exhibit10-77.htm


    Exhibit
10.77

     

     

    CERTAIN
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.

    


     

     

    EXECUTION
COPY

     

    


     

    CREDIT
AGREEMENT

     

    Dated
as of July 30, 2009

     

    by
and among

     

    PINNACLE
AIRLINES, INC.

     

    AND

     

    COLGAN
AIR, INC.,

     

    as
Borrowers,

     

    THE
LOAN PARTIES HERETO,

     

    C.I.T.
LEASING CORPORATION,

     

    as
Administrative Agent and Collateral Agent,

     

     

    CIT
BANK, as a Lender,

     

    AND

     

    THE
OTHER LENDERS SIGNATORY HERETO

     

    FROM
TIME TO TIME,

     

    as
Lenders

     


    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          TABLE
OF CONTENTS

           

          Page

           

        

      

    


    
      	
              ARTICLE I

            	
              DEFINITIONS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      1.1.

            	
              Defined
      Terms 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      1.2.

            	
              Classification
      of Term Loan 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      1.3.

            	
              Terms
      Generally 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      1.4.

            	
              Accounting
      Terms; GAAP 

            	
               

            


    

     

     

    
      	
              ARTICLE II

            	
              THE
      CREDIT 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      2.1.

            	
              Term
      Loan Commitment; Borrowing Base 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.2.

            	
              Loans
      and Borrowings 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.3.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.4.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.5.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.6.

            	
              Interest
      Elections 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.7.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.8.

            	
              Repayment
      of Loans; Evidence of Debt 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.9.

            	
              Prepayment
      of Loans 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.10.

            	
              Fees 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.11.

            	
              Interest 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.12.

            	
              Alternate
      Rate of Interest 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.13.

            	
              Increased
      Costs 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.14.

            	
              Break
      Funding Payments 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.15.

            	
              Taxes 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.16.

            	
              Payments
      Generally; Pro Rata Treatment; Sharing of
  Set-offs27

            


    

    
      	
               
      

            	
              SECTION
      2.17.

            	
              Mitigation
      Obligations 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      2.18.

            	
              Replacement
      of Lenders 

            	
               

            


    

     

     

    
      	
              ARTICLE III

            	
              REPRESENTATIONS
      AND WARRANTIES 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      3.1.

            	
              Existence
      and Power 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.2.

            	
              Corporate
      and Governmental Authorization; No
  Contravention30

            


    

    
      	
               
      

            	
              SECTION
      3.3.

            	
              Binding
      Effect 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.4.

            	
              Financial
      Information 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.5.

            	
              Litigation 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.6.

            	
              Compliance
      with ERISA 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.7.

            	
              Taxes 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.8.

            	
              Environmental
      Compliance 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.9.

            	
              Properties 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.10.

            	
              Compliance
      with Laws and Agreements; Compliance with Anti-Terrorism
      Laws 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.11.

            	
              Investment
      Company Status 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.12.

            	
              Full
      Disclosure 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.13.

            	
              Security
      Interest 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.14.

            	
              Solvency 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.15.

            	
              Employee
      Matters 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.16.

            	
              Use
      of Proceeds 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.17.

            	
              Indebtedness
      and Default 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.18.

            	
              Subsidiaries 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.19.

            	
              Contracts 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.20.

            	
              Reserved. 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.21.

            	
              FAA
      Investigations and Audits 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.22.

            	
              Anti-Terrorism
      Laws 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.23.

            	
              Insurance 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      3.24.

            	
              Brokers;
      Fees 

            	
               

            


    

     

     

    
      	
              ARTICLE IV

            	
              CONDITIONS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      4.1.

            	
              Effective
      Date 

            	
               

            


    

     

     

    
      	
              ARTICLE V

            	
              AFFIRMATIVE
      COVENANTS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      5.1.

            	
              Information 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.2.

            	
              Maintenance
      of Property 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.3.

            	
              Compliance
      with Laws 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.4.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.5.

            	
              Use
      of Proceeds 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.6.

            	
              Environmental
      Matters 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.7.

            	
              Taxes 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.8.

            	
              Security
      Interests; Further Assurances 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.9.

            	
              Existence;
      Conduct of Business 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.10.

            	
              Litigation
      and Other Notices 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.11.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.12.

            	
              Contracts 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.13.

            	
              ERISA 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.14.

            	
              Lenders’
      Meeting 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.15.

            	
              Collateral
      Matters 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.16.

            	
              Anti-Terrorism
      Laws Compliance 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.17.

            	
              Engine
      Warranties Acknowledgment 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      5.18.

            	
              Spare
      Parts Tracking System License Agreement 

            	
               

            


    

     

     

    
      	
              ARTICLE VI

            	
              NEGATIVE
      COVENANTS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      6.1.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.2.

            	
              Liens 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.3.

            	
              Fundamental
      Changes 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.4.

            	
              Acquisitions 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.5.

            	
              Prepayment
      or Modification of Indebtedness; Modification of Operating Documents;
      Change of Business Location; Change of Name 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.6.

            	
              Reserved. 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.7.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.8.

            	
              Restrictive
      Agreements 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.9.

            	
              Compliance
      with Anti-Terrorism Laws 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.10.

            	
              Reserved 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.11.

            	
              Minimum
      Liquidity 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.12.

            	
              Reg
      U Requirements 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      6.13.

            	
              Permitted
      Sales or Dispositions 

            	
               

            


    

     

     

    
      	
              ARTICLE VII

            	
              EVENTS
      OF DEFAULT AND APPLICATION OF PROCEEDS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      7.1.

            	
              Events
      of Default 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      7.2.

            	
              Application
      of Proceeds 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      7.3.

            	
              Collateral
      Accounts 

            	
               

            


    

     

     

    
      	
              ARTICLE VIII

            	
              THE
      ADMINISTRATIVE AGENT 

            	
               

            


    

     

    
      	
              ARTICLE IX

            	
              RESERVED 

            	
               

            


    

     

    
      	
              ARTICLE X

            	
              MISCELLANEOUS 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      10.1.

            	
              Notices 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.2.

            	
              Waivers;
      Amendments 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.3.

            	
              Expenses;
      Indemnity; Damage Waiver 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.4.

            	
              Successors
      and Assigns 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.5.

            	
              Survival 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.6.

            	
              Counterparts;
      Integration; Effectiveness 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.7.

            	
              Severability 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.8.

            	
              Right
      of Setoff 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.9.

            	
              GOVERNING
      LAW; Jurisdiction; Consent to Service of Process 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      10.10.WAIVER OF JURY TRIAL65

            


    

    
      	
               
      

            	
              SECTION
      10.11.Headings65

            


    

    
      	
               
      

            	
              SECTION
      10.12.Confidentiality65

            


    

    
      	
               
      

            	
              SECTION
      10.13.Interest Rate Limitation66

            


    

    
      	
               
      

            	
              SECTION
      10.14.Publication66

            


    

    
      	
               
      

            	
              SECTION
      10.15.Currency67

            


    

     

     

    
      	
              ARTICLE XI

            	
              BORROWER
      REPRESENTATIVE 

            	
               

            


    

     

    
      	
               
      

            	
              SECTION
      11.1.

            	
              Appointment;
      Nature of Relationship 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      11.2.

            	
              Powers 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      11.3.

            	
              Employment
      of Agents 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      11.4.

            	
              Notices 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      11.5.

            	
              Successor
      Borrower Representative 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      11.6.

            	
              Execution
      of Financing Documents; Certificates 

            	
               

            


    

     

     

    
      	
              ARTICLE XII

            	
              JOINT
      AND SEVERAL OBLIGATIONS;
CROSS-GUARANTIES68

            


    

     

    
      	
               
      

            	
              SECTION
      12.1.

            	
              Joint
      and Several Obligations 

            	
               

            


    

    
      	
               
      

            	
              SECTION
      12.2.

            	
              Cross-Guaranty
      Provisions 

            	
               

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


        
          


           

          TABLE
OF CONTENTS

          (cont’d)

           

        

      

    


    


    EXHIBITS
AND SCHEDULES

     

    Exhibits

     

    
      	
              Exhibit A

            	
              Form
      of Assignment and Assumption

            
	
              Exhibit B

            	
              Form
      of Term Loan Note

            
	
              Exhibit
      C

            	
              Form
      of Compliance Certificate

            
	
              Exhibit
      D

            	
              Borrowing
      Base Certificate

            
	
              Exhibit
      E

            	
              Closing
      Document List/Schedule of
Responsibilities

            


    

    


    Schedules

     

    
      	
              Schedule
      1

            	
              Storage
      Locations

            
	
              Schedule 2.1

            	
              List
      of Lenders and Commitments

            
	
              Schedule
      3.5

            	
              Disclosed
      Matters (Litigation)

            
	
              Schedule
      3.6

            	
              Compliance
      with ERISA

            
	
              Schedule
      3.8

            	
              Disclosed
      Matters (Environmental)

            
	
              Schedule
      3.17

            	
              Indebtedness
      and Default

            
	
              Schedule
      3.18

            	
              Equity
      Interest Rights

            
	
              Schedule
      3.23

            	
              Insurance

            
	
              Schedule 6.8

            	
              Existing
      Restrictive Agreements

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    CREDIT
AGREEMENT

     

    CREDIT
AGREEMENT (this “Agreement”) dated as
of July 30, 2009 among PINNACLE AIRLINES, INC., a Georgia corporation
(“Pinnacle”),
COLGAN AIR, INC., a Virginia corporation (“Colgan”, and together
with Pinnacle, each a “Borrower” and
collectively, the “Borrowers”), the LOAN
PARTIES party hereto, the LENDERS party hereto, and C.I.T. LEASING CORPORATION,
as Administrative Agent and Collateral Agent.

     

    The
Borrowers have applied to the Lenders for a Term Loan (such terms and all other
capitalized terms used in this paragraph having the respective meanings ascribed
to such terms hereinafter) in an original principal amount of
$25,000,000.  The Lenders are severally, and not jointly, willing to
extend such Loans to the Borrowers subject to the terms and conditions
hereinafter set forth.  Accordingly, the Borrowers, the Lenders and
the Administrative Agent hereby agree as follows:

     

     

    
      	 ARTICLE I


    

     

    
      	 DEFINITIONS


    

     

     

     

    SECTION
1.1.   Defined
Terms.

     

    As used
in this Agreement, the following terms have the meanings specified
below:

     

    “ABR Borrowing” refers
to the Term Loan when it is bearing interest at a rate determined by reference
to the Alternate Base Rate.

     

    “Adjusted LIBOR Rate”
means, with respect to a Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBOR Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.

     

    “Administrative Agent”
means C.I.T. Leasing Corporation, in its capacity as administrative and
collateral agent for the Lenders hereunder or any successors appointed pursuant
to Article VIII.

     

    “Administrative
Questionnaire” means an Information Certificate or Administrative
Questionnaire in a form supplied by the Administrative Agent.

     

    “Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.  Notwithstanding the
foregoing, neither the Administrative Agent nor any Lender shall be deemed to be
an Affiliate of any Borrower, or any Affiliate thereof.

     

    “Agreement” means this
Credit Agreement, as it may be amended, restated, supplemented or otherwise
modified from time to time.

     

    “Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day, (b) the Federal Funds Effective Rate in effect
on such day plus [***], and
(c) the Three Month LIBOR Rate in effect on such day plus
[***].  Any change in the Alternate Base Rate due to a change in the
Prime Rate shall be effective from and including the effective date of such
change in the Prime Rate.

     

    “Anti-Terrorism Laws”
means any Laws relating to terrorism or money laundering, including Executive
Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
OFAC.

     

    “Applicable Rate”
means (i) with respect to Eurodollar Borrowings, [***], and (ii) with
respect to ABR Borrowings, [***].

     

    “Appraisal” means
(i) the appraisal furnished by SH&E delivered as required by Section 4.1(i)
or (ii) the most recently delivered SH&E appraisal delivered as
provided by Section 5.1(h),
as appropriate, in form and substance mutually satisfactory to the
Administrative Agent and the Borrower Representative and prepared on a basis
consistent with the SH&E appraisal dated May 28, 2009.

     

    “Approved Fund” has
the meaning assigned to such term in Section 10.4(b).

     

    “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 10.4),
and accepted by the Administrative Agent, in the form of Exhibit A or any
other form approved by the Administrative Agent.

     

    “Blocked Person” means
any Person:  (i) listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224; (ii) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a
person that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224; or (v) a Person that is named a
“specially designated national” or “blocked person” on the most current list
published by OFAC or other similar list.

     

    “Board” means the
Board of Governors of the Federal Reserve System of the United States of
America.

     

    “Bombardier Aircraft”
means the following aircraft manufactured by Bombardier: CRJ 200, CRJ 900 and
Dash 8-Q400.

     

    “Borrower
Representative” shall have the meaning assigned to such term in Section 11.1.

     

    “Borrowing Base” shall
mean an amount equal to the total of:

     

    (i)(A) [***]
of the OLV determined for an 18-month period of Eligible Bombardier Rotable
Parts; plus
(B) [***] of the OLV determined for an 18-month period of Eligible Saab340
Rotable parts; plus

     

    (ii)(A) [***]
of the OLV determined for an 18-month period of Eligible Bombardier
Consumable/Expendable Parts; plus (B) [***]
of the OLV determined for an 18-month period of Eligible Saab340
Consumable/Expendable Parts; plus

     

    (iii)(A) [***]
of the CMV of Eligible Bombardier Spare Engines; plus (B) [***]
of the CMV of Eligible Saab340 Spare Engines; minus

     

    (iv) such
reserves and allowances specifically relating to the Collateral Administrative
Agent establishes from time to time in the exercise of its reasonable business
judgment after 5 Business Days prior written notice from Administrative
Agent to the Borrower Representative.  The Borrowing Base will be
computed on a monthly basis as of the last day of the calendar month and the
Borrowers’ calculation of the Borrowing Base shall be provided to Administrative
Agent within [***] calendar days of each calendar month end for Administrative
Agent’s review and approval.

     

    “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain closed; provided that, when
used in connection with a Eurodollar Borrowing, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.

     

    “Cape Town Convention”
shall mean the official English language texts of the Convention on
International Interests in Mobile Equipment and the Protocol to the Convention
on International Interests in Mobile Equipment on Matters Specific to Aircraft
Equipment (the “Protocol”) which were
signed in Cape Town, South Africa on November 16, 2001.

     

    “Capital Expenditures”
shall mean all expenditures for the acquisition or leasing (pursuant to a
capital lease) of assets or additions to equipment (including replacements,
capitalized repairs and improvements) which should be capitalized under
GAAP.

     

    “Capital Lease
Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with
GAAP.

     

    “CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended.

     

    “Change in Control”
means Holdings shall cease to own at least fifty-one percent (51%) of all Equity
Interests with voting rights of each Borrower, free and clear of all Liens,
other encumbrances, or voting agreements, restrictions or trusts of any
kind.

     

    “Change in Law” means
(a) the adoption or effectiveness of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after or
in effect after the date of this Agreement or (c) compliance by any Lender
(or, for purposes of Section 2.13(b),
by any lending office of such Lender or by such Lender’s holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made, issued or becoming effective after
the date of this Agreement.

     

    “CMV” means
(a) for any month in which an Appraisal has been provided pursuant to Section 5.1(h),
the current market value of such asset as set forth in the Appraisal and
(b) for any month in between such Appraisals, the “Current Market Value”
from the most recent Appraisal adjusted on the same ratio as changes in Monthly
Collateral NBV occurring since the date of the most recent
Appraisal.

     

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

     

    “Colgan Air Flight 3407
Incident” means the fatal crash of Colgan Air Flight 3407, marketed as
Continental Connections, on February 12, 2009 resulting in 50
fatalities.

     

    “Collateral” means all
assets and properties of a Loan Party or any other Person, whether real, person
or mixed, and all interest in any of the foregoing, on which a Lien is granted
or purported to be granted pursuant to the Security Agreement.

     

    “Collateral Shortfall
Default” shall have the meaning set forth in Section 2.1(b).

     

    “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled”
have meanings correlative thereto.

     

    “Convertible Notes”
means Holding’s 3.25% Senior Convertible Notes due 2025.

     

    “Default” means any
event or condition which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

     

    “Disclosed Matters”
means the actions, suits and proceedings and the environmental matters disclosed
in Schedules
3.5 and 3.8.

     

    “Dollars”, “dollars” or “$” refers to lawful
money of the United States of America.

     

    “EDC Financing” shall
mean any loan financing involving Export Development Canada, as lender, and the
relevant Borrower, as borrower in respect of any Bombardier Inc. aircraft or
Pratt & Whitney Canada engine, as the case may be.

     

    “Effective Date” means
the date on which the conditions specified in Section 4.1 are
satisfied (or waived in accordance with Section 10.2).

     

    “Eligible Aircraft”
shall mean such aircraft (i) owned by a Borrower and not subject to a
mortgage, or (ii) owned by a Borrower and subject to a mortgage, or leased
by a Borrower, and such Borrower (a) has provided Administrative Agent with
assurance that the engine constituting an Eligible Bombardier Spare Engine or an
Eligible Saab340 Spare Engine on such aircraft is not and shall not become
subject to any Lien or claim by any secured party of a higher priority than
Administrative Agent, on behalf of the Lenders, in form and substance
satisfactory to Administrative Agent, and (b) has provided Administrative
Agent with a written agreement from the lessor or secured party within [***]
Business Days following the installation of such engine constituting an Eligible
Bombardier Spare Engine or an Eligible Saab340 Spare Engine whereby such party
agrees to recognize Administrative Agent’s security interest in such engine on
such aircraft and to not assert any Lien or other claim in respect of such
engine, all in form and substance satisfactory to Administrative Agent;
provided, however, if the foregoing qualifications are not satisfied in the
Administrative Agent’s reasonable business judgment, such spare engine shall not
constitute an Eligible Bombardier Spare Engine or an Eligible Saab340 Spare
Engine for purposes of the Borrowing Base.

     

    “Eligible Bombardier
Consumable/Expendable Parts” shall mean the consumable/expendable parts
for Bombardier Aircraft which Borrowers have a 100% ownership interest in, which
are held in the ordinary course of business for operation of such Borrower’s
business which are not obsolete or unmerchantable; provided, however, that
Eligible Bombardier Consumable/Expendable Parts shall in no event include a
consumable/expendable part which (i) is on consignment or is covered by a
negotiable instrument of title, or is not owned by the Borrowers free and clear
of all rights, claims and Liens, other than Permitted Liens, or is not in
conformity with the representations and warranties and covenants made by the
Borrowers under the Financing Documents with respect thereto or is not located
at a Storage Location, or with respect to which the Administrative Agent does
not possess a valid, perfected first priority security interest, or (ii) is in
transit other than Transit Parts.  Standards of eligibility may be
fixed and revised from time to time solely by the Administrative Agent in the
Administrative Agent’s reasonable business judgment, exercised in good faith,
upon at least five (5) Business Days prior written notice delivered to the
Borrowers, in the case of any change in any existing standards of eligibility or
the imposition of any new standards of eligibility.

     

    “Eligible Bombardier Rotable
Parts” shall mean the rotable and repairable parts for Bombardier
Aircraft which Borrowers have a 100% ownership interest, held in the ordinary
course of business for operation of such Borrower’s business which are not
obsolete or unmerchantable; provided, however, that
Eligible Bombardier Rotable Parts shall in no event include a rotable or
repairable part which (i) is on consignment or is covered by a negotiable
instrument of title, or is not owned by the Borrowers free and clear of all
rights, claims and Liens, other than Permitted Liens, or is not in conformity
with the representations and warranties and covenants made by the Borrowers
under the Financing Documents with respect thereto or is not located at a
Storage Location, or with respect to which the Administrative Agent does not
possess a valid, perfected first priority security interest, or (ii) is in
transit other than Transit Parts.  Standards of eligibility may be
fixed and revised from time to time solely by the Administrative Agent in the
Administrative Agent’s reasonable business judgment, exercised in good faith,
upon at least five (5) Business Days prior written notice delivered to the
Borrowers, in the case of any change in any existing standards of eligibility or
the imposition of any new standards of
eligibility.    

     

    “Eligible Bombardier Spare
Engines” shall mean the spare engines for Bombardier Aircraft which
Borrowers have a 100% ownership interest; provided, however, that
Eligible Bombardier Spare Engines shall in no event include engines which (i)
are not owned by the Borrowers free and clear of all rights, claims or Liens,
other than Permitted Liens, are not in conformity with the representations and
warranties and covenants made by the Borrowers under the Financing Documents
with respect thereto, or with respect to which the Administrative Agent does not
possess a valid, perfected first priority security interest, and (ii) are not at
a Storage Location or installed on an Eligible Aircraft. Standards of
eligibility may be fixed and revised from time to time solely by the
Administrative Agent in the Administrative Agent’s reasonable business judgment,
exercised in good faith, upon at least five (5) Business Days prior written notice
delivered to the Borrowers, in the case of any change in any existing standards
of eligibility or the imposition of any new standards of
eligibility.

     

    “Eligible Saab340
Consumable/Expendable Parts” shall mean the consumable/expendable parts
for Saab340 aircraft which Borrowers have a 100% ownership interest in, which
are held in the ordinary course of business for the operation of such Borrower’s
business, which are not obsolete or unmerchantable; provided, however, that
Eligible Saab340 Consumable/Expendable Parts shall in no event include a
consumable/expendable part which (i) is on consignment or is covered by a
negotiable instrument of title, or is not owned by the Borrowers free and clear
of all rights, claims and Liens, other than Permitted Liens, or is not in
conformity with the representations and warranties and covenants made by the
Borrowers under the Financing Documents with respect thereto or is not located
at a Storage Location, or with respect to which the Administrative Agent does
not possess a valid, perfected first priority security interest, or (ii) is in
transit other than Transit Parts.  Standards of eligibility may be
fixed and revised from time to time solely by the Administrative Agent in the
Administrative Agent’s reasonable business judgment, exercised in good faith,
upon at least five (5) Business Days prior written notice delivered to the
Borrowers, in the case of any change in any existing standards of eligibility or
the imposition of any new standards of eligibility.

     

    “Eligible Saab340 Rotable
Parts” shall mean the rotable and repairable parts for Saab 340 Aircraft
which Borrowers have a 100% ownership interest, held in the ordinary course of
business for operation of such Borrower’s business which are not obsolete or
unmerchantable; provided, however, that
Eligible Saab340 Rotable Parts shall in no event include a rotable or repairable
part which (i) is on consignment or is covered by a negotiable instrument of
title, or is not owned by the Borrowers free and clear of all rights, claims and
Liens, other than Permitted Liens, or is not in conformity with the
representations and warranties and covenants made by the Borrowers under the
Financing Documents with respect thereto or is not located at a Storage
Location, or with respect to which the Administrative Agent does not possess a
valid, perfected first priority security interest, or (ii) is in transit other
than Transit Parts.  Standards of eligibility may be fixed and revised
from time to time solely by the Administrative Agent in the Administrative
Agent’s reasonable business judgment, exercised in good faith, upon at least
five (5) Business Days prior written notice delivered to the Borrowers, in the
case of any change in any existing standards of eligibility or the imposition of
any new standards of eligibility.    

     

    “Eligible Saab340 Spare
Engines” shall mean the spare engines for Saab340 aircraft which
Borrowers have a 100% ownership interest; provided, however, that
Eligible Saab340 Spare Engines shall in no event include engines which (i) are
not owned by the Borrowers free and clear of all rights, claims or Liens, other
than Permitted Liens, are not in conformity with the representations and
warranties and covenants made by the Borrowers under the Financing Documents
with respect thereto, or with respect to which the Administrative Agent does not
possess a valid, perfected first priority security interest, and (ii) are not at
a Storage Location or installed on an Eligible Aircraft.  Standards of
eligibility may be fixed and revised from time to time solely by the
Administrative Agent in the Administrative Agent’s reasonable business judgment,
exercised in good faith, upon at least five (5) Business Days prior written notice
delivered to the Borrowers, in the case of any change in any existing standards
of eligibility or the imposition of any new standards of
eligibility.

     

    “Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Materials or to health and safety
matters.

     

    “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of any Loan Party or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

     

    “Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
or any successor statute.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with
any Loan Party, is treated as a single employer under Section 414(b) or (c)
of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

     

    “ERISA Event” means
(a) any “reportable event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect
to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by any Loan
Party or any of its Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any Loan Party
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by any Loan Party or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any
Loan Party or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

     

    “Eurodollar Borrowing”
refers to the Term Loan when it is bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate.

     

    “Event of Default” has
the meaning assigned to such term in Section
7.1.

     

    “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, or any other
recipient of any payment to be made by or on account of any obligation of the
Borrowers hereunder, (a) income or franchise taxes imposed on (or measured
by) the net income or net worth of any recipient by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Borrower is located and (c) in the
case of a Foreign Lender, any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 2.15(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 2.15(a).

     

    “FAA” means the
Federal Aviation Administration of the United States of America (or any
successor agency thereto).

     

    “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding 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 average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Fee Letter” means the
letter agreement of even date herewith executed among Borrowers, Administrative
Agent and CIT Bank regarding the payment of certain fees.

     

    “Financial Officer”
means, with respect to any Loan Party, the president, chief financial officer,
principal accounting officer, treasurer or controller of such Loan
Party.

     

    “Financing Documents”
means this Agreement (including the Schedules and Exhibits hereto), the Notes
evidencing Loans, the Security Agreement, and any other document, instrument or
agreement hereafter created to which any Loan Party is a party that evidences
any of the Obligations, provides for collateral security for any of the
Obligations of such Loan Party under any of the foregoing or is otherwise
delivered to Administrative Agent or any Lender in connection with this
Agreement or any of the transactions contemplated hereby.

     

    “FIRREA” means the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended
from time to time.

     

    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than the
United States of America, each State thereof and the District of
Columbia.

     

    “GAAP” means generally
accepted accounting principles in the United States of America.

     

    “Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to such governments,
including, without limitation, the FAA.

     

    “Guarantee” of or by
any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not in each case under this clause (d) include endorsements
for collection or deposit in the ordinary course of business.

     

    “Hazardous Materials”
means all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

     

    “Holdings” means
Pinnacle Airlines Corp., a Delaware corporation and owner of each of the
Borrowers.

     

    “Indebtedness” of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges
are customarily paid, (d) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts payable
incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person and obligations in respect of
synthetic leases, (i) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of
guaranty, (j) “earnouts” and similar payment obligations of such Person and
(k) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

     

    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Indemnitee” has the
meaning assigned to such term in Section 10.3(b)
hereof.

     

    “Interest Election
Request” means a request by the Borrower Representative to convert or
continue an ABR Borrowing or Eurodollar Borrowing in accordance with Section 2.6.

     

    “Interest Expense”
means, with respect to Borrowers for any period, the interest expense of
Borrowers during such period determined on a consolidated basis in accordance
with GAAP, and shall in any event include, without limitation, (i) the
amortization of debt discounts, (ii) the amortization of all fees payable
in connection with the incurrence of Indebtedness to the extent included in
interest expense and (iii) the portion of any Capitalized Lease Obligation
allocable to interest expense.

     

    “Interest Payment
Date” means (a) with respect to any ABR Borrowing, the last day of
each calendar month commencing August 31, 2009 and (b) with respect to
any Eurodollar Borrowing, the last day of the Interest Period applicable to the
borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period.

     

    “Interest Period”
means, with respect to a Eurodollar Borrowing, the period commencing on the date
of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter; provided, that
(i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (ii) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For
purposes hereof, the date of a Eurodollar Borrowing initially shall be the date
on which such Eurodollar Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Eurodollar
Borrowing.

     

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

     

    “Laws” means any and
all federal, state, local and foreign statutes, laws, judicial decisions,
regulations, guidances, guidelines, ordinances, rules, judgments, orders,
decrees, codes, plans, injunctions, permits, concessions, grants, franchises,
governmental agreements and governmental restrictions, whether now or hereafter
in effect.

     

    “Lenders” means CIT
Bank and any other Persons listed on Schedule 2.1 and
any other Person that shall have become a party hereto pursuant to an Assignment
and Assumption or otherwise pursuant hereto, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and
Assumption.

     

    “LIBOR Rate” means,
with respect to a Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of: (a) [***]; and (b) the rate determined by the Administrative Agent
to be the offered rate that appears on the Bloomberg BBAM Screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such interest period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period.  In the event that such rate is not
available at such time for any reason, then the “LIBOR Rate” with
respect to the Eurodollar Borrowing for such Interest Period shall be determined
by the Administrative Agent by reference to such other comparable publicly
available service for displaying the offered rate for dollar deposits in the
London interbank market as may be selected by the Administrative Agent and, in
the absence of availability, such other method as may be selected by the
Administrative Agent in the exercise of its reasonable business
judgment.

     

    “Lien” means, with
respect to any asset or property, or any interest therein, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, property or interest, whether
consensual or non-consensual, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset or property and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.  For the avoidance of doubt, the interest
of the lessor, lessee or any other Person under an operating lease shall not
constitute a Lien, subject to receipt by Administrative Agent of a Lease
Acknowledgement signed by such lessor, lessee or other Person under any
operating lease with respect to any Collateral.

     

    “Liquidity” means the
total of (a) cash, cash equivalents and the total amount of unrestricted
availability of credit facilities of the Borrowers and Holdings as of the
testing date  minus (b) the
outstanding principal amount of all Indebtedness of the Borrowers and Holdings
with a maturity date or call date on or prior to the date which is thirty-one
(31) days after such testing date (excluding regularly scheduled amortization
under any EDC Financing or any other financings owed or due by either Borrower
or Holdings).

     

    “Loan Parties” means
Holdings, the Borrowers and any other Person (excluding Administrative Agent and
the Lenders) who is party to this Agreement.

     

    “Loans” means the Term
Loan made by the Lenders to the Borrowers pursuant to this Agreement which bears
interest as either an ABR Borrowing or a Eurodollar Borrowing.

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations, industry, prospects or condition, financial or otherwise, of the
Loan Parties and their Subsidiaries, taken as a whole, (b) the ability of
any Loan Party to perform any of its obligations under this Agreement and the
other Financing Documents, taken as a whole, (c) the rights of or benefits
available to the Lenders or the Administrative Agent under this Agreement and
the other Financing Documents, taken as a whole, or (d) the Administrative
Agent’s Lien on any material portion of the Collateral or the priority of such
Lien.  Notwithstanding the foregoing, it is understood and agreed that
any liability associated with Colgan Air Flight 3407 Incident shall not be
deemed to be a Material Adverse Effect so long as such liability is covered by
the Loan Parties’ insurance in a manner satisfactory to Administrative
Agent.

     

    “Material Contract”
means any capacity purchase agreement with a Borrower and any of Northwest
Airlines Inc., Delta Air Lines, Inc. or Continental Airlines Inc., or any of
such entities’ affiliates, subsidiaries, successors or assigns, and any similar
contracts with a Borrower.

     

    “Material
Indebtedness” means Indebtedness (other than the Loan), or obligations in
respect of one or more Swap Agreements, of any one or more of the Loan Parties
in an aggregate principal amount outstanding or committed as of the date of such
determination (including undrawn committed or available amounts) equal to or
exceeding [***].  For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of any Loan Party in respect of any
Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that any Loan Party would be required to pay if such
Swap Agreement were terminated at such time.

     

    “Minimum Liquidity”
shall have the meaning assigned to such term in Section 6.11.

     

    “Monthly Collateral
NBV” means the net book value reflected on the Borrowers’ financial
statements of the assets comprising the Collateral that is part of the Borrowing
Base, as determined in accordance with GAAP consistently applied and as adjusted
from time to time on the books and records of either Borrower in accordance with
GAAP.

     

    “Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

     

    “Net Proceeds” means
with respect to the sale or other disposition of any Collateral, the excess, if
any, of (i) the aggregate amount received in cash (including any cash
received by way of deferred payment pursuant to a note receivable, other
non-cash consideration or otherwise, but only as and when such cash is so
received) in connection with such sale or other disposition, over (ii) the
sum of (A) the amount of any Indebtedness payable to a Person that is not
an Affiliate of a Loan Party which is secured by any such asset or which is
required to be, and is, repaid in connection with the sale or other disposition
thereof (other than Indebtedness hereunder), (B) the reasonable
out-of-pocket expenses and fees incurred with respect to legal, investment
banking, brokerage, advisor and accounting and other professional fees, sales
commissions and disbursements and all other reasonable fees, expenses and
charges, in each case actually incurred in connection with such sale or
disposition and payable to a Person that is not an Affiliate of a Loan Party,
(C) all income and transfer taxes payable in connection with such sale or
other disposition, whether actually paid or estimated to be payable in cash in
connection with such disposition or the payment of dividends or the making of
other distributions of the proceeds thereof and (D) reserves, required to
be established in accordance with GAAP or the definitive agreements relating to
such disposition, with respect to such disposition, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations.

     

    “Note” means any of
the promissory notes executed pursuant to this Agreement, as amended, restated,
modified, supplemented, renewed or extended from time to time.

     

    “Obligations” means
all obligations of the Borrowers to pay principal and interest on the Loans and
all other payment obligations of the Borrowers or any other Loan Party to the
Administrative Agent or any Lender arising under this Agreement or the other
Financing Documents, in each case whether now existing or hereafter arising, due
or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, and including, without limitation, all protective
advances made by Administrative Agent with respect to the Collateral under or
pursuant to the terms of any Financing Document, and all such obligations
arising after the commencement of any case with respect to any Loan Party under
the United States Bankruptcy Code or any similar statute or liquidation or
insolvency proceedings with regard to any Borrower (including the payment of
interest and other amounts which would accrue and become due but for the
commencement of such case, whether or not such amounts are allowed or allowable
in whole or in part in such case) and protective advances made by Administrative
Agent with respect to the Collateral under or pursuant to the terms of any
Financing Document.

     

    “OFAC” means the U.S.
Department of Treasury Office of Foreign Assets Control.

     

    “OFAC Lists” means,
collectively, the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to Executive Order No. 13224, 6 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or
other restricted Persons maintained pursuant to any of the rules and regulations
of OFAC or pursuant to any other applicable executive orders.

     

    “OLV” means
(a) for any month in which an Appraisal has been provided by the Borrowers
pursuant to Section
5.1(h), the “Orderly Liquidation Value” as defined and set forth in such
Appraisal, and (b) for any month in between such Appraisals, the “Orderly
Liquidation Value” from the most recent Appraisal, as adjusted by Administrative
Agent based on the same ratio as changes in Monthly Collateral NBV occurring
since the date of the most recent Appraisal.

     

    “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.

     

    “Participant” has the
meaning assigned to such term in Section 10.4(d)(i)
hereof.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.

     

    “Permitted
Encumbrances” means, solely to the extent the following apply to the
Collateral and the Administrative Agent has established a related reserve, if
any, under the Borrowing Base in its reasonable business judgment:

     

    (a) Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.7;

     

    (b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than ninety (90) days or are being
contested in good faith and, landlord’s Liens arising by operation of law
which are subordinated to the Liens in favor of the Administrative Agent
pursuant to an agreement executed by the applicable landlord, in form and
substance reasonably satisfactory to the Administrative Agent; or

     

    (c) judgment
liens in respect of judgments that do not constitute an Event of Default under
clause (j)
of Section
7.1.

     

    “Permitted Liens”
means any Liens permitted by Section 6.2.

     

    “Permits” has the
meaning assigned to such term in Section 3.8(i)
hereof.

     

    “Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

     

    “Plan” means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     

    “Prime Rate” means the
rate of interest per annum publicly announced from time to time by JPMorgan
Chase Bank as its “prime rate” in effect from time to time.  In the
event that such rate is not available at such time for any reason, “Prime Rate”
shall mean a rate of interest per annum publicly announced from time to time by
any banking institution selected by the Administrative Agent as its prime
rate.  It is understood that the Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer.

     

    “Proceeds” shall mean
any and all proceeds, as such term is defined in the UCC, products, rents, lease
payments and profits of or from any and all of the Collateral and, to the extent
not otherwise included in Collateral, all payments under any insurance (whether
or not the Administrative Agent is the loss payee thereunder), indemnity,
warranty or guaranty with respect to any of the Collateral, all payments in
connection with any requisition, condemnation, seizure or forfeiture with
respect to any of the Collateral, and all other amounts from time to time paid
or payable under or with respect to any of the Collateral.

     

    “Register” has the
meaning set forth in Section 10.4.

     

    “Regulation U”
means Regulation U of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or
thereof.

     

    “Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     

    “Required Lenders”
means those Lenders holding Term Loan Commitments representing at least 66 2/3%
of the unpaid principal amount of the Term Loan, all after giving effect to the
terms of Section 2.16(e).

     

    “Security Agreement”
means, collectively, (i) the Equipment Mortgage and Security Agreement of
even date herewith, between Pinnacle, as Grantor and the Administrative Agent,
as Collateral Agent, for its own benefit and for the ratable benefit of the
Lenders, as amended, restated, modified or supplemented from time to time and
(ii) the Equipment Mortgage and Security Agreement of even date herewith,
between Colgan, as Grantor and the Administrative Agent, as Collateral Agent,
for its own benefit and for the ratable benefit of the Lenders, as each may be
amended, restated, modified or supplemented from time to time.

     

    “SH&E” means
Simat, Helliesen & Eichner or such other appraiser approved by the
Administrative Agent and acceptable by Borrowers.

     

    “Security Interests”
means the security interests in, and Liens on, the Collateral granted under the
Security Agreement to secure the Secured Obligations (as defined
therein).

     

    “Statutory Reserve
Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject with respect to the Adjusted LIBOR
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such
Regulation D.  A Eurodollar Borrowing shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

     

    “Storage Locations”
shall mean those secure locations owned or leased by a Borrower at which
Collateral is located as set forth on Schedule 1; provided,
however, such location shall only be deemed a “Storage Location” if
Administrative Agent has received a written agreement by the owner or lessor of
the location acknowledging Administrative Agent’s first priority security
interest in the Collateral held at such location, waiving any interest such
party may have in the Collateral held at such location, and agreeing to provide
Administrative Agent’s representatives access to the location upon
Administrative Agent’s demand.

     

    “Subsidiary” means,
with respect to any Person at any date, any corporation, limited liability
company, partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.

     

    “Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Loan Parties shall be a Swap Agreement.

     

    “Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

     

    “Term Loan” means the
Term Loan made pursuant to Section 2.1.

     

    “Term Loan Commitment”
means, with respect to each Lender, the commitment of such Lender to make a Term
Loan on the Effective Date.  The amount of each Lender’s Term Loan
Commitment on the Effective Date is set forth on Schedule 2.1.  The
aggregate amount of the Lenders’ Term Loan Commitments on the Effective Date is
$25,000,000.  Effective upon the assignment of an interest pursuant to
Section 10.4,
Schedule 2.1 may
be amended by the Administrative Agent to reflect such assignment.

     

    “Term Loan Maturity
Date” means July 29, 2012 or such earlier date on which the Term
Loan is terminated in accordance with this Agreement.

     

    “Three Month LIBOR
Rate” means, for any day, the greater of (a) the rate per annum
equal to the rate determined by Administrative Agent to be the offered rate that
appears on the Bloomberg BBAM Screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on such day) with a term equivalent to three months,
determined as of approximately 11:00 a.m. (London time) on such day (or if
such day is not a Business Day, the immediately preceding Business Day), and
(b) [***].  In the event that such rate is not available at such
time for any reason, then the “Three Month LIBOR Rate” for such day shall be
determined by Administrative Agent by reference to such other comparable
publicly available service for displaying the offered rate for dollar deposits
in the London interbank market as may be selected by Administrative Agent and,
in the absence of availability, such other method as may be selected by
Administrative Agent in its sole discretion.

     

    “Transactions” means
the execution, delivery and performance by the Loan Parties of this Agreement,
the borrowing of Loans and the use of the proceeds thereof.

     

    “Transit Parts” means
those consumable/expendable parts or rotable parts that would, but for being in
transit, be Eligible Bombardier Consumable/Expendable Parts, Eligible Saab340
Consumable/Expendable Parts, Eligible Bombardier Rotable Parts or Eligible
Saab340 Rotable Parts, as applicable, valued up to [***] in the aggregate
according to the appropriate Appraisal.  It is understood and agreed
that consumable/expendable parts or rotable parts in transit in excess of the
aggregate amount of [***] shall not constitute “Transit Parts” nor be eligible
for calculation of the Borrowing Base.

     

    “UCC” means the
Uniform Commercial Code, as the same may be enacted and in effect from time to
time in the State of New York.

     

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

     

    SECTION
1.2.   Classification of Term
Loan.  For purposes of this Agreement, the Term Loan may be
classified and referred to as a Eurodollar Borrowing or an ABR
Borrowing.

     

    SECTION
1.3.   Terms
Generally.  The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be construed to have the same
meaning and effect as the word “shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof’ and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

     

    SECTION
1.4.   Accounting Terms;
GAAP.  Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided that, if the
Borrower Representative notifies the Administrative Agent that the Borrower
Representative requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower Representative that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.  In calculating compliance with any of the
financial covenants (and related definitions), any amounts taken into account in
making such calculations that were paid, incurred or accrued in violation of any
provision of this Agreement shall be added back or deducted, as applicable, in
order to determine compliance with such covenants.

     

     

    
      	 ARTICLE II


    

     

    THE
CREDIT

     

    SECTION
2.1.   Term Loan Commitment;
Borrowing Base.

     

    (a) Subject
to the terms and conditions set forth herein, each Lender, severally and not
jointly, agrees to make the Term Loan to the Borrowers on the Effective Date, in
a principal amount not to exceed such Lender’s Term Loan
Commitment.  Notwithstanding the foregoing, the aggregate principal
amount of Term Loan outstanding at any time (the “Outstanding Term
Loan”) shall not exceed the lesser of (“Maximum
Availability”):

     

    (i) the total
amount of the Lenders’ Term Loan Commitments as reduced from time to time as a
result of payments required to be made in accordance with Sections 2.8 and
2.9
herein;  and

     

    (ii) the
Borrowing Base.

     

    (b) In the
event the Outstanding Term Loan exceeds the Maximum Availability at any time
(including, without limitation, as a result of the failure to obtain the
acknowledgment from the relevant lessor or secured party pursuant to Section 2.01(b)(iii)
or 2.01(b)(iv)
of the Security Agreement and in the defined term “Eligible Aircraft” within the
required timeframe) (a “Collateral
Shortfall”), such failure shall constitute a Default hereunder and, upon
the written notice of Administrative Agent to the Borrowers (a “Collateral Shortfall
Notice”), the Borrowers shall (a) in the event the Outstanding Term
Loan exceeds the Maximum Availability [***], within one (1) Business Day of
delivery of the Collateral Shortfall Notice, permit Administrative Agent to
station guards and representatives, selected by Administrative Agent in its sole
discretion and acting on behalf of Administrative Agent and the Lenders, with
authority to ensure the safekeeping of all Collateral, at each of the Storage
Locations, and (b) within [***] Business Days of delivery of the Collateral
Shortfall Notice, at the Borrowers’ election, either (i) pledge cash as
collateral (or such other Collateral acceptable to Administrative Agent in its
sole discretion).  (ii) make a prepayment of the Term Loan in an
amount to be in compliance with the Maximum Availability calculation or (iii) do
a combination of (i) and (ii) in an aggregate amount equal to the amount of the
Collateral Shortfall.  Any amount paid in connection with curing any
such Collateral Shortfall may not be re-borrowed by the Borrowers in connection
with the Term Loan.  If the Borrowers fail to cure any Collateral
Shortfall within [***] Business Days of delivery of the Collateral Shortfall
Notice, or if the Borrowers do not cooperate with Administrative Agent to ensure
the safekeeping of all Collateral and take all steps necessary and legally
permissible to allow the posting of guards at all Storage Locations, such
failure shall constitute an immediate Event of Default hereunder (each, a “Collateral Shortfall
Default”) without further notice by Administrative Agent or any
Lender.

     

    SECTION
2.2.   Loans and
Borrowings.

     

    (a) General.  The
Term Loan shall be made by the Lenders ratably in accordance with their
respective Term Loan Commitments.  The failure of any Lender to make
any Term Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the
Term Loan Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Term Loans as
required.

     

    (b) Type.  Subject
to Section 2.6 and
Section 2.11,
the Term Loan shall be comprised entirely of ABR Borrowings or Eurodollar
Borrowings as the Borrower Representative may request in accordance
herewith.  Each Lender at its option may make its portion of the Term
Loan Commitment for a Eurodollar Borrowing by causing any domestic or foreign
branch or Affiliate of such Lender to provide for such Eurodollar Borrowing;
provided that
any exercise of such option shall not affect the obligation of the Borrowers to
repay the Term Loan in accordance with the terms of this Agreement.

     

    (c) Amounts.  At
the commencement of each Interest Period for any Eurodollar Borrowing, such
borrowing shall be in a minimum amount of [***] and in an aggregate amount in
excess of such minimum amount that is an integral multiple of
[***].  At the time that each ABR Borrowing is made, such borrowing
shall be in an aggregate amount that is an integral multiple of [***] and not
less than [***] or the remaining amount of the Term Loan.  Borrowings
of more than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of [***] Borrowings
outstanding.

     

    (d) Limitations.  Notwithstanding
any other provision of this Agreement, the Borrower Representative shall not be
entitled to request, or to elect to convert or continue, any Eurodollar
Borrowing if the Interest Period requested with respect thereto would end after
Term Loan Maturity Date.

     

    SECTION
2.3.   Reserved.

     

    SECTION
2.4.   Reserved.

     

    SECTION
2.5.   Reserved.

     

    SECTION
2.6.   Interest
Elections.

     

    (a) On the
Effective Date the Term Loan shall be a Eurodollar Borrowing with an Interest
Period of one (1) month for $3,000,000 of the Term Loan and the remainder
with an Interest Period of six (6) months or such other Interest Period as
the Borrower Representative may specify in accordance herewith.  The
Borrower Representative may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such
Borrowing.

     

    (b) To make
an election pursuant to this Section, the Borrower Representative shall notify
the Administrative Agent of such election in writing or by facsimile
transmission or by telephone (promptly confirmed by facsimile) three (3)
Business Days prior to the desired effective date of such
election.  Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower
Representative.

     

    (c) Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.2;

     

    (i) the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

     

    (ii) whether
the Outstanding Term Loan is to be an ABR Borrowing or a Eurodollar Borrowing;
and

     

    (iii) if a
Eurodollar Borrowing is elected, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a period contemplated by
the definition of the term “Interest Period”.

     

    If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower Representative shall be deemed to
have selected an Interest Period of one (1) month’s duration.

     

    (d) Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each applicable Lender of the details thereof and of such Lender’s
portion of the resulting ABR Borrowing or Eurodollar Borrowing.

     

    (e) If the
Borrower Representative fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Eurodollar Borrowing is repaid as provided
herein at the end of such Interest Period, such Eurodollar Borrowing shall be
converted to an ABR Borrowing.  Notwithstanding any contrary provision
hereof, (i) upon the occurrence and during the continuance of any Event of
Default under clause (g), clause (h) or clause (r) of Section 7.1, or
(ii) upon written notice from the Administrative Agent (or the Required
Lenders, through the Administrative Agent) upon the occurrence and continuance
of any other Event of Default, then, so long as an Event of Default is
continuing (i) no request may be made for a Eurodollar Borrowing and no
outstanding ABR Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) each Eurodollar Borrowing, unless repaid as provided
herein, shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.

     

    SECTION
2.7.   Reserved.

     

    SECTION
2.8.   Repayment of Loans; Evidence
of Debt.

     

    (a) The
Borrowers hereby unconditionally promise to pay to the Administrative Agent, for
the account of each Lender, the outstanding amount of the Obligations on the
Term Loan Maturity Date.  In addition to the foregoing, the aggregate
principal amount of the Term Loan shall be payable in twelve (12)
consecutive quarterly installments (the date of each such installment, a “Repayment Date”) on
the dates and in the amounts set forth below, with the entire unpaid principal
balance of the Term Loan, if not sooner paid, being due and payable, without
notice or demand, on the Term Loan Maturity Date, (such payments to be
distributed ratably among the Lenders in accordance with their respective Term
Loan Commitments):

     

    
      	
              
                Repayment
      Date

              

            	
              
                Payment

              

            
	
              September
      30, 2009

            	
              [***]

            
	
              Quarters
      ending December 31, 2009 through June 30, 2010

            	
              [***]

            
	
              Quarters
      ending September 30, 2010 and each fiscal quarter ending thereafter
      through the Term Loan Maturity Date

            	
              [***]

            


    

    


    (b) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrowers to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.

     

    (c) The
Administrative Agent shall maintain accounts in which it shall record
(i) the amount of the Term Loan and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrowers to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender’s share thereof.

     

    (d) The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.

     

    (e) Unless
all Lenders otherwise agree, the Term Loan Commitment of each Lender shall be
evidenced by a promissory note substantially in the form of Exhibit B (each,
a “Note”).  The
Borrowers shall execute and deliver to each Lender a Note or Notes payable to
such Lender with blanks completed to the satisfaction of such
Lender.  Each Note shall be issued in registered form and shall be
transferable only in accordance with Section 10.4(b).

     

    SECTION
2.9.   Prepayment of
Loans.

     

    (a) The
Borrowers shall have the right at any time and from time to time to prepay the
Term Loan in whole or in part, subject to prior notice in accordance with
paragraph (b) of this Section and subject to the provisions of Section 2.14 below in
an amount of [***] or any integral of [***] in excess thereof, or the full
amount of the Term Loan.

     

    (b) The
Borrower Representative shall notify the Administrative Agent by telephone
(promptly confirmed by telecopy) of any prepayment hereunder (i) in the
case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New
York City time three (3) Business Days before the date of prepayment or
(ii) in the case of prepayment of an ABR Borrowing, not later than 12:00
noon, New York City time, one (1) Business Day before the date of
prepayment.  Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of the Term Loan or portion thereof
to be prepaid.  Promptly following receipt of any such notice relating
to the Term Loan, the Administrative Agent shall advise the applicable Lenders
of the contents thereof.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.11.

     

    (c) Within
[***] of the sale or other disposition of any Collateral permitted by Sections 6.13(ii) or
(iii) hereof
which result in proceeds therefrom received subsequent to the Effective Date,
the Borrowers shall make a mandatory prepayment of the Loans in an amount equal
to [***] of the net proceeds received (after providing for the reasonable costs
and expenses incurred in connection with such sales or dispositions and any
Taxes payable in connection therewith), any prepayment to be applied in
accordance with subparagraph (e) below.

     

    (d) Upon the
receipt of any proceeds of any insurance carried by any Borrower (including,
without limitation, those arising from an Event of Loss as defined in the
Security Agreement), to the extent payable hereunder pursuant to Article III of
the Security Agreement and after giving effect to Article III of the Security
Agreement, the Borrowers shall make a mandatory prepayment of the Loans in an
amount equal to [***] of the remaining proceeds received, any prepayment to be
applied in accordance with subparagraph (e) below.

     

    (e) Each
prepayment of Loans required by subsections (c) and (d) of this
Section shall be made ratably among the Lenders and such prepayments shall
be made with respect to such Type of Loans as the Borrower Representative may
specify by notice to the Administrative Agent at or before the time of such
prepayment and shall be applied to prepay the Term Loan comprising each such
Type pro rata; provided that, if no
such timely specification is given by the Borrower Representative, such payment
shall be allocated to such Type or Types as the Administrative Agent may
determine but in any event shall be applied pro rata to all remaining payments
of principal required by Section 2.8(a). The Term Loan Commitment
shall be permanently reduced ratably among the Term Loan Commitments of the
Lenders to the extent of all additional proceeds in accordance with Sections 2.9(c)
and (d).

     

    SECTION
2.10.   Fees.

     

    (a) The
Borrowers agree to pay to the Administrative Agent, for its own account, fees in
the amounts and at the times separately agreed upon in the Fee Letter or
otherwise in writing among the Borrowers and the Administrative
Agent.

     

    (b) All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution to the Lenders, as
appropriate.  Absent any error in the calculation thereof, fees paid
shall not be refundable under any circumstances.

     

    SECTION
2.11.   Interest.

     

    (a) That
portion of the Term Loan which comprises an ABR Borrowing shall bear interest
for each day on which any principal of such Loan remains outstanding at the
Alternate Base Rate for such day plus the Applicable
Rate for such day.

     

    (b) That
portion of the Term Loan which comprises a Eurodollar Borrowing shall bear
interest for each day during each Interest Period applicable thereto at the
Adjusted LIBOR Rate for such Interest Period plus the Applicable
Rate for such day.

     

    (c) Notwithstanding
the foregoing, (i) automatically upon the occurrence and during the
continuance of any Event of Default under clause (g), clause (h) or
clause (r) of Section 7.1, and
(ii) upon written notice from the Administrative Agent (or the Required
Lenders, through the Administrative Agent) upon the occurrence and continuance
of any other Event of Default, (i) the Loans shall bear interest at a rate per
annum equal to [***].

     

    (d)           Accrued
interest on the Term Loan shall be payable in arrears on each Interest Payment
Date and on the Term Loan Maturity Date; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall
be payable on demand, (ii) in the event of any repayment or prepayment of a
Eurodollar Borrowing, accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of a Eurodollar Borrowing  prior to the
end of the current Interest Period therefor, accrued interest on such Eurodollar
Borrowing shall be payable on the effective date of such
conversion.

     

    (e)           All
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of
a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate, Adjusted
LIBOR Rate or LIBOR Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.

     

    SECTION
2.12.   Alternate Rate of
Interest.  If prior to the commencement of any Interest Period
for a Eurodollar Borrowing:

     

    (a) the
Administrative Agent determines in its reasonable business judgment (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBOR Rate, for such
Interest Period; or

     

    (b) the
Administrative Agent is advised by the Required Lenders (other than CIT Bank or
any Affiliate thereof) that the Adjusted LIBOR Rate, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining the Term Loan for such Interest Period;

     

    then the
Administrative Agent shall give notice thereof to the Borrower Representative
and the Lenders by telephone or telecopy, as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of the Term Loan to, or
continuation of the Term Loan as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Interest Election Request requests a Eurodollar Borrowing,
the Term Loan shall be treated as an ABR Borrowing.

     

    SECTION
2.13.   Increased
Costs.

     

    (a) If any
Change in Law shall:

     

    (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets or deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBOR
Rate); or

     

    (ii) impose on
any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Borrowing made by such Lender;

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining such Eurodollar Borrowing (or of maintaining its
obligation to make the Eurodollar Borrowing) or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise with respect to such Eurodollar Borrowing), then the Borrowers will
pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.

     

    (b) If any
Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement or the Loans made by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time the Borrowers will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

     

    (c) A
certificate of a Lender setting forth in reasonable detail the calculation of
the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower Representative and shall be
conclusive absent manifest error.  The Borrower shall pay such Lender
the amount shown as due on any such certificate within fifteen (15) days
after receipt thereof.

     

    (d) Failure
or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such
compensation; provided that the
Borrowers shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than one
hundred eighty (180) days prior to the date that such Lender notifies the
Borrowers of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the one hundred eighty (180) day period referred to above shall be extended
to include the period of retroactive effect thereof.

     

    SECTION
2.14.   Break Funding
Payments.  In the event of (a) the payment of any
principal of any Eurodollar Borrowing other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Borrowing other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Borrowing on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.9(b)
and is revoked in accordance therewith), then, in any such event, the Borrowers
shall compensate each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Borrowing, such loss, cost or
expense to any Lender shall be deemed to include, without limitation,
(a) an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBOR Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market and (b) any other loss in connection with the
re-employment of such funds) that any Lender may sustain as a result of such
default or such payment.  A certificate of any Lender setting forth in
reasonable detail any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The Borrowers shall pay such Lender
the amount shown as due on any such certificate within fifteen (15) days
after receipt thereof.  Notwithstanding the foregoing, the Borrowers
shall not be required to make any prepayment of a Eurodollar Borrowing pursuant
to Sections 2.9(c)
and (d) until
the last day of the Interest Period with respect thereto so long as an amount
equal to such prepayment is deposited by the Borrowers into a cash collateral
account with the Administrative Agent and applied to such prepayment on the last
day of such Interest Period.

     

    SECTION
2.15.   Taxes.

     

    (a) Payments Free of
Taxes.  Any and all payments by or on account of any obligation
of the Borrowers hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if the
Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

     

    (b) Payment of Other Taxes by
the Borrower.  In addition, the Borrowers shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable
law.

     

    (c) Indemnification by the
Borrowers.  The Borrowers shall indemnify the Administrative
Agent and each Lender, within ten (10) days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender on or with respect to any payment by or on
account of any obligation of the Borrowers hereunder (including any taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority
provided that the Borrower shall be assigned the right to seek reimbursement
from such Governmental Authority, at Borrower’s sole cost and expense and so
long as there is no unindemnified adverse consequence to the Administrative
Agent or Lenders.  A certificate as to the amount of such payment or
liability delivered to the Borrower Representative by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

     

    (d) Evidence of
Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority,
the Borrower Representative shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative
Agent.

     

    (e) Status of
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
Representative (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower
Representative as will permit such payments to be made without withholding or at
a reduced rate.

     

    Without
limiting the generality of the foregoing, in the event that any Borrower is
resident for tax purposes in the United States of America, any Foreign Lender
shall deliver to the Borrowers and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

     

    (i) duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States of America is a
party,

     

    (ii) duly
completed copies of Internal Revenue Service Form W-8ECI,

     

    (iii) in the
case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrowers within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
and (y) duly completed copies of  Internal Revenue Service Form
W-8BEN, or

     

    (iv) any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrowers to determine the withholding or deduction required to be
made.

     

    (f) Treatment of Certain
Refunds.  If the Administrative Agent or a Lender determines,
in its sole discretion, that it has received a refund of any Taxes or Other
Taxes as to which it has been indemnified by the Borrowers or with respect to
which the Borrowers have paid additional amounts pursuant to this Section 2.15, it
shall pay over such refund to the Borrowers (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrowers under this Section 2.15
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the
Borrowers, upon the request of the Administrative Agent or such Lender, agrees
to repay the amount paid over to the Borrowers (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or other
information relating to its taxes which it deems confidential) to the Borrowers
or any other Person.

     

    SECTION
2.16.   Payments Generally; Pro Rata
Treatment; Sharing of Set-offs.

     

    (a) The
Borrowers shall make each payment required to be made by it hereunder (whether
of principal, interest or fees, or of amounts payable under Section 2.13,
2.14 or 2.15, or otherwise)
prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds and shall be absolute and unconditional, without defense,
rescission, recoupment, setoff or counterclaim, free of any restriction or
condition.  Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest
thereon.  All such payments shall be made to the Administrative Agent
at its offices at 11 West 42nd Street, 12th Floor, New York, New York 10036,
except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.3 shall be made
directly to the Persons entitled thereto.  The Administrative Agent
shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt
thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension; provided that, in the
case of any prepayment of principal of or interest on any Eurodollar Borrowing,
if such next succeeding Business Day would fall in the next calendar month, the
date for payment shall instead be the next preceding Business
Day.  All payments hereunder shall be made in dollars.

     

    (b) If at any
time insufficient funds are received by and are available to the Administrative
Agent to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
then due to such parties.

     

    (c) If any
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans; provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed
to apply to any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrowers or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).  Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation.

     

    (d) Unless
the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrowers
will not make such payment, the Administrative Agent may assume that the
Borrowers have made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount
due.  In such event, if the Borrowers have not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Effective Rate.

     

    (e) If any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.16(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.  Until such Lender’s unsatisfied obligations are fully paid,
such Lender shall be excluded from any determination of Required Lenders under
this Agreement.

     

    SECTION
2.17.   Mitigation
Obligations.  If any Lender requests compensation under Section 2.13, or
if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.13 or
2.15, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

     

    SECTION
2.18.   Replacement of
Lenders.  If any Lender requests compensation under Section 2.13, or
if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15, or
if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender fails to approve an amendment or waiver to this Agreement for which its
consent has been requested and is required pursuant to the terms of this
Agreement, which amendment or waiver is approved by the Required Lenders, then
the Borrowers may, at their sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.4),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that
(i) the Borrowers shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.13 or
payments required to be made pursuant to Section 2.15,
such assignment will result in a reduction in such compensation or
payments.  A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrowers to require such assignment
and delegation cease to apply.

     

    ARTICLE III                                

     

    


     

    REPRESENTATIONS AND
WARRANTIES

     

    Each
Borrower represents and warrants to the Lenders that:

     

    SECTION
3.1.   Existence and
Power.  Each of the Loan Parties and its Subsidiaries is duly
organized or incorporated, as applicable, validly existing and in good standing
under the laws of the jurisdiction of its organization or incorporation, as
applicable, has all requisite power and authority to carry on its business as
now conducted and is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required and where the failure to
be so qualified would be reasonably likely to have a Material Adverse
Effect.

     

    SECTION
3.2.   Corporate and Governmental
Authorization; No Contravention.  The execution, delivery and
performance by each Loan Party of the Financing Documents to which it is a party
are (i) within its corporate or other organizational powers, (ii) have been duly
authorized by all necessary corporate or other organizational action, (iii)
require no action by or in respect of, or filing with, any Governmental
Authority (except as contemplated by the Security Agreement) and (iv) do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of its charter or bylaws, as applicable, or other constitutive
documents or of any material agreement, or any judgment, injunction, order,
decree or other instrument binding upon any Loan Party or result in the creation
or imposition of any Lien on any asset of the Loan Parties (except the Security
Interests).

     

    SECTION
3.3.   Binding
Effect.  This Agreement and the other Financing Documents to
which it is a party constitute valid and binding agreements of each Loan Party,
in each case enforceable in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the enforcement
of creditors’ rights generally and by general equitable principles.

     

    SECTION
3.4.   Financial
Information.

     

    (a) The
opening balance sheet of Holdings as of March 31, 2009, prepared by its
management, a copy of which has been delivered to each of the Lenders, fairly
presents, in conformity with GAAP, the financial position of the Loan Parties as
of such date.  The Borrower Representative has heretofore furnished to
the Administrative Agent (i) audited financial statements for the fiscal years
ending 2006, 2007 and 2008 for Holdings and its Subsidiaries on a consolidated
basis, (ii) unaudited financial statements for each quarterly period ending
after December 31, 2008 for Holdings and its Subsidiaries on a consolidated
basis, and (iii) monthly unaudited internal financial statements from March 31,
2009 through the Effective Date for Holdings and its Subsidiaries on a
consolidated basis.  Such financial statements present fairly in all
material respects the financial condition and results of operations of the Loan
Parties, respectively, as of the dates and for the periods indicated, and such
financial statements fairly presents, in conformity with GAAP, the financial
position of the Loan Parties as of the date thereof.

     

    (b) The
Borrower Representative has heretofore furnished to the Administrative Agent pro
forma financial information for the twelve month period ending March 31,
2010 and for the fiscal years ending 2009, 2010, and
2011.  Projections included in such financial information are based
upon reasonable estimates and assumptions, all of which were reasonable in light
of the conditions which existed at the time the projections were made, were
prepared on the basis of the assumptions stated therein, and reflect as of the
Effective Date the good faith estimate of Holdings and the Borrowers of the
results of operations and other information projected therein, provided that no
representation is made that the assumptions are or will prove to be
correct.

     

    (c) Since
December 31, 2008, there has been no Material Adverse Effect.

     

    SECTION
3.5.   Litigation.  Except
for the Disclosed Matters, there is no action, suit or proceeding pending
against, or to the knowledge of the Loan Parties threatened against or
affecting, the Loan Parties before any arbitrator or any Governmental Authority,
that (i) could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (ii) which would in any material
respect draw into question the enforceability of this Agreement or of any of the
Financing Documents, taken as a whole.

     

    SECTION
3.6.   Compliance with
ERISA.  None of the Loan Parties or any ERISA Affiliate
maintains or contributes to any Plan other than those listed on Schedule 3.6.  Each
of the Loan Parties and each ERISA Affiliate has fulfilled its obligations under
the minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material respects with the
applicable provisions of ERISA and the Code with respect to each Plan, and has
not incurred any liability under Title IV of ERISA (i) to the PBGC
other than a liability to the PBGC for premiums under Section 4007 of ERISA
or (ii) in respect of a Multiemployer Plan which has not been discharged in
full when due.

     

    SECTION
3.7.   Taxes.  To
the extent applicable, each of the Loan Parties has filed all United States
Federal income tax returns and all other material tax returns which are required
to be filed by it and has paid all taxes stated to be due in such returns or
pursuant to any assessment received by it, except for taxes the amount,
applicability or validity of which is being diligently contested in good faith
by appropriate proceedings.  The charges, accruals and reserves on the
books of each Loan Party in respect of taxes or other similar governmental
charges, additions to taxes and any penalties and interest thereon are, in the
opinion of the Loan Parties, adequate.

     

    SECTION
3.8.   Environmental
Compliance.

     

    (a) Except
for Disclosed Matters,

     

    (i) the Loan
Parties obtained, or made timely application for, all permits, certificates,
licenses, approvals, registrations and other authorizations (collectively “Permits”) which are
required under all applicable Environmental Laws and are necessary for their
operations and are in compliance with the terms and conditions of all such
Permits, except where the failure to obtain such Permits or to comply with their
terms could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;

     

    (ii) no
notice, notification, demand, request for information, citation, summons,
complaint or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending, or to such Loan Party’s
knowledge, threatened by any governmental entity or other Person with respect to
any (A) alleged violation by any Loan Party of any Environmental Law,
(B) alleged failure by any Loan Party to have any Permits required in
connection with the conduct of its business or to comply with the terms and
conditions thereof, (C) any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Materials or (D) release of
Hazardous Materials, except where such event or events could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect;

     

    (iii) all oral
or written notifications of a release of Hazardous Materials required to be
filed under any applicable Environmental Law have been filed or are in the
process of being filed by or on behalf of any Loan Party where the failure to do
so would be reasonably likely to have a Material Adverse Effect;
and

     

    (iv) no
property now owned or leased by any Loan Party and, no such property previously
owned or leased or any property to which any Loan Party has, directly or
indirectly, transported or arranged for the transportation of any Hazardous
Materials, is listed or, to the Borrower’s knowledge, proposed for listing, on
the National Priorities List promulgated pursuant to CERCLA, or CERCLIS (as
defined in CERCLA) or any similar state list or is the subject of federal, state
or local enforcement actions or, to the knowledge of any Loan Party, other
investigations which may lead to claims against any Loan Party for clean-up
costs, remedial work, damage to natural resources or personal injury claims,
including, but not limited to, claims under CERCLA, except where such listings
or investigations could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

     

    (b) For
purposes of this Section 3.8, the
“Loan Party” and “Borrower” shall include any business or business entity
(including a corporation) which is a predecessor, in whole or in part, of such
Loan Party or Borrower, respectively.

     

    SECTION
3.9.   Properties.  Each
Loan Party has good title to, or valid leasehold interests in, all its real and
personal property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended
purposes.

     

    SECTION
3.10.   Compliance with Laws and
Agreements; Compliance with Anti-Terrorism Laws.

     

    (a) Each Loan
Party is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property, and each has all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     

    (b) None of
the Loan Parties, their Affiliates or any of their respective agents acting or
benefiting in any capacity in connection with the transactions contemplated by
this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a
Blocked Person.  No Loan Party nor, to the knowledge of any Loan
Party, any of its Affiliates or agents acting or benefiting in any capacity in
connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deals in, or otherwise engages in any transaction relating
to, any property or interest in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism
Law.

     

    SECTION
3.11.   Investment Company
Status.  No Loan Party is an “investment company” as defined
in, or subject to regulation under, the Investment Company Act of
1940.

     

    SECTION
3.12.   Full
Disclosure.  All information furnished by the Borrower
Representative to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement and the Transactions, taken as whole and in light
of the circumstances under which such information was furnished, and true and
accurate in all material respects on the date as of which such information was
furnished, and true and accurate in all material respects on the date as of
which such information was stated or certified.  It is understood that
the foregoing is limited to the extent that (i) projections have been made
in good faith by the management of the Loan Parties and in the view of such
management are reasonable in light of all information known to management as of
the Effective Date, and (ii) no representation or warranty is made as to
whether the projected results are or will be realized.

     

    SECTION
3.13.   Security
Interest.  The Security Agreement creates and grants to the
Administrative Agent, for its own benefit and for the benefit of the Lenders, a
legal, valid and perfected first priority (except as permitted pursuant to Section 6.2
hereof) Lien in the Collateral identified therein and all necessary filings
evidencing Administrative Agent’s security interest have been made (or will be
made prior to the date of any advance with respect to such Collateral) in all
applicable jurisdictions and offices including, without limitation, with the
Federal Aviation Administration (where applicable) and the international
registry created and maintained pursuant to the Cape Town
Convention.  Such Collateral is not subject to any other Liens
whatsoever, except Liens permitted by Section 6.2
hereof.

     

    SECTION
3.14.   Solvency.

     

    (a) The fair
salable value of the business of Holdings and its Subsidiaries, taken as a
whole and measured on a going concern basis, is not less than the amount that
will be required to be paid on or in respect of the probable liability on the
existing debts and other liabilities (including contingent liabilities) of
Holdings and its Subsidiaries, as they become absolute and mature.

     

    (b) The
assets of Holdings and its Subsidiaries taken as a
whole do not constitute unreasonably small capital for Holdings and its
Subsidiaries to carry out their business as now conducted and as proposed to be
conducted, including the capital needs of Holdings and its Subsidiaries , taking
into account the particular capital requirements of the business conducted by
Holdings and its Subsidiaries and projected capital requirements and capital
availability thereof.

     

    (c) No Loan
Party intends to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by such Loan
Party, and of amounts to be payable on or in respect of debt of such Loan
Party).

     

    (d) No Loan
Party believes that final judgments against them in actions for money damages
presently pending will be rendered at a time when, or in an amount such that,
they will be unable to satisfy any such judgments promptly in accordance with
their terms (taking into account the maximum reasonable amount of such judgments
in any such actions and the earliest reasonable time at which such judgments
might be rendered).  The cash flow of Holdings and its consolidated
Subsidiaries, taken as a whole, after taking into account all other anticipated
insurance proceeds and all other uses of the cash of Holdings and its consolidated
Subsidiaries (including the payments on or in respect of debt referred to in
paragraph (c) of this Section) will at all times be sufficient to pay all
such judgments promptly in accordance with their terms.

     

    SECTION
3.15.   Employee
Matters.  There are no strikes, slowdowns, work stoppages or
controversies pending or, to the knowledge of the Loan Parties, threatened
between any Loan Party and its employees, other than employee grievances arising
in the ordinary
course of business, none of which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

     

    SECTION
3.16.   Use of
Proceeds.  All proceeds of the Term Loan shall be used for the
purposes set forth in Section
5.5.

     

    SECTION
3.17.   Indebtedness and
Default.  Except as set forth in Schedule 3.17,
the Loan Parties do not have any Indebtedness in excess of [***] for
borrowed money other than the Obligations.  The Loan Parties are not
in default in the payment of the principal of or interest on any Material
Indebtedness or under any instrument or agreement under or subject to which any
Indebtedness has been issued and no event has occurred under the provisions of
any such instrument or agreement which with or without the lapse of time or the
giving of notice, or both, constitutes or would constitute a default or event of
default thereunder.

     

    SECTION
3.18.   Subsidiaries.  As
of the Effective Date, Holdings has no Subsidiaries other than each Borrower and
no Borrower has any Subsidiaries. Holdings holds 100% of the Equity Interests of
each Borrower as of the Effective Date.  All issued and outstanding
Equity Interests of such Persons are duly authorized and validly issued, fully
paid, nonassessable, and such Equity Interests were issued in compliance with
all applicable Laws. No Equity Interests of any such Persons, other than those
described above, are issued and outstanding as of the Effective
Date.  Except as set forth on Schedule 3.18, as of
the Effective Date, there are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings for
the purchase or acquisition from any such Person of any Equity Interest of any
such Person.

     

    SECTION
3.19.   Contracts.  As
to each Material Contract to which any Loan Party is a party, (i) such Loan
Party is not in default in any material respect under such Material Contract,
and to the knowledge of such Loan Party, none of the other parties to such
Material Contract is in default in any material respect thereunder (except as
shall have been disclosed in writing to the Administrative Agent), (ii) the
performance by such Loan Party of its obligations under such Material Contract
in accordance with its terms will not contravene any statute, law, treaty, rule,
regulation, order, decree, injunction or determination of any arbitrator or
Governmental Authority applicable to or binding on such Loan Party or any
contractual restriction binding on or affecting such Loan Party or any of its
properties, and will not result in or require the creation of any Lien upon or
with respect to any of its properties, except for Permitted Encumbrances and
(iii) upon the Administrative Agent’s reasonable request therefor, such Loan
Party will furnish the Administrative Agent with a correct and complete copy of
each Material Contract redacted in each case to remove any proprietary pricing
information, and such other information regarding the Material Contracts as
mutually agreed upon between the Administrative Agent and the relevant Loan
Party subject to compliance with any confidentiality requirement.

     

    SECTION
3.20.    Reserved.

     

    SECTION
3.21.   FAA Investigations and
Audits.  No Loan Party is subject to any non-routine FAA
investigations or audits with respect to pilots or maintenance that would
materially adversely affect the business, assets, operations, industry,
prospects or condition, financial or otherwise, of the Loan Parties or their
Subsidiaries.

     

    SECTION
3.22.   Anti-Terrorism
Laws.  No Loan Party, its Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism
Law, (ii) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a
Blocked Person.  No such Person nor, to the knowledge of any such
Person, any of the Affiliates or agents acting or benefiting in any capacity in
connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person or (y) deals in, or otherwise engages in any transaction relating
to, any property or interest in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism
Law.

     

    SECTION
3.23.   Insurance.  Loan
Parties have in full force and effect such insurance policies as are customary
in its industry and as may be required pursuant to the Security
Agreement.  All such insurance policies are listed and described on
Schedule 3.23.

     

    SECTION
3.24.   Brokers;
Fees.  Except for fees payable to Administrative Agent and/or
Lenders, no broker, finder or other intermediary has brought about the
obtaining, making or closing of the Transactions, and no Loan Party has or will
have any obligation to any Person in respect of any finder’s or brokerage fees,
commissions or other expenses in connection herewith or therewith.

     

     

    
      	 ARTICLE IV 


    

     

    CONDITIONS

     

    SECTION
4.1.   Effective
Date.  The obligations of the Lenders to make Loans hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.2):

     

    (a) The
Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement;

     

    (b) The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
counsel for the Loan Parties, inclusive of opinions regarding the application of
Section 1110 of the United States Bankruptcy Code with respect to the
Collateral, in form and substance acceptable to Administrative Agent, and
covering such other matters relating to the Loan Parties and this Agreement and
the Transactions as the Required Lenders shall reasonably request.

     

    (c) The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Loan Parties, the authorization
of the Transactions and any other legal matters relating to the Loan Parties,
this Agreement , the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel;

     

    (d) Administrative
Agent shall have received (or shall concurrently receive) payment of all fees
and other amounts due and payable, on or prior to the Effective Date, in
connection with the execution and delivery of this Agreement, including, without
limitation, all fees payable on the Effective Date pursuant to the Fee Letter
and, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder,
including, without limitation, all of the legal fees and expenses of counsel to
the Administrative Agent and all of the legal fees and expenses of Crowe &
Dunlevy, special FAA counsel;

     

    (e) Administrative
Agent (or its counsel) shall have received the other executed Financing
Documents, all in form and substance satisfactory to the Administrative Agent
and its counsel;

     

    (f) With
respect to any Liens not permitted pursuant to Section 6.2
hereof, the Administrative Agent shall have received termination statements in
form and substance satisfactory to it;

     

    (g) Each
document (including, without limitation, each Uniform Commercial Code financing
statement) required by law or requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of Administrative Agent for
its own benefit and for the benefit of the Lenders a first priority perfected
Lien in the Collateral shall have been properly filed, registered or recorded in
each jurisdiction in which the filing, registration or recordation thereof is so
required or requested, or arrangements reasonably satisfactory to the
Administrative Agent for the filing, registering or recording thereof shall have
been made;

     

    (h) Administrative
Agent shall have received and be satisfied with the results of searches of tax
and other Liens against each Loan Party and the Collateral (including, without
limitation, any Liens of record at the FAA or any other registry of rights in
aircraft equipment, and any registrations made as to any Collateral with the
international registry created and maintained pursuant to the Cape Town
Convention), judgments and Uniform Commercial Code filings made with respect to
each Loan Party in the jurisdictions in which any Collateral is located, and in
which Uniform Commercial Code filings have been, or are to be, made against each
such Loan Party pursuant to paragraph (G) above;

     

    (i) The
Administrative Agent shall have received and determined to be in form and
substance satisfactory to it:

     

    (i) the
results of the final appraisal report for the initial physical appraisal
conducted in May 2009, by SH&E, and any other appraisals required by
Administrative Agent and the Lenders;

     

    (ii) evidence
of the compliance by the Borrowers with Section 2.03 of the
Security Agreement;

     

    (iii) the
financial statements and projections described in Section 3.4
hereof;

     

    (iv) copies of
landlord waivers and/or consent agreements executed by each Borrower’s
landlords, bailees and processors for the Storage Locations and any other
consents or approvals by Governmental Authorities and any other third party for
the Transaction, all in full force and effect as of the Effective
Date;

     

    (v) completion
of financial and legal due diligence with respect to the Loan Parties and their
business, including, without limitation, regulatory issues, ownership,
corporate, tax, management, capital structure, restrictions and compliance
issues, including evidence of compliance with ERISA Plan Obligations, all
reasonably satisfactory to the Administrative Agent;

     

    (j) No
Material Adverse Effect shall have occurred since December 31, 2008 with regard to Holdings
and its Subsidiaries or any of their material contractual counterparties and no
litigation shall have been commenced which, if successful, would have a Material
Adverse Effect (it being understood and agreed that any adverse change in the
terms, conditions, assumptions or projections supplied by the Borrowers and upon
which the Lenders based their credit approval may, in the Lenders’ reasonable
business judgment, be deemed a Material Adverse Effect);

     

    (k) Administrative
Agent shall have received a certificate of Holdings, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer or a
Director of Holdings, representing and warranting, on behalf of Holdings, that
(i) Citibank, N.A. (“Citibank”) has
provided a binding offer to Holdings for settlement of the assets and
liabilities for the auction rate securities sold by Citibank to Holdings (the
“ARS Assets and
Liabilities”) and related Citibank line of credit on terms that would
result in: (A) the pay-off or discharge in full of the line of credit
extended by Citibank against the ARS Assets and Liabilities and
(B) Holdings receiving from Citibank cash in excess of the amount of all
outstandings under the Citibank line of credit to be discharged pursuant to
clause (A) hereof on the basis of at least [***] cents/par for the ARS Assets
and Liabilities, (ii) attached to such certificate is a true and correct
copy of such offer by Citibank and (iii) as of the Effective Date, such
offer remains in full force and effect and has not been withdrawn by
Citibank;

     

    (l) The
Borrowers shall have executed and delivered to the Administrative Agent a
disbursement authorization letter with respect to the disbursement of the
proceeds of the Loans made on the Effective Date and all other documentation and
information required by Administrative Agent to comply with Anti-Terrorism
Laws;

     

    (m) The
Administrative Agent shall have received such other documents, and completed
such other reviews of, including, without limitation, litigation, taxes,
insurance matters, regulatory matters and restrictions and compliance matters
(including pension liabilities), and each item listed on the Schedule of
Responsibilities and Closing Document List attached hereto as Exhibit E, as
the Administrative Agent or its counsel shall reasonably deem necessary;
and

     

    (n) The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
Crowe & Dunlevy, special FAA counsel with respect to the Collateral, in
form and substance acceptable to Administrative Agent, and covering such other
matters relating to the Loan Parties and this Agreement and the Transactions as
the Required Lenders shall reasonably request.

     

    The
Administrative Agent shall notify the Borrowers and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

     

     

    
      	 ARTICLE V 


    

     

    AFFIRMATIVE
COVENANTS

     

    Until
(i) the Commitments have expired or been terminated and, (ii) the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, each Borrower covenants and agrees with the Lenders
that:

     

    SECTION
5.1.   Information.  Borrower
Representative will furnish to the Administrative Agent and each of the
Lenders:

     

    (a) within
one hundred twenty (120) days after the end of each fiscal year or such earlier
date upon which a report of Holdings on Form 10-K is filed with the Securities
and Exchange Commission, either (at the Borrower Representative’s discretion):
(i)(A) a consolidated balance sheet and consolidated income statement
showing the financial position of Holdings and its Subsidiaries as of the close
of such fiscal year and the results of their operations during such year, and
(B) a consolidated statement of shareholder’s equity and a consolidated
statement of cash flow, as of the close of such fiscal year, all the foregoing
financial statements to be audited by an independent public accountants
reasonably acceptable to the Administrative Agent (which report shall not
contain any going concern or similar qualification or exception as to scope or
any qualification except with respect to new accounting principles mandated by
the Financial Accounting Standards Board), and together with supplemental
consolidating balance sheets and statements of income, shareholders’ equity and
cash flow audited by such independent public accountants as being fairly stated
in relation to such audited financial statements taken as a whole and together
with management’s discussion and analysis presented to the management of
Holdings and its Subsidiaries; or (ii) a report of Holdings on Form 10-K in
respect of such year in the form filed with the Securities and Exchange
Commission (the posting of such on the publicly available website maintained by
the Securities and Exchange Commission shall satisfy such delivery
requirement);

     

    (b) within
forty-five (45) days after the end of each fiscal quarter of each fiscal
year of Holdings or such earlier date upon which a report of Holdings on Form
10-Q is filed with the Securities and Exchange Commission, either (at the
Borrower Representative’s discretion): (i) unaudited consolidated balance
sheets of Holdings and its Subsidiaries as of the
end of such fiscal quarter, together with the related consolidated and
consolidating statements of income for such fiscal quarter and for the portion
of Holdings’ fiscal year ended at the end of such fiscal quarter and the related
consolidated statements of cash flows and consolidated changes in shareholders’
equity for the portion of Holdings’ fiscal year
ended at the end of such fiscal quarter, in each case certified by a Financial
Officer of Holdings as presenting fairly in all material respects the financial
position and results of operations and cash flow of Holdings and its
Subsidiaries in accordance with GAAP (except the absence of footnote
disclosure), in each case subject to normal year-end audit adjustments, and,
solely for the last month of each fiscal quarter for such quarter then ending,
management’s discussion and analysis presented to the management of Holdings and
its Subsidiaries; or (ii) a report of Holdings on Form 10-Q in respect of such
period in the form filed with the Securities and Exchange Commission (the
posting of such on the publicly available website maintained by the Securities
and Exchange Commission shall satisfy such delivery requirement);

     

    (c) within
thirty (30) days after the end of each calendar month (other than any such
month that corresponds to the end of a fiscal quarter or fiscal year of Holdings), unaudited
internal consolidated balance sheets of Holdings and its Subsidiaries as at the
end of such month, together with the related unaudited internal consolidated
statements of income for such month and the portion of Holdings’ fiscal year
ended at the end of such month, certified by a Financial Officer of Holdings as
presenting fairly in all material respects the financial position and results of
operations and cash flows of Holdings and its Subsidiaries as at the
date of, and for the periods covered by, such financial statements, in
accordance with GAAP (except for the absence of footnotes), in each case subject
to normal quarter-end audit adjustments and in form and substance reasonably
acceptable to the Administrative Agent, and Holdings shall make its management
available to discuss such financial statements with the Administrative Agent in
a prompt manner upon the Administrative Agent’s request;

     

    (d) (i) concurrently
with any delivery under paragraph (a) or (b), a management discussion and
analysis in form and substance reasonably acceptable to the Administrative Agent
describing any differences in the reported financial results as between the
periods covered and that in the same periods during the immediately preceding
Fiscal Year, provided, however, if a management discussion and analysis is
included in either the Form 10-K or Form 10-Q delivered in accordance with
paragraph (a) or (b), no additional delivery is required under this subparagraph
(i), and (ii) concurrently with any delivery under paragraph (a) or
(b), a certificate of the firm or Person referred to therein (x) which
certificate shall, in the case of the certificate of a Financial Officer of the
Borrower Representative, be substantially in the form of the Compliance
Certificate attached hereto as Exhibit C and certify
that to the best of his or her knowledge no Default or Event of Default has
occurred (including calculations demonstrating compliance, as of the dates of
the financial statements being furnished, with the covenant set forth in Section 6.11
hereof) and, if such a Default or Event of Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (y) which certificate, in the case of the
certificate furnished by the independent public accountants referred in
paragraph (a)(i) above, may be limited to accounting matters and disclaim
responsibility for legal interpretations, but shall in any event state that to
the best of such accountants’ knowledge, as of the dates of the financial
statements being furnished no Default or Event of Default has occurred under any
of the covenant set forth in Section 6.11
hereof and, if such a Default or Event of Default has occurred,
specifying the nature and extent thereof;

     

    (e) promptly
after the same become publicly available, such registration statements, annual,
periodic and other reports, and such proxy statements and other information, if
any, as shall be filed by Holdings or any of its Subsidiaries with the
Securities and Exchange Commission pursuant to the requirements of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, if any;

     

    (f) within
thirty (30) days of Holdings’ calendar year end, a summary of business
plans and financial operation annual budget (including, without limitation, with
respect to Capital Expenditures and cash flow) for Holdings and its Subsidiaries
on a consolidated basis for such fiscal year prepared by management and
presented to and approved by the Boards of Director of Holdings;

     

    (g) within
[***] days after the end of each fiscal month (or more frequently as requested
by the Administrative Agent following an Event of Default), a Borrowing Base
Certificate, substantially in the form of Exhibit D
hereto, executed by a Financial Officer of the Borrower Representative
demonstrating compliance as at the end of each month with the Maximum
Availability requirements and the Borrowers’ calculation of the Monthly
Collateral NBV for the Administrative Agent’s review and
acceptance;

     

    (h) (i)
within forty-five (45) days after the end of each calendar year, the annual
physical appraisal by SH&E of the Collateral in the manner set forth in that
certain Pinnacle Airlines’ Spare Parts and Spare Engines  - A Proposal
to Provide Appraisal Services from SH&E to the Administrative Agent and
Borrowers dated April 23, 2009 (the “Appraisal Proposal”)
as of December 31 of such calendar year being appraised, and (ii) within
thirty (30) days after the end of each calendar quarter ending March 31,
June 30 and September 30, a quarterly desktop appraisal by SH&E of
the Collateral in the manner set forth in the Appraisal Proposal  as
of each such quarter end;

     

    (i) as soon
as practicable, notification of the filing of all other material financial
reports, forms, filings, loan documents and financial information submitted to
the Securities and Exchange Commission;

     

    (j) promptly
upon becoming aware thereof, notice to the Administrative Agent of the
occurrence of any Default or Event of Default then continuing or the occurrence
of an event that will have a Material Adverse Effect on the Loan
Parties;

     

    (k)  within
[***] days after the end of each fiscal month, inventory files in form and
substance reasonably acceptable to the Administrative Agent indicating the
(i) part number, (ii) description, (iii) quantity,
(iv) location and (v) associated costs of such inventory. The
Borrowers shall also provide any other information regarding the Collateral as
reasonably requested by Administrative Agent and the Lenders, within [***] after
the end of each fiscal month or as otherwise mutually agreed;

     

    (l) within
[***] days after the end of each determination date of the Minimum Liquidity
requirement set forth in Section 6.11, a
Compliance Certificate substantially in the form of Exhibit C
hereto, executed by a Financial Officer of the Borrower Representative
demonstrating compliance with the Minimum Liquidity covenant;

     

    (m) promptly
following receipt, copies of any notice of default or event of default under any
lease for property in which any Collateral is located and notice immediately
following the termination of any lease or sublease where any Collateral is
located; and

     

    (n) such
other information as the Administrative Agent or the Required Lenders (through
the Administrative Agent) may reasonably request.

     

    SECTION
5.2.   Maintenance of
Property.  Borrowers will keep, and will cause each other Loan
Party to keep, all property useful and necessary in its business as then
conducted in good working order and condition, ordinary wear and tear excepted,
where the failure to do so would be reasonably expected to result in a Material
Adverse Effect.

     

    SECTION
5.3.   Compliance with
Laws.  The Loan Parties will comply, and cause each Subsidiary
to comply, with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder and
Federal Aviation Administration directives) except where failure to comply could
not reasonably be expected to have a Material Adverse Effect.

     

    SECTION
5.4.   Reserved.

     

    SECTION
5.5.   Use of
Proceeds.  The proceeds of the Loans made under this Agreement
will be used by the Borrowers to (i) refinance the Indebtedness
constituting the Convertible Notes by either (a) purchasing such
Convertible Notes in the open market and subsequently canceling such Convertible
Notes, or (b) repaying such Convertible Notes upon the first instance the
Indebtedness evidenced by such Convertible Notes may be called or, to the extent
the call date of such Convertible Notes is extended beyond the Term Loan
Maturity Date, such other Indebtedness of Borrowers and Holdings to the extent
permitted in accordance with Section 6.5(a)
of this Agreement, (ii) pay fees and expenses in connection with the
Transactions, and (iii) purchase inventory and replacement spare parts,
rotables and engines, to the extent consistent with this
Agreement.  None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any “margin stock” within the meaning of Regulation
U.

     

    SECTION
5.6.   Environmental
Matters.  The Borrower Representative will promptly give to the
Administrative Agent notice in writing of any complaint, order, citation or
notice of violation with respect to, or if any Loan Party becomes aware of,
(i) the existence or alleged existence of a violation of any applicable
Environmental Law, (ii) any release into the environment, (iii) the
commencement of any cleanup pursuant to or in accordance with any applicable
Environmental Law of any Hazardous Materials, (iv) any pending legislative
or threatened proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law, (v) any property of
the Loan Parties that is or will be subject to a Lien imposed pursuant to any
Environmental Law, in each case that would be reasonably expected to result in a
Material Adverse Effect.

     

    SECTION
5.7.   Taxes.  The
Loan Parties will, and will cause each of its Subsidiaries to, pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Loan Parties or upon their respective income or profits or in
respect of their respective property before the same shall become delinquent or
in default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, would give rise to Liens upon such properties or
any part thereof; provided, however, that such
payment and discharge shall not be required with respect to (i) any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be diligently contested in good faith by appropriate proceedings and the
applicable party, shall have set aside on its books adequate reserves with
respect thereto, and such contest operates to suspend collection of the
contested tax, assessment, charge, levy or claims and enforcement of a Lien or
(ii) any tax, assessment, charge, levy or claims, the failure to pay and
discharge when due which, individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.

     

    SECTION
5.8.   Security Interests; Further
Assurances.  The Loan Parties will at all times, at their sole
expense, take, or cause to be taken, all actions necessary to maintain the
Security Interests as valid and perfected first priority Liens (including,
without limitation, such filings with the FAA and registrations with the
international registry created and maintained pursuant to the Cape Town
Convention and further including Liens on spare parts and spare engines acquired
after the Effective Date), subject only to Liens permitted under Section 6.2, and
supply all information to the Administrative Agent necessary for such
maintenance.  The Loan Parties will at all times also take, or cause
to be taken, such actions as the Administrative Agent may reasonably request
from time to time (including, without limitation, the execution and delivery
of  security agreements, financing statements and other documents, the
filing or recording of any of the foregoing, and other collateral with respect
to which perfection is obtained by possession) to ensure that the indebtedness,
obligations and liabilities under this Agreement and the other Financing
Documents are secured by all of the Collateral.

     

    SECTION
5.9.   Existence; Conduct of
Business.  The Loan Parties will, and will cause each of their
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges and franchises material to the conduct of its business, and
comply with any new or additional requirements that may be imposed on it or its
business, including, without limitation, rights, licenses, permits, privileges
and franchises issued or granted by the FAA or any other Governmental Authority
or necessary to maintain its aircraft operating certificate as in effect on the
date hereof; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.3(a)
or the termination, revocation or expiration of any right, license, permit or
franchise the absence of which, individually or in the aggregate,  not
reasonably be expected to have a Material Adverse Effect.

     

    SECTION
5.10.   Litigation and Other
Notices.  The Borrower Representative will give the
Administrative Agent prompt written notice of the following:

     

    (a) the
issuance by any court or Governmental Authority of any injunction, order,
decision or other restraint prohibiting, or having the effect of prohibiting,
the making of the Loans, or invalidating, or having the effect of invalidating,
any provision of this Agreement or the other Financing Documents that would
materially adversely affect the Lenders’ ability to enforce any payment
obligations hereunder, or the initiation of any litigation or similar proceeding
seeking any such injunction, order, decision or other restraint;

     

    (b) the
filing or commencement of any action, suit or proceeding against any Loan Party
or a Subsidiary, whether at law or in equity or by or before any arbitrator or
Governmental Authority, (i) which is material and is brought by or on
behalf of any Governmental Authority, or in which injunctive or other equitable
relief is sought or (ii) as to which it is probable (within the meaning of
Statement of Financial Accounting Standards No. 5) that there will be an
adverse determination and which, if adversely determined, would
(A) reasonably be expected to result in liability of any Loan Party or a
Subsidiary thereof in an aggregate amount of [***] or more, not reimbursable by
insurance, or (B) materially impairs the ability of any Borrower or a
Subsidiary thereof to perform its obligations under this Agreement, any Note or
any other Financing Document to which it is a party;

     

    (c) any
Default, specifying the nature and extent thereof and the action (if any) which
is proposed to be taken with respect thereto;

     

    (d) any
development in the business or affairs of the Loan Parties which has had or
which could be expected to have, in the reasonable judgment of the Borrower
Representative, a Material Adverse Effect;

     

    (e) any
change in Holdings’ or its Subsidiaries’ accounting practices with regard to
depreciation and/or establishing reserves for any or all of the Collateral or
any other material change in any accounting practices or procedures of Holdings
or its Subsidiaries, in each case no later than five (5) Business Days of such
change; and

     

    (f) the
commencement of any investigation by a Governmental Authority of any Borrower or
Holdings including, without limitation, any non-routine FAA audit of any
Borrower or Holdings which could reasonably be expected to result in a Material
Adverse Effect.

     

    SECTION
5.11.   Reserved.

     

    SECTION
5.12.   Contracts.  Each
Loan Party will, at its expense, at all times perform and comply with, in all
material respects, all terms and provisions of each Material Contract to which
it is or hereafter becomes a party required to be performed or complied with by
it and enforce the terms and provisions thereof in accordance with its terms,
and will not waive, amend or modify any provision thereof in any manner other
than in the ordinary course of business of such Loan Party or for a valid
business reason except to the extent of any of the foregoing would not cause a
Material Adverse Effect.  Each Loan Party will notify the
Administrative Agent promptly in writing upon any termination of any Material
Contract, in whole or in part, or any material breach, default or event of
default by any party thereunder which could have a Material Adverse
Effect.

     

    SECTION
5.13.   ERISA.  Each
of the Loan Parties and each ERISA Affiliate shall continue to fulfill its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and remain in compliance in all material
respects with the applicable provisions of ERISA and the Code with respect to
each Plan, and has not incurred any liability under Title IV of ERISA (i) to the
PBGC other than a liability to the PBGC for premiums under Section 4007 of ERISA
or (ii) in respect of a Multiemployer Plan which has not been discharged in full
when due where the failure of such obligations would be reasonably likely to
result in a Material Adverse Effect.

     

    SECTION
5.14.   Lenders’
Meeting.  Within fifteen (15) days after delivery to the
Administrative Agent and Lenders of financial statements pursuant to Section 5.1(a),
Borrowers will in each case to the extent requested by either the Administrative
Agent or Required Lenders, conduct a meeting of the Administrative Agent and the
Lenders to discuss the most recently reported financial results and the
financial condition of the Loan Parties, at which meeting shall be present a
Financial Officer and such other officers of the Loan Parties as may be
reasonably requested to attend by the Administrative Agent or any Lender, such
request or requests to be made within a reasonable time prior to the scheduled
date of such meeting.  Such meeting may be conducted via
teleconference for all meetings following deliveries of financial statements
pursuant to Sections 5.1(b)
and (c).

     

    SECTION
5.15.   Collateral
Matters.  The Borrowers will use their best efforts to ensure
that all containers, boxes, pallets and the like that contain inventory or
engines that are included in the Collateral and which are held or stored at
premises that are not under the exclusive control of the Borrowers are properly
marked as being the property of the Borrowers.

     

    SECTION
5.16.   Anti-Terrorism Laws
Compliance.  The Borrowers shall provide to the Administrative
Agent and the Lenders such information and take such actions as are reasonably
requested by the Administrative Agent in order to assist the Administrative
Agent and the Lenders with compliance with the Anti-Terrorism Laws.

     

    SECTION
5.17.   Engine Warranties
Acknowledgment.  Within [***]  days of the Effective
Date, to the extent not assignable in accordance with their terms, the
Administrative Agent shall have received the relevant consent or acknowledgment
from the applicable engine manufacturers of the collateral assignment of the
Engine Warranties in the Security Agreement, in form and substance acceptable to
Administrative Agent, and covering such other matters relating to the Loan
Parties and this Agreement and the Transactions as the Required Lenders shall
reasonably request.

     

    SECTION
5.18.   Spare Parts Tracking System
License Agreement.  Within [***]  days of the
Effective Date, the Administrative Agent, Holdings, the Borrowers and any other
relevant Person shall have entered into a collateral assignment of license
agreement acknowledged by the provider of such license which permits the
Administrative Agent, upon the notification of an Event of Default by the
Administrative Agent to such provider, to utilize the relevant software or other
intellectual property necessary to use or operate the Tracking System (as
defined in the Security Agreement), and covering such other matters relating to
the Loan Parties and this Agreement and the Transactions as the Required Lenders
shall reasonably request.

     

    
    

     

    
      	 ARTICLE VI 


    

     

    NEGATIVE
COVENANTS

     

    Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees and other Obligations payable hereunder have been paid in
full, each Borrower covenants and agrees with the Lenders that:

     

    SECTION
6.1.   Reserved.

     

    SECTION
6.2.   Liens.  No
Borrower will, nor will it permit any Subsidiary to, create, incur, assume or
permit to exist any Lien on any Collateral, except:

     

    (a) Permitted
Encumbrances; and

     

    (b) Liens
created by the Financing Documents in favor of the Administrative Agent and the
Lenders.

     

    SECTION
6.3.   Fundamental
Changes.

     

    (a) No Loan
Party will, nor will it permit any Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, or otherwise dispose of (in one transaction or in a
series of transactions) the stock or other Equity Interests of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, a Loan Party
may merge into or consolidate with another Person so long as such Loan Party’s
rights and obligations under this Agreement are assumed in their entirety by the
surviving Person.

     

    (b) No
Borrower will, nor will it permit any Subsidiary to, (i) engage to any
material extent in any business other than businesses of the type conducted by
Borrowers on the date hereof and businesses reasonably related thereto,
(ii) change its fiscal year or (iii) change its method of accounting as it
relates to the Collateral included in the calculation of the Borrowing Base;
provided, however, if Borrowers change their method of accounting as it relates
to the Collateral but continues to provide the Administrative Agent with
Borrowing Base calculations and inventory reporting required pursuant to Section 5.1
prepared in accordance with the accounting practices and policies used by
Borrowers as of March 31, 2009, such changes in methods of accounting shall
be permitted.

     

    SECTION
6.4.   Acquisitions.  No
Borrower will, nor will it permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness
or other securities (including any option, warrant or other right to acquire any
of the foregoing) of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit (collectively, “Investments”) during
the occurrence and continuance of a Default or Event of Default; provided, however,
the parties hereto acknowledge and agree that if Borrower or any Subsidiary is
permitted to make an Investment in compliance with the foregoing clause, the
Minimum Liquidity covenant set forth in Section 6.11
hereof may be revised as reasonably determined by the Administrative Agent upon
the making of such Investment.

     

    SECTION
6.5.   Prepayment or Modification
of Indebtedness; Modification of Operating Documents; Change of Business
Location; Change of Name.

     

    (a) No
Borrower will, nor will it permit any Subsidiary to, directly or indirectly
prepay, to the extent such prepayment is optional or at Borrower’s discretion,
redeem, purchase, repurchase or retire (or offer to prepay, redeem, purchase,
repurchase or retire), or make any cash interest or principal payments in excess
of regularly scheduled payments with respect to any Indebtedness, other than
Indebtedness incurred hereunder, provided, however, (i) so
long as no Default or Event of Default has occurred and is continuing, and
(ii) the Borrowers are in compliance with the Minimum Liquidity covenant
set forth in Section 6.11
exists before and after giving effect to any such payment as of the date of such
determination, the Borrowers may (x) prepay amounts owing with respect to the
line of credit extended by Citibank in accordance with the terms of loan
documents in effect on the date hereof, (y) make prepayments of principal
and interest under each Borrower's pre-delivery payment financing with Export
Development Canada in respect of the purchase of certain Bombardier Inc.
aircraft in accordance with the terms of loan documents in effect on the date
hereof, and (z) make repayments with respect to the Convertible Notes in
accordance with Section 5.5
hereof, provided that the Borrowers may optionally prepay other Indebtedness
using proceeds of the Loans to the extent the first call date for the redemption
of the Convertible Notes is extended beyond the Term Loan Maturity
Date.

     

    (b) No
Borrower will, nor will it permit any Subsidiary to, modify, amend or alter
their operating agreements, certificates or articles of incorporation or other
constitutive documents in any manner that would have a Material Adverse Effect
on such party.

     

    (c) No
Borrower will, and will not permit any of its Subsidiaries to, relocate its
principal executive offices or other facilities or establish new business
locations or store any Collateral at a location not identified to the
Administrative Agent on or before the Effective Date, without providing not less
than thirty (30) days’ advance written notice to the Administrative
Agent.

     

    (d) No
Borrower will, and will not permit any of its Subsidiaries to, change its
corporate name, jurisdiction of organization or organizational identification
number, or establish new or additional trade names without providing not less
than thirty (30) days’ advance written notice to the Administrative
Agent.

     

    SECTION
6.6.   Reserved.

     

    SECTION
6.7.   Reserved.

     

    SECTION
6.8.   Restrictive
Agreements.  No Borrower will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of any Borrower or any Subsidiary to create, incur or
permit to exist any Lien upon any of the Collateral; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by
law or by this Agreement or any of the other Financing Documents, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.8
(but shall apply to any amendment or modification expanding the scope or
duration of, any such restriction or condition), (iii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary or any asset pending such sale, provided
such restrictions and conditions apply only to the Subsidiary or asset that is
to be sold and such sale is permitted hereunder, and (iv) the foregoing
shall not apply to customary provisions in leases, licenses and other contracts
restricting the assignment thereof.

     

    SECTION
6.9.   Compliance with
Anti-Terrorism Laws.  No Borrower will, nor will permit any
Subsidiary to, directly or indirectly, knowingly enter into any agreement with
any Person listed on the OFAC Lists.  Each Borrower shall immediately
notify Administrative Agent if such Borrower has knowledge that any Borrower or
Subsidiary is listed on the OFAC Lists or (i) is convicted on,
(ii) pleads nolo contendere to, (iii) is indicted on or (iv) is
arraigned and held over on charges involving money laundering or predicate
crimes to money laundering.  No Borrower will, nor will any Borrower
permit any Subsidiary to, directly or indirectly, (i) conduct any business
or engage in any transaction or dealing with any Blocked Person, including,
without limitation, the making or receiving of any contribution of funds, goods
or services to or for the benefit of any Blocked Person, (ii) deal in, or
otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law, or (iii) engage in or conspire
to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth
in Executive Order No. 13224 or other Anti-Terrorism Law.

     

    SECTION
6.10.   Reserved.

     

    SECTION
6.11.   Minimum
Liquidity.  Holdings and Borrowers will not permit their
Liquidity [***].  Borrower Representative shall provide Administrative
Agent with evidence of compliance with the Minimum Liquidity requirement, in
form and substance satisfactory to Administrative Agent, within four (4)
Business Days of each testing date set forth in Section 6.11(a),
and within two (2) Business Days of each testing date for such testing
dates set forth in Sections 6.11(b) and
(c).

     

    SECTION
6.12.   Reg U
Requirements.  None of the Borrowers shall use any portion of
the proceeds of any Loans for the purpose of purchasing or carrying any “margin
stock” (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) in any manner which violates the provisions of
Regulation T, U or X of said Board of Governors or for any other purpose in
violation of any applicable statute or regulation.

     

    SECTION
6.13.   Permitted Sales or
Dispositions.  Except to the extent otherwise permitted in the
Security Agreement, no Borrower will, nor will any Borrower permit any
Subsidiary or any other Person acting by, through or under it, to sell,
transfer, lease or dispose of any of the Collateral without the prior written
consent of  the Administrative Agent, which consent may be withheld in
the Administrative Agent’s sole discretion other than (i) sales for cash or
exchanges of parts in the ordinary course of business, not to exceed [***] in
the aggregate in any fiscal year or [***] in the aggregate in any calendar
month, (ii) sales or other dispositions for cash of damaged, obsolete,
obsolescent, unmerchantable or excess parts, and (iii) as permitted by the
Security Agreement.

     

    ARTICLE VII                                

     

    EVENTS OF DEFAULT AND
APPLICATION OF PROCEEDS

     

    SECTION
7.1.   Events of
Default.  If any of the following events (“Events of Default”)
shall occur:

     

    (a) the
Borrowers shall fail to pay any principal of any Loan when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

     

    (b) the
Borrowers shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable
under this Agreement or any other Financing Document, when and as the same shall
become due and payable, [***];

     

    (c) any
representation or warranty made or deemed made by any Loan Party in the
Financing Documents, or in any report, certificate, financial statement or other
document furnished pursuant to the Financing Documents, shall prove to have been
incorrect in any material respect as of the date when made or deemed
made;

     

    (d) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.1
(excluding subparagraph 5.1(i)), 5.5, 5.8, 5.9 (with respect to
each Borrower’s existence), 5.15 or 5.16 or in Article VI of
this Agreement, or Section 2.03 or
Article III of
the Security Agreement;

     

    (e) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specifically set forth in this
Article) or any other Financing Document (other than those specifically set
forth in this Article), and such failure shall continue unremedied for a period
of [***] after the earlier of any Loan Party’s knowledge of such failure or
notice thereof from the Administrative Agent to the Borrower
Representative;

     

    (f) any Loan
Party shall (i) fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Material Indebtedness (other than Indebtedness hereunder), or
(ii) fails to observe or perform any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders or the
beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be purchased, repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to purchase, repurchase, prepay,
defease or redeem such Indebtedness to be made, prior to its stated maturity, or
cash collateral in respect thereof to be demanded provided that any notice, if
required, and cure period, if any, shall first have been given or
allowed;

     

    (g) an
involuntary case or proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Loan Party or any Subsidiary of its debts, as applicable, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
examinership, liquidation, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a liquidator, examiner,
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Loan Party or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
[***] days or an order or decree approving or ordering any of the foregoing
shall be entered;

     

    (h) any Loan
Party or any Subsidiary shall (i) voluntarily commence any case or
proceeding or file any petition seeking liquidation, examinership,
reorganization or other relief under any Federal, state or foreign bankruptcy,
liquidation, examinership, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (g) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Loan Party or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

     

    (i) any Loan
Party or any Subsidiary shall become unable, admit in writing its inability or
fail generally to pay its debts as they become due;

     

    (j) one or
more judgments for the payment of money in an aggregate amount in excess of
[***] pertaining to the Collateral or [***] with respect to all assets of
the Borrowers (not covered by insurance where the carrier has accepted
responsibility) shall be rendered against the any Loan Party or any Subsidiary
or any combination thereof and the same shall remain undischarged for a period
of thirty (30) consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any material assets of any Borrower or any Subsidiary to
enforce any such judgment;

     

    (k) an ERISA
Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;

     

    (l) a Change
in Control shall occur;

     

    (m) any of
the Financing Documents shall for any reason cease to be, or shall be asserted
by any Person obligated thereunder not to be, a legal, valid and binding
obligation of such Person, including, without limitation, the improper filing by
such Person of an amendment or termination statement relating to a filed
financing statement describing the Collateral that names the Administrative
Agent as secured party, or any Lien on any material portion of the Collateral
purported to be created by any of such Financing Documents shall for any reason
cease to be, or be asserted by any Person granting any such Lien not to be a
valid, first priority perfected Lien (except to the extent otherwise permitted
under any of the Financing Documents);

     

    (n) any
material damage to, or loss, theft or destruction of, any material Collateral,
whether or not insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty not otherwise
covered by Article III of the Security Agreement or continuing for more than
[***] beyond the coverage of any applicable business interruption insurance, if
in the case of any of the foregoing, any such event or circumstance could
reasonably be expected to have a Material Adverse Effect on a material portion
of the Collateral;

     

    (o) any
Financing Document shall at any time for any reason cease to be in full force
and effect (other than in accordance with the terms hereof or the terms of any
other Financing Document), as applicable, or the validity, binding effect or
enforceability thereof shall be contested by any Loan Party (other than any
Lender or Administrative Agent), or any Loan Party shall deny that it has any or
further liability or obligation under any Financing Document, or any such
Financing Document shall be, or shall be deemed, terminated (other than in
accordance with the terms thereof or the terms of any other Financing Document),
invalidated, revoked or set aside or in any way cease to give or provide to the
Lenders and the Administrative Agent the benefits purported to be created
thereby;

     

    (p) any
Borrower or their Subsidiaries shall receive notice that a Material Contract
shall be terminated, cancelled or modified in a manner that is materially
adverse to such Borrower or Subsidiary, or the occurrence of any termination,
cancellation or materially adverse modification of a Material Contract if no
notice is given; provided, however, if Borrower
receives notice of a materially adverse modification or a materially adverse
modification occurs, such Borrower or Subsidiary shall have thirty (30)
days to replace such Material Contract on the same or better terms before such
modification gives rise to an Event of Default;

     

    (q) the
occurrence of a Collateral Shortfall Default; or

     

    (r) either
Borrower ceases to be a Certificated Air Carrier (as defined in the Security
Agreement),

     

    then, and
in every such event (other than an event with respect to the Borrower described
in clause (g) or (h) of this Article), and at any time thereafter during
the continuance of such event, the Administrative Agent may, and at the request
of the Required Lenders shall, by notice to the Borrower, take any one or more
of the following actions, at the same or different
times:  (i) terminate the Term Loan Commitment, and thereupon the
Term Loan Commitment shall terminate immediately, (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Loan Parties accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower,  or
(iii) exercise any other rights or remedies available under the Financing
Documents, the UCC or other applicable law; and in case of any event with
respect to the Loan Parties described in clause (g), (h) or (r) of this
Article, the Term Loan Commitment shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other Obligations of the Loan Parties accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Loan
Parties.

     

    SECTION
7.2.   Application of
Proceeds.

     

    (a) All
Proceeds collected by the Administrative Agent upon any sale, other disposition
of or realization upon any of the Collateral, together with any offsets,
voluntary payments by any Borrower or others and any other sums received or
collected in respect of the Obligations received by the Administrative Agent,
shall be applied as follows:

     

    FIRST, to
the payment of all reasonable costs and expenses incurred by the Administrative
Agent in connection with such collection or sale or otherwise in connection with
this Agreement, the Financing Documents or any of the Obligations, including,
but not limited to, those under Section 4.02 of
the Security Agreement, all court costs and the reasonable fees and expenses of
its agents and legal counsel, the repayment of all advances made by the
Administrative Agent under this Agreement or any of the Financing Documents on
behalf of the Borrowers and any other reasonable costs or expenses incurred in
connection with the exercise of any right or remedy hereunder;

     

    SECOND,
pro rata to the payment in full of principal and interest in respect of any
Loans outstanding (pro rata as among the Lenders in accordance with the amounts
of the Loans made by them pursuant to this Agreement);

     

    THIRD,
pro rata to the payment in full of all Obligations (other than those referred to
above) owed to the Administrative Agent and/or the Lenders (pro rata as among
the Lenders in accordance with the amount of the Obligations owed to them on the
date of any such distribution);

     

    FOURTH,
to the Borrowers or such other party entitled thereto, as the case may be, or
their successors and assigns, or as a court of competent jurisdiction may
otherwise direct.

     

    (b) Each
Borrower shall remain liable to the extent of any deficiency between the amount
of all Proceeds realized upon sale, other disposition or collection of the
Collateral, and monies held as Collateral pursuant to this Agreement and the
aggregate amount of unpaid Obligations.  Upon any sale of any
Collateral by the Administrative Agent (whether by virtue of the power of sale
granted under the Financing Documents, pursuant to judicial proceeding, or
otherwise), the receipt by the Administrative Agent or the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.

     

    SECTION
7.3.   Collateral
Accounts.  Upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent shall have the right to cause to be
established and maintained, at its principal office or such other location or
locations as it may establish from time to time in its discretion, one or more
accounts (collectively, “Collateral Accounts”)
for the collection of cash Proceeds of Collateral.  Such Proceeds,
when deposited, shall continue to constitute Collateral for the Obligations and
shall not constitute payment thereof until applied as herein
provided.  The Administrative Agent shall have sole dominion and
control over all funds deposited in any Collateral Accounts, and such funds may
be withdrawn therefrom only by the Administrative Agent.  Upon the
occurrence and during the continuance of an Event of Default, Administrative
Agent shall have the right to (and, if directed by the Required Lenders pursuant
to this Agreement, shall) apply amounts held in the Collateral Accounts in
payment of the Obligations in the manner provided for in Section 7.2
above.

     

    ARTICLE VIII    

     

     

    THE ADMINISTRATIVE
AGENT

     

    Each of
the Lenders hereby irrevocably appoints the Administrative Agent as its agent
both as administrative agent and collateral agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Financing Documents, together with such actions and powers as are
reasonably incidental thereto.

     

    The
Person serving as the Administrative Agent hereunder and under the other
Financing Documents shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and such Person and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with any Loan
Party or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

     

    The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein or in the other Financing
Documents.  Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or thereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 10.2),
and (c) except as expressly set forth herein, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for any failure to
disclose, any information relating to the Loan Parties or any of their
Subsidiaries that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity.  The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2) or
in the absence of its own gross negligence or willful misconduct, as determined
by a court of competent jurisdiction by final and nonappealable
judgment.  The Administrative Agent shall be deemed not to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower Representative or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.

     

    The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone in accordance with Section 2.6 and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon.  The Administrative Agent may consult
with legal counsel (who may be counsel for any of the Lenders), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

     

    The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties.  The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their activities as Administrative Agent.

     

    With
respect to the release of Collateral, the Lenders hereby irrevocably authorize
the Administrative Agent, at its option and in its discretion, to release any
Lien granted to or held by the Administrative Agent upon any property covered by
this Agreement or the other Financing Documents (i) upon termination or
expiration of the Commitments, the payment and satisfaction of all Obligations
arising with respect to the Loans (including, without limitation, all fees and
expenses payable hereunder and under the other Financing Documents), or
(ii) constituting property being sold or disposed of in compliance with the
provisions of the Financing Documents (and the Administrative Agent may rely in
good faith conclusively on any certificate stating that the property is being
sold or disposed of in compliance with the provisions of the Financing
Documents, without further inquiry); provided, however, that
(x) the Administrative Agent shall not be required to execute any release
on terms which, in the Administrative Agent’s opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (y) such release shall not in any manner discharge, affect or impair
any Liens upon all interests retained, all of which shall continue to constitute
part of the Collateral covered by the Financing Documents.

     

    With
respect to perfecting security interests in Collateral which, in accordance with
Article 9
of the Uniform Commercial Code or any comparable provision of any Lien
perfection statute in any applicable jurisdiction, can be perfected only by
possession, each Lender hereby appoints each other Lender its agent for the
purpose of perfecting such interest.  Should any Lender (other than
the Administrative Agent) obtain possession of any such Collateral, such Lender
shall notify the Administrative Agent, and, promptly upon the Administrative
Agent’s request, shall deliver such Collateral to the Administrative Agent or in
accordance with the Administrative Agent’s instructions.  Each Lender
agrees that it will not have any right individually to enforce or seek to
enforce this Agreement or any other Financing Document or to realize upon any
Collateral for the Loans, it being understood and agreed that such rights and
remedies may be exercised only by or with the approval of the Administrative
Agent.

     

    In the
event that a petition seeking relief under Title 11 of the United States Code or
any other Federal, state or foreign bankruptcy, insolvency, liquidation or
similar law is filed by or against any Loan Party, the Administrative Agent is
authorized, to the fullest extent permitted by applicable law, but shall not be
required, to file a proof of claim on behalf of itself, the Lenders in such
proceeding for the total amount of Obligations owed by such
Person.  With respect to any such proof of claim which the
Administrative Agent may file, each Lender acknowledges that without reliance on
such proof of claim, such Lender shall make its own evaluation as to whether an
individual proof of claim must be filed in respect of such Obligations owed to
such Lender and, if so, take the steps necessary to prepare and timely file such
individual claim.

     

    Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower Representative.  Upon any such
resignation, the Required Lenders shall have the right, with the approval of the
Borrower Representative (not to be unreasonably withheld, except that no such
approval shall be required upon the occurrence and during the continuance of an
Event of Default), to appoint a successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a bank with an office in New York, New York, or an Affiliate of any such bank
with such an office.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Borrower
Representative and such successor.  After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.3
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

     

    Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such 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 the Administrative Agent
or any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any related agreement or
any document furnished hereunder or thereunder.  Each Lender
acknowledges the potential conflict of interest of each other Lender as a result
of Lenders holding disproportionate interests in the Loans, and expressly
consents to and waives any claim based upon such conflict of
interest.

     

    Each
Lender authorizes the Administrative Agent to release Liens on any Collateral
sold, transferred or otherwise disposed of by any Loan Party as permitted by
this Agreement or the Security Agreement to the extent all conditions set forth
herein and therein are satisfied.

     

    ARTICLE IX

     

    RESERVED

     

    ARTICLE X

     

    MISCELLANEOUS

     

    SECTION
10.1.   Notices.

     

    (a) Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:

     

    (i) if to the
Loan Parties, c/o the Borrower Representative at 1689 Nonconnah Blvd., Suite
111, Memphis, Tennessee 38132, attention:  General Counsel (telecopy
no. (901) 358-4103);

     

    (ii) if to the
Administrative Agent, to 30 S. Wacker Drive, Chicago, IL 60606, attention: John
Heskin, and to 11 West 42nd Street, 12th Floor, New York, New York 10036,
attention: Chief Counsel, with copies for informational purposes only to Vedder
Price P.C., 222 North LaSalle Street, Suite 2400, Chicago, Illinois 60601,
Attention: Michael A. Nemeroff (Telecopy No. (312) 609-5005);
and

     

    (iii) if to any
other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

     

    (b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable
Lender.  The Administrative Agent or the Borrower Representative may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that
approval of such procedures may be limited to particular notices or
communications.

     

    (c) Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

     

    SECTION
10.2.   Waivers;
Amendments.

     

    (a) No
failure or delay by the Administrative Agent or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or
power.  The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have.  No waiver of any provision of this
Agreement or consent to any departure by the Borrowers therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without
limiting the generality of the foregoing, the making of a Loan shall not be
construed as a waiver of any Default or Event of Default, regardless of whether
the Administrative Agent or any Lender may have had notice or knowledge of such
Default or Event of Default at the time.

     

    (b) Neither
this Agreement nor any provision hereof nor any provision of any other Financing
Document may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Loan Parties and the Required Lenders
or by the Loan Parties and the Administrative Agent with the consent of the
Required Lenders; provided that no such
agreement shall (i) increase the Term Loan Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of the
Term Loan or Note or reduce the rate of interest thereon, or reduce any fees
payable to or for the account of Lenders hereunder, without the written consent
of each Lender directly affected thereby, (iii) postpone the Term Loan
Maturity Date or the scheduled date of payment of the principal amount of any
Loan (other than pursuant to Section 2.9(d)
or (e) hereof),
or any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment without the written consent of each Lender
directly affected thereby, (iv) change Section 2.16(b)
or 2.16(c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) release all or a material
portion of the Collateral (except following termination of the Term Loan
Commitment and payment in full of all Obligations then outstanding or make
overadvances (other than for the purpose of preserving Collateral),
(vi) except as provided herein or in the other Financing Documents, release
all or substantially all of the Collateral, or (vii) change any of the
provisions of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to waive, amend or modify any rights hereunder or make any determination or
grant any consent hereunder, without the written consent of each Lender, and
provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.

     

    SECTION
10.3.   Expenses; Indemnity; Damage
Waiver.

     

    (a) The
Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, each Lender and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and each Lender, in connection with the preparation of this Agreement and
the other Financing Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and out-of-pocket field examination
expenses, and (ii) all out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.

     

    (b) The
Borrowers shall indemnify the Administrative Agent and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the use of the
proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Loan Party
or any of its Subsidiaries, or any Environmental Liability related in any way to
any Loan Party or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claim, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.

     

    (c) To the
extent that the Borrowers fail to pay any amount required to be paid by it to
the Administrative Agent or its respective Related Parties under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the applicable Related Party, as the case may be, such
Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought and based upon the
outstanding principal amount of the Term Loan at such time) of such unpaid
amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or such Related Party in its capacity as such.

     

    (d) To the
extent permitted by applicable law, no Borrower shall assert, and each Borrower
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions
or any Loan or the use of the proceeds thereof.

     

    (e) All
amounts due under this Section shall be payable promptly after written
demand therefor.

     

    SECTION
10.4.   Successors and
Assigns.

     

    (a) Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that (i) no Loan Party may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by any Loan Party without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 10.4.  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.

     

    (b) Assignments by
Lenders.

     

    (i) Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Term Loan Commitment) with the
prior written consent (such consent not to be unreasonably withheld) of the
Administrative Agent, provided that no consent of the Administrative Agent shall
be required for assignments in respect of a Term Loan Commitment if such
assignment is to a Person that is a Lender with a Commitment in respect of such
facility, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.

     

    (ii) Assignments
shall be subject to the following additional conditions:

     

    (A) Minimum
Amounts.  Except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Term Loan Commitment, the amount of the Term Loan Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than [***] in the case of such
Lender’s Term Loan Commitment, unless Administrative Agent otherwise
consents;

     

    (B) Recording
Fee.  The parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
[***];

     

    (C) Administrative
Questionnaire.  If the assignee is not an existing Lender
hereunder, such assignee shall deliver an Administrative Questionnaire to the
Administrative Agent;

     

    (D) No Assignment to any
Borrower.  No assignment shall be made to any Borrower or any
of a Borrower’s Affiliates or Subsidiaries; and

     

    (E) No Assignment to Natural
Persons.  No assignment shall be made to a natural
person.

     

    For the
purposes of this Section 10.4(b),
the term “Approved Fund” has the following meaning:

     

    “Approved Fund” means
any Person (other than a natural person) engaged in making, purchasing, holding,
or investing in commercial loans and similar extensions of credit in the
ordinary course of its business and that is advised, administered, or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers, advises or manages a Lender; and with
respect to any Lender that is an investment fund, any other investment fund that
invests in loans and that is advised, administered or managed by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor.

     

    (iii) Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 10.4,
from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.13,
2.14, 2.15 and 10.3).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 10.4
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

     

    (c) Register.

     

    (i) The Loans
shall be issued in registered form and shall be transferable only upon a
register (the “Register”) maintained
by the Administrative Agent as Registrar (the “Registrar”), acting
solely for this purpose as an agent of the Borrowers.  The Registrar
shall maintain the Register at one of its offices in the United States for the
recordation of the names and addresses of the holders of the Notes from time to
time.  The Registrar shall record each transfer of all or part of the
Loans to a transferee on the Registrar upon written notification by the
registered owner of such transfer (with the Registrar being allowed to rely
conclusively on any such notification).  The entries in the Register
shall be conclusive, and the Borrowers, the Administrative Agent and Lenders may
deem and treat the Person whose name is recorded in the Register pursuant to the
terms hereof as the owner of the Loans and holders of the Notes for the purpose
of receiving payment of, or on account of, the principal and interest due on the
Loans and for all other purposes, notwithstanding notice to the contrary, provided that, failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender’s Commitments or Borrower’s Obligations in respect of any
Loan.  The Register shall be available for inspection by the Borrowers
and the Lenders, at any reasonable time and from time to time upon reasonable
prior notice.  Each Borrower hereby designates the entity serving as
Administrative Agent to serve as such Borrower’s agent solely for purposes of
maintaining the Register as provided in this Section, and each Borrower hereby
agrees that, to the extent such entity serves in such capacity, the entity
serving as Agent and its affiliates, and its and its affiliates officers,
directors, employees and agents shall constitute “Indemnitees” under Section 10.3(b).

     

    (ii) Upon its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section 10.4,
any Note or Notes subject to such assignment and any written consent to such
assignment required by paragraph (b) of this Section 10.4,
the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.  Upon notice to the
Borrower Representative, at no expense to any Loan Party, the Borrowers shall
execute and deliver to the Administrative Agent in exchange for such surrendered
Notes, new Notes to the assignee in an amount equal to the portion of the
Commitments assumed by it pursuant to such Assignment and Assumption and, if the
assigning Lender has retained any Commitment hereunder, new Notes to the
assigning Lender in an amount equal to the respective Commitments retained by it
hereunder.

     

    (iii) At the
request of the registered owner of the Note, the Administrative Agent shall note
a collateral assignment of the Note on the Register and, provided that the
Administrative Agent has been given the name and address of such collateral
assignee, the Administrative Agent (i) shall not permit any further transfers of
the Note on the Register absent receipt of written consent to such transfers
from such collateral assignee and (ii) shall record the transfer of the Note on
the Register to such collateral assignee (or such collateral assignee’s
designee, nominee or assignee) upon written request by such collateral
assignee.

     

    (d) Participations.

     

    (i) Any
Lender may, without the consent of the Loan Parties or the Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (C) the Borrowers, the
Administrative 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.

     

    (ii) Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Financing Documents and to approve any amendment,
modification or waiver of any provision of this Agreement and the other
Financing Documents; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.2(b)
that affects such Participant.  Subject to paragraph (c)(ii) of this
Section, the Borrower agrees, to the fullest extent permitted under applicable
law, that each Participant shall be entitled to the benefits of Sections 2.13,
2.14 and 2.15 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.8 as
though it were a Lender, provided such Participant agrees in writing to be
subject to Section 2.16(c)
as though it were a Lender.

     

    (e) Limitation on Participant’s
Rights.  A Participant shall not be entitled to receive any
greater payment under Section 2.13 or
2.15 other than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender, i.e., if it were a
Lender, shall not be entitled to the benefits of Section 2.15
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.15(e)
as though it were a Lender.

     

    (f) Certain
Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement and
the Notes issued to such Lender to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    (g) Limitation on
Effectiveness.  Notwithstanding anything contained herein to
the contrary, in the case of an assignment by any Lender to any Affiliate of
such Lender, such assignment shall be effective as between such assigning Lender
and its Affiliate immediately without compliance with the conditions for
assignment under this Section 10.4,
but shall not be effective with respect to the Borrowers, the Administrative
Agent or any Lender, and the Borrowers, the Administrative Agent and each Lender
shall be entitled to deal solely and directly with such assigning Lender under
any such assignment, in each case, until all of the conditions for assignment
under this Section 10.4
have been complied with.

     

    (h) Securitization.  In
addition to any other assignment permitted pursuant to this Section, Loan
Parties hereby acknowledge that (x) the Lenders, their Affiliates and
Approved Funds (each, a “Lender Party” and
collectively, “Lender
Parties”) may sell or securitize the Loans (a “Securitization”)
through the pledge of the Loans as collateral security for loans to a Lender
Party or the assignment or issuance of direct or indirect interests in the Loans
(such as, for instance, collateralized loan obligations), and (y) such
Securitization may be rated by a Rating Agency (as defined in Section
10.12).  The  Loan Parties shall reasonably cooperate
with the Lender Parties to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents,
and executing such additional documents, as reasonably requested by the Lenders
in connection with the Securitization, (b) providing such information as
may be reasonably requested by the Lenders or Rating Agencies in connection with
the rating of the Loans or the Securitization, and (c) providing a
certificate (i) agreeing to indemnify the Lender Parties, or any party
providing credit support or otherwise participating in the
Securitization,  including any investors in a securitization entity
(collectively, the “Securitization
Parties”) for any losses, claims, damages or liabilities (the “Securitization
Liabilities”) to which the Lender Parties or such Securitization Parties
may become subject insofar as the Securitization Liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in any Loan Document or in any writing delivered by or on behalf of
any Loan Party to the Lender Partiers in connection with any Loan Document or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and such indemnity shall survive any transfer by the Lenders or
their successors or assigns of the Loans, and (ii) agreeing to reimburse
the Lender Parties and the other Securitization Parties for any legal or other
expenses reasonably incurred by such Persons in connection with defending the
Securitization Liabilities.

     

    SECTION
10.5.   Survival.  All
covenants, agreements, representations and warranties made by the Loan Parties
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, or any Lender may have had notice or knowledge of any
Default, Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Commitments have not expired or terminated.  The provisions of
Sections 2.13,
2.14, 2.15 and 10.3 and Article VIII
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Term Loan, the
expiration the Term Loan Commitment or the termination of this Agreement or any
provision hereof.  Notwithstanding the foregoing, the Administrative
Agent hereby agrees to release all of its Liens on the Collateral upon payment
in full of all Obligations.

     

    SECTION
10.6.   Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement, the other Financing Documents and
any separate letter agreements with respect to or referring to fees and other
amounts payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof.  Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

     

    SECTION
10.7.   Severability.  Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof, and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    SECTION
10.8.   Right of
Setoff.  (a) Subject to the provisions of Section 10.8(b)
below, If an Event of Default shall have occurred and be continuing, each Lender
and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of any Loan Party against any of and all the
obligations of such Loan Party now or hereafter existing under this Agreement or
any other Financing Document held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement or any other
Financing Document and although such obligations may be
unmatured.  The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.

     

    (b) If any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of principal of,
or interest on, any of the Loans made by it, in excess of its pro rata share of
payments then or thereafter obtained by all Lenders upon principal of and
interest on all such Obligations, such Lender shall purchase from the other
Lenders such participations in the Term Loan held by them as shall be necessary
to cause such purchasing Lender to share the excess payment or other recovery
ratably in accordance with the applicable percentages of the aggregate Term Loan
Commitment of the Lenders; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
holder, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.

     

    SECTION
10.9.   GOVERNING LAW; Jurisdiction;
Consent to Service of Process.

     

    (a) THIS
AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATION LAW
OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.

     

    (b) Each Loan
Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court for
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or any of
the other Financing 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 may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court.  Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement or any of the other
Financing Documents shall affect any right that the Administrative Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Loan Party or its properties in the courts of any
jurisdiction.

     

    (c) Each Loan
Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Financing Documents in any court
referred to in paragraph (b) of this Section.  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.

     

    (d) Each Loan
Party irrevocably consents to service of process in the manner provided for
notices in Section 10.1.  Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

     

    SECTION
10.10.   WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    SECTION
10.11.   Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    SECTION
10.12.   Confidentiality.  Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, Rating Agencies, portfolio
management servicers, legal counsel and other advisors (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any of the other Financing Documents or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) to a Person that is a
trustee, investment advisor, collateral manager, servicer, noteholder or secured
party in a Securitization (as hereinafter defined) in connection with the
administration, servicing and reporting on the assets serving as collateral for
such Securitization, (h) with the consent of the Borrower Representative or
(i) to the extent such Information (i) becomes publicly available,
other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than a Loan Party.  Notwithstanding the foregoing,
each of the Administrative Agent and the Lenders may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
the Transactions and all materials of any kind (including opinions and tax
analysis) that have been provided to such Persons relating to the tax treatment
and tax structure of the Transactions (it being understood that this
authorization is retroactively effective to the commencement of the first
discussions between or among any of the parties regarding the
Transactions).  For the purposes of this Section, (i) “Information” means
all information received from any Loan Party relating to the Loan Parties or
their business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by such Loan Party; provided that, in the
case of information received from a Loan Party after the date hereof, such
information is clearly identified as confidential at the time of
delivery.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information and (ii) “Rating Agencies”
means Moody’s Investor Services, Inc., Standard and Poor’s Ratings Group, a
Division of McGraw Hill Corporation, Fitch Ratings Ltd., or any other nationally
recognized rating agency or service.  The obligations of any Person
required to maintain the confidentiality of Information as provided in this
Section shall continue with respect to any item of Information for only so long
as the item of Information has or retains a confidential nature, but in no event
beyond a period of two (2) years from the date of delivery of such item of
Information to such Person.  In no event shall the Administrative
Agent or any Lender be obligated or required to return any Information or other
materials furnished by a Loan Party.

     

    SECTION
10.13.   Interest Rate
Limitation.  Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the “Charges”), shall
exceed the maximum lawful rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

     

    SECTION
10.14.   Publication.  No
Loan Party or Affiliate thereof will in the future issue any press releases or
other public disclosure using the name “C.I.T. Leasing Corporation” or its
Affiliates or any other Lender or its Affiliates or referring to this Agreement
or the other Financing Documents without at least two (2) Business Days’
prior notice to Administrative Agent and Lender, if applicable, and without the
prior written consent of Administrative Agent and Lender, if applicable, unless
(and only to the extent that) such Loan Party or Affiliate is required to do so
under Applicable Law and then, in any event, such Loan Party or Affiliate will
consult with Administrative Agent before issuing such press release or other
public disclosure.  Each Loan Party expressly consents to and
authorizes the publication by Administrative Agent or any Lender of a summary
description of the transaction(s) contemplated by this Agreement in any format
(including tombstones, deal listings or similar advertising materials), which
may be published in one or more of financial or other industry periodicals,
newspapers, reporting services, trade organizations, written promotional
materials, Administrative Agent or Lender web site, etc.  In addition,
each Loan Party expressly consents to and authorizes Administrative Agent or
Lender to provide to financial or other industry periodicals, newspapers,
reporting services or trade organizations information necessary and customary
for inclusion of the transaction(s) in league table measurements, including the
aggregate dollar value of the transaction.

     

    SECTION
10.15.   Currency.  All
references herein with respect to currency denominations of “Dollars” or “$”
shall mean U.S. Dollars.

     

    ARTICLE XI

     

    


     

    BORROWER
REPRESENTATIVE

     

    SECTION
11.1.   Appointment; Nature of
Relationship.  Holdings is
hereby appointed by each of the Borrowers as its contractual representative
(herein referred to as the “Borrower
Representative”) hereunder and under each other Loan Document, and each
of the Borrowers irrevocably authorizes the Borrower Representative to act as
the contractual representative of such Borrower with the rights and duties
expressly set forth herein and in the other Financing Documents.  The
Borrower Representative agrees to act as such contractual representative upon
the express conditions contained in this
Article XI.  Additionally, the Borrowers hereby appoint the
Borrower Representative as their agent to receive all of the proceeds of the
Loans in any account designated by Borrower Representative, at which time the
Borrower Representative shall promptly disburse such Loans to the appropriate
Borrower.  The Administrative Agent and the Lenders, and their
respective Affiliates, and their respective officers, directors, agents or
employees, shall not be liable to the Borrower Representative or any Borrower
for any action taken or omitted to be taken by the Borrower Representative or
the Borrowers pursuant to this Section 11.1.

     

    SECTION
11.2.   Powers.  The
Borrower Representative shall have and may exercise such powers under the
Financing Documents as are specifically delegated to the Borrowers and/or the
Borrower Representative by the terms of each thereof, together with such powers
as are reasonably incidental thereto.  The Borrower Representative
shall have no implied duties to the Borrowers, or any obligation to the Lenders
to take any action thereunder except any action specifically provided by the
Financing Documents to be taken by the Borrower Representative.

     

    SECTION
11.3.   Employment of
Agents.  The Borrower Representative may execute any of its
duties and powers as the Borrower Representative hereunder and under any other
Loan Document by or through Authorized Officers.

     

    SECTION
11.4.   Notices.  Each
Borrower shall immediately notify the Borrower Representative of the occurrence
of any Default hereunder referring to this Agreement describing such Default and
stating that such notice is a “notice of default.”  In the event that
the Borrower Representative receives such a notice, the Borrower Representative
shall give prompt notice thereof to the Administrative Agent and the
Lenders.  Any notice provided to the Borrower Representative under
this Agreement or any of the Financing Documents shall constitute notice to each
Borrower on the date received by the Borrower Representative.

     

    SECTION
11.5.   Successor Borrower
Representative.  Upon the prior written consent of the
Administrative Agent, the Borrower Representative may resign at any time, such
resignation to be effective upon the appointment of a successor Borrower
Representative.  The Administrative Agent shall give prompt written
notice of such resignation and corresponding appointment of a successor to the
Lenders.

     

    SECTION
11.6.   Execution of Financing
Documents; Certificates.  The Borrowers hereby empower and
authorize the Borrower Representative, on behalf of the Borrowers, to execute
and deliver to the Administrative Agent and the Lenders the Financing Documents
and all related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Financing Documents,
including without limitation, the Compliance Certificates.  Each
Borrower agrees that any action taken by the Borrower Representative or the
Borrowers in accordance with the terms of this Agreement or the other Financing
Documents, and the exercise by the Borrower Representative of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Borrowers.

     

    ARTICLE XII

     

    JOINT AND SEVERAL
OBLIGATIONS; CROSS-GUARANTIES

     

    SECTION
12.1.   Joint and Several
Obligations.

     

    (a) Each
Borrower shall be jointly and severally liable for all of the obligations of
Borrowers under this Agreement, regardless of which Borrower actually receives
the proceeds of the Indebtedness governed hereby or the benefit of any other
extensions of credit hereunder, or the manner in which the Borrowers,
Administrative Agent or Lenders account therefor in their respective books and
records.  In addition, each Borrower hereby acknowledges and agrees
that all of the representations, warranties, covenants, obligations, conditions,
agreements and other terms contained in this Agreement shall be applicable to
and shall be binding upon and measured and enforceable individually against each
Borrower as well as all Borrowers when taken together.  By way of
illustration, but without limiting the generality of the foregoing, the terms of
Article VII of this Agreement are to be applied to each Borrower (as well as to
all Borrowers taken as a whole), such that the occurrence of any of the events
described in Article VII of this Agreement as to any Borrower shall constitute
an Event of Default even if such event has not occurred as to any other Borrower
or as to all Borrowers taken as a whole (except as otherwise expressly provided
therein).

     

    (b) Each
Borrower acknowledges that it will enjoy significant benefits from the business
conducted by the other Borrowers because of, inter alia, their combined ability
to bargain with other Persons including without limitation their ability to
receive the credit extensions under this Agreement and the Security Documents,
which would not have been available to an individual Borrower acting
alone.  Each Borrower has determined that it is in its best interest
to procure the credit facilities contemplated hereunder, with the credit support
of the other Borrowers as contemplated by this Agreement and the Security
Documents.

     

    (c) Administrative
Agent and the Lenders have advised the Borrowers that they are unwilling to
enter into this Agreement and the Security Documents and make available the
credit facilities extended hereby or thereby to any Borrower unless each
Borrower agrees, among other things, to be jointly and severally liable for the
due and proper payment of the Obligations of each other Borrower under this
Agreement and the Security Documents.  Each Borrower has determined
that it is in its best interest and in pursuit of its purposes that it so induce
the Administrative Agent and the Lenders to extend credit pursuant to this
Agreement and the Security Documents (i) because of the desirability to
each Borrower of the credit facilities hereunder and the interest rates and the
modes of borrowing available hereunder, (ii) because each Borrower may
engage in transactions jointly with other Borrowers, and (iii) because each
Borrower may require, from time to time, access to funds under this Agreement
for the purposes herein set forth.  Each Borrower, individually,
expressly understands, agrees and acknowledges, that the credit facilities
contemplated hereunder would not be made available on the terms herein in the
absence of the collective credit of the Borrowers, the joint and several
liability of all such Persons, and the cross-collateralization of the collateral
of all such Persons hereunder.  Accordingly, each Borrower
individually acknowledges that the benefit of the accommodations made under this
Agreement to Borrowers as a whole constitutes reasonably equivalent value,
regardless of the amount of the indebtedness actually borrowed by, advanced to,
or the amount of credit provided to, or the amount of collateral provided by,
any individual Borrower.

     

    (d) Each
Borrower has determined that it has and, after giving effect to the transactions
contemplated by this Agreement and the Security Documents (including, without
limitation, the inter-Borrower arrangement set forth in this Section) will have,
assets having a fair saleable value in excess of the amount required to pay its
probable liability on its existing debts as they fall due for payment and that
the sum of its debts is not and will not then be greater than all of its
property at a fair valuation, that such Borrower has, and will have, access to
adequate capital for the conduct of its business and the ability to pay its
debts from time to time incurred in connection therewith as such debts mature
and that the value of the benefits to be derived by such Borrower from the
access to funds under this Agreement (including, without limitation, the
intercompany arrangement set forth in this Section) is reasonably equivalent to
the obligations undertaken pursuant hereto.

     

    (e) Borrower
Representative (on behalf of each Borrower) shall maintain records specifying
(a) all Obligations incurred by each Borrower, (b) the date of such
incurrence, (c) the date and amount of any payments made in respect of such
Obligations and (d) all inter-Borrower obligations pursuant to this
Section.  Borrower Representative shall make copies of such records
available to Administrative Agent and the Lenders, upon request.

     

    (f) To the
extent that applicable law otherwise would render the full amount of the joint
and several obligations of any Borrower hereunder and under the Security
Documents invalid or unenforceable, such Borrower’s obligations hereunder and
under the Security Documents shall be limited to the maximum amount which does
not result in such invalidity or unenforceability; provided, however, that each
Borrower’s obligations hereunder and under the Security Documents shall be
presumptively valid and enforceable to their fullest extent in accordance with
the terms hereof, as if this Section were not a part of this
Agreement.

     

    (g) To the
extent that any Borrower shall make a payment under this Section of all or any
of the Obligations (other than credit facilities made to that Borrower for which
it is primarily liable) (a “Joint Liability
Payment”) which, taking into account all other Joint Liability Payments
then previously or concurrently made by any other Borrower, exceeds the amount
which such Borrower would otherwise have paid if each Borrower had paid the
aggregate Obligations satisfied by such Joint Liability Payments in the same
proportion that such Borrower’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Joint Liability Payments) bore to the
aggregate Allocable Amounts of each of the Borrowers as determined immediately
prior to the making of such Joint Liability Payments, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Joint Liability Payments.  As of any
date of determination, the “Allocable Amount” of
any Borrower shall be equal to the maximum amount of the claim which could then
be recovered from such Borrower under this Section without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.

     

    (h) Administrative
Agent is hereby authorized, without notice or demand and without affecting the
liability of any Borrower hereunder, to, at any time and from time to time,
(i) renew, extend or otherwise increase the time for payment of the
Obligations; (ii) with the written agreement of any Borrower accelerate or
otherwise change the terms relating to the Obligations or otherwise modify,
amend or change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by any Borrower and delivered to
Administrative Agent; (iii) accept partial payments of the Obligations;
(iv) take and hold security or collateral for the payment of the
Obligations or for the payment of any guaranties of the Obligations and
exchange, enforce, waive and release any such security or collateral;
(v) apply such security or collateral and direct the order or manner of
sale thereof as Administrative Agent, in its sole discretion, may determine; and
(vi) settle, release, compromise, collect or otherwise liquidate the
Obligations and any security or collateral therefor in any manner, without
affecting or impairing the obligations of any Borrower.  Except as
specifically provided in this Agreement or any of the Security Documents,
Administrative Agent shall have the exclusive right to determine the time and
manner of application of any payments or credits, whether received from any
Borrower or any other source, and such determination shall be binding on all
Borrowers.  All such payments and credits may be applied, reversed and
reapplied, in whole or in part, to any of the Obligations. Administrative Agent
shall determine in its sole discretion without affecting the validity or
enforceability of the Obligations of any other Borrower.

     

    (i) Each
Borrower hereby agrees that, except as hereinafter provided, its obligations
hereunder shall be unconditional, irrespective of (i) the absence of any
attempt to collect the Obligations from any obligor or other action to enforce
the same; (ii) the waiver or consent by Administrative Agent with respect
to any provision of any instrument evidencing the Obligations, or any part
thereof, or any other agreement heretofore, now or hereafter executed by a
Borrower and delivered to Administrative Agent; (iii) failure by
Administrative Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations; (iv) the institution of any proceeding under the United States
Bankruptcy Code, or any similar proceeding, by or against a Borrower or
Administrative Agent’s election in any such proceeding of the application of
Section 1111(b)(2) of the United States Bankruptcy Code; (v) any
borrowing or grant of a security interest by a Borrower as debtor-in-possession,
under Section 364 of the United States Bankruptcy Code; (vi) the
disallowance, under Section 502 of the United States Bankruptcy Code, of
all or any portion of Administrative Agent’s claim(s) for repayment of any of
the Obligations; or (vii) any other circumstance other than payment in full
of the Obligations which might otherwise constitute a legal or equitable
discharge or defense of a guarantor or surety.

     

    (j) Until all
Obligations have been paid and satisfied in full, no payment made by or for the
account of a Borrower including, without limitation, (i) a payment made by
such Borrower on behalf of the liabilities of any other Borrower or (ii) a
payment made by any other person under any guaranty, shall entitle such
Borrower, by subrogation or otherwise, to any payment from any other Borrower or
from or out of any other Borrower’s property and such Borrower shall not
exercise any right or remedy against any other Borrower or any property of any
other Borrower by reason of any performance of such Borrower of its joint and
several obligations hereunder.

     

    (k) Any
notice given by one Borrower hereunder shall constitute and be deemed to be
notice given by all Borrowers, jointly and severally.  Notice given by
Administrative Agent or Lenders to any one Borrower hereunder or pursuant to any
Security Documents in accordance with the terms hereof shall constitute notice
to each and every Borrower.  The knowledge of one Borrower shall be
imputed to all Borrowers and any consent by one Borrower shall constitute the
consent of and shall bind all Borrowers.

     

    (l) This
Section is intended only to define the relative rights of Borrowers and nothing
set forth in this Section is intended to or shall impair the obligations of
Borrowers, jointly and severally, to pay any amounts as and when the same shall
become due and payable in accordance with the terms of this Agreement or any
Security Documents.  Nothing contained in this Section shall limit the
liability of any Borrower to pay the credit facilities made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.

     

    (m) The
parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of each Borrower to which such contribution
and indemnification is owing.  The rights of any indemnifying Borrower
against the other Borrowers under this Section shall be exercisable upon the
full and indefeasible payment of the Obligations and the termination of the
credit facilities hereunder.

     

    SECTION
12.2.   Cross-Guaranty
Provisions.

     

    (a) This
Agreement is a primary and original obligation of each of the Borrowers and each
of the Borrowers shall be liable for all existing and future Obligations of any
other Borrower as fully as if such Obligations were directly incurred by such
Borrower.

     

    (b) Each
Borrower, as joint and several primary obligor of the Obligations directly
incurred by any other Borrower, authorizes Administrative Agent, without giving
notice to such Borrower or to any other Borrower (to the extent permitted
hereunder) or obtaining such Borrower’s consent or any other Borrower’s consent
(to the extent permitted hereunder) and without affecting the liability of such
Borrower for the Obligations directly incurred by the other Borrower, from time
to time to:

     

    (i) compromise,
settle, renew, extend the time for payment, change the manner or terms of
payment, discharge the performance of, decline to enforce, or release all or any
of the Obligations; grant other indulgences to any Borrower in respect thereof;
or modify in any manner any documents relating to the Obligations;

     

    (ii) declare
all Obligations due and payable upon the occurrence and during the continuance
of an Event of Default;

     

    (iii) take and
hold security for the performance of the Obligations of any Borrower and
exchange, enforce, waive and release any such security;

     

    (iv) apply and
reapply such security and direct the order or manner of sale thereof as
Administrative Agent, in its sole discretion, may determine;

     

    (v) release,
surrender or exchange any deposits or other property securing the Obligations or
on which Administrative Agent at any time may have a Lien; release, substitute
or add any one or more endorsers or guarantors of the Obligations of any other
Borrower; or compromise, settle, renew, extend the time for payment, discharge
the performance of, decline to enforce, or release all or any obligations of any
such endorser or guarantor or other Person who is now or may hereafter be liable
on any Obligations or release, surrender or exchange any deposits or other
property of any such Person;

     

    (vi) apply
payments received by Administrative Agent from any Borrower to any Obligations,
in such order as Administrative Agent shall determine, in its sole discretion;
and

     

    (vii) assign
this Agreement in whole or in part.

     

    (c) Each
Borrower, as a primary, joint and several obligor with respect to the
Obligations directly incurred by any other Borrower, waives:

     

    (i) any
defense based upon any legal disability or other defense of any other Borrower,
or by reason of the cessation or limitation of the liability of any other
Borrower from any cause (other than full payment of all Obligations), including,
but not limited to, failure of consideration, breach of warranty, statute of
frauds, statute of limitations, accord and satisfaction, and usury;

     

    (ii) any
defense based upon any legal disability or other defense of any other guarantor
or other Person;

     

    (iii) any
defense based upon any lack of authority of the officers, directors, partners or
agents acting or purporting to act on behalf of any other Borrower or any
principal of any other Borrower or any defect in the formation of any other
Borrower or any principal of any other Borrower;

     

    (iv) any
defense based upon the application by any other Borrower of the proceeds of the
credit facilities for purposes other than the purposes represented by such other
Borrower to Administrative Agent or intended or understood by Administrative
Agent or such Borrower;

     

    (v) any
defense based on such Borrower’s rights, under statute or otherwise, to require
Administrative Agent to sue any other Borrower or otherwise to exhaust its
rights and remedies against any other Borrower or any other Person or against
any collateral before seeking to enforce its right to require such Borrower to
satisfy the Obligations of any other Borrower;

     

    (vi) any
defense based on Administrative Agent’s failure at any time to require strict
performance by any Borrower of any provision of the Security
Documents.  Such Borrower agrees that no such failure shall waive,
alter or diminish any right of Lender thereafter to demand strict compliance and
performance therewith.  Nothing contained herein shall prevent
Administrative Agent from foreclosing on any Lien, or exercising any rights
available to Administrative Agent thereunder, and the exercise of any such
rights shall not constitute a legal or equitable discharge of such
Borrower;

     

    (vii) any
defense arising from any act or omission of Administrative Agent which changes
the scope of such Borrower’s risks hereunder;

     

    (viii) any
defense based upon Administrative Agent’s election of any remedy against such
Borrower or any other Borrower; any defense based on the order in which
Administrative Agent enforces its remedies;

     

    (ix) any
defense based on (A) Administrative Agent’s surrender, release, exchange,
substitution, dealing with or taking any additional collateral,
(B) Administrative Agent’s abstaining from taking advantage of or realizing
upon any Lien or other guaranty, and (C) any impairment of collateral
securing the Obligations, including, but not limited to, Administrative Agent’s
failure to perfect or maintain a Lien in such collateral;

     

    (x) any
defense based upon Administrative Agent’s failure to disclose to such Borrower
any information concerning any other Borrower’s financial condition or any other
circumstances bearing on any other Borrower’s ability to pay the
Obligations;

     

    (xi) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in any other respects more
burdensome than that of a principal;

     

    (xii) any
defense based upon Administrative Agent’s election, in any proceeding instituted
under the Bankruptcy Code, of the application of Bankruptcy Code
§ 1111(b)(2) or any successor statute;

     

    (xiii) any
defense based upon any borrowing or any grant of a security interest under
Bankruptcy Code § 364;

     

    (xiv) any
defense based on Administrative Agent’s failure to be diligent or to satisfy any
other standard imposed on a secured party, in exercising rights with respect to
collateral securing the Obligations;

     

    (xv) except as
otherwise expressly set forth herein:  notice of acceptance hereof;
notice of the existence, creation or acquisition of any Obligation; notice of
any Event of Default; notice of the amount of the Obligations outstanding from
time to time; notice of any other fact which might increase such Borrower’s
risk; diligence; presentment; demand of payment; protest; filing of claims with
a court in the event of any other Borrower’s receivership or bankruptcy and all
other notices and demands to which such Borrower might otherwise be entitled
(and agrees the same shall not have to be made on the other Borrower as a
condition precedent to such Borrower’s obligations hereunder);

     

    (xvi) any
defense based on errors and omissions by Administrative Agent in connection with
its administration of the credit facilities;

     

    (xvii) any
defense based on application of fraudulent conveyance or transfer law or
shareholder distribution law to any of the Obligations or the security
therefor;

     

    (xviii) any
defense based on Administrative Agent’s failure to seek relief from stay or
adequate protection in any other Borrower’s bankruptcy proceeding or any other
act or omission by Administrative Agent which impairs such Borrower’s
prospective subrogation rights;

     

    (xix) any
defense based on legal prohibition of Administrative Agent’s acceleration of the
maturity of the Obligations during the occurrence of an Event of Default or any
other legal prohibition on enforcement of any other right or remedy of
Administrative Agent with respect to the Obligations and the security
therefor;

     

    (xx) any
defense available to a surety under applicable law; and

     

    (xxi) the
benefit of any statute of limitations affecting the liability of such Borrower
hereunder or the enforcement hereof.

     

    (d) Each
Borrower further agrees that its obligations hereunder shall not be impaired in
any manner whatsoever by any bankruptcy, extensions, moratoria or other relief
granted to any other Borrower pursuant to any statute presently in force or
hereafter enacted.

     

    (e) Each
Borrower authorizes Administrative Agent to exercise, in its sole discretion,
any right, remedy or combination thereof which may then be available to
Administrative Agent in accordance with, and subject to standards established
by, this Agreement and the other Financing Documents, since it is such
Borrower’s intent that the Obligations be absolute, independent and
unconditional obligations of such Borrower under all
circumstances.  Notwithstanding any foreclosure of any Lien with
respect to any or all of any property securing the Obligations, whether by the
exercise of the power of sale contained therein, by an action for judicial
foreclosure or by an acceptance of a deed in lieu of foreclosure, each Borrower
shall remain bound under such Borrower’s guaranty of the Obligations directly
incurred by any other Borrower.

     

    


    [SIGNATURE
PAGE FOLLOWS]

     


    
      
         


      

      
         


        
          

        

      

      
         


        
          Signature
Page to Credit Agreement

        

      

    


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

     

    
      	 
      	
              BORROWERS:

              PINNACLE
      AIRLINES, INC.

              By:                                                                

              Name:                                                              

              Title:                                                              

            
	 
      	
              COLGAN
      AIR, INC.

              By:                                                                

              Name:                                                              

              Title:                                                              

            
	 
      	
              HOLDINGS:

              PINNACLE
      AIRLINES CORP.

              By:                                                                

              Name:                                                              

              Title:                                                              

            


    

    


    



    
      
         


      

      
         


        
          

        

      

      
         


        
          Signature
Page to Credit Agreement

        

      

    


    
      	 
      	
              AGENT:

              C.I.T. LEASING
      CORPORATION, as Administrative Agent and Collateral
      Agent

              By:                                                              

              Name:                                                              

              Title:                                                                

            


    

    


    



    
      
         


      

      
         


        
          

        

      

      
         


        
          Signature
Page to Credit Agreement

        

      

    


    
      	 
      	
              LENDERS:

              CIT BANK, as a
      Lender

              By:                                                              

              Name:                                                              

              Title:                                                                

            


    

    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	 
      


    

    EXHIBIT
A

     

    FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT

     

     

    Reference
is made to the Credit Agreement dated as of July 30, 2009 (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit
Agreement”) among Pinnacle Airlines, Inc., a Georgia corporation (“Pinnacle”), Colgan
Air, Inc., a Virginia corporation (“Colgan”, and together
with Pinnacle, each a “Borrower” and
collectively, the “Borrowers”), the
other Loan Parties from time to time party thereto, the financial institutions
from time to time party thereto as lenders (collectively, the “Lenders”, and
individually, each a “Lender”), and C.I.T.
Leasing Corporation, as agent for the Lenders (in such capacity, the “Agent”).  Capitalized
terms used in this Assignment and Assumption Agreement (this “Agreement”) and not
otherwise defined shall have the meanings given to such terms in the Credit
Agreement.  This Agreement between the Assignor (as defined and set
forth on Schedule 1,
which is made a part of this Credit Agreement) and the Assignee (as defined and
set forth on Schedule 1) is
effective as of Effective Date (as set forth on Schedule 1).

     

    1.           The
Assignor hereby irrevocably sells and assigns to the Assignee, without recourse
to the Assignor, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, without recourse to the Assignor, as of the Effective Date, an
undivided interest (the “Assigned Interest”)
in and to all of the Assignor’s rights and obligations under the Credit
Agreement respecting those, and only those, portions of the financing facilities
contained in the Credit Agreement as are set forth on Schedule 1
(collectively, the “Assigned
Facilities”), in an amount for each of the Assigned Facilities as set
forth on Schedule 1.

     

    2.           The
Assignor: (i) 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 any other instrument,
document or agreement executed or delivered in connection therewith
(collectively the “Loan Documents”), or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any Collateral thereunder or any of the other
Loan Documents, other than a representation and warranty that the Assignor is
the legal and beneficial owner of the Assigned Interest and that the Assigned
Interest is free and clear of any adverse claim; and (ii) makes no
representation or warranty and assumes no responsibility with respect to
(x) the financial condition of any Loan Party, or (y) the performance
or observance by any Loan Party of any of its respective obligations under the
Credit Agreement or any of the Loan Documents.

     

    3.           The
Assignee (i) represents and warrants that it is legally authorized to enter
into this Credit Agreement, (ii) confirms that it has received a copy of
the Credit Agreement as amended through the Effective Date, together with the
copies of the most recent financial statements of the Loan Parties, and such
other documents and information as the Assignee has deemed appropriate to make
its own credit analysis, (iii) agrees that the Assignee will, independently
and without reliance upon the Agent, the Assignor or any other Lender and based
on such documents and information as the Assignee shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, (iv) appoints and authorizes the Agent to take
such action as agent on the Assignee’s behalf and to exercise such powers under
the Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (v) agrees
that the Assignee will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as Lender, and
(vi) if the Assignee is organized under the laws of a jurisdiction outside
the United States, attaches the forms prescribed by the IRS certifying as to the
Assignee’s exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty.

     

    4.           Following
the execution of this Assignment and Assumption Agreement, such agreement will
be delivered to the Agent for acceptance by the Agent, effective as of the
Effective Date.

     

    5.           Upon
such acceptance, from and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee, whether such amounts have
accrued prior to the Effective Date or accrue subsequent to the Effective
Date.  The Assignor and the Assignee shall make all other appropriate
adjustments in payments for periods prior to the Effective Date made by the
Agent or with respect to the making of this assignment directly between
themselves.

     

    6.           From
and after the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Credit Agreement, have the
rights and obligations of a Lender thereunder, and (ii) the Assignor shall,
to the extent provided in this Credit Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement.

     

    7.           THIS
ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed by its respective duly authorized officers on Schedule 1
hereto.

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
1 to Assignment and Assumption Agreement

     

    Name of
Assignor:                                __________________________

     

    Name of
Assignee:                                __________________________

     

    Effective
Date of
Assignment:           ________,
20__

     

    
      	
              Assigned
      Facilities

            	
              Percentage
      of Facilities Assigned

            	
              Dollar
      Amount  Assigned

            
	
              Term
      Loan

            	
              %

            	
              $                                

            
	 
      	 
      	 
      


    

    


     

    


     

    
      	
              ASSIGNOR:

            	
              ASSIGNEE:

            
	
               

              By:                                                              

              Name:                                                              

              Its:                                                                

            	
               

              By:                                                              

              Name:                                                              

              Its:                                                                

            


    

    


     

    
      	
              Accepted
      by the Agent:

              C.I.T.
      LEASING CORPORATION

              By:                                                              

              Name:                                                              

              Its:                                                                

            	
              Acknowledged
      and Agreed to by:

              PINNACLE
      AIRLINES, INC.

              By:                                                                

              Name:                                                              

              Its:      

            
	 
      	
              COLGAN
      AIR, INC.

              By:                                                                

              Name:                                                              

              Its:      

            


    

    


    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


          


        

         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B

     

    


     

    TERM
LOAN NOTE

     

    $_______________ New
York, New York

     

     _________________

     

    FOR VALUE
RECEIVED, each of the undersigned, PINNACLE AIRLINES, INC., a Georgia
corporation (“Pinnacle”), and
COLGAN AIR, INC., a Virginia corporation (“Colgan”, and together
with Pinnacle, each a “Borrower” and
collectively, the “Borrowers”), jointly
and severally, hereby promise to pay to _____________________ (the “Lender”), at the
office of C.I.T. Leasing Corporation, as administrative agent and collateral
agent (the “Administrative
Agent”), at 30 S. Wacker Drive, Chicago, IL 60606, on the Term Loan
Maturity Date, as such term is defined in the Credit Agreement dated as of
July 30, 2009 among the Borrowers, the Lenders party thereto from time to
time including the Lender, the Administrative Agent, and certain other parties
from time to time party thereto (as the same may be amended, modified or
supplemented from time to time in accordance with its terms, the “Credit Agreement”),
or earlier as provided for in the Credit Agreement, the principal amount of
_____________________ ($____________) in the manner set forth in the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date thereof on the principal
amount hereof from time to time outstanding, in like funds, at said office, at a
rate or rates per annum and, in each case, and payable on such dates as
determined pursuant to the terms of the Credit Agreement.

     

    The
Borrowers, jointly and severally, promise to pay interest, in accordance with
the Credit Agreement, on any overdue principal and fees and, to the extent
permitted by law, overdue interest from their due dates at a rate or rates
determined as set forth in the Credit Agreement.

     

    The
Borrowers, jointly and severally, further promise to pay all costs and expenses
(including reasonable attorneys’ fees) suffered or incurred by the holder hereof
in collecting this Term Loan Note (this “Note”) or enforcing
any rights in any Collateral therefor as set forth in the Credit
Agreement.

     

    The
Borrowers hereby waive diligence, presentment, demand, protest and notice of any
kind whatsoever.  The non-exercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

     

    This Note
is one of the Notes referred to in the Credit Agreement (and is secured by the
Collateral referred to therein), which, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain
events, for optional and mandatory prepayment of the principal hereof prior to
the maturity hereof and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein
specified.  THIS NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD
CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

     

    This Note
shall be held in registered form, and transfers of this Note must be made
pursuant to the Register maintained pursuant to Section 10.4(c)
of the Credit Agreement.  The Borrower may deem and treat the Person
in whose name this Note is recorded on the Register as the absolute owner of
this Note for the purpose of receiving payment of, or on account of, the
principal and interest due on this Note and for all other purposes,
notwithstanding notice to the contrary (subject to the rights of any collateral
assignee of this Note as set forth in Section 10.4(c)
of the Loan Agreement.)

     

    [SIGNATURE
PAGE FOLLOWS]

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


        
          Signature
Page to Term Loan Note

        

      

    


    
      	 
      	
              BORROWERS:

              PINNACLE
      AIRLINES, INC.

              By:                                                                

              Name:                                                              

              Title:                                                              

            
	 
      	
              COLGAN
      AIR, INC.

              By:                                                                

              Name:                                                              

              Title:                                                              

            
	 
      	 
      


    

    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    
      	 
      


    

    EXHIBIT
C

     

    FORM
OF COMPLIANCE CERTIFICATE

     

     

    Financial
Statement Date:_______ __, ____

     

    
      	
              To:

            	
              C.I.T.
      Leasing Corporation

            


    

    
      	
               
      

            	
              30
      S. Wacker Drive

            


    

    
      	
               
      

            	
              Chicago,
      IL 60606

            


    

    
      	
               
      

            	
              Attention:
      John Heskin

            


    

    


    
      	
               
      

            	
              C.I.T.
      Leasing Corporation

            


    

    
      	
               
      

            	
              11
      West 42nd Street, 12th Floor

            


    

    
      	
               
      

            	
              New
      York, New York 10036

            


    

    Attention: Chief Counsel

     

    Ladies
and Gentlemen:

     

    Please
refer to the Credit Agreement dated as of July 30, 2009 among Pinnacle Airlines,
Inc., a Georgia corporation (“Pinnacle”), Colgan
Air, Inc., a Virginia corporation (“Colgan”, and together
with Pinnacle, collectively, the “Borrowers”), Pinnacle
Airlines Corp., a Delaware corporation (“Holdings”), as
Borrower Representative (in such capacity, “Borrower
Representative”), the Lenders party thereto from time to time, C.I.T.
Leasing Corporation, as administrative agent and collateral agent (the “Administrative
Agent”), and certain other parties from time to time party thereto (as
the same may be amended, modified or supplemented from time to time in
accordance with its terms, the “Credit
Agreement”).  Capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to such terms in the Credit
Agreement.

     

    The
undersigned hereby certifies as of the date hereof that this certificate is
signed by a person who is a Financial Officer of the Borrowers as of the date
hereof, and that, as such, such person is authorized to execute and deliver this
Compliance Certificate to the Administrative Agent on behalf of Holdings and the
Borrowers, and that:

     

    [Use
following paragraph 1 for fiscal year-end financial statements]

     

    Attached
hereto as Schedule I are the annual audited financial statements required by
Section 5.1(a) of the Credit Agreement for the fiscal year of Holdings ended as
of the above date, together with the report and opinion of an independent
certified public accountant to the extent required by such section.

     

    [Use
following paragraph 1 for fiscal quarter-end financial statements]

     

    Attached
hereto as Schedule I are the quarterly unaudited financial statements required
by Section 5.1(b) of the Credit Agreement for the fiscal quarter of Holdings
ended as of the above date.  Such financial statements present fairly
in all material respects the financial position and results of operations and
cash flows of Holdings and its Subsidiaries in accordance with GAAP at such date
and for such periods, subject only to normal year-end audit adjustments and the
absence of footnotes.

     

    The
undersigned Financial Officer of Holdings, as Borrower Representative, has
reviewed and is familiar with the terms of the Credit Agreement and has made, or
has caused to be made under such person’s supervision, a detailed review of the
transactions and condition (financial or otherwise) of Holdings and its
Subsidiaries during the accounting period covered by the attached financial
statements.

     

    A review
of the activities of Holdings and its Subsidiaries during such fiscal period has
been made under the supervision of the undersigned Financial Officer with a view
to determining whether during such fiscal period Holdings and its Subsidiaries
have performed and observed all their respective obligations under the Financing
Documents, and

     

    [select
one:]

     

    [to the
best knowledge of the undersigned during such fiscal period, Holdings and its
Subsidiaries have performed and observed each covenant and condition of the
Credit Agreement and other Financing Documents applicable to it.]

     

    --or--

     

    [the
following covenants or conditions have not been performed or observed and the
following is a list of each such [Default] [and/or] [Event of Default] and its
nature and status:]

     

    The
financial covenant analyses and information set forth on Schedule II attached
hereto are true and accurate on and as of the date of this Compliance
Certificate.

     

    


     

    [SIGNATURE
PAGE FOLLOWS]

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


        
          (Signature
Page to Compliance Certificate)

        

      

    


    IN WITNESS WHEREOF, the undersigned has
executed this Compliance Certificate as of the date first above
written.

     

    


    
      	 
      	
              PINNACLE AIRLINES CORP.,
      a Delaware corporation, as Borrower
      Representative

               

               

              By:                                                              

              Name:                                                              

              Its:                                                              

            


    

    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
I

     

    See
attached

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
II

     

    Minimum
Liquidity

     

    Date:  _______________
__, 20__

     

    For
calendar month or test period ended ____________

     

    


    


    


    [***]


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
D

     

    
      	 
      


    

    BORROWING BASE
CERTIFICATE

     

    
      	
              To:

            	
              C.I.T.
      Leasing Corporation

            


    

    
      	
               
      

            	
              30
      S. Wacker Drive

            


    

    
      	
               
      

            	
              Chicago,
      IL 60606

            


    

    
      	
               
      

            	
              Attention:
      John Heskin

            


    

    


    
      	
               
      

            	
              C.I.T.
      Leasing Corporation

            


    

    
      	
               
      

            	
              11
      West 42nd Street, 12th Floor

            


    

    
      	
               
      

            	
              New
      York, New York 10036

            


    

    
      	
               
      

            	
              Attention:
      Chief Counsel

            


    

    


    Ladies
and Gentlemen:

     

    Please
refer to the Credit Agreement dated as of July 30, 2009 among Pinnacle Airlines,
Inc., a Georgia corporation (“Pinnacle”), Colgan
Air, Inc., a Virginia corporation (“Colgan”, and together
with Pinnacle, collectively, the “Borrowers”), Pinnacle
Airlines Corp., a Delaware corporation, as Borrower Representative (“Borrower
Representative”), the Lenders party thereto from time to time, C.I.T.
Leasing Corporation, as administrative agent and collateral agent (the “Administrative
Agent”), and certain other parties from time to time party thereto (as
the same may be amended, modified or supplemented from time to time in
accordance with its terms, the “Credit
Agreement”).  This Borrowing Base Certificate  (this
“Borrowing Base
Certificate”), together with supporting calculations attached hereto, is
delivered to you pursuant to the terms of the Credit
Agreement.  Capitalized terms used but not otherwise defined herein
shall have the same meanings herein as in the Credit Agreement.

     

    Borrower
Representative hereby certifies and warrants to the Administrative Agent and the
Lenders, on behalf of itself and Borrowers, that at the close of business on
__________, the Borrowing Base and Monthly Collateral NBV are as set forth
on Schedule I attached hereto.

     

    [SIGNATURE
PAGE FOLLOWS]

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


        
          Signature
Page to Borrowing Base Certificate

        

      

    


    IN
WITNESS WHEREOF, Borrower Representative has caused this Borrowing Base
Certificate to be executed and delivered by its Financial Officer thereunto duly
authorized on ______ __, 20___.

     

    
      	 
      	
              PINNACLE AIRLINES CORP.,
      a Delaware corporation, as Borrower
      Representative

               

               

              By:                                                              

              Name:                                                              

              Its:                                                              

            


    


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    


    SCHEDULE
I

     

    See
attached.

     

    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
E

     

    


     

    C.I.T.
LEASING CORPORATION,

     

    as
Administrative Agent and Collateral Agent,

     

    CIT
BANK, as a Lender,

     

    AND

     

    THE
OTHER LENDERS PARTY TO THE CREDIT FACILITY

     

    FROM TIME TO
TIME,

     

    $25,000,000 CREDIT
FACILITY

     

    TO

     

    PINNACLE
AIRLINES, INC.

     

    AND

     

    COLGAN
AIR, INC., as Borrowers

     

    (“Borrowers”)

     

    July
30, 2009

     

    SCHEDULE
OF RESPONSIBILITIES

     

    AND

     

    CLOSING DOCUMENT
LIST

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              A. Deal Team

               

            	
               

            
	
               Borrowers (“B”):

            	
              Pinnacle
      Airlines, Inc.

              Colgan
      Air, Inc.

              c/o
      Pinnacle Airlines Corp.

              1689
      Nonconnah Blvd., Suite 111

              Memphis,
      Tennessee 38132

               

              Brian
      T. Hunt

              Vide
      President and General Counsel

              Phone:   
      [***]

              Fax:         [***]

              E-Mail:  
      [***]

               

              Ron
      Kay

              Treasurer

              Phone:    [***]

              E-Mail:    [***]

               

            
	
               

            	
               

            
	
              Agent:

            	
              C.I.T.
      Leasing Corporation

              505
      Fifth Avenue, 12th
      Floor

              New
      York, New York 10017

               

              Oliver
      Althoff

              Phone:     [***]

              Fax:           [***]

              E-Mail:    
      [***]

               

              Thomas
      Maddi

              Phone:      [***]

              E-Mail:     
      [***]

               

              John
      Heskin

              Phone:     [***]

              E-Mail:   
       [***]

               

            
	
              Counsel
      to Lenders (“VP”):

            	
              Vedder
      Price P.C.

              222
      N. LaSalle Street, Suite 2400

              Chicago,
      Illinois 60601

              Fax:       [***]

               

              Michael
      A. Nemeroff, Esq.

              Phone  
      [***]

              E-Mail: 
      [***]

               

              Matthew
      T. O’Connor, Esq.

              Phone:  [***]

              E-Mail:
      [***]

               

              Eliza
      Hommel Peterson

              Phone:  [***]

              E-Mail:
      [***]

               

            
	
               

            	
               

            


    

    


    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    


    
      	 
      	
                       Drafting
      or

                      Responsible Party

            
	
              B. Operative Loan Documents

               

            	
               

            
	
              1. Credit
      Agreement

               

            	
              VP

            
	
              2. Exhibits
      to Credit Agreement:

               

            	
              VP

            
	
              a. Exhibit
      A - Form of Assignment and Assumption Agreement

            	
            
	
              b. Exhibit
      B - Form of Term Loan Note

            	
            
	
              c. Exhibit
      C – Form of Compliance Certificate

            	
            
	
              d. Exhibit
      D - Form of Borrowing Base Certificate

            	
            
	
              e. Exhibit
      E - Schedule of Responsibilities and Closing Document List

               

            	
            
	
              3. Schedules
      to Credit Agreement:

               

            	
              BC

            
	
              a. Schedule
      1 – Storage Locations

            	
            
	
              b. Schedule
      2.1 – List of Lenders and Commitments (VP)

            	
            
	
              c. Schedule
      3.5 – Disclosed Matters (Litigation)

            	
            
	
              d. Schedule
      3.6 – Compliance with ERISA

            	
            
	
              e. Schedule
      3.8 – Disclosed Matters (Environmental)

            	
               

            
	
              f. Schedule
      3.17 – Indebtedness and Default

            	
            
	
              g. Schedule
      3.18 -

            	
            
	
              h. Schedule
      3.23 – Insurance

            	
            
	
              i. Schedule
      6.8 – Existing Restrictive Agreements

            	
            
	
              4. Notes
      in favor of Lenders:

               

            	
              VP

            
	
              b. C.I.T.
      Bank

            	
            
	
              (ii) $25,000,000
      Term Loan Note

               

            	
            
	
              5. Pinnacle
      Airlines, Inc. Equipment Mortgage and Security Agreement, together with
      Supplement thereto

               

            	
              VP

            
	
              6. Colgan
      Air, Inc. Equipment Mortgage and Security Agreement, together with
      Supplement thereto

               

            	
              VP

            
	
              7. Officers’
      Certificate of Borrowers (Bring Down)

               

            	
              BC

              (form
      provided by VP)

            
	
              8. Landlord
      Agreements [***]

               

            	
              BC

              (form
      provided by VP)

            
	 
      	
               

            
	
              9. Aircraft
      Acknowledgments [***]

               

            	
              BC/B

              (form
      provided by VP)

            
	
              C. Basic Closing Documents

               

            	
               

            
	
              1. Secretary’s
      Certificate (or equivalent) of each Borrower certifying to the
      following:

               

            	
              BC

              (form
      provided by VP)

            
	
              a. Resolutions
      approving the financing

            	
               

            
	
              b. Incumbency
      of Officers

            	
               

            
	
              c. Certificate
      of Organization (certified by applicable Secretary of
    State)

            	
               

            
	
              d. Bylaws

               

            	
               

            
	
              2. Good
      Standing Certificate (or equivalent) of each Borrower from its
      jurisdiction of incorporation and each state where it is qualified to do
      business, as follows:

               

            	
              BC

            
	
              Pinnacle Airlines Corp.

            	
            
	
              a. Delaware

               

            	
            
	
                            
      Pinnacle Airlines,
    Inc.

            	
            
	
              a. Georgia

               

            	
            
	
                                      Colgan Air, Inc.

            	
               

            
	
                                      a.          Virginia

            	
               

            
	
              3. Legal
      Opinion of counsel to Borrowers

               

            	
              BC

              (form
      provided by VP)

            
	
              a. Vinson
      & Elkins

            	 
      
	
              b. Georgia
      counsel

            	 
      
	
              c. Virginia
      counsel

            	 
      
	
              d. In-House
      general counsel

            	 
      
	
              4. Legal
      Opinion of FAA Counsel

               

            	
              FAA
      Counsel

            
	
              5. Payoff
      Letters, UCC terminations and lien release from the following creditors of
      Borrowers:

               

            	
              B/BC

            
	
              a. Middleburg

            	
            
	
              b. Synovus

            	
            
	
              c. Fairbrook

            	
            
	
              6. Certificate
      of Insurance naming C.I.T. Leasing Corporation, as
      Administrative Agent, as an “additional insured” with respect to
      liability insurance and “lender’s loss payee”

               

            	
              B

            
	
              7. UCC,
      Tax Lien and Judgment searches for each Borrower in the following
      jurisdictions and/or offices:

               

            	
              VP

            
	
              Pinnacle Airlines Corp.

            	
            
	
              b. Delaware

               

            	
            
	
              c. Tennessee

               

            	
            
	
                                      Pinnacle Airlines, Inc.

            	 
      
	
                                      a.          Georgia

            	 
      
	
                                      b.          Tennessee

            	 
      
	
              Colgan Air Inc.

            	
            
	
              d. Virginia

            	
            
	
              8. UCC-1
      Financing Statement for each Borrower and Guarantor filed with the
      Secretary of State of Incorporation/Organization (as applicable) as
      follows:

               

            	
              VP

            
	
              Pinnacle Airlines Corp.

            	
            
	
              b. Georgia

               

            	
            
	
              Colgan Air Inc.

            	
            
	
              c. Virginia

               

            	
            
	
              9. Pre-Closing
      UCC Filing Authorization

               

            	
              VP/B

            
	
              10. Borrowing
      Base Certificate

               

            	
              B

            
	
              11. Authorization
      to Pay Proceeds

               

            	
              VP/B

            
	
              12. Information
      Certificate

               

            	
              BC/B

            
	
              13. Cape
      Town Side Letter

               

            	
            
	
              14. FAA
      and Cape Town searches for Aircraft Collateral

               

            	
              VP

            
	
              15. Consents
      of Engine Manufacturers to assignment of engine warranties (30 day
      post-closing)

               

            	
              VP

            
	
              16. Collateral
      Assignment of License Agreement re Inventory Tracking, together with copy
      of Software License Agreement (30 days post-closing)

               

            	
            
	
              D. Other Ancillary Matters

               

              [***]

            	
            


    

    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
1

     

    


     

    Storage
Locations

     

    COLGAN

     

    
      	
              Address

            
	
               

              [***]

            


    

    


     

    PINNACLE

     

    
      	
              [***]

            


    

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
2.1

     

    List
of Lenders and Commitments

     

    


     

    
      	
              Lender

            	
              Term
      Loan Commitment

            
	
              CIT
      Bank

            	
              $25,000,000.00

            


    

    


     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.5

     

    Disclosed
Matters (Litigation)

     

    


    


    NONE

    


    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.6

     

    Compliance
with ERISA

     

    


    


    Pinnacle
Airlines, Inc. Savings Plan

    Pinnacle
Airlines, Inc. Pilot Savings Plan

    Colgan
Air Inc. 401(k) Plan

    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.8

     

    Disclosed
Matters (Environmental)

     

    


    


    NONE

    


    



    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.17

     

    Indebtedness
and Default

     

    [***]

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.18

     

    Equity
Interest Rights

     

    Stock
options and restricted shares issued to directors and employees of the Loan
Parties pursuant to the 2003 Stock Incentive Plan, as amended.

     


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
3.23

     

    Insurance

     

    See
Attached

     

    


    


    Schedule
of Customary Airline Insurance

    


    [***]


    
      
        
          
            	 
      	
                     

                  	 
      


          

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
6.8

     

    Existing
Restrictive Agreements

     

    


     

    NONE