY THE
BORROWER WITH SECTION 3.2(B) OF THE MORTGAGE).

 

(F)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED COPIES OF INVOICES
SUBSTANTIATING TO ITS REASONABLE SATISFACTION THE BFE COST.

 

(G)  THE AIRCRAFT SHALL BE ONE OF THE LETTER AGREEMENT AIRCRAFT SPECIFIED IN THE
LETTER AGREEMENT AS BEING ELIGIBLE FOR FINANCING HEREUNDER.

 

(H)  PURSUANT TO SUBSECTIONS 364(C)(2) AND (3) OF THE BANKRUPTCY CODE AND THE
FINAL ORDER, ALL AMOUNTS OWING BY THE BORROWER TO THE LENDERS WILL BE SECURED BY
A FIRST PRIORITY PERFECTED LIEN ON THE COLLATERAL, AND NO LIEN ON THE COLLATERAL
OR IN ANY PROPERTY SECURING THE OBLIGATIONS OF THE BORROWER UNDER ANY AIRBUS
FINANCING THAT IS NOT A POOLED AIRBUS FINANCING SHALL HAVE BEEN GRANTED IN FAVOR
OF ANY LENDER OR OTHER FINANCING PARTY OR REPRESENTATIVE THEREOF UNDER ANY OTHER
FINANCING OF THE BORROWER AUTHORIZED IN THE CASE BY THE BANKRUPTCY COURT UNDER
SECTION 364 OF THE BANKRUPTCY CODE.

 

(I)  THE FINAL ORDER SHALL BE IN FULL FORCE AND EFFECT AND SHALL NOT HAVE BEEN
VACATED, REVERSED, MODIFIED, AMENDED OR STAYED IN ANY MANNER THAT AFFECTS THE
RIGHTS OR DUTIES OF THE AGENT OR THE LENDERS, IN EACH CASE, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE AGENT.

 

(J)  THE BORROWER SHALL HAVE PAID OR CAUSED TO HAVE BEEN PAID ALL AMOUNTS DUE
AND OWING UNDER CERTAIN PRODUCT SUPPORT AGREEMENTS THAT IT AND ITS AFFILIATES
OWE TO AVSA AND ALL AIRBUS LENDERS, SUBJECT TO ANY BONA FIDE TRADE DISPUTE.

 

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(K)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED EVIDENCE REASONABLY
SATISFACTORY TO THE EFFECT THAT THE BORROWER HAS LIQUID ASSETS IN AN AMOUNT
GREATER THAN OR EQUAL TO CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT DOLLARS ($ CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT) AS OF THE FUNDING DATE.

 

(L)  THE CASE SHALL NOT HAVE BEEN CONVERTED TO A LIQUIDATION UNDER CHAPTER 7 OR
CHAPTER 11 OF THE BANKRUPTCY CODE, NO TRUSTEE SHALL BEEN APPOINTED IN THE CASE,
AND THE EXCLUSIVE RIGHT OF THE BORROWER AND THE OTHER DEBTORS IN THE CASE TO
PROPOSE A CHAPTER 11 PLAN IN THE CASE SHALL NOT HAVE BEEN TERMINATED.

 

(M)  THE BANKRUPTCY COURT SHALL NOT HAVE GRANTED RELIEF TO ANY PERSON THAT IS
INCONSISTENT WITH THE PROVISIONS OF THE TERM SHEET OR THE AIRBUS DOCUMENTATION,
AND THE ADMINISTRATIVE AGENT SHALL BE SATISFIED THAT ANY CHAPTER 11 PLAN WHICH
MAY HAVE BEEN PROPOSED BY THE BORROWER PRIOR TO THE DATE HEREOF SHALL HAVE
INCORPORATED ALL OF THE PROVISIONS OF THE TERM SHEET AND, IF APPLICABLE, ANY
AIRBUS DOCUMENTATION, AND ANY CHAPTER 11 PLAN CONFIRMED BY THE BANKRUPTCY COURT
(WHETHER OR NOT PROPOSED BY THE BORROWER) WHICH MAY HAVE BEEN CONFIRMED PRIOR TO
THE DATE HEREOF DOES NOT CONTAIN ANY PROVISION INCONSISTENT WITH THE TERM SHEET
OR THE AIRBUS DOCUMENTATION.

 

(N)  THERE SHALL NOT BE ANY DEFAULT BY THE BORROWER UNDER (I) ANY AIRBUS
FINANCING THAT IS NOT A POOLED AIRBUS FINANCING; (II) ANY AIRBUS PURCHASE
AGREEMENT; (III) ANY DEBTOR-IN-POSSESSION OR OTHER FINANCING OF THE BORROWER
AUTHORIZED IN THE CASE BY THE BANKRUPTCY COURT UNDER SECTION 364 OF THE
BANKRUPTCY CODE; OR (IV) ANY AGREEMENT BETWEEN ITSELF OR ANY OF ITS AFFILIATES,
ON THE ONE HAND, AND AIRBUS OR ANY OF ITS AFFILIATES, ON THE OTHER HAND (OTHER
THAN AGREEMENTS DESCRIBED IN SUB-CLAUSES (I) AND (II) OF THIS CLAUSE (N)),
PROVIDED, HOWEVER, THAT NEITHER A (X) A BONA FIDE DISPUTE RELATING TO MATTERS
ARISING UNDER ANY AGREEMENT DESCRIBED IN SUBCLAUSE (IV) OF THIS CLAUSE (N), NOR
(Y) THE COMMENCEMENT BY THE BORROWER OF THE CASE SHALL CONSTITUTE A “DEFAULT”
FOR PURPOSES OF ANY SUB-CLAUSE OF THIS CLAUSE(N).

 

(O)  THERE SHALL NOT BE ANY MATERIAL DEFAULT BY THE BORROWER UNDER ANY ENGINE
MANUFACTURER FINANCING.

 

(P)  THE BORROWER SHALL HAVE SUPPLIED TO THE ADMINISTRATIVE AGENT, NOT LESS THAN
THIRTY (30) DAYS PRIOR TO THE FUNDING DATE EITHER AN UPDATE OF THE BORROWER’S
BUSINESS PLAN, WHICH SHALL MAINTAIN THE BORROWER’S CONTINUING COMPLIANCE WITH
ITS LONG-TERM COMMITMENT TO THE AIRBUS A330 AIRCRAFT AND SHALL COVER A PERIOD
EXTENDING AT LEAST THROUGH CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT, OR A CERTIFICATE OF THE CHIEF FINANCIAL OFFICER OF THE
BORROWER THAT SUCH BUSINESS PLAN HAS NOT BEEN SUBSTANTIALLY MODIFIED IN RELATION
TO THE BORROWER’S OPERATION OF AIRBUS A330 AIRCRAFT, IN EACH CASE SINCE THE
BUSINESS PLAN OR ANY UPDATE MEETING THE REQUIREMENTS OF THIS CLAUSE (P) WAS LAST
DELIVERED TO THE ADMINISTRATIVE AGENT, OR, PRIOR TO THE CONSUMMATION DATE, IN
RELATION TO THE BORROWER’S EXPECTED TREATMENT OF THE TRANSACTIONS CONTEMPLATED
BY THE TERM SHEET.

 

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(Q)  NO APPLICABLE LAW OR REGULATION OR INTERPRETATION THEREOF BY APPROPRIATE
REGULATORY AUTHORITIES SHALL BE IN EFFECT WHICH, IN THE REASONABLE OPINION OF
THE ADMINISTRATIVE AGENT OR ITS COUNSEL, WOULD MATERIALLY RESTRICT, PROHIBIT OR
MAKE IT ILLEGAL FOR THE INITIAL LENDER TO MAKE THE LOAN; AND NO ACTION OR
PROCEEDING SHALL HAVE BEEN INSTITUTED NOR SHALL GOVERNMENT ACTION BE THREATENED
BEFORE ANY COURT OR GOVERNMENTAL AGENCY, NOR SHALL ANY ORDER, JUDGMENT OR DECREE
HAVE BEEN ISSUED OR PROPOSED TO BE ISSUED BY ANY COURT OR GOVERNMENTAL AGENCY AT
THE TIME OF THE LOAN TO SET ASIDE, RESTRAIN, ENJOIN OR PREVENT THE COMPLETION
AND CONSUMMATION OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Promptly upon the filing of the Mortgage and the Mortgage Supplement (as defined
in such Mortgage) and the due registration of the Aircraft, in each case
pursuant to the Transportation Code, the Borrower shall cause Daugherty, Fowler,
Peregrin, Haught & Jenson, a Professional Corporation, special aviation counsel
for the Administrative Agent, to deliver an opinion as to the due and valid
registration of the Aircraft in the name of the Borrower, the due recording of
the Borrower’s FAA bill of sale, the Mortgage and the Mortgage Supplement and
the lack of filing of any intervening documents with respect to the Aircraft.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.1.   Representations and Warranties of the Borrower. (a)  The Borrower
represents and warrants, on the date of this Agreement, as follows:

 

(I)            THE BORROWER IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF MINNESOTA; IS DULY QUALIFIED
TO DO BUSINESS AS A FOREIGN CORPORATION IN EACH JURISDICTION IN WHICH ITS
OPERATIONS OR THE NATURE OF ITS BUSINESS REQUIRES, OTHER THAN FAILURES TO
QUALIFY WHICH WOULD NOT HAVE A MATERIAL ADVERSE EFFECT ON THE CONSOLIDATED
BUSINESS, ASSETS, PROPERTIES OR CONDITION (FINANCIAL OR OTHERWISE) OF THE
BORROWER AND ITS SUBSIDIARIES TAKEN AS A WHOLE OR ON THE ABILITY OF THE BORROWER
TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT; IS A CERTIFICATED AIR CARRIER;
HAS ITS LOCATION (FOR PURPOSES OF ARTICLE 9 OF THE U.C.C.) IN EAGAN, MINNESOTA;
HOLDS ALL LICENSES, CERTIFICATES, PERMITS AND FRANCHISES FROM THE APPROPRIATE
AGENCIES OF THE UNITED STATES AND/OR ALL OTHER GOVERNMENTAL AUTHORITIES HAVING
JURISDICTION NECESSARY TO AUTHORIZE THE BORROWER TO ENGAGE IN AIR TRANSPORT AND
TO CARRY ON SCHEDULED PASSENGER SERVICE AS PRESENTLY CONDUCTED (OTHER THAN THOSE
LICENSES, CERTIFICATES, PERMITS AND FRANCHISES WHICH, IF NOT OBTAINED, WOULD NOT
HAVE A MATERIAL ADVERSE EFFECT ON THE CONSOLIDATED BUSINESS, ASSETS, PROPERTIES
OR CONDITION (FINANCIAL OR OTHERWISE) OF THE BORROWER AND ITS SUBSIDIARIES TAKEN
AS A WHOLE OR ON THE ABILITY OF THE BORROWER TO PERFORM ITS OBLIGATIONS UNDER
THIS AGREEMENT); AND HAS THE CORPORATE POWER AND AUTHORITY TO CONDUCT ITS
BUSINESS AS IT IS PRESENTLY BEING CONDUCTED.

 

(II)           TAKING INTO ACCOUNT THE FINAL ORDER, THE EXECUTION, DELIVERY AND
PERFORMANCE BY THE BORROWER OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY, ARE WITHIN THE BORROWER’S CORPORATE POWERS,
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION, AND DO NOT
CONTRAVENE (1) THE BORROWER’S CHARTER OR BY-LAWS OR (2) ANY LAW OR ANY
CONTRACTUAL RESTRICTION BINDING ON OR

 

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AFFECTING THE BORROWER AND DO NOT RESULT IN OR REQUIRE THE CREATION OF ANY LIEN,
SECURITY INTEREST OR OTHER CHARGE OR ENCUMBRANCE (OTHER THAN PURSUANT TO THE
MORTGAGE) UPON OR WITH RESPECT TO ANY OF ITS PROPERTIES.

 

(III)          NO AUTHORIZATION OR APPROVAL OR OTHER ACTION BY, AND NO NOTICE TO
OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER THIRD PARTY IS REQUIRED
FOR THE DUE EXECUTION, DELIVERY AND PERFORMANCE BY THE BORROWER OF THIS
AGREEMENT, EXCEPT FOR (1) THE FINAL ORDER, (2) THE ORDERS, PERMITS, WAIVERS,
EXEMPTIONS, AUTHORIZATIONS AND APPROVALS OF THE GOVERNMENTAL AUTHORITIES HAVING
JURISDICTION OVER THE BORROWER, WHICH ORDERS, PERMITS, WAIVERS, EXEMPTIONS,
AUTHORIZATIONS AND APPROVALS HAVE BEEN DULY OBTAINED AND ARE IN FULL FORCE AND
EFFECT AND (2) ANY SUCH AUTHORIZATION OR APPROVAL OR OTHER ACTION, NOTICE OR
FILING TO THE EXTENT REQUIRED TO BE GIVEN OR OBTAINED ONLY AFTER THE DATE OF
THIS AGREEMENT.

 

(IV)          THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY THE
BORROWER. TAKING INTO ACCOUNT THE FINAL ORDER, THIS AGREEMENT IS THE LEGAL,
VALID BINDING OBLIGATION OF THE BORROWER ENFORCEABLE AGAINST THE BORROWER IN
ACCORDANCE WITH ITS TERMS EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED AFTER THE
CONSUMMATION DATE BY BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR
SIMILAR LAWS RELATING TO OR LIMITING CREDITORS’ RIGHTS GENERALLY OR BY EQUITABLE
PRINCIPLES RELATING TO ENFORCEABILITY.

 

(V)           THE CONSOLIDATED BALANCE SHEET OF NAC AND ITS SUBSIDIARIES AS AT
THE END OF THE MOST RECENT FISCAL YEAR OF NAC FOR WHICH SUCH BALANCE SHEET IS
AVAILABLE, AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS
OF NAC AND ITS SUBSIDIARIES FOR SUCH FISCAL YEAR, ACCOMPANIED BY AN OPINION OF
ERNST & YOUNG, INDEPENDENT PUBLIC ACCOUNTANTS (OR ANY OTHER FIRM OF INDEPENDENT
PUBLIC ACCOUNTANTS OF RECOGNIZED STANDING SELECTED BY NAC), AND THE CONSOLIDATED
BALANCE SHEET OF NAC AND ITS SUBSIDIARIES AS AT THE END OF THE MOST RECENT
FISCAL QUARTER OF NAC (EXCLUDING THE FINAL FISCAL QUARTER OF EACH FISCAL YEAR)
FOR WHICH SUCH BALANCE SHEET IS AVAILABLE, AND THE RELATED CONSOLIDATED
STATEMENTS OF OPERATIONS AND CASH FLOWS OF NAC AND ITS SUBSIDIARIES FOR THE
FISCAL PERIOD THEN ENDED, DULY CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF NAC,
COPIES OF WHICH HAVE BEEN FURNISHED TO THE ADMINISTRATIVE AGENT, FAIRLY PRESENT,
SUBJECT, IN THE CASE OF SAID BALANCE SHEET AS AT THE END OF SUCH FISCAL QUARTER,
AND SAID STATEMENTS OF OPERATIONS AND CASH FLOWS FOR SUCH FISCAL PERIOD THEN
ENDED, TO YEAR-END AUDIT ADJUSTMENTS, THE CONSOLIDATED FINANCIAL CONDITION OF
NAC AND ITS SUBSIDIARIES AS AT SUCH DATES AND THE CONSOLIDATED RESULTS OF THE
OPERATIONS OF NAC AND ITS SUBSIDIARIES FOR THE PERIOD ENDED ON SUCH DATES, ALL
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY
APPLIED.

 

(VI)          EXCEPT FOR THE CASE, THERE IS NO PENDING OR THREATENED ACTION,
SUIT, INVESTIGATION, LITIGATION OR PROCEEDING AFFECTING THE BORROWER OR ANY OF
ITS SUBSIDIARIES BEFORE ANY COURT, GOVERNMENTAL AGENCY OR ARBITRATOR THAT (1) IS
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON (A) THE BUSINESS,
CONDITION (FINANCIAL OR OTHERWISE), OPERATIONS OR PROPERTIES OF THE BORROWER AND
ITS SUBSIDIARIES TAKEN AS A WHOLE, (B) THE RIGHTS AND REMEDIES OF THE
ADMINISTRATIVE AGENT OR ANY LENDER UNDER THIS AGREEMENT OR (C) THE ABILITY OF
THE BORROWER TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, OR (2) PURPORTS TO

 

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AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(VII)         THE BORROWER IS NOT ENGAGED IN THE BUSINESS OF EXTENDING CREDIT
FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN STOCK (WITHIN THE MEANING OF
REGULATION U ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM).

 

(VIII)        THE FINAL ORDER IS IN FULL FORCE AND EFFECT AND HAS NOT BEEN
VACATED, REVERSED, MODIFIED, AMENDED OR STAYED IN ANY MANNER THAT AFFECTS THE
RIGHTS OR DUTIES OF AIRBUS OR ANY OF ITS AFFILIATES, IN EACH CASE, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE AGENT, AND THE BANKRUPTCY COURT HAS NOT GRANTED
RELIEF TO ANY PERSON THAT IS INCONSISTENT WITH THE TERM SHEET.

 

(B)  ON THE FUNDING DATE, THE BORROWER REPRESENTS AND WARRANTS AS SET FORTH IN
PARAGRAPHS (I), (V) AND (VII) OF SECTION 4.1(A) AS OF SUCH DATE AND AS FOLLOWS:

 

(I)            THE BORROWER HAS THE CORPORATE POWER AND AUTHORITY TO OWN THE
AIRCRAFT SECURING THE LOAN.

 

(II)           TAKING INTO ACCOUNT THE FINAL ORDER, THE EXECUTION, DELIVERY AND
PERFORMANCE BY THE BORROWER OF EACH LOAN DOCUMENT TO WHICH IT IS OR WILL BE A
PARTY, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY, ARE WITHIN
THE BORROWER’S CORPORATE POWERS, HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY
CORPORATE ACTION, AND DO NOT CONTRAVENE (1) THE BORROWER’S CHARTER OR BY-LAWS OR
(2) ANY LAW OR ANY CONTRACTUAL RESTRICTION BINDING ON OR AFFECTING THE BORROWER
AND DO NOT RESULT IN OR REQUIRE THE CREATION OF ANY LIEN, SECURITY INTEREST OR
OTHER CHARGE OR ENCUMBRANCE (OTHER THAN PURSUANT TO THE MORTGAGE) UPON OR WITH
RESPECT TO ANY OF ITS PROPERTIES.

 

(III)          NO AUTHORIZATION OR APPROVAL OR OTHER ACTION BY, AND NO NOTICE TO
OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER THIRD PARTY IS REQUIRED
FOR THE DUE EXECUTION, DELIVERY AND PERFORMANCE BY THE BORROWER OF ANY LOAN
DOCUMENT TO WHICH IT IS OR WILL BE A PARTY, EXCEPT FOR (1) THE FINAL ORDER, (2)
THE ORDERS, PERMITS, WAIVERS, EXEMPTIONS, AUTHORIZATIONS AND APPROVALS OF THE
GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER THE OPERATION OF THE AIRCRAFT
BY THE BORROWER, WHICH ORDERS, PERMITS, WAIVERS, EXEMPTIONS, AUTHORIZATIONS AND
APPROVALS HAVE BEEN DULY OBTAINED OR WILL PRIOR TO THE FUNDING DATE BE DULY
OBTAINED, AND WILL ON THE FUNDING DATE BE IN FULL FORCE AND EFFECT AND (2) ANY
SUCH AUTHORIZATION OR APPROVAL OR OTHER ACTION, NOTICE OR FILING TO THE EXTENT
REQUIRED TO BE GIVEN OR OBTAINED ONLY AFTER THE FUNDING DATE.

 

(IV)          EXCEPT FOR (1) THE FILING FOR RECORDING PURSUANT TO THE
TRANSPORTATION CODE OF THE MORTGAGE AND THE MORTGAGE SUPPLEMENT ATTACHED THERETO
AND MADE A PART THEREOF, (2) THE FILING OF FINANCING STATEMENTS (AND
CONTINUATION STATEMENTS AT PERIODIC INTERVALS) WITH RESPECT TO THE PERFECTION OF
THE SECURITY AND OTHER INTERESTS CREATED BY SUCH DOCUMENTS IN ACCORDANCE WITH
THE U.C.C. OF THE STATE OF MINNESOTA (WHICH FINANCING STATEMENTS THE BORROWER
HAS CAUSED OR IS IN THE PROCESS OF CAUSING TO BE PRESENTED IN DUE FORM FOR
FILING TO THE APPROPRIATE FILING OFFICE IN MINNESOTA) AND (3) THE TAKING OF
POSSESSION BY THE AGENT OF THE ORIGINAL COUNTERPARTS OF THE MORTGAGE AND THE
MORTGAGE

 

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SUPPLEMENT COVERING THE AIRCRAFT, NO FURTHER ACTION, INCLUDING ANY FILING OR
RECORDING OF ANY DOCUMENT (INCLUDING ANY FINANCING STATEMENT IN RESPECT THEREOF
UNDER ARTICLE 9 OF THE U.C.C.), IS NECESSARY OR ADVISABLE IN ORDER TO ESTABLISH
OR PERFECT THE AGENT’S SECURITY INTEREST IN THE AIRCRAFT (GRANTED PURSUANT TO
THE MORTGAGE AND THE MORTGAGE SUPPLEMENT COVERING THE AIRCRAFT) AS AGAINST THE
BORROWER AND ANY THIRD PARTIES IN ANY APPLICABLE JURISDICTIONS IN THE UNITED
STATES.

 

(V)           THERE HAS NOT OCCURRED ANY DEFAULT OR AN EVENT OF DEFAULT WHICH IS
PRESENTLY CONTINUING AND THERE HAS NOT OCCURRED ANY EVENT WHICH CONSTITUTES OR
WOULD, WITH THE PASSAGE OF TIME OR THE GIVING OF NOTICE, OR BOTH, CONSTITUTE AN
EVENT OF LOSS.

 

(VI)          THIS AGREEMENT HAS BEEN, AND EACH OF THE OTHER LOAN DOCUMENTS TO
WHICH THE BORROWER WILL BE A PARTY WHEN DELIVERED HEREUNDER WILL HAVE BEEN, DULY
EXECUTED AND DELIVERED BY THE BORROWER. THIS AGREEMENT IS, AND EACH OF THE LOAN
DOCUMENTS TO WHICH THE BORROWER WILL BE A PARTY WHEN DELIVERED HEREUNDER WILL
BE, THE LEGAL, VALID AND BINDING OBLIGATION OF THE BORROWER ENFORCEABLE AGAINST
THE BORROWER IN ACCORDANCE WITH THEIR RESPECTIVE TERMS EXCEPT AS SUCH
ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM OR SIMILAR LAWS RELATING TO OR LIMITING CREDITORS’ RIGHTS GENERALLY
OR BY EQUITABLE PRINCIPLES RELATING TO ENFORCEABILITY.

 

(VII)         EXCEPT FOR THE CASE, THERE IS NO PENDING OR THREATENED ACTION,
SUIT, INVESTIGATION, LITIGATION OR PROCEEDING AFFECTING THE BORROWER OR ANY OF
ITS SUBSIDIARIES BEFORE ANY COURT, GOVERNMENTAL AGENCY OR ARBITRATOR THAT (1) IS
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON (A) THE BUSINESS,
CONDITION (FINANCIAL OR OTHERWISE), OPERATIONS OR PROPERTIES OF THE BORROWER AND
ITS SUBSIDIARIES TAKEN AS A WHOLE, (B) THE RIGHTS AND REMEDIES OF THE AGENTS OR
ANY LENDER UNDER THE LOAN DOCUMENTS OR (C) THE ABILITY OF THE BORROWER TO
PERFORM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS OR (2) PURPORTS TO AFFECT THE
LEGALITY, VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY LOAN DOCUMENT OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

(VIII)        NO PROCEEDS OF THE LOAN WILL BE USED TO PURCHASE OR CARRY ANY
MARGIN STOCK OR TO EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR
CARRYING ANY MARGIN STOCK.

 

(IX)           THE BORROWER HAS GOOD TITLE TO THE AIRCRAFT, FREE AND CLEAR OF
LIENS OTHER THAN THE PERMITTED LIENS. THE AIRCRAFT HAS BEEN DULY CERTIFIED BY
THE FAA AS TO TYPE AND AIRWORTHINESS, HAS BEEN INSURED BY THE BORROWER IN
ACCORDANCE WITH THE TERMS OF THE MORTGAGE AND IS IN THE CONDITION AND STATE OF
REPAIR REQUIRED UNDER THE TERMS OF THE MORTGAGE.

 

(X)            THE AGENT, AS SECURED PARTY UNDER THE MORTGAGE, IS ENTITLED TO
THE PROTECTION OF SECTION 1110 OF THE BANKRUPTCY CODE IN CONNECTION WITH ITS
RIGHT TO TAKE POSSESSION OF THE AIRFRAME AND ENGINES SECURING THE LOAN IN THE
EVENT OF A CASE UNDER CHAPTER 11 OF THE BANKRUPTCY CODE (INCLUDING THE CASE) IN
WHICH THE BORROWER IS A DEBTOR. PURSUANT TO SUBSECTIONS 364(C)(2) AND (3) OF THE
BANKRUPTCY CODE AND THE FINAL ORDER, ALL AMOUNTS OWING BY THE BORROWER TO THE
LENDERS UNDER ANY LOAN DOCUMENT ARE SECURED BY A FIRST PRIORITY PERFECTED LIEN
ON THE COLLATERAL.

 

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(XI)           EXCEPT FOR ANY DEFAULTS ARISING OUT OF OR IN CONNECTION WITH THE
CASE OR RELATED TO THE BORROWER’S FINANCIAL CONDITION, THE BORROWER IS NOT IN
MATERIAL DEFAULT UNDER ANY MATERIAL FINANCING (INCLUDING, WITHOUT LIMITATION,
EITHER OF THE A330 FINANCINGS, IF AIRBUS FINANCE COMPANY LIMITED OR AN AFFILIATE
REMAINS AT RISK THEREUNDER, THE FINANCING UNDER THE AFS TERM LOAN IF AFS OR AN
AFFILIATE REMAINS AT RISK THEREUNDER, ANY LEASE FINANCING PURSUANT TO AN AL
SUBLEASE, IF AIRBUS LEASING IV OR AN AFFILIATE REMAINS AT RISK THEREUNDER, OR
ANY EETC PARTICIPATION, IF AIRBUS OR AN AFFILIATE REMAINS AT RISK THEREUNDER) OR
UNDER THE AIRBUS A319 PURCHASE AGREEMENT, THE AIRBUS A330 PURCHASE AGREEMENT OR
ANY OTHER PURCHASE AGREEMENT.

 

ARTICLE V

COVENANTS OF THE BORROWER

 

SECTION 5.1.   Affirmative Covenants. So long as the Loan shall remain unpaid,
the Borrower will:

 

(a)  Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all respects, with all applicable laws, rules, regulations and orders
other than those the noncompliance with which would not have a material adverse
effect on the Consolidated business, assets, properties or condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole or on the
ability of the Borrower to perform its obligations under any Loan Document to
which it is a party.

 

(b)  Payment of Taxes, Etc. Unless payment thereof is precluded by the Case, pay
and discharge, and cause each of its Subsidiaries to pay and discharge, before
the same shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all lawful
claims that, if unpaid, might become a Lien upon its property, other than any
such tax, assessment and governmental charge or levy or any such lawful claim
which, if unpaid, in the aggregate, would not have a material adverse effect on
the Consolidated business, assets, properties or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole or on the
ability of the Borrower to perform its obligations under any Loan Document to
which it is a party; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
if it has maintained adequate reserves with respect thereto in accordance with
GAAP.

 

(c)  Preservation of Corporate Existence, Etc. Except as otherwise required by
the Bankruptcy Code, preserve and maintain and cause each of its Subsidiaries to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to preserve any right or franchise if the Board
of Directors of the Borrower or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Borrower or such Subsidiary. Notwithstanding the foregoing, the Borrower
shall at all times be a Certificated Air Carrier.

 

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(d)  Visitation Rights. At any reasonable time and from time to time, permit the
Administrative Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants, provided that (i) any Lender
exercising its rights under this Section 5.1(d) must act through the
Administrative Agent, (ii) neither the Borrower nor any of its Subsidiaries
shall be required to violate any confidentiality provision of any agreement by
which it is bound and (iii) nothing in this Section 5.1(d) shall entitle the
Agent or Lender or any of their agents or representatives, in connection with
the inspection of the Aircraft, to open any panels, bays or similar openings
without the consent of the Borrower.

 

(e)  Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Borrower and each
such Subsidiary in accordance with generally accepted accounting principles in
effect from time to time.

 

(f)  Reporting Requirements. Furnish to the Lenders:

 

(i)            as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of NAC, the
Consolidated balance sheet of NAC and its Subsidiaries as of the end of such
quarter and Consolidated statements of operations and cash flows of NAC and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified (subject to year-end
audit adjustments) by the chief financial officer of NAC as having been prepared
in accordance with generally accepted accounting principles;

 

(ii)           as soon as available and in any event within 120 days after the
end of each fiscal year of NAC, a copy of the audited annual report for such
fiscal year for NAC and its Subsidiaries, containing Consolidated balance sheets
of NAC and its Subsidiaries as of the end of such fiscal year and Consolidated
statements of operations and cash flows of NAC and its Subsidiaries for such
fiscal year, in each case accompanied by an opinion by Ernst & Young or any
other firm of independent public accountants of recognized standing selected by
NAC and acceptable to the Required Lenders;

 

(iii)          as soon as possible and in any event within five days after the
occurrence of each Default continuing on the date of such statement, a statement
of the chief financial officer of the Borrower setting forth details of such
Default and the action that the Borrower has taken and proposes to take with
respect thereto;

 

(iv)          promptly after the sending or filing thereof, copies of all
reports that the Borrower sends to any of its security holders, and copies of
all reports that the

 

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Borrower or any Subsidiary files with the Securities and Exchange Commission or
any national securities exchange;

 

(v)           promptly after the commencement thereof, notice of all actions and
proceedings before any court, governmental agency or arbitrator affecting the
Borrower or any of its Subsidiaries of the type described in Section 4.1(a)(vi)
and (b)(vii); and

 

(vi)          such other information respecting the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from time to
time reasonably request;

 

provided that, in the case of clauses (i), (ii) or (iv) of this Section 5.1(f),
to the extent that any such information is posted on the Borrower’s website or
is otherwise available on the internet through the Securities and Exchange
Commission’s “EDGAR” database (located at www.sec.gov), such information shall
be deemed to have been delivered to the Administrative Agent and each Lender
upon the posting of such information on the internet.

 

SECTION 5.2.   Compliance with Mortgage. So long as the Loan shall remain
unpaid, the Borrower will comply with the terms and provisions of the Mortgage.

 

SECTION 5.3.   Maintenance of Office. So long as the Loan shall remain unpaid,
the Borrower will maintain an office in the State of Minnesota where notices,
presentations and demands in respect of this Agreement and the other Loan
Documents may be made upon it (which office shall be maintained at 2700 Lone Oak
Parkway, Eagan, Minnesota 55121 until such time as the Borrower shall have
notified the Administrative Agent of a change of location).

 

SECTION 5.4.   Negative Covenants. So long as the Loan shall remain unpaid, the
Borrower will not make or permit, or permit any of its Subsidiaries to make or
permit, any change in accounting policies or reporting practices, except as
required or permitted by GAAP.

 

ARTICLE VI

EVENTS OF DEFAULT

 

SECTION 6.1.   Events of Default. Each of the following events shall constitute
an event of default with respect to the Loan (each an “Event of Default”),
whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or government body, and each such Event of Default shall continue
so long as, but only as long as, it shall not have been remedied:

 

(a)  the Borrower shall fail to make any payment within CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT days after the same shall have
become due of principal of, or interest on, any Note evidencing the Loan; or
(ii) the Borrower shall fail to make any payment when the same shall become due
of any other

 

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Obligations with respect to the Loan, and such failure shall continue unremedied
for CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT days after
the receipt by the Borrower of written notice thereof from the Administrative
Agent; or

 

(b)  the Borrower shall have failed to perform or observe (or cause to be
performed and observed) in any material respect any covenant or agreement to be
performed or observed by it under this Agreement or the Mortgage (other than the
covenant to carry and maintain insurance in Section 3.6 of the Mortgage), and
such failure shall continue unremedied for a period of thirty (30) days after
receipt by the Borrower of written notice thereof from the Administrative Agent;
provided, however, that if the Borrower shall have undertaken to cure any such
failure which arises under Section 3.2(c) of the Mortgage or under the first
sentence of Section 3.2(b) of the Mortgage as it relates to maintenance,
service, repair or overhaul or under Section 3.4(a), (b), (c) or (d) of the
Mortgage and, notwithstanding the diligence of the Borrower in attempting to
cure such failure, such failure is not cured within said thirty-day period but
is curable with future due diligence, there shall exist no Event of Default
under this Section 6.1(b) so long as the Borrower is proceeding with due
diligence to cure such failure and such failure is remedied not later than one
hundred eighty (180) days after receipt by the Borrower of such written notice;
or

 

(c)  any representation or warranty made by the Borrower herein or in the
Mortgage or any document or certificate furnished by the Borrower in connection
herewith or therewith or pursuant hereto or thereto shall prove to have been
incorrect in any material respect at the time made and the incorrectness of any
such representation or warranty shall not have been cured (to the extent of the
adverse impact of such incorrectness on the interests of the Lenders) within
thirty (30) days after the receipt by the Borrower of written notice from the
Administrative Agent advising the Borrower of the existence of such
incorrectness; or

 

(d)  the commencement of an involuntary case or other proceeding in respect of
the Borrower in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law in the United States or seeking the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Borrower or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and unstayed for a
period of ninety (90) consecutive days or an order, judgment or decree shall be
entered in any proceeding by any court of competent jurisdiction appointing,
without the consent of the Borrower, a receiver, trustee or liquidator of the
Borrower, or of any substantial part of its property, or sequestering any
substantial part of the property of the Borrower and any such order, judgment or
decree or appointment or sequestration shall be final or shall remain in force
undismissed, unstayed or unvacated for a period of ninety (90) days after the
date of entry thereof; or

 

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(e)  the commencement by the Borrower of a voluntary case (other than the Case)
under the Federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other similar
law in the United States, or the consent by the Borrower to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Borrower or for all or
substantially all of its property, or the making by the Borrower of any
assignment for the benefit of creditors or the Borrower shall take any corporate
action to authorize any of the foregoing; or

 

(f)  the Borrower shall fail to carry and maintain on or with respect to the
Aircraft (or cause to be carried and maintained) insurance required to be
maintained in accordance with the provisions of Section 3.6 of the Mortgage; or

 

(g)  so long as (i) an Airbus Lender holds at least 50% of the outstanding
principal amount of the Notes, an “event of default” shall occur under any
Airbus Financing that is not a Pooled Airbus Financing, or (ii) more than 50% of
the outstanding principal amount of the Notes are held by a Pooled Sell-Down
Lender, an “event of default” shall occur under any Pooled Airbus Financing held
by such Pooled Sell-Down Lender, in each case as the term “event of default” is
defined or otherwise described under the Other Financing Documents for such
Airbus Financing or Pooled Airbus Financing, other than an “event of default”
resulting from the commencement of the Case; or

 

(h)  the Loan Documents and the Final Order shall, for any reason, cease to
create a valid Lien on any of the Collateral purported to be covered thereby or
such Lien shall cease to be a perfected Lien having the priority provided for
herein and in the Final Order, or the Borrower shall so allege in any pleading
filed in any court or any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on the Borrower (or the Borrower shall
challenge the enforceability of any Loan Document or shall assert in writing, or
engage in any action or inaction based on any such assertion, that any provision
of any of the Loan Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms;

 

(i)  the Case shall be dismissed or converted to a case under Chapter 7 of the
Bankruptcy Code or the Borrower shall file a motion or other pleading seeking
the dismissal of any of the Case under Section 1112 of the Bankruptcy Code or
otherwise;

 

(j)  a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code, a
responsible officer 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 Case and the order appointing such trustee,
responsible officer or examiner shall not be reversed or vacated within 30 days
after entry thereof;

 

(k)  the Borrower’s Board of Directors shall authorize a liquidation of the
Borrower’s business;

 

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(l)  the Final Order shall have been vacated, reversed, modified, amended or
stayed in any manner that materially and adversely affects the rights or duties
of the Agent or the Lenders, in each case, without the prior written consent of
the Agent;

 

(m)  any Lien on the Collateral or in any property securing the obligations of
the Borrower under any Airbus Financing that is not a Pooled Airbus Financing
shall have been granted, at any time after the Consummation Date, in favor of
any lender or other financing party (other than an Airbus Lender) or
representative thereof under any other financing of the Borrower authorized in
the Case by the Bankruptcy Court under Section 364 of the Bankruptcy Code; or

 

(n)  The Borrower files a proposed Chapter 11 plan in the Case which does not
contain or is inconsistent with the provisions contemplated by this Agreement,
the Term Sheet or any Airbus Financing that is not a Pooled Airbus Financing; or
a Chapter 11 plan is confirmed by the Bankruptcy Court for the Borrower and such
Chapter 11 plan as so confirmed fails to contain or is inconsistent with the
provisions of this Agreement, the Term Sheet or any Airbus Financing that is not
a Pooled Airbus Financing;

 

provided, however, that, notwithstanding anything to the contrary contained in
Section 6.1(b) or (c), any failure of the Borrower to perform or observe any
covenant, condition, agreement or any error in a representation or warranty
shall not constitute an Event of Default if such failure or error is caused
solely by reason of an event that constitutes an Event of Loss affecting the
Aircraft so long as the Borrower is continuing to comply with all of the terms
of Section 3.5 of the Mortgage.

 

Upon the occurrence of any Event of Default, the Administrative Agent shall at
the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare all the Notes, all interest thereon and all other amounts
payable under this Agreement in connection with the Loan to be forthwith due and
payable, whereupon the Loan and Notes, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Bankruptcy
Code, the Loan, the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. To the extent that any rights and remedies under this Section 6.1
would otherwise be in violation of the automatic stay of section 362 of the
Bankruptcy Code, such stay shall be deemed modified, as set forth in the Final
Order, as applicable, to the extent necessary to permit the Administrative Agent
to exercise such rights and remedies.

 

ARTICLE VII

THE AGENTS

 

SECTION 7.1.   Authorization and Action. Each Lender hereby appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are expressly delegated
to such Agent by the terms

 

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thereof, together with such powers and discretion as are reasonably incidental
thereto. Each Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Loan Document. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), each Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law or is not within the powers and discretion expressly delegated
to such Agent pursuant to the Loan Documents. Each Agent agrees to give to each
Lender prompt notice of each notice received by it from the Borrower pursuant to
the terms of this Agreement.

 

SECTION 7.2.   Each Agent’s Reliance, Etc. Neither Agent nor such Agent’s
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent:  (i) may
treat the payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.7; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties
representations (whether written or oral) made in or in connection with the Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Loan Documents on the part of the Borrower or to inspect the property (including
the books and records and the Airbus Aircraft) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any Lien or security interest created or purported to be created
under or in connection with, the Loan Documents or any other instrument or
document furnished pursuant thereto; and (vi) shall incur no liability under or
in respect of the Loan Documents by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

 

SECTION 7.3.   The Agents and Their Affiliates. Each Agent (or an Affiliate of
such Agent) shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not an Agent, and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include each Agent in its individual capacity. Each Agent and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if such
Agent were not an Agent and without any duty to account therefor to the Lenders.

 

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SECTION 7.4.   Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.1(a)(v) and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

 

SECTION 7.5.   Indemnification. The Lenders agree to indemnify each Agent and
such Agent’s directors, officers, agents or employees (to the extent not
reimbursed by the Borrower), ratably according to the respective principal
amounts of the Notes then held by each such Lender, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by such
Agent under the Loan Documents, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from an Agent’s
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse each Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by such
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, the Loan Documents, to the extent that such Agent is not
reimbursed for such expenses by the Borrower.

 

SECTION 7.6.   Successor Agent. Subject to the appointment and acceptance of a
successor agent as provided below, either Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, or the earlier written request of such Agent to resign addressed as
aforesaid, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent. In each case, the successor Agent (if not an
Airbus Lender) shall be an entity having a consolidated tangible net worth of at
least $ CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. Upon
the acceptance of any appointment as an Agent by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. After any retiring Agent’s resignation or removal hereunder as
an Agent, the provisions of this Article VII (including, without limitation,
Section 7.5) shall inure to the retiring Agent’s benefit as to any actions taken
or omitted to be taken by it while it was an Agent under the Loan Documents.
Notwithstanding anything to the contrary herein, the Administrative Agent and
the Collateral Agent under (and as defined in) the Mortgage shall be the same
institution.

 

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ARTICLE VIII

MISCELLANEOUS

 

SECTION 8.1.   Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes or the other Loan Documents, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (or, in the case of
clauses (b) and (c) below, by the holder of each Note affected thereby), do any
of the following: (a) reduce the principal of, or interest on, the Loan or the
Notes or any other amounts hereunder, (b) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any other amounts payable
hereunder, (c) change the aggregate unpaid principal amount of the Notes, or the
number of Lenders, that shall be required for the Lenders or any of them to take
any action hereunder, (d) release any material portion of any collateral held to
secure the obligations of the Borrower in respect of the Loan under the Loan
Documents or (e) amend this Section 8.1; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Lenders required
above to take such action and by the Agent, affect the rights or duties of the
Agent under this Agreement or any Note.

 

SECTION 8.2.   Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telecopier or telegraphic
communication) and mailed, telecopied, telegraphed or delivered, if to the
Borrower, at its address at Department A4010, 2700 Lone Oak Parkway, Eagan, MN
55121, Attention: Senior Vice President and Treasurer (Telecopier No.
+1-612-726-2221); if to the Initial Lender, at its Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; if to the Administrative Agent, at its address at 5th Floor, 6 George’s
Dock, International Financial Services Centre, Dublin 1, Ireland, Attention: 
Managing Director (Telecopier No. +353-1-670-2020); or, as to the Borrower or
the Agent, at such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Agent. All such notices and communications shall, when mailed,
telecopied or telegraphed, be effective when deposited in the mails, telecopied
or delivered to the telegraph company, respectively, except that notices and
communications to the Agent or any Lender pursuant to Article II, III or VII
shall not be effective until received. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.

 

SECTION 8.3.   No Waiver; Remedies. No failure on the part of any Lender or the
Agent to exercise, and no delay in exercising, any right under any Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

 

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SECTION 8.4.   Costs and Expenses. (a)  The Borrower agrees to pay on demand the
reasonable and adequately documented fees and expenses, including without
limitation reasonable legal fees and expenses of counsel for the Agent and any
Airbus Lender in connection with the transactions contemplated hereby; provided
that the Borrower will be obligated to pay the legal fees and expenses of only
one law firm. The Borrower further agrees to pay on demand all reasonable and
adequately documented costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of the Loan Documents and the other documents to be delivered
under the Loan Documents, including, without limitation, reasonable fees and
expenses of counsel for the Agent and each Lender in connection with the
enforcement of rights under this Section 8.4(a).

 

(B)  THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS (X) EACH LENDER, THE
AGENTS, AIRBUS AND AVSA, (Y) THEIR RESPECTIVE AFFILIATES, AND (Z) THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS (EACH, AN
“INDEMNIFIED PARTY”) FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND
EXPENSES OF COUNSEL) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY
INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY
REASON OF, OR IN CONNECTION WITH THE PREPARATION FOR A DEFENSE OF, ANY
INVESTIGATION, LITIGATION OR PROCEEDING ARISING OUT OF, RELATED TO OR IN
CONNECTION WITH THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN
OR THEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOAN, WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, EXCEPT TO THE EXTENT SUCH
CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE (I) RESULTS FROM SUCH INDEMNIFIED
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (II) ARISES BY REASON OF LAWS OR
GOVERNMENTAL REGULATIONS, ORDERS OR OTHER LEGAL REQUIREMENTS PERTAINING TO
SECURED LENDING BY SUCH INDEMNIFIED PARTY, (III) CONSISTS OF TAXES OR OTHER
TAXES (WHETHER OR NOT OTHERWISE INDEMNIFIED BY THE BORROWER), (IV) IS
ATTRIBUTABLE, IN THE CASE OF A PARTICULAR INDEMNIFIED PARTY, TO THE
INCORRECTNESS OF ANY REPRESENTATION OR WARRANTY OR THE BREACH OF ANY COVENANT OF
SUCH INDEMNIFIED PARTY IN THE LOAN DOCUMENTS, (V) IS ATTRIBUTABLE TO AMENDMENTS
TO THE LOAN DOCUMENTS NOT MADE IN ACCORDANCE WITH THE TERMS THEREOF, (VI)
CONSTITUTES AN ADMINISTRATIVE EXPENSE, (VII) ARISES BECAUSE OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT IN DISTRIBUTING FUNDS IN
ACCORDANCE WITH THE LOAN DOCUMENTS, (VIII) ARISES DUE TO A TRANSFER OR
DISPOSITION OF AN INDEMNIFIED PARTY’S INTEREST IN THE AIRCRAFT OR IN THE LOAN
DOCUMENTS OTHER THAN AS REQUIRED THEREIN OR FOLLOWING THE OCCURRENCE OF AN EVENT
OF DEFAULT OR (IX) RESULTS FROM ACTIONS OF AIRBUS OR AVSA IN THEIR RESPECTIVE
CAPACITIES AS MANUFACTURER AND SELLER OF THE AIRCRAFT.

 

(C)  IF (I) ANY PAYMENT OR PREPAYMENT OF PRINCIPAL OF THE LOAN IS MADE BY THE
BORROWER (OR ANY REPLACEMENT LENDER PURSUANT TO SECTION 2.16) TO OR FOR THE
ACCOUNT OF A LENDER OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD FOR THE
LOAN, AS A RESULT OF A PREPAYMENT PURSUANT TO SECTION 2.8, ACCELERATION PURSUANT
TO SECTION 6.1 OR FOR ANY OTHER REASON OR (II) THE LOAN IS CONVERTED FROM BEING
BASED ON THE EURODOLLAR RATE TO BEING BASED ON A SUBSTITUTE RATE PURSUANT TO
SECTION 2.10 OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD FOR THE LOAN, THE
BORROWER SHALL, UPON DEMAND BY SUCH LENDER (WITH A COPY OF SUCH DEMAND TO THE
AGENT), PAY TO THE AGENT FOR THE ACCOUNT OF SUCH LENDER ANY AMOUNTS REQUIRED TO
COMPENSATE SUCH LENDER FOR ANY ADDITIONAL LOSSES, COSTS OR EXPENSES THAT IT MAY
REASONABLY INCUR AND AS ARE SET FORTH IN REASONABLE DETAIL IN A

 

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CERTIFICATE FURNISHED TO THE BORROWER WITHIN 90 DAYS AFTER THE INCURRENCE OF
SUCH LOSS, COST OR EXPENSE AS A RESULT OF SUCH PAYMENT OR CONVERSION (AS THE
CASE MAY BE), INCLUDING, WITHOUT LIMITATION, ANY LOSS (INCLUDING LOSS OF
ANTICIPATED PROFITS), COST OR EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR
REEMPLOYMENT OF DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH LENDER TO FUND OR
MAINTAIN THE LOAN.

 

(D)  WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF THE BORROWER
HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF THE BORROWER CONTAINED IN SECTIONS
2.9, 2.10, 2.12, 2.13 AND 8.4 SHALL SURVIVE THE PAYMENT IN FULL OF PRINCIPAL,
INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER AND UNDER THE NOTES.

 

SECTION 8.5.   Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.1 to authorize the Administrative
Agent to declare the Notes relating to the Loan to be due and payable pursuant
to the provisions of Section 6.1, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under any Loan Document,
whether or not such Lender shall have made any demand under such Loan Document
and although such obligations may be unmatured; provided that an Airbus Lender
shall not be entitled to set off and apply as aforesaid deposits held by or
indebtedness owing by the Manufacturer or AVSA to the Borrower. Each such Lender
agrees promptly to notify the Borrower after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each such Lender under this Section
8.5 are in addition to other rights and remedies (including, without limitation,
other rights of setoff) that such Lender may have.

 

SECTION 8.6.   Binding Effect; Integration. This Agreement shall become
effective when it shall have been executed by the Borrower, the Administrative
Agent and the Initial Lender and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders. This Agreement and the other Loan Documents
constitute the entire agreement and understanding among the parties hereto
relating to the subject matter hereof and supersede any and all prior agreements
and understandings, oral or written, relating to the subject matter hereof.

 

SECTION 8.7.   Assignments and Participations. (a)  Each Lender (x) may, at any
time, and (y) shall, so long as no Default has occurred and is continuing and if
demanded by the Borrower pursuant to the provisions of Section 2.16, assign to
one or more Persons all or a portion of its rights and obligations under the
Loan Documents (including, without limitation, the portion of the Loan owing to
it and the Note or Notes held by it); provided, however, that (i) each such
assignment may be of a constant or of a varying, percentage of all rights and
obligations under this Agreement and the other Loan Documents, (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the principal

 

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amount of the Loan of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, (iii)
each such assignment shall be (x) (A) to any Airbus Lender or any Affiliate
thereof, or (B) to any special purpose entity formed pursuant to Section 8.7(j),
or (y) (A) to a bank or other financial institution with a combined capital,
surplus and undivided profits of at least $75,000,000, or a corporation whose
consolidated tangible net worth is at least $75,000,000, exclusive of goodwill,
in either case as of the proposed date of such sale, as determined in accordance
with GAAP or (B) to any Affiliate of any such bank, financial institution or
corporation if such bank, financial institution or corporation furnishes to the
Borrower an agreement or agreements of such bank, financial institution or
corporation (in form and substance reasonably satisfactory to the Borrower)
unconditionally guaranteeing to the Borrower such Affiliate’s obligations to the
Borrower hereunder, or (z) Avion or any Person in which AFS or its successor
holds at least twenty-five percent (25%) of the equity interests, so long as
such entity referred to in clause (x) or (y) or (z) is (A) not an airline, a
commercial air carrier, an air freight forwarder, an entity engaged in the
business of parcel transport or other similar business (collectively, a
“Potential Competitor”) and (B) is not a Person (other than a bank or other
financial institution) controlling, controlled by or under common control with
any such Potential Competitor (the entities referred to in clauses (x) and (y)
above, subject to the limitations aforesaid in clauses (A) and (B),
collectively, the “Eligible Assignees”), (iv) each such assignment made as a
result of a demand by the Borrower pursuant to Section 2.16 shall be arranged by
the Borrower, shall be to an Eligible Assignee acceptable to the Administrative
Agent (which acceptance shall not be unreasonably withheld) and shall be either
an assignment of all of the rights and obligations of the assigning Lender under
the Loan Documents or an assignment of a portion of such rights and obligations
made concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
the Loan Documents and (v) no Lender shall be obligated to make any such
assignment as a result of a demand by the Borrower pursuant to Section 2.16
unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Loan owing to
such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under the
Loan Documents. The parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance together with any Note subject to such assignment.
Upon such execution, delivery, acceptance and recording from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).

 

(B)  BY EXECUTING AND DELIVERING AN ASSIGNMENT AND ACCEPTANCE, THE LENDER
ASSIGNOR THEREUNDER AND THE ASSIGNEE THEREUNDER CONFIRM TO AND AGREE WITH EACH
OTHER AND THE OTHER PARTIES HERETO AS FOLLOWS: (I) OTHER THAN AS PROVIDED IN
SUCH ASSIGNMENT AND ACCEPTANCE,

 

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SUCH ASSIGNING LENDER MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR REPRESENTATIONS
MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE
EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, GENUINENESS, SUFFICIENCY OR VALUE
OF, OR THE PERFECTION OR PRIORITY OF ANY LIEN OR SECURITY INTEREST CREATED OR
PURPORTED TO BE CREATED UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO;
(II) SUCH ASSIGNING LENDER MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO THE FINANCIAL CONDITION OF THE BORROWER OR THE
PERFORMANCE OR OBSERVANCE BY THE BORROWER OF ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY OTHER INSTRUMENT OR DOCUMENT
FURNISHED PURSUANT HERETO; (III) SUCH ASSIGNEE CONFIRMS THAT IT HAS RECEIVED A
COPY OF THIS AGREEMENT, TOGETHER WITH COPIES OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTION 4.1(A)(V) AND SUCH OTHER DOCUMENTS AND INFORMATION AS IT
HAS DEEMED APPROPRIATE TO MAKE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER
INTO SUCH ASSIGNMENT AND ACCEPTANCE; (IV) SUCH ASSIGNEE WILL, INDEPENDENTLY AND
WITHOUT RELIANCE UPON THE AGENT, SUCH ASSIGNING LENDER OR ANY OTHER LENDER AND
BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE
TIME, CONTINUE TO MAKE ITS OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION
UNDER THIS AGREEMENT; (V) SUCH ASSIGNEE CONFIRMS THAT IT IS AN ELIGIBLE
ASSIGNEE; (VI) SUCH ASSIGNEE REPRESENTS AND WARRANTS THAT EITHER (X) NO PART OF
THE FUNDS TO BE USED BY IT FOR THE PURCHASE OF A PORTION OF THE LOAN (OR ANY
PART THEREOF) CONSTITUTES ASSETS OF ANY “EMPLOYEE BENEFIT PLAN” AS DEFINED IN
SECTION 3(3) OF ERISA OR (Y) THE PROPOSED ASSIGNMENT WILL NOT RESULT IN A
NONEXEMPT PROHIBITED TRANSACTION (AS DEFINED IN SECTION 4975 OF THE INTERNAL
REVENUE CODE AND ERISA); (VII) SUCH ASSIGNEE APPOINTS AND AUTHORIZES EACH AGENT
TO TAKE SUCH ACTION AS AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS AND
DISCRETION UNDER THE LOAN DOCUMENTS AS ARE DELEGATED TO SUCH AGENT BY THE TERMS
THEREOF, TOGETHER WITH SUCH POWERS AND DISCRETION AS ARE REASONABLY INCIDENTAL
THERETO; AND (IX) SUCH ASSIGNEE AGREES THAT IT WILL PERFORM IN ACCORDANCE WITH
THEIR TERMS ALL OF THE OBLIGATIONS THAT BY THE TERMS OF THIS AGREEMENT ARE
REQUIRED TO BE PERFORMED BY IT AS A LENDER.

 

(C)  THE ADMINISTRATIVE AGENT SHALL MAINTAIN AT ITS ADDRESS REFERRED TO IN
SECTION 8.2 A COPY OF EACH ASSIGNMENT AND ACCEPTANCE DELIVERED TO AND ACCEPTED
BY IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF THE
LENDERS, AND THE PRINCIPAL AMOUNT OF THE LOAN OWING TO, EACH LENDER FROM TIME TO
TIME (THE “REGISTER”). IF MORE THAN 50% OF THE THEN OUTSTANDING PRINCIPAL AMOUNT
OF THE NOTES ARE HELD BY A PERSON OR PERSONS OTHER THAN AN AIRBUS LENDER, THE
ADMINISTRATIVE AGENT SHALL MAINTAIN, AND MAKE AVAILABLE TO THE BORROWER ON
REQUEST, A LIST OF POOLED AIRBUS FINANCINGS IN WHICH SUCH PERSON OR PERSONS
HOLDS MORE THAN 50% OF THE THEN OUTSTANDING PRINCIPAL BALANCE (OTHER THAN POOLED
AIRBUS FINANCINGS THAT ARE AL SUBLEASES) AND/OR ALL OF THE LEASEHOLD INTEREST IN
ONE OR MORE POOLED AIRBUS FINANCINGS THAT ARE AL SUBLEASES. THE ENTRIES IN THE
REGISTER SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST
ERROR, AND THE BORROWER, THE AGENT AND THE LENDERS MAY TREAT EACH PERSON WHOSE
NAME IS RECORDED IN THE REGISTER AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS
AGREEMENT. THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER OR ANY
LENDER AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR
NOTICE.

 

(D)  UPON ITS RECEIPT OF AN ASSIGNMENT AND ACCEPTANCE EXECUTED BY AN ASSIGNING
LENDER AND AN ASSIGNEE REPRESENTING THAT IT IS AN ELIGIBLE ASSIGNEE, TOGETHER
WITH ANY NOTE OR NOTES SUBJECT TO SUCH ASSIGNMENT, THE ADMINISTRATIVE AGENT
SHALL, IF SUCH ASSIGNMENT AND ACCEPTANCE HAS BEEN COMPLETED AND IS IN
SUBSTANTIALLY THE FORM OF EXHIBIT C HERETO, (I) ACCEPT SUCH ASSIGNMENT AND
ACCEPTANCE, (II) RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER

 

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AND (III) GIVE PROMPT NOTICE THEREOF TO THE BORROWER. WITHIN FIVE BUSINESS DAYS
AFTER ITS RECEIPT OF SUCH NOTICE, THE BORROWER, AT ITS OWN EXPENSE, SHALL
EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT IN EXCHANGE FOR ANY SURRENDERED
NOTES NEW NOTES TO THE ORDER OF SUCH ELIGIBLE ASSIGNEE EACH IN AN AMOUNT EQUAL
TO THE PORTION OF SUCH SURRENDERED NOTE ASSUMED BY SUCH ELIGIBLE ASSIGNEE
PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE AND, IF THE ASSIGNING LENDER HAS
RETAINED A PORTION OF SUCH SURRENDERED NOTE, A NEW NOTE TO THE ORDER OF THE
ASSIGNING LENDER IN AN AMOUNT EQUAL TO SUCH RETAINED PORTION AND SUCH OLD NOTE
SHALL BE RETURNED TO THE BORROWER MARKED “CANCELLED”. SUCH NEW NOTE OR NOTES
SHALL BE DATED THE EFFECTIVE DATE OF SUCH ASSIGNMENT AND ACCEPTANCE AND SHALL
OTHERWISE BE IN SUBSTANTIALLY THE FORM OF EXHIBIT A HERETO.

 

(E)  EACH LENDER MAY SELL PARTICIPATIONS TO ONE OR MORE ELIGIBLE ASSIGNEES IN OR
TO ALL OR A PORTION OF THE LOAN OWING TO IT AND THE NOTE OR NOTES HELD BY IT;
PROVIDED, HOWEVER, THAT (I) SUCH LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL
REMAIN UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER
PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS, (III) SUCH LENDER SHALL
REMAIN THE HOLDER OF ANY SUCH NOTE FOR ALL PURPOSES OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, (IV) THE BORROWER, EACH AGENT 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 AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND (V) EACH SUCH PARTICIPATION SHALL BE IN A MINIMUM AMOUNT OF $
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT (UNLESS
OTHERWISE AGREED TO BY THE BORROWER).

 

(F)  ANY LENDER MAY, IN CONNECTION WITH ANY ASSIGNMENT OR PARTICIPATION OR
PROPOSED ASSIGNMENT OR PARTICIPATION PURSUANT TO THIS SECTION 8.7, DISCLOSE TO
THE ASSIGNEE OR PARTICIPANT OR PROPOSED ASSIGNEE OR PARTICIPANT, ANY INFORMATION
RELATING TO THE BORROWER FURNISHED TO SUCH LENDER BY OR ON BEHALF OF THE
BORROWER; PROVIDED THAT, PRIOR TO ANY SUCH DISCLOSURE, THE ASSIGNEE OR
PARTICIPANT OR PROPOSED ASSIGNEE OR PARTICIPANT SHALL AGREE TO PRESERVE THE
CONFIDENTIALITY OF ANY CONFIDENTIAL INFORMATION RELATING TO THE BORROWER
RECEIVED BY IT FROM SUCH LENDER PURSUANT TO A CONFIDENTIALITY AGREEMENT
SUBSTANTIALLY IN THE FORM OF EXHIBIT E.

 

(G)  NOTWITHSTANDING ANY OTHER PROVISION SET FORTH IN THIS AGREEMENT, ANY LENDER
MAY AT ANY TIME CREATE A SECURITY INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS
UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE LOAN OWING TO IT AND
THE NOTES HELD BY IT) IN FAVOR OF ANY FEDERAL RESERVE BANK IN ACCORDANCE WITH
REGULATION A OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM OR ANY
OTHER PERSON.

 

(H)  THE BORROWER AGREES TO COOPERATE WITH EACH LENDER TO ACCOMMODATE THE
EFFORTS OF SUCH LENDER TO TRANSFER, SELL OR ASSIGN ALL OR ANY PART OF ITS RIGHTS
AND OBLIGATIONS UNDER THIS AGREEMENT PURSUANT TO THIS SECTION 8.7. EACH LENDER
SEVERALLY AGREES TO REIMBURSE THE BORROWER’S REASONABLE AND ADEQUATELY
DOCUMENTED EXTERNAL LEGAL AND INVESTMENT BANK FEES AND EXPENSES IN RESPECT OF
ANY SUCH TRANSFER, SALE OR ASSIGNMENT.

 

(I)  IF AS A RESULT OF ONE OR MORE ASSIGNMENTS, TRANSFERS OR OTHER TRANSACTIONS,
THE AIRBUS LENDERS CEASE TO CONTROL THE ABILITY TO ACCELERATE THE LOAN, THE
ADMINISTRATIVE AGENT AGREES TO GIVE PROMPT WRITTEN NOTICE THEREOF TO THE
BORROWER.

 

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(J)  IN CONNECTION WITH A TRANSFER, SALE, ASSIGNMENT OF, OR PARTICIPATION WITH
RESPECT TO, ALL OR ANY PART OF ITS RIGHTS AND/OR OBLIGATIONS UNDER THE LOAN
DOCUMENTS BY THE INITIAL LENDER OR ANY AFFILIATE THEREOF (IT BEING UNDERSTOOD
THAT THE INITIAL LENDER OR AFFILIATE MAY ALLOCATE PARTICULAR RIGHTS AND
OBLIGATIONS AS BETWEEN THE RELEVANT PARTIES), INCLUDING BY MEANS OF A CAPITAL
MARKETS, PRIVATE PLACEMENT OR SECURITIZATION TRANSACTION IN ONE OR MORE STEPS
(AN “INITIAL LENDER SELL-DOWN”), THE PARTIES AGREE AS FOLLOWS, NOTWITHSTANDING
ANY OTHER PROVISION OF THIS SECTION 8.7:

 

(I)            THAT THE BORROWER SHALL HAVE THE RIGHT TO REVIEW AND APPROVE
(ACTING REASONABLY) ANY WIDELY CIRCULATED (AS, FOR EXAMPLE, IN A RULE 144A
OFFERING) PLACEMENT OR OFFERING MATERIALS IN CONNECTION WITH ANY INITIAL LENDER
SELL-DOWN, LIMITED TO THOSE PORTIONS OF SUCH PLACEMENT OR OFFERING MATERIALS
THAT: (I) DESCRIBE THE BORROWER OR ITS BUSINESS, (II) DESCRIBE THE LOAN
DOCUMENTS TO WHICH THE BORROWER IS A PARTY OR (III) DESCRIBE ANY RISK FACTORS
CONCERNING THE BORROWER OR THE AIRLINE INDUSTRY, AND FOR THIS PURPOSE, THE
BORROWER SHALL HAVE A PERIOD OF NOT LESS THAN 30 DAYS FOR ANY SUCH REVIEW AND
APPROVAL IN CONNECTION WITH AN INITIAL LENDER SELL-DOWN;

 

(II)           THAT NOT MORE THAN TWO INITIAL LENDER SELL-DOWN TRANSACTIONS (AS
DEFINED HEREIN AND IN THE CREDIT AGREEMENTS IN RESPECT OF OTHER AIRBUS LOANS)
PER CALENDAR YEAR SHALL BE SUBJECT TO THE PROVISIONS OF THIS SECTION 8.7(J) (OR
THE COMPARABLE PROVISIONS OF THE CREDIT AGREEMENTS IN RESPECT OF OTHER AIRBUS
FINANCINGS) (IT BEING UNDERSTOOD THAT ANY ONE INITIAL LENDER SELL-DOWN
TRANSACTION MAY INVOLVE MORE THAN ONE CREDIT AGREEMENT FOR PURPOSES OF THIS
SUBCLAUSE) IN WHICH REVIEW AND APPROVAL OF THE PLACEMENT OR OFFERING MATERIALS
BY THE BORROWER IS REQUIRED AS PROVIDED IN THE PRECEDING SUBCLAUSE (1);

 

(III)          THAT A SPECIAL PURPOSE ENTITY (AN “SPV”) ORGANIZED IN A MANNER
ACCEPTABLE TO THE PLACEMENT AGENTS, RATING AGENCIES AND OTHER PARTICIPANTS IN AN
INITIAL LENDER SELL-DOWN TRANSACTION SHALL BE AN ACCEPTABLE “ELIGIBLE ASSIGNEE”
UNDER THE LOAN DOCUMENTS (IT BEING UNDERSTOOD THAT SUCH SPV MAY HAVE ONLY
NOMINAL CAPITALIZATION);

 

(IV)          THAT THE LOAN DOCUMENTS AND CLOSING DOCUMENTS MAY BE DISCLOSED TO
THE RATING AGENCIES, UNDERWRITERS, INVESTORS, PLACEMENT AGENTS AND TRUSTEES AND
OTHER PARTIES REASONABLY DEEMED NECESSARY BY THE INITIAL LENDER IN CONNECTION
WITH AN INITIAL LENDER SELL-DOWN TRANSACTION, AND THEIR RESPECTIVE COUNSEL,
AUDITORS, AGENTS AND ADVISORS, EACH OF WHOM AGREE TO HOLD SUCH INFORMATION
CONFIDENTIAL IN ACCORDANCE WITH THE TERMS OF EXHIBIT E OR OTHERWISE IN A MANNER
CUSTOMARY FOR SUCH PERSONS IN SIMILAR TRANSACTIONS;

 

(V)           THAT, IF REQUESTED BY THE INITIAL LENDER, THE BORROWER WILL
PROVIDE RELIANCE LETTERS WITH RESPECT TO THE LEGAL OPINIONS DELIVERED AT THE
CLOSING OF THE LOAN AT THE CLOSING OF AN INITIAL LENDER SELL-DOWN TRANSACTION,
PROVIDED THAT SUCH RELIANCE LETTERS NEED ONLY RELATE TO THE DATE OF THE CLOSING
OF THE LOAN; AND

 

(VI)          THAT, THE BORROWER WILL COOPERATE WITH THE INITIAL LENDER, TO THE
EXTENT CONSISTENT WITH THE BORROWER’S ACCESS TO THE CAPITAL MARKETS (SUBJECT TO
THE BORROWER INFORMING THE INITIAL LENDER, UPON REASONABLE REQUEST BY THE
INITIAL LENDER, OF THE TRANSACTIONS THE BORROWER IS THEN UNDERTAKING, OR
PLANNING TO UNDERTAKE, TO RAISE FUNDS IN RELATION TO WHICH THE BORROWER IS THE
OBLIGOR ON THE CAPITAL MARKETS (WHETHER OR NOT SUCH

 

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TRANSACTIONS ARE COLLATERALIZED BY AIRCRAFT)), IN CONNECTION WITH ANY INITIAL
LENDER SELL-DOWN TRANSACTION INVOLVING A PRIVATE PLACEMENT OR RULE 144A OFFERING
OF SECURITIES, IN AGREEING TO AMEND THE TERMS OF THIS AGREEMENT AND THE MORTGAGE
TO INCLUDE SUCH MARKET TERMS AS SHALL BE AVAILABLE TO THE BORROWER AT SUCH TIME
(X) TO THE EXTENT NOT INCLUDED IN THE LOAN DOCUMENTS AND (Y) TO THE EXTENT SUCH
AMENDMENTS DOE NOT ADVERSELY DETERIORATE THE ECONOMIC VALUE TO THE BORROWER OF
THE LOAN DOCUMENTS; AND

 

(VII)         FROM AND AFTER THE CLOSING OF AN INITIAL LENDER SELL-DOWN
TRANSACTION, THAT SECTION 2.11 OF THIS AGREEMENT SHALL BE DEEMED AMENDED BY
ADDING A NEW PARAGRAPH (F) TO READ AS FOLLOWS:

 

‘(f)  Borrower’s payment obligations under the Loan Documents shall be absolute
and unconditional, and shall not be affected by any event or circumstance,
including, without limitation:  (i) any setoff, counterclaim, recoupment,
defense or other right that Borrower may have against any Airbus Lender, any
Affiliate thereof or any other Person for any reason whatsoever; or (ii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing; and, to the extent permitted by applicable law, the Borrower
waives and agrees not to assert any right, claim or defense based on the
foregoing.’

 

; IT BEING AGREED THAT THE REASONABLE COSTS AND EXPENSES OF BORROWER (INCLUDING
REASONABLE LEGAL FEES AND DISBURSEMENTS) INCURRED BY THE BORROWER IN COMPLYING
WITH CLAUSES (IV) AND (V) ABOVE AND IN CONNECTION WITH ITS REVIEW AND APPROVAL
OF ANY WIDELY CIRCULATED (AS, FOR EXAMPLE, IN A RULE 144A OFFERING) PLACEMENT OR
OFFERING MATERIALS TO BE UTILIZED IN CONNECTION WITH AN INITIAL LENDER SELL-DOWN
SHALL BE REIMBURSED BY THE INITIAL LENDER.

 

SECTION 8.8.   Confidentiality. Neither Agent nor any Lender nor the Borrower
shall disclose any Confidential Information to any other Person without the
consent of each other, except (a) to such Agent’s or such Lender’s Affiliates
and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.7(f), to actual or prospective assignees and
participants, and then only on a confidential basis or as otherwise permitted
under Section 8.7(j), (b) as required by any law, rule or regulation or judicial
process and (c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking. Notwithstanding anything
herein to the contrary, any party subject to confidentiality obligations
hereunder or under any other related document (and any employee, representative
or other agent of such party) may disclose to any and all persons, without
limitation of any kind, such party’s U.S. federal income tax treatment and the
U.S. federal income tax structure of the transactions contemplated by this
Agreement relating to such party and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no such party shall disclose any
information relating to such tax treatment or tax structure to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

 

SECTION 8.9.   Certain Agreements and Representations of Lenders. Each Lender
represents and warrants that: (i) such Lender qualifies as an Eligible Assignee;
(ii) such Lender will not make the Loan or acquire any interest in the Loan with
the assets of any

 

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“employee benefit plan” as defined in Section 3(3) of ERISA or of any “plan”
within the meaning of Section 4975(e)(1) of the Code, unless the acquisition
will not result in a non-exempt prohibited transaction (as defined in Section
4975 of the Code and ERISA; and (iii) such Lender will acquire the Loan and each
Note for investment and not with a view to resale or distribution (it being
understood that such Lender may pledge or assign as security its interest in the
Loan and each Note issued to it), provided that the disposition of its property
shall at all times be and remain within its control, except that such Lender may
sell, transfer or otherwise dispose of any Note or any portion thereof or grant
participations therein, in a manner which in itself will not require
registration under the Securities Act of 1933, as amended.

 

SECTION 8.10.   GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY CHOICE OF LAW PRINCIPLE THAT WOULD DICTATE THE APPLICATION
OF THE LAW OF ANOTHER JURISDICTION.

 

SECTION 8.11.   Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 8.12.   Jurisdiction, Etc. (a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America, in each case sitting in New York City, except that
during the pendency of the Case, the Bankruptcy Court shall have exclusive
jurisdiction, in any action or proceeding arising out of or relating to the Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment may be heard and determined in
such state court or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in such action or proceeding
or in any other manner provided by law. Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.

 

(B)  THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW
YORK, NEW YORK 10011 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT
UNDER THIS AGREEMENT. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED

 

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COURTS SPECIFIED IN PARAGRAPH (A) ABOVE IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THERE BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
BORROWER, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY LENDER OR
THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.

 

(C)  EACH OF THE PARTIES HERETO 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 LOAN DOCUMENTS IN ANY NEW YORK STATE OR
FEDERAL COURT REFERRED TO IN SECTION 8.12(A). 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 8.13.   WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.

 

SECTION 8.14.   Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

SECTION 8.15.   Headings. All headings in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement.

 

SECTION 8.16.   Interpretation of Term Sheet. Nothing in this Agreement or the
other Loan Documents shall be deemed to interpret the provisions of the Term
Sheet for purposes of, and no reliance shall be made on the terms of this
Agreement or the other Loan Documents in the negotiation of, any other financing
required to be provided by AVSA under the Term Sheet.

 

SECTION 8.17.   Quiet Enjoyment. Each Lender and the Administrative Agent
covenant to the Borrower as follows:

 

(A)  THE LENDERS AND THE ADMINISTRATIVE AGENT ACKNOWLEDGE AND CONSENT TO THE
PROVISIONS CONTAINED IN THE PROVISO IN SECTION 2.1 OF THE MORTGAGE; AND

 

(B)  EACH LENDER AND THE ADMINISTRATIVE AGENT SHALL NOT, THROUGH ITS OWN ACTIONS
OR INACTIONS, INTERFERE WITH, OR SUFFER TO EXIST WITH RESPECT TO THE AIRCRAFT,
ANY LIEN ATTRIBUTABLE TO ITSELF WHICH MIGHT INTERFERE WITH THE BORROWER’S (OR
ANY LESSEE’S THEREOF) CONTINUED POSSESSION, USE AND OPERATION OF, AND QUIET
ENJOYMENT (INCLUDING, WITHOUT LIMITATION, ADMINISTRATIVE QUIET ENJOYMENT) OF,
THE AIRCRAFT DURING THE TERM OF THE MORTGAGE AND IN ACCORDANCE WITH THE TERMS OF
THE LOAN DOCUMENTS SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING.

 

48

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SECTION 8.18.   Concerning Clause (i)(y) of Section 3.6(a)(I) of the Mortgage.
The Borrower agrees that the dollar amount referred to in Clause (i)(y) of
Section 3.6(a)(I) of the Mortgage shall be: $ Confidential material omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment per occurrence.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and to be delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.

 

 

NORTHWEST AIRLINES, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

AIRBUS FINANCIAL SERVICES,

 

as Administrative Agent and as the Initial Lender

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

49

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

 

Schedule I
to
Credit Agreement

 

Lending Office of Airbus Financial Services

 

 

5th Floor

 

6 George’s Dock

 

International Financial Services Centre

 

Dublin 1, Ireland

 

Attn: Managing Director

 

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

 

Schedule II
to
Credit Agreement

 

Approved Commercial Banks

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

their successors or assigns.

 

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

 

Schedule III
to
Credit Agreement

 

Principal Payment Schedule

 

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

 

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

 

Schedule IV
to
Credit Agreement

 

Approved Countries for Reregistration

 

 

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

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

 

Schedule V
to
Credit Agreement

 

AL Subleases

 

Sublease [1992 Trust NW-A], dated as of January 1, 1992, between Airbus Leasing
IV and the Borrower, as amended and supplemented from time to time, with respect
to one Airbus A320 aircraft bearing airframe serial number 262 and FAA
registration number N321US.

 

Sublease [1992 Trust NW-B], dated as of January 5, 1992, between Airbus Leasing
IV and the Borrower, as amended and supplemented from time to time, with respect
to one Airbus A320 aircraft bearing airframe serial number 263 and FAA
registration number N322US.

 

Sublease [1992 Trust NW-C], dated as of February 1, 1992, between Airbus Leasing
IV and the Borrower, as amended and supplemented from time to time, with respect
to one Airbus A320 aircraft bearing airframe serial number 272 and FAA
registration number N323US.

 

Sublease [1992 Trust NW-D], dated as of February 5, 1992, between Airbus Leasing
IV and the Borrower, as amended and supplemented from time to time, with respect
to one Airbus A320 aircraft bearing airframe serial number 273 and FAA
registration number N324US.

 

Sublease [1992 Trust NW-E], dated as of March 2, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 281 and FAA registration
number N325US.

 

Sublease [1992 Trust NW-F], dated as of March 4, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 282 and FAA registration
number N326US.

 

Sublease [1992 Trust NW-G], dated as of April 1, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 297 and FAA registration
number N327NW.

 

Sublease [1992 Trust NW-H], dated as of April 6, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 298 and FAA registration
number N328NW.

 

Sublease [1992 Trust NW-I], dated as of May 5, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 306 and FAA registration
number N329NW.

 

Sublease [1992 Trust NW-J], dated as of May 7, 1992, between Airbus Leasing IV
and the Borrower, as amended and supplemented from time to time, with respect to
one Airbus A320 aircraft bearing airframe serial number 307 and FAA registration
number N330NW.

 

1

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

 

Exhibit A
to
Credit Agreement

 

Form of Promissory Note

 

U.S.$ [

                   

]

 

Dated:                   ,           

 

FOR VALUE RECEIVED, the undersigned, NORTHWEST AIRLINES, INC., a Minnesota
corporation (the “Borrower”), HEREBY PROMISES TO PAY to                     (the
“Lender”) for the account of its Lending Office as defined in the Credit
Agreement referred to below) the principal sum of U.S.$ [                 ] (the
“Original Amount”) representing a Loan made by the Lender to the Borrower
pursuant to the Credit Agreement dated as of January 24, 2006 between the
Borrower and Airbus Financial Services, as the Initial Lender and as
Administrative Agent (as amended or modified from time to time, the “Credit
Agreement”; the terms defined therein being used herein as therein defined). The
Original Amount shall be payable in installments in the amounts and on the dates
specified in Section 2.5 of the Credit Agreement. Notwithstanding the foregoing,
the final payment made on this Promissory Note shall be in an amount sufficient
to discharge in full the unpaid Original Amount and all accrued and unpaid
interest on any amounts due under this Promissory Note.

 

The Borrower promises to pay interest on the unpaid principal amount hereof from
the date hereof until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of
America to the Administrative Agent, to the account specified in Section 2.11 of
the Credit Agreement, in same day funds.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
The obligations of the Borrower under this Promissory Note and the Credit
Agreement are secured by collateral as provided in the Credit Agreement and in
the Mortgage and Security Agreement, dated as of January 24, 2006, executed by
the Borrower and pertaining to the Aircraft bearing FAA Registration No.
N[    ]NW.

 

 

NORTHWEST AIRLINES, INC.

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

1

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

 

Exhibit B
to
Credit Agreement

 

Form of Notice of Loan

 

Airbus Financial Services, as Administrative Agent

for the Lenders under to the Credit

Agreement referred to below

 

[Date]

 

Attention:

                                          

 

 

Ladies and Gentlemen:

 

The undersigned, Northwest Airlines, Inc., refers to the Credit Agreement, dated
as of January 24, 2006 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
between the undersigned and Airbus Financial Services, as the Initial Lender and
as Administrative Agent for the Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.2 of the Credit Agreement that the
undersigned hereby requests the Loan under the Credit Agreement, and in that
connection sets forth below the information relating to the Loan (the “Proposed
Loan”) as required by Section 2.2(a) of the Credit Agreement:

 

The requested Business Day of the Proposed Loan (which shall not be a legal
holiday in Toulouse, France, Dublin, Ireland, or New York, New York) is January
[  ], 2006.

 

The aggregate amount of the Proposed Loan is $[            ].

 

The Aircraft related to the Proposed Loan is the Airbus model A330-223 aircraft
bearing manufacturer’s serial number [        ] and will be delivered to the
Borrower on January [  ], 2006.

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Loan:

 

(x)  the representations and warranties made by the Borrower and contained in
the Loan Documents relating to the Loan are correct in all material respects on
and as of the date of the Proposed Loan before and after giving effect to the
Loan and to the application of the proceeds therefrom, as though made on and as
of such date, and

 

B-1

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

 

(y)  no Default or Event of Default has occurred and is continuing.

 

 

Very truly yours,

 

 

 

NORTHWEST AIRLINES, INC.

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

B-2

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

 

Exhibit C
to
Credit Agreement

 

Form of Assignment and Acceptance

 

Reference is made to the Credit Agreement dated as of January 24, 2006 (as
amended or modified from time to time, the “Credit Agreement”) between Northwest
Airlines, Inc., a Minnesota corporation (the “Borrower”) and Airbus Financial
Services, as Initial Lender and as Administrative Agent for the Lenders (the
“Administrative Agent”). Terms defined in the Credit Agreement are used herein
with the same meaning.

 

The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as
follows:

 

1.     The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor’s rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the amount of the Loan owing to the Assignee
will be as set forth on Schedule 1 hereto.

 

2.     The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, the Credit Agreement or the other Loan Documents or
any other instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or the other Loan
Documents or any other instrument or document furnished pursuant thereto; and
(iv) attaches each Note held by the Assignor and requests that the
Administrative Agent exchange each such Note for a new Note payable to the order
of the Assignee in an amount equal to the portion of such Note assumed by the
Assignee pursuant hereto or new Notes payable to the Assignee in an amount equal
to the portion of such Note assumed by the Assignee pursuant hereto and to the
Assignor in an amount equal to the portion of such Note retained by the Assignor
under the Credit Agreement, respectively, as specified on Schedule 1 hereto.

 

3.     The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.1(a)(v) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agents, the Assignor or any other

 

C-1

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

 

Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) represents and warrants that either (x) no part of the funds to
be used by it for the purchase of the Loan (or any part thereof) constitutes
assets of any “employee benefit plan” as defined in Section 3(3) of ERISA or (y)
the proposed assignment will not result in a non-exempt prohibited transaction
(as defined in Section 4975 of the Code and ERISA); (v) represents and warrants
that it will acquire Notes for investment and not with a view to sale or
distribution (it being understood that the Assignee may pledge or assign as
security its interest in each Note or each such instrument issued to it),
provided that the disposition of its property shall at all times be and remain
within its control, except that the Assignee may sell, transfer or otherwise
dispose of any Note, any such instrument or any portion thereof or grant
participations therein, in a manner which in itself will not require
registration under the Securities Act of 1933, as amended; (vi) appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to such
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (vii) agrees, for the benefit of the assigning
Lender and Borrower, that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (viii) attaches any U.S. Internal Revenue
Service forms required under Section 2.12 of the Credit Agreement.

 

4.     Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent (together with such payment), unless otherwise specified on Schedule 1
hereto.

 

5.     Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

 

6.     Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and other
amounts with respect thereto) to the Assignee. The Assignor and Assignee shall
make all appropriate adjustments in payments under the Credit Agreement and the
Notes for periods prior to the Effective Date directly between themselves.

 

7.     This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

C-2

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

 

8.     This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

C-3

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

 

Schedule 1
to
Assignment and Acceptance

 

Percentage interest assigned:

 

Outstanding principal amount of the Loan assigned:

 

Effective Date:

 

Note

 

Principal Amount of
Note payable to Assignee

 

Principal Amount of
Note payable to Assignor

 

 

 

 

 

 

 

[NAME OF ASSIGNOR], as Assignor

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

Dated:              ,          

 

 

 

 

 

[NAME OF ASSIGNEE], as Assignee

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

Lending Office:

 

 

[Address]

 

Accepted this

          day of                  ,         

 

Airbus Financial Services, as

Administrative Agent

 

By:

 

 

 

Title:

 

C-4

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

 

Exhibit D-1
to
Credit Agreement

 

 

Form of Opinion of Associate General Counsel of The Borrower

 

 

[In the form delivered at closing]

 

D-1-1

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

 

Exhibit D-2
to
Credit Agreement

 

 

Form of Opinion of Cadwalader, Wickersham & Taft LLP,
Special Counsel for the Borrower

 

 

[In the form delivered at closing]

 

D-2-1

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

 

Exhibit D-3
to
Credit Agreement

 

 

Form of Opinion of Daugherty, Fowler, Peregrin, Haught & Jenson,
Special Aviation Counsel for the Agent

 

 

[In the form delivered at closing]

 

D-3-1

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

 

Exhibit E
to
Credit Agreement

 

Form of Confidentiality Agreement

 

 

[Insert Name and Address of
the Prospective Assignee or Holder
of a Participation]

 

Ladies and Gentlemen:

 

You have expressed interest in establishing a credit relationship with Northwest
Airlines, Inc., a Minnesota corporation (together with its subsidiaries and
affiliates, the “Borrower”). In connection therewith, you have asked for certain
information about the Borrower. In consideration for and as a condition of your
receiving the Materials (as hereinafter defined), you acknowledge the
confidential and proprietary nature of the Materials and agree to hold and keep
the same confidential as provided in this letter agreement and to take or
refrain from taking certain other actions as set forth in this letter agreement.

 

The term “Materials” means any information concerning the Borrower which was
furnished to us by or on behalf of the Borrower and which we furnish to you. The
term “Materials” does not include information which (i) is or becomes generally
available to the public or (ii) is or becomes available to you from a source
other than the Borrower, unless you have the actual knowledge (without being
obligated to conduct any investigation) that such information has been made
available by such source in breach of a confidentiality agreement by which such
source is bound with respect to such information.

 

We are prepared to provide you with a copy of the Materials, as necessary, which
have been or may be provided pursuant to the information provisions under the
Credit Agreement (the “Credit Agreement”) dated as of January 24, 2006 between
Northwest Airlines, Inc. and Airbus Financial Services, as the Initial Lender
and as Administrative Agent. Pursuant to Section 8.7(f) of the Credit Agreement,
we are required to have you, as a prospective assignee or holder of a
participation in the Loan (as defined in the Credit Agreement) enter into this
Confidentiality Agreement (the “Agreement”) before receiving the Materials. Such
Materials will be made available to you upon your execution of this Agreement.
In consideration thereof, you agree that Materials will be kept confidential, in
accordance with your customary procedure for handling confidential information
and in accordance with safe and sound banking practices, and not be used by you
except in connection with the proposed credit relationship referred to above.
Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party’s U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated by the Credit Agreement relating to such party and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to

 

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

 

such tax treatment or tax structure to the extent nondisclosure is reasonably
necessary in order to comply with applicable securities laws.

 

You acknowledge that the Materials are internal information that may include
allocations, projections data, analyses and calculations that may not completely
and accurately reflect the results of the Borrower’s operations. In addition,
you acknowledge that the Materials regarding operations have not been prepared
for financial statement disclosure purposes.

 

You hereby acknowledge that you are aware, and that you will advise such of your
representatives who are informed as to the matters which are the subject of this
letter agreement, that the United States securities law impose restrictions on
any person who has received from an issuer material, non-public information
concerning the matters which are the subject of this letter agreement from
purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.

 

You and your affiliates, directors, officers, employees and representatives
agree to be bound by the terms of this Agreement. This Agreement shall inure to
the benefit of the Borrower.

 

In this connection, we acknowledge that you may make disclosure as required by
any governmental agency or representative thereof or pursuant to legal process
and that you are subject to oversight by bank or other financial regulatory
agencies and may be required to provide to, or otherwise make available for
review by, the representatives of such agencies the Materials. You also agree to
request confidential treatment of the Materials to the extent permitted by law.

 

Please indicate your agreement to the foregoing at the place provided below.

 

 

Very truly yours,

 

 

 

[Insert Name of Lender]

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

The foregoing is agreed to as of

 

the date of this letter.

 

 

 

 

 

By:

 

 

 

 

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