Exhibit 10.21






 


CREDIT AGREEMENT


 


by and among


 


NORTHWEST AIRLINES, INC.,


 


as Borrower,


 


NORTHWEST AIRLINES CORPORATION,


MCH, INC.,


COMPASS AIRLINES, INC.,


MESABA AVIATION, INC.,


NWA FUEL SERVICES CORPORATION,


NORTHWEST AEROSPACE TRAINING
CORPORATION,


NWA RETAIL SALES INC.,


and MLT INC.,


 


as Guarantors,


 


THE LENDERS FROM TIME TO TIME
PARTIES HERETO,


 


U.S. BANK NATIONAL ASSOCIATION,


 


as Lead Arranger, Joint Book
Runner and Administrative Agent,


 


CITIGROUP GLOBAL MARKETS INC. and
MORGAN STANLEY BANK, N.A.,


 


as Co-Lead Arrangers and Joint
Book Runners


 


Dated as of October 29, 2008








 

















 


Table of Contents


 


	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
  Section 1.1

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2 

  	
  Accounting Terms and Calculations

  	
   

  	
  26

  
	
  Section 1.3 

  	
  Computation of Time Periods

  	
   

  	
  26

  
	
  Section 1.4 

  	
  Times of Day

  	
   

  	
  26

  
	
  Section 1.5 

  	
  Other Definitional Terms

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II CREDIT FACILITY

  	
   

  	
  27

  
	
  Section 2.1

  	
  Lending Commitments

  	
   

  	
  27

  
	
  Section 2.2 

  	
  Procedures for Loans

  	
   

  	
  27

  
	
  Section 2.3 

  	
  Distributions by Agent

  	
   

  	
  28

  
	
  Section 2.4 

  	
  Pro Rata Allocation of Loans Between Tranches

  	
   

  	
  28

  
	
  Section 2.5 

  	
  Notes

  	
   

  	
  28

  
	
  Section 2.6 

  	
  Conversions and Continuations

  	
   

  	
  29

  
	
  Section 2.7 

  	
  Interest Rates, Interest Payments and Default
  Interest

  	
   

  	
  29

  
	
  Section 2.8 

  	
  Repayment

  	
   

  	
  30

  
	
  Section 2.9

  	
  Mandatory Prepayments and Related Reductions of
  Commitments; Simultaneous and Pro Rata Payments Across Tranches

  	
   

  	
  30

  
	
  Section 2.10 

  	
  Deposit Requirement and Commitment Termination —
  Cash Liquidity

  	
   

  	
  31

  
	
  Section 2.11 

  	
  Optional Prepayments

  	
   

  	
  31

  
	
  Section 2.12 

  	
  Letters of Credit

  	
   

  	
  32

  
	
  Section 2.13 

  	
  Procedures for Letters of Credit; Letter of Credit
  Collateral Account

  	
   

  	
  32

  
	
  Section 2.14 

  	
  Terms of Letters of Credit

  	
   

  	
  32

  
	
  Section 2.15 

  	
  Agreement to Repay Letter of Credit Drawings;
  Withdrawals from Letter of Credit Collateral Account

  	
   

  	
  33

  
	
  Section 2.16 

  	
  Obligations Absolute

  	
   

  	
  33

  
	
  Section 2.17 

  	
  Optional Reduction of Commitment Amounts or
  Termination of Commitments

  	
   

  	
  34

  
	
  Section 2.18 

  	
  Certain Fees

  	
   

  	
  35

  
	
  Section 2.19 

  	
  Computation

  	
   

  	
  35

  
	
  Section 2.20 

  	
  Payments

  	
   

  	
  35

  
	
  Section 2.21 

  	
  Use of Loan Proceeds

  	
   

  	
  36

  
	
  Section 2.22 

  	
  Basis for Determining Interest Rate Not
  Ascertainable, Inadequate or Unfair

  	
   

  	
  36

  
	
  Section 2.23 

  	
  Increased Cost

  	
   

  	
  36

  
	
  Section 2.24 

  	
  Illegality

  	
   

  	
  37

  
	
  Section 2.25 

  	
  Capital Adequacy

  	
   

  	
  37

  
	
  Section 2.26 

  	
  Funding Losses; LIBOR Advances

  	
   

  	
  38

  
	
  Section 2.27 

  	
  Discretion of Lenders as to Manner of Funding

  	
   

  	
  38

  
	
  Section 2.28 

  	
  Taxes

  	
   

  	
  38

  
	
  Section 2.29

  	
  Replacement of Certain Lenders

  	
   

  	
  40

  
	
  Section 2.30 

  	
  Obligations of Lenders Several

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III CONDITIONS PRECEDENT

  	
   

  	
  41

  



 

















 


	
  Section 3.1

  	
  Conditions Precedent to Initial Loans

  	
  41

  
	
  Section 3.2

  	
  Conditions Precedent to all Loans and Letters of
  Credit

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES

  	
  48

  
	
  Section 4.1

  	
  Financial Condition

  	
  48

  
	
  Section 4.2

  	
  No Change

  	
  48

  
	
  Section 4.3

  	
  Corporate Existence; Compliance

  	
  48

  
	
  Section 4.4

  	
  Corporate Power; Authorization; Enforceable
  Obligations

  	
  48

  
	
  Section 4.5

  	
  No Legal Bar

  	
  49

  
	
  Section 4.6

  	
  Litigation; Properties

  	
  49

  
	
  Section 4.7

  	
  Federal Regulation

  	
  50

  
	
  Section 4.8

  	
  ERISA

  	
  50

  
	
  Section 4.9

  	
  Investment Company Act

  	
  51

  
	
  Section 4.10

  	
  Subsidiaries

  	
  51

  
	
  Section 4.11

  	
  Use of Proceeds

  	
  51

  
	
  Section 4.12

  	
  True and Complete Disclosure

  	
  51

  
	
  Section 4.13

  	
  Air Carrier

  	
  51

  
	
  Section 4.14

  	
  Slot Utilization

  	
  51

  
	
  Section 4.15

  	
  Route Utilization

  	
  52

  
	
  Section 4.16

  	
  Security Documents.

  	
  52

  
	
  Section 4.17

  	
  Pledged Accounts

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE V AFFIRMATIVE COVENANTS

  	
  53

  
	
  Section 5.1

  	
  Financial Statements

  	
  53

  
	
  Section 5.2

  	
  Certificates; Other Information

  	
  54

  
	
  Section 5.3

  	
  Payment of Taxes

  	
  55

  
	
  Section 5.4

  	
  Maintenance of Existence; Compliance

  	
  56

  
	
  Section 5.5

  	
  Maintenance of Property; Insurance

  	
  56

  
	
  Section 5.6

  	
  Inspection of Property; Books and Records;
  Discussions; Appraisal and Audits

  	
  58

  
	
  Section 5.7

  	
  Notices

  	
  59

  
	
  Section 5.8

  	
  Performance of Obligations

  	
  59

  
	
  Section 5.9

  	
  End of Fiscal Years; Fiscal Quarters

  	
  59

  
	
  Section 5.10

  	
  Air Carrier Status; Maintenance

  	
  59

  
	
  Section 5.11

  	
  ERISA.

  	
  60

  
	
  Section 5.12

  	
  Slot Utilization

  	
  61

  
	
  Section 5.13

  	
  Route Utilization

  	
  61

  
	
  Section 5.14

  	
  Spare Parts

  	
  61

  
	
  Section 5.15

  	
  Additional Collateral

  	
  61

  
	
  Section 5.16

  	
  Further Assurances

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI NEGATIVE COVENANTS

  	
  62

  
	
  Section 6.1

  	
  Financial Condition Covenants

  	
  62

  
	
  Section 6.2

  	
  Indebtedness

  	
  64

  
	
  Section 6.3

  	
  Liens

  	
  65

  
	
  Section 6.4

  	
  Fundamental Changes

  	
  66

  
	
  Section 6.5

  	
  Disposition of Collateral

  	
  66

  



 


 


ii

















 


	
  Section 6.6

  	
  Restricted Payments

  	
  66

  
	
  Section 6.7

  	
  Transactions with Affiliates

  	
  66

  
	
  Section 6.8

  	
  Lines of Business

  	
  67

  
	
  Section 6.9

  	
  ERISA

  	
  67

  
	
  Section 6.10

  	
  Investments

  	
  67

  
	
  Section 6.11

  	
  Acquisitions

  	
  68

  
	
  Section 6.12

  	
  Restrictions on Accounts; Foreign Accounts

  	
  68

  
	
  Section 6.13

  	
  Aircraft Fuel Supply

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DEFAULTS

  	
  69

  
	
  Section 7.1

  	
  Events of Default

  	
  69

  
	
  Section 7.2

  	
  Presumptive Prepayment and Commitment Reduction at
  Lender’s Request Upon Event of Default — Specified Investment Account
  Proceeds

  	
  72

  
	
  Section 7.3

  	
  Offset

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII GUARANTY

  	
  73

  
	
  Section 8.1

  	
  The Guaranty

  	
  73

  
	
  Section 8.2

  	
  Bankruptcy; Reinstatement

  	
  73

  
	
  Section 8.3

  	
  Nature of Liability

  	
  73

  
	
  Section 8.4

  	
  Independent Obligation

  	
  73

  
	
  Section 8.5

  	
  Authorization

  	
  74

  
	
  Section 8.6

  	
  Reliance

  	
  74

  
	
  Section 8.7

  	
  Subordination

  	
  74

  
	
  Section 8.8

  	
  Waiver

  	
  74

  
	
  Section 8.9

  	
  Limitation on Enforcement

  	
  75

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX THE AGENT 

  	
  75

  
	
  Section 9.1

  	
  Appointment and Authorization

  	
  75

  
	
  Section 9.2

  	
  Note Holders

  	
  76

  
	
  Section 9.3

  	
  Consultation With Counsel

  	
  76

  
	
  Section 9.4

  	
  Loan Documents

  	
  76

  
	
  Section 9.5

  	
  U.S. Bank and Affiliates

  	
  76

  
	
  Section 9.6

  	
  Action by Agent

  	
  76

  
	
  Section 9.7

  	
  Non-Reliance on Agent and Other Lenders

  	
  77

  
	
  Section 9.8

  	
  Notices of Event of Default

  	
  78

  
	
  Section 9.9

  	
  Indemnification

  	
  78

  
	
  Section 9.10

  	
  Payments and Collections

  	
  78

  
	
  Section 9.11

  	
  Sharing of Payments

  	
  79

  
	
  Section 9.12

  	
  Advice to Lenders

  	
  79

  
	
  Section 9.13

  	
  Defaulting Lender

  	
  79

  
	
  Section 9.14

  	
  Resignation By Agent

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
  81

  
	
  Section 10.1

  	
  Modifications

  	
  81

  
	
  Section 10.2

  	
  Expenses

  	
  82

  
	
  Section 10.3

  	
  Waivers; Cumulative Remedies

  	
  82

  



 


iii

















 


	
  Section 10.4

  	
  Notices

  	
  82

  
	
  Section 10.5

  	
  Taxes

  	
  83

  
	
  Section 10.6

  	
  Successors and Assigns; Disposition of Loans;
  Transferees

  	
  83

  
	
  Section 10.7

  	
  Confidentiality of Information

  	
  85

  
	
  Section 10.8

  	
  Governing Law and Construction

  	
  86

  
	
  Section 10.9

  	
  Consent to Jurisdiction

  	
  86

  
	
  Section 10.10

  	
  Waiver of Jury Trial

  	
  87

  
	
  Section 10.11

  	
  Survival of Agreement

  	
  87

  
	
  Section 10.12

  	
  Indemnification

  	
  87

  
	
  Section 10.13

  	
  Captions

  	
  88

  
	
  Section 10.14

  	
  Entire Agreement

  	
  88

  
	
  Section 10.15

  	
  Counterparts

  	
  88

  
	
  Section 10.16

  	
  Borrower and Guarantor Acknowledgments

  	
  88

  



 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Commitment
  Amounts

  
	
  Exhibit B

  	
   

  	
  Form of
  Collateral Report

  
	
  Exhibit C

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit D

  	
   

  	
  Form of
  Cash Liquidity Report

  
	
  Exhibit E

  	
   

  	
  Form of
  Note

  
	
  Exhibit F

  	
   

  	
  Form of
  Joinder

  
	
  Exhibit G

  	
   

  	
  Form of
  Assignment

  
	
  Exhibit H

  	
   

  	
  Form of
  Confidentiality Agreement

  
	
  Exhibit I

  	
   

  	
  Form of
  Borrowing Request

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1-A

  	
   

  	
  Real
  Property Assets

  	 

	
  Schedule
  1.1-B

  	
   

  	
  Pre-existing
  Accounts

  	 

	
  Schedule
  1.1-C

  	
   

  	
  Pledged
  Dual-Control Accounts

  	 

	
  Schedule
  1.1-D

  	
   

  	
  Pledged
  Exclusive-Control Accounts

  	 

	
  Schedule
  1.1-E

  	
   

  	
  Excluded
  Accounts

  	 

	
  Schedule
  3.2

  	
   

  	
  Aircraft
  Fuel Locations

  	 

	
  Schedule
  4.4

  	
   

  	
  Consents, Authorizations, Filings and Notices

  	 

	
  Schedule 4.10

  	
   

  	
  Subsidiaries

  	 

	
  Schedule 6.2(c)

  	
   

  	
  Indebtedness

  	 




 


 


iv






 












 


CREDIT AGREEMENT


 


This Credit Agreement (“Agreement”), dated as of  October 29, 2008, is made and entered
into by and among NORTHWEST AIRLINES, INC., a corporation organized under the
laws of the State of Minnesota (the “Borrower”), NORTHWEST AIRLINES CORPORATION,
a corporation organized under the laws of the State of Delaware (including,
from and after the Initial Delta Merger Date, as defined below, the surviving
corporation of the Initial Delta Merger, as defined below, “Holdings”), MCH, INC., a corporation organized under the laws
of the State of Delaware (“MCH”), COMPASS AIRLINES, INC., a corporation
organized under the laws of the State of Delaware (“Compass”), MESABA
AVIATION, INC., a corporation organized under the laws of the State of
Minnesota (“Mesaba”),  NWA FUEL
SERVICES CORPORATION, a corporation organized under the laws of the State of
New York (“NWA Fuel”), NORTHWEST AEROSPACE TRAINING CORPORATION, a
corporation organized under the laws of the State of Delaware (“Northwest
Aerospace”), NWA RETAIL SALES INC., a corporation organized under the laws
of the State of Minnesota (“NWA Retail”), and MLT INC., a corporation
organized under the laws of the State of Minnesota (“MLT”)
(Holdings, MCH, Compass, Mesaba, NWA Fuel, Northwest Aerospace, NWA Retail and
MLT each individually a “Guarantor” and, collectively, the “Guarantors”),
each entity that is a party hereto from time to time as a lender (each
individually a “Lender” and, collectively, the “Lenders”), U.S.
BANK NATIONAL ASSOCIATION, a national banking association (“U.S. Bank”),
as a Lender and Letter of Credit Issuer, lead arranger and joint book runner
and as administrative agent for the Secured Creditors, as defined below (in
such capacity, the “Agent”), CITIBANK, N.A., a national banking association,
as a Lender, CITIGROUP GLOBAL MARKETS INC., as co-lead arranger and joint book
runner, and MORGAN STANLEY BANK, N.A., a national banking association, as a
Lender, co-lead arranger and joint book runner.


 


WHEREAS, the Borrower and each Guarantor have requested the Lenders to
make available to the Borrower a secured revolving credit facility (capitalized
terms used in these recitals having the meanings assigned thereto in the
preamble hereto); and


 


WHEREAS, the Lenders are willing to make such credit facility
available, on the terms and conditions set forth below;


 


NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:


 


ARTICLE I


 


DEFINITIONS AND ACCOUNTING TERMS


 


Section 1.1  Definitions.  As used in this Agreement, the following
terms shall have the following respective meanings (and such meanings shall be
equally applicable to both the singular and plural form of the terms defined,
as the context may require):


 

















 


“Account
Control Agreement” means, in respect of a deposit account, sweep account
linked thereto or other securities account owned by the Borrower or a
Guarantor, an agreement among the Borrower or such Guarantor, as the case may
be, the Agent, acting on behalf of the Secured Creditors and other Persons to
the extent provided in the Agency Agreement, and the bank or the securities
intermediary or financial institution, as applicable, with which such account
is maintained, in respect of such account, in each case in form and substance
reasonably satisfactory to the Agent.


 


“Acquisition” means an acquisition, the
consideration for which is paid (in whole or in part) in cash (it being
understood that any deferred purchase price or assumed Indebtedness due within
one year after any such acquisition shall be treated as paid in cash as of the
date of such acquisition), by any Person of (a) the Capital Stock of any
other Person which, upon consummation of such acquisition, becomes a Subsidiary
of such Person, (b) assets constituting all or substantially all of the
assets of any other Person, (c) assets constituting an operating unit or
division of any other Person, (d) one or more Routes in a single
transaction or series of related transactions to the extent that the cash
consideration for the acquisition of such Routes exceeds $50,000,000, (e) Intellectual
Property used in connection with the operation of an air passenger or cargo
business by any other Person purchased outside the ordinary course of business
from any such Person in a single transaction or series of related transactions
to the extent that the cash consideration for the acquisition of such
Intellectual Property exceeds $25,000,000 and (f) Flight Equipment from
any other Person (other than a manufacturer) in a single transaction or series
of related transactions to the extent the cash consideration for the
acquisition of such Flight Equipment exceeds $100,000,000, including any such
acquisition in connection with the establishment of a low cost air passenger
business.


 


“Adjusted Daily LIBOR Rate” means, with respect to each day, the rate determined
by dividing the Daily LIBOR Rate in effect on such day by 1.00 minus the LIBOR
Reserve Percentage.


 


“Adjusted LIBOR Rate” means, with respect to each Interest
Period applicable to a LIBOR Advance, the rate determined by dividing the LIBOR
Rate for such Interest Period by 1.00 minus the LIBOR Reserve Percentage.


 


“Advance” means any portion of the outstanding Loans by a Lender
as to which one of the available interest rate options and, if pertinent, an
Interest Period, is applicable. Subject to the terms and conditions hereof, an
Advance may be a LIBOR Advance or a Base Rate Advance, and a LIBOR Advance may
be a One-Month LIBOR Advance, a Two-Month LIBOR Advance or a Three-Month LIBOR
Advance.


 


“Affiliate” means as to any Person, any other
Person that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. 
For purposes of this definition, “control” of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct 


 


2

















 


or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.


 


“Agency Agreement” means that certain Agency Agreement dated as
of October 29, 2008, between U.S. Bank and JPMorgan Chase Bank, N.A., in
each case in the capacity or capacities referred to therein.


 


“Agent” has the meaning given in the preamble.


 


“Aggregate Commitment Amount” means, as of any date, the sum of
the Commitment Amounts of all the Lenders.


 


“Aircraft” means any “Aircraft”, as defined in any of the
Aircraft Mortgages.


 


“Aircraft Fuel” has the meaning given in the Security Agreement.


 


“Aircraft Mortgages” means the NWA Aircraft Mortgage, the
Compass Aircraft Mortgage and the Mesaba Aircraft Mortgage.


 


“Airport Authority” means any city or any public or private board or other body
or organization chartered or otherwise established for the purpose of
administering, operating or managing airports or related facilities, which in
each case is an owner, administrator, operator or manager of one or more
airports or related facilities.


 


“Applicable Lending Office” means, for each Lender and for each
type of Advance, the office of such Lender identified as such Lender’s
Applicable Lending Office on the signature pages hereof or such other
domestic or foreign office of such Lender (or of an Affiliate of such Lender)
as such Lender may specify from time to time, by notice given pursuant to Section 10.4, to the Agent
and the Borrower as the office by which its Advances of such type are to be
made and maintained.


 


“Applicable Margin” means:


 


(a)         for
LIBOR Advances,


 


(i)            3.50% for
Tranche 1 Loans; and


 


(ii)           4.50% for
Tranche 2 Loans; and


 


(b)        for Base Rate
Advances,


 


(i)            2.00% for
Tranche 1 Loans; and


 


(ii)           3.00% for
Tranche 2 Loans.


 


“Applicable Termination Date” means, for any Loan, the
earlier of (a) (I) if such Loan is a Tranche 1 Loan, the
Tranche 1 Termination Date, and (II) if such Loan is a Tranche 2
Loan, the Tranche 2 Termination Date, (b) the date on which the
Borrower ceases to be a separate legal entity and an operating airline,
including, without limitation, 


 


3

















 


the
Final Delta Consolidation Date, and (c) the date on which the Aggregate
Commitment Amount is reduced to zero or the Commitments are terminated,
pursuant to Section 2.17, Section 7.1 or otherwise.


 


“Appraisal Report” means an appraisal in form and substance reasonably
satisfactory to the Agent and prepared by the Non-Real Estate Appraisers or the
Real Estate Appraisers, as applicable, that certifies, at the time of
determination, the Current Appraised Value of the applicable Collateral.


 


“Appraised Collateral” means Collateral that is Mortgaged Aircraft Collateral,
Appraised FAA Slots, Spare Parts owned by the Borrower, Japanese Real Property
Assets or any other individual asset that constitutes Collateral and is
included in an Appraisal Report.


 


“Appraised FAA
Slots” means FAA Slots that constitute “Collateral” as defined in the Slot
and Gate Security Agreement and are included in an Appraisal Report.


 


“Appraisers” means the Non-Real Estate Appraisers and the Real
Estate Appraisers.


 


“Assigned Engine Lease” has the meaning given in the NWA
Aircraft Mortgage.


 


“Bailee Letter” means an agreement in form and substance
reasonably satisfactory to the Agent executed by a Person who is or may from
time to time be in possession of property of the Borrower, pursuant to which
such Person, subject to exceptions reasonably acceptable to the Agent, (i) acknowledges
the Agent’s Lien in such property and (ii) agrees that, upon notice from
the Agent, such Person will dispose of such property only in accordance with
the Agent’s directions.


 


“Base Rate” means, as of any date of determination, the greatest
of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and (c) the Adjusted Daily LIBOR Rate in effect
and reset each Business Day plus 2.00%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime
Rate, the Federal Funds Rate or the Adjusted Daily LIBOR Rate, as applicable.


 


“Base Rate Advance” means an Advance with respect to which the
interest rate is determined by reference to the Base Rate.


 


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


 


“Borrower” has the meaning given in the preamble.


 


“Borrowing Request” means a request substantially in the form of
Exhibit I hereto and executed by a Responsible Officer of the
Borrower.


 


4

















 


“Business Day” means any day (other than a Saturday, Sunday or
legal holiday in the State of Minnesota or the State of New York) on which
commercial banks are permitted to be open in Minneapolis, Minnesota and New York,
New York; provided that, if any such day relates to a LIBOR Advance, the
Adjusted LIBOR Rate or the Adjusted Daily LIBOR Rate, such day must also be a
day on which dealings in U.S. Dollar deposits are conducted by and between
banks in the London interbank Eurodollar market.


 


“Cape Town Convention” means 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 which were signed in Cape Town, South Africa (together
with the Regulations and Procedures issued by the Supervisory Authority for the
International Registry and all other rules, amendments, supplements,
modifications and revisions thereto), as in effect in any applicable
jurisdiction and as the same may be amended from time to time.


 


“Capital Lease Obligations” means as to any Person, 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, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.


 


“Capital Stock” means any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options to
purchase any of the foregoing.


 


“Cases” means the voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the Southern District of New
York filed on September 14, 2005, by Holdings, the Borrower and certain
other Affiliates and certain of the Borrower’s domestic Subsidiaries.


 


“Cash Equivalent Securities” means cash or:


 


(a)           marketable securities (i) issued
or directly and unconditionally guaranteed as to interest and principal by the
United States government or (ii) issued by any agency of the United States
the obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year or less after the date of
issuance;


 


(b)           certificates of
deposit issued by U.S. Bank and maturing within one year or less after the date
of issuance; or


 


5

















 


(c)           short-term
commercial paper issued by U.S. Bank carrying ratings of A-1+ from S&P and
P-1 from Moody’s.


 


“Cash Liquidity” means, at any time, the sum of (a) (I) unrestricted
cash and cash equivalents of Holdings and its Subsidiaries at such time and (II) unrestricted
short term investments of Holdings and its Subsidiaries at such time,
excluding, however, in the case of both clause (I) and clause (II), any
such cash, cash equivalents or short term investments on deposit or held in any
of the Pledged Dual-Control Accounts, Excluded Accounts or Escrow Accounts, and
(b) the Undrawn Facility Amount at such time.


 


“Cash Liquidity Report” means a report certified by a Responsible Officer of
the Borrower substantially in the form of Exhibit D (with such
changes as may be reasonably approved by the Agent).


 


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


 


“Citicorp Credit Agreement” means that certain Super Priority
Debtor In Possession and Exit Credit and Guarantee Agreement, dated as of August 21,
2006, among Holdings, the Borrower, certain Affiliates thereof, the several
banks and other financial institutions or entities from time to time parties
thereto as lenders, Citicorp USA, Inc., as administrative agent, and
certain other parties, as amended to date and as may be amended, restated, modified, supplemented or
amended and restated from time to time


 


“Citicorp
Credit Agreement Obligations” means “Obligations” under and as defined in
the Citicorp Credit Agreement.


 


“Citizen of the United States” has the meaning provided in Section 40102(a)(15)
of Title 49.


 


“Class D Certificates” has the meaning given in the
Security Agreement.


 


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


 


“Collateral” means the property of the Borrower and the Guarantors,
as applicable, upon which a Lien is purported to be created by any Security
Document; provided that “Collateral” shall not include any such property
Disposed of in accordance with the terms of Section 6.5.


 


“Collateral
Coverage Shortfall Deposit” has the meaning given in Section 6.1(c).


 


“Collateral Coverage Threshold” means $625,000,000.


 


6

















 


“Collateral Event” means, with respect to an item of Collateral, any of the
events described below:


 


(a)           with respect to any and all Appraised
FAA Slots affected thereby, (i) the occurrence of any event, including the
Borrower’s or any applicable Guarantor’s abandonment or failure to comply with
any applicable Use or Lose Rule, that would allow the FAA, the DOT, any other
Governmental Authority or any Airport Authority to withdraw, cancel, suspend or
terminate the Borrower’s or such Guarantor’s authority to hold or use any of
the Appraised FAA Slots at any one airport, or (ii) any withdrawal,
retirement, reallocation, re-characterization or revision thereof by the FAA,
the DOT, any other Governmental Authority or any Airport Authority (A) in
connection with or as a consequence of the merger, as contemplated by the
Merger Agreement, of the Borrower and Delta (including the Initial Delta
Merger), or (B) pursuant to or as a consequence of any regulatory changes
(including, without limitation, the issuance, effectiveness or implementation
of 14 C.F.R. Part 93 Subpart C), or any judicial or administrative
determination in any petition, action or proceeding (with the resulting
appraisal under Section 5.6(c),
in the case of clause (i) or clause (ii), being an appraisal of the
Appraised FAA Slots at such airport);


 


(b)           the failure of any material
assumption contained in any Appraisal Report or Collateral Report or otherwise
bearing on the Current Appraised Value of any Eligible Collateral from time to
time to be true, except to the extent such failure would not reasonably be
expected to affect in a materially adverse manner the Current Appraised Value
of the applicable Appraised Collateral, or the value assigned to the applicable
Collateral in such Collateral Report or otherwise, as applicable, in each case
as determined by the Agent or the Required Lenders; or


 


(c)           without limiting the generality of
clause (b) above, (i) any failure of the Borrower or any applicable
Guarantor to maintain insurance in accordance with the provisions of this
Agreement or any Security Document with respect to such item of Collateral, and
(ii) any Event of Loss with respect to such item of Collateral.


 


“Collateral
Report” means a report certified by a Responsible Officer of the Borrower
substantially in the form of Exhibit B (with such changes as may be
reasonably approved by the Agent).


 


“Collateralization Requirements” means the covenant set forth in
Section 6.1(c) and the
Deposit Requirement.


 


“Commitment” means, with respect to a Lender, the agreement of
such Lender to make Loans to the Borrower in an aggregate principal amount
outstanding at any time not to exceed such Lender’s Commitment Amount (or, if
the term “Commitment” is used specifically in respect of Tranche 1 Loans
or Tranche 2 Loans, a portion thereof equal to such Lender’s
Tranche 1 Commitment Amount or Tranche 2 Commitment Amount, 


 


7

















 


respectively)
upon the terms and subject to the conditions and limitations of this Agreement.


 


“Commitment Amount” means, with respect to a Lender, the sum of (a) such
Lender’s Tranche 1 Commitment Amount and (b) such Lender’s
Tranche 2 Commitment Amount (to the extent that such Lender has any such
Commitment).


 


“Commitment Fees” has the meaning specified in Section 2.18(b).


 


“Commonly Controlled Entity” means an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower
and that is treated as a single employer under Section 414 of the Code.


 


“Compass” has the meaning given in the preamble.


 


“Compass Aircraft Mortgage” means that certain Equipment
Mortgage and Security Agreement dated as of the date hereof, between Compass
and the Agent, as the same may be amended, supplemented, restated or otherwise
modified from time to time, including by way of any Mortgage Supplement (as
defined therein).


 


“Compliance Certificate” means a certificate of a Responsible Officer of the Borrower
substantially in the form of Exhibit C (with such changes as may be
reasonably approved by the Agent).


 


“Consolidated EBITDAR” means for any period, without
duplication, the consolidated operating income of Holdings and its Subsidiaries
for such period (calculated on a consolidated basis in accordance with GAAP and
in a manner consistent with the consolidated financial statements of Holdings
and its Subsidiaries for the preceding periods plus (i) consolidated
aircraft operating rental expenses of Holdings and its Subsidiaries that were
deducted in arriving at the amount of such consolidated operating income for
such period (excluding total consolidated aircraft operating rental income
received by Holdings and/or its Subsidiaries during such period under leases
with non-consolidated third-party operators to the extent such income was
excluded from Consolidated Fixed Charges for such period) plus (ii) amortization
and depreciation that were deducted in arriving at the amount of such
consolidated operating income for such period plus (iii) interest
income of Holdings and its Subsidiaries during such period plus (iv) all
government reimbursements in cash for losses incurred as a result of
developments affecting the aviation industry (including, without limitation,
terrorist acts and epidemic diseases) plus (v) any non-recurring
non-cash charges of Holdings and its Subsidiaries recorded during such period
(excluding any such charge incurred in the ordinary course of business that
constitutes an accrual of or a reserve for cash charges for any future period),
all as determined on a consolidated basis in accordance with GAAP; plus (vi) cash
or non-cash non-recurring charges resulting from the Borrower’s fleet
restructuring during the Cases and professional fees and other direct
bankruptcy costs related to the Cases, provided,  however, that
cash payments made in such period or in any future period in respect of such
noncash charges (excluding any such charge incurred 


 


8

















 


in
the ordinary course of business that constitutes an accrual of or a reserve for
cash charges for any future period) shall be subtracted in calculating
Consolidated EBITDAR in the period when such payments are made, and provided
further that Consolidated EBITDAR shall be calculated without giving
effect to any acceleration of flight equipment rental expense after August 21,
2006 required as a result of the Borrower’s decision to remove an aircraft or
aircraft class from the operating fleet of the Borrower.


 


“Consolidated Fixed Charges” means for any period, the total
consolidated interest expense  (excluding (x) fees
and expenses incurred in connection with the Second Amendment, dated as of April 30, 2008, to the Citicorp
Credit Agreement, and the Third Amendment, dated as of September 15, 2008,
to the Citicorp Credit Agreement and (y) non-cash merger-related
adjustments incurred in connection with the Initial Delta Merger) of Holdings and
its Subsidiaries for such period (calculated without regard to any limitations
on the payment thereof) plus, without duplication, that portion of
Capital Lease Obligations of Holdings and its Subsidiaries representing the
interest factor for such period, plus (i) the total consolidated
aircraft operating rental expenses of Holdings and its Subsidiaries for such
period less (ii) the total consolidated aircraft operating rental
income received by Holdings and/or its Subsidiaries during such period under
leases with non-consolidated third-party operators but only if, in the case of
any such lease, such rental income was received at a time when the applicable
non-consolidated third-party operator was not in default in the payment of any
obligation due and owing under such lease which remains uncured, all as
determined on a consolidated basis in accordance with GAAP, provided that
Consolidated Fixed Charges shall be calculated without giving effect to any
acceleration of flight equipment rental expense required as a result of the
Borrower’s decision to remove an aircraft or aircraft class from the operating
fleet of the Borrower.


 


“Contingent Obligations” means, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other
Person (other than Holdings or any of its Subsidiaries) (the “primary
obligor”), in any manner, whether directly or indirectly, including any
obligation of such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof, provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made (or;
if less, the maximum amount of such-primary obligation for which such Person
may be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the 


 


9

















 


maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.


 


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


 


“Currency Exchange Rate Protection Agreement” means any foreign
currency exchange agreement, currency swap agreement or other similar agreement
or arrangement entered into for the purpose of hedging foreign currency risk.


 


“Current Appraised Value” means, at any time, an amount
expressed in U.S. Dollars equal to:


 


(a)           in the case of Appraised Collateral
other than Spare Parts and Japanese Real Property Assets, the fair market value
thereof as reflected in the most recent Appraisal Report obtained in respect of
such Collateral in accordance with this Agreement and delivered to the Agent,
so long as such Appraisal Report was certified and delivered not more than one
year prior to such time (provided, however, that in the case of any Aircraft
that has been Parked for a period of more than thirty (30) days, such Appraisal
Report shall have been certified and delivered after such 30-day period with
respect to such Aircraft);


 


(b)           (i) in the case of Spare Parts
owned by the Borrower, the aggregate of the values for each Spare Part stock
number by category (airframe, avionics or engine parts, as applicable)
calculated as the product of (A) the then current book value for each such
stock number and (B) a fraction, the numerator of which is the fair market
value for such stock number (as reported in the applicable Appraisal Report)
and the denominator of which is the book value for such stock number (as
reported in the applicable Appraisal Report), and (ii) in the case of
Spare Parts owned by Compass or Mesaba, the book value thereof as reflected in
the financial statements most recently delivered to the Agent under Section 5.1;


 


(c)           in the case of Aircraft Fuel, the
applicable amount thereof, in gallons, reflected in the Borrower’s consolidated
financial statements and reported in the applicable Collateral Report as of the
end of the most recently-ended calendar month as being owned by the Borrower at
the fifteen locations in the United States with the highest volumes of Aircraft
Fuel owned thereby, multiplied by the price per gallon in U.S. Dollars of jet
fuel published under the heading “Spot Price Assessments: U.S. Gulf Coast:
Pipeline: Jet Kerosene” in the issue of Platt’s Oilgram (or such other source
as the Agent may in its reasonable discretion select) that reports prices
effective on the last day of such month or, if such day is not a Business Day,
the immediately preceding Business Day;


 


(d)           in the case of Japanese Real Property
Assets, the net book value thereof as reported in the Borrower’s consolidated
financial statements as of the end of the most recently-ended calendar month;


 


10






 












 


(e)                                  in the case of the Class D
Certificates, the lesser of (i) $38,000,000 and (ii) an amount
otherwise determined in accordance herewith; and


 


(f)                                    in the case of other Eligible Collateral,
the value determined in accordance herewith and most recently reported by the
Borrower  in a Collateral Report,


 


each such value or amount
in the case of clauses (b) through (f) referred to in this definition
to be (x) determined in a manner reasonably satisfactory to the Agent and (y) subject
to reserves and other criteria established from time to time by the Agent in
its commercially reasonable discretion; provided, however, that if at any time (A) an
Event of Loss or any other Collateral Event occurs with respect to any
Collateral, (B) the Agent requests a new Appraisal Report or Collateral
Report in respect of any Collateral pursuant to Section 5.6(c) and
the Borrower does not deliver such Appraisal Report or Collateral Report, as
applicable, within a reasonable time after such request, or (C) any
Collateral is not, or for any reason ceases, to be Eligible Collateral, the “Current
Appraised Value” of such Collateral shall be zero.


 


“Daily LIBOR
Rate” means, with respect to any date of determination, the average offered
rate for deposits in United States Dollars on such date for an assumed interest
period of one month, which appears on Reuters Screen, LIBOR01 Page, or any
successor thereto, as of 11:00 a.m. London time (or such other time as of
which such rate appears), or the rate for such deposits determined by the Agent
at such time based on such other published service of general application as
shall be selected by the Agent for such purpose.


 


“Default” means an event that, with the giving of notice (whether
such notice is required under Section 7.1,
or under some other provision of this Agreement, or otherwise) or lapse of
time, or both, would constitute an Event of Default.


 


“Defaulting Lender” means, at any time, any Lender that, at such time (a) has
failed to make a Loan or any Advance thereunder required pursuant to the terms
of this Agreement, (b) has failed to pay to the Agent or any Lender any
amount owed by such Lender pursuant to the terms of this Agreement, (c) has
repudiated its Commitment or any portion thereof, or (d) has been deemed
insolvent or has become subject to a bankruptcy, receivership or insolvency
proceeding, or to a receiver, trustee or similar official.


 


“Delta” means Delta Air Lines, Inc., a Delaware
corporation.


 


“Delta-JPMCB Agreement” means that certain First Lien Revolving
Credit and Guaranty Agreement dated as of April 30, 2007 among Delta, the
subsidiaries of Delta party thereto, the lenders party thereto, JPMorgan Chase
Bank, N.A., as administrative agent and collateral agent, and the other agents
party thereto, as the same may be amended, restated, modified, supplemented,
extended, refinanced or amended and restated from time to time.


 


 


11

















 


“Delta-JPMCB Obligations” means the “First Priority Obligations”
as defined in the Delta-JPMCB Agreement.


 


“Delta-GSCP Agreement” means that certain Second Lien Term Loan
and Guaranty Agreement dated as of April 30, 2007 among Delta, the
subsidiaries of Delta party thereto, the lenders party thereto, Goldman Sachs
Credit Partners L.P., as administrative agent and collateral agent, and the
other agents party thereto, as the same may be amended, restated, modified,
supplemented, extended, refinanced or amended and restated from time to time.


 


“Delta-GSCP Obligations” means the “Second Priority Obligations”
as defined in the Delta-GSCPAgreement.


 


“Delta Obligations” means the Delta-JPMCB Obligations and the
Delta-GSCP Obligations, collectively.


 


“Deposit Requirement” has the meaning given in Section 2.10(a).


 


“Dispose” means, with respect to any
property, any sale, lease, sale and leaseback, assignment, conveyance, transfer
or other disposition thereof (whether voluntary or involuntary, but excluding,
however, the creation or imposition of any Lien).  The terms “Dispose”, “Disposition”
and “Disposed of” have correlative meanings.


 


“DOT” means the United States Department of Transportation and any successor
thereto.


 


“Effective Date” means October 29, 2008.


 


“Eligible Collateral” means Collateral constituting (a) Receivables,
Flight Simulators, Mortgaged Aircraft Collateral, other Equipment, Appraised
FAA Slots, Japanese Real Property Assets, Aircraft Fuel, the Class D Certificates and any
Collateral Coverage Shortfall Deposits on deposit in the Specified Investment
Account, and (b) additional assets as to which each of the requirements
set forth in Section 5.15 has
been satisfied, in the case of both clause (a) and clause (b) solely
(i) to the extent owned or held by the Borrower or a Guarantor and on
which the Agent has a valid and perfected first priority Lien (subject to
Permitted Liens but no other Liens) for the benefit of the Secured Creditors
and (ii) as to which no Collateral Event has occurred and is continuing;
provided, however, that none of the following shall constitute “Eligible
Collateral”: (w) any Receivable that does not constitute a “non-traffic
trade receivable” as reflected in the Borrower’s most recent consolidated
financial statements, or is 90 or more days past due, or (x) any Aircraft Fuel
that is in the possession of a Person that has not delivered to the Agent a
Bailee Letter, or (y) any Equipment subject to a title registration statute that is not
registered pursuant to such statute or, if so registered, as to which the Agent
is not noted on the certificate of title therefor issued by the applicable
Governmental Authority or such certificate or title has been issued thereby but
has not been delivered to the Agent or its designee, or (z) any assets
described in clause (b) of this definition, until 


 


 


12

















 


the 91st day after the
date on which all the requirements of clauses (a) and (b) of the
final sentence of Section 5.15 have been satisfied in respect of
such assets.


 


“Environmental Laws” means any and all foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.


 


“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, natural resource damage, costs of environmental investigation,
remediation or monitoring, administrative oversight, costs, fines or
penalties), resulting from or based upon (a) violation of any
Environmental Law or requirement of any Airport Authority relating to
environmental matters, (b) the generation, use, handling, transportation,
storage, treatment, disposal or the arrangement for 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, lease or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.


 


“Environmental Permits” means any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization issued
pursuant to or required under any Environmental Law or by any Airport Authority
with respect to environmental matters.


 


“Equipment”
has the meaning given in the Security Agreement.


 


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


 


“ERISA Affiliate” means each trade or business
(whether or not incorporated) that together with Holdings or any of its
Subsidiaries would be deemed to be a “single employer” within the meaning of Section 414(b),
(c) or (o) of the Code.


 


“Escrow Accounts” means accounts of the Borrower or any Guarantor, solely to
the extent any such accounts hold funds set aside by the Borrower or any
Subsidiary to manage the collection and payment of amounts collected, withheld
or incurred by the Borrower or such Subsidiary for the benefit of third parties
relating to: (a) federal income tax withholding and backup withholding
tax, employment taxes, transportation excise taxes and charges incurred in
connection with airport security and screenings and any other security related
charges that may be imposed on the Borrower or any Guarantor, (b) any and
all state and local income tax withholding, employment taxes and related
charges and fees and similar taxes, charges and fees, including, but not
limited to, state and local payroll withholding taxes, unemployment and
supplemental unemployment taxes, disability taxes, workman’s or workers’
compensation charges and related charges and fees, (c) state and local
taxes imposed on overall gross receipts, sales and use taxes, 


 


 


13

















 


fuel excise taxes and
hotel occupancy taxes, (d) passenger facility fees and charges collected
on behalf of and owed to any Airport Authority, Foreign Aviation Authority, the
Department of Homeland Security, the FAA or any other federal, state or local
administrators, institutions, authorities, agencies and entities, (e) other
similar federal, state or local taxes, charges and fees (including without
limitation any amount required to be withheld or collected under applicable
law), (f) fees, charges and disbursements payable to any Airport Authority
and (g) other funds held in trust for an identified beneficiary in an
aggregate amount pursuant to this clause (g) not to exceed $10,000,000; in
each case, held in escrow accounts, trust funds or other segregated accounts,
plus accrued interest.


 


“Event of
Default” means any of the events specified in Section 7.1(a) through (j), provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.


 


“Event of Loss” means, with respect to any Collateral, any of
the following: (a) any material loss, destruction or damage of such
Collateral or (b) any actual condemnation, seizure or taking, by exercise
of the power of eminent domain or otherwise, of such Collateral, or
confiscation of such Collateral or the requisition of the use of such
Collateral, and with respect to Mortgaged Aircraft Collateral, shall include
(in addition to any such loss, destruction, damage, condemnation, seizure,
taking, confiscation or requisition) any “Event of Loss” as such term is
defined in the applicable Aircraft Mortgage.


 


“Excluded Account” means each deposit account, sweep account
linked thereto and other securities account listed on Schedule 1.1-E
hereto.


 


“FAA” shall
mean the Federal Aviation Administration of the United States of America and
any successor thereto.


 


“FAA Slots”
means all “slots” as defined in 14 CFR Sections 93.36 and 93.213(a)(2), as
may be amended or re-codified from time to time,   in each case of the
Borrower and, if applicable, any other Guarantor, now held or hereafter
acquired (other than “slots” that have been permanently allocated to another
air carrier and in which the Borrower and, if applicable, any Guarantor holds
temporary use rights).


 


“Facility”
means the Commitments and the extensions of credit made thereunder.


 


“Federal Funds Rate” means, for any period of determination, a
fluctuating interest rate per annum (based on a 360 day year) equal for each
day during such period to the weighted average of the rates of interest charged
on overnight federal funds transactions, with member banks of the Federal
Reserve System only, as reasonably determined by the Agent.


 


“Fee Letter”
means that certain letter agreement between the Borrower and the Agent, dated October 29,
2008, concerning
certain fees payable to the Agent.


 


 


14

















 


“Field Audit”
means one or more field examinations conducted by a Field Auditor of the
Borrower’s or the Guarantors’ accounts receivable and books and records related
thereto and all tangible Collateral, the results of which are reasonably
satisfactory to the Agent in all respects.


 


“Field Auditor”
shall mean the Agent or its Affiliates, appraisers or other advisors who may be
retained by the Agent to conduct a Field Audit.


 


“Final Delta Consolidation Date” shall mean the date on which
the Borrower is merged with and into Delta.


 


“Flight Equipment” means aircraft, airframes or engines and all
parts incorporated or installed in or attached or made a part of the aircraft,
airframes or engines.


 


“Flight Simulators” has the meaning given in the Security
Agreement.


 


“Foreign
Aviation Authorities” means any foreign governmental, quasi-governmental,
regulatory or other agencies, public corporations or private entities that
exercise jurisdiction over the authorization (a) to serve any foreign
point on each of the Routes and/or to conduct operations related to foreign points
on the Routes and Supporting Route Facilities and/or (b) to hold and
operate any Foreign Slots.


 


“Foreign Slot”
means all of the rights and operational authority, now held or hereafter
acquired, of the Borrower and, if applicable, a Guarantor, to conduct one
landing or takeoff at a specific time or in a specific time period on a
specific day of the week at each non-U.S. airport served in conjunction with
the Borrower’s, or, if applicable, a Guarantor’s operations over a Route, other
than “slots” which have been permanently allocated to another air carrier and
in which the Borrower and, if applicable, any Guarantor, hold temporary use
rights.


 


“Fuel Hedging Agreement” means any swap, collars, forward,
future or derivative transactions or options or similar agreements or
arrangements involving, or settled by reference to, fuel commodities.


 


“GAAP” means generally accepted accounting principles in the
United States as in effect from time to time.


 


“Gate Interests”
means all of the right, title, privilege, interest, and authority now or
hereafter acquired or held by the Borrower or, if applicable, a Guarantor in
connection with the right to use or occupy holdroom and passenger boarding and
deplaning space in any airport terminal located in the United States at which
the Borrower conducts scheduled operations.


 


“Governmental Authority” means any nation or government, any
state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities 


 


 


15

















 


exchange
and any self-regulatory organization (including the National Association of
Insurance Commissioners).


 


“Guaranty” means the guaranty set forth in Article VIII.


 


“Guarantor” and “Guarantors” each have the meaning given
in the preamble (and such terms include any Person that joins this Agreement as
a Guarantor pursuant to Section 5.15).


 


“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 that are regulated pursuant to, or
could reasonably be expected to give rise to liability under, any Environmental
Law.


 


“Hedging Obligations” means, as to any Person, all obligations
and liabilities of such Person under any Interest Rate Protection Agreement,
Fuel Hedging Agreement or Currency Exchange Rate Protection Agreement, which
are payable upon the termination of such agreement.


 


“Holdings” has the meaning given in the preamble.


 


“Immediately Available Funds” means funds with good value on the
day and in the city in which payment is received, in each case in United States
Dollars.


 


“Indebtedness” means as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services
but excluding trade accounts payable and accrued expenses incurred in the
ordinary course of business, (ii) the maximum amount available to be drawn
under all letters of credit issued for the account of such Person and all
unpaid drawings in respect of such letters of credit, (iii) all
Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or
(vii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person (to
the extent of the value of the respective property), (iv) Capital Lease
Obligations, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted, i.e.
take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person and (vii) all Hedging Obligations under any Interest Rate
Protection Agreement or any Currency Exchange Rate Protection Agreement.


 


“Initial Delta Merger” means the merger of Nautilus Merger
Corporation with and into Holdings (which shall result in Holdings’ becoming a
Subsidiary of Delta) as contemplated by and pursuant to the Merger Agreement.


 


“Initial Delta Merger Date” means the date on which the Initial
Delta Merger occurs.


 


 


16

















 


“Intellectual Property” means, collectively, all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or
in equity for infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.


 


“Interest Period” means, with respect to each LIBOR Advance, the
period commencing on the date of such Advance or on the last day of the
immediately preceding Interest Period, if any, applicable to an outstanding
Advance and ending one, two or three months thereafter, as the Borrower may
elect in the applicable notice of borrowing, continuation or conversion;
provided that:


 


(a)           any Interest Period that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day;


 


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


 


(c)           any Interest Period applicable to an
Advance on a Loan that would otherwise end after a date that is an Applicable
Termination Date in respect of any Loan shall end on such Applicable
Termination Date.


 


“Interest Rate Protection Agreement” means any interest rate
swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.


 


“International Registry” means “International Registry” as defined in the Cape Town
Convention.


 


“Investments” has the meaning given in Section 6.10.


 


“Japanese Insurance Pledge Agreement” means that certain
Insurance Claims Pledge Agreement, dated on or about the date hereof, from the
Borrower to the Agent and the Lenders, as the same may be amended,
supplemented, restated or otherwise modified from time to time.


 


“Japanese Real
Property Mortgage” means one or more mortgages, deeds of trust or
equivalent documents in respect of the Japanese Real Property Assets securing
the Obligations, as the same may be  amended, restated, modified, supplemented,
extended or amended and restated from time to time.


 


 


17

















 


“Japanese Real
Property Assets” means those certain parcels of real property owned by the
Borrower and described in Schedule 1.1-A (as may be amended from time to
time with the consent of the Agent), together with, in each case, all
buildings, improvements, facilities, easements and other property and rights
incidental or appurtenant to the ownership of such parcel of real property
(including all collateral described in the applicable Japanese Real Property
Mortgage and/or the Japanese Insurance Pledge Agreement).


 


“LAX Two” means
LAX TWO CORP., a non-profit California mutual benefit corporation.


 


“Lender”
and “Lenders” each have the meaning given in the preamble.


 


“Letter of Credit” means an irrevocable letter of credit issued
by the Agent pursuant to this Agreement for the account of the Borrower.


 


“Letter of Credit Collateral Account” means account no.
410000798 maintained by the Borrower with U.S. Bank captioned “NWA Letter of
Credit Collateral Account”, as such account may be re-numbered or re-captioned
from time to time, all sub-accounts of such account, and any duplicate,
corollary or replacement account of such account, which in all events shall be
a restricted account subject to an Account Control Agreement and a Safekeeping
Agreement and pledged to the Agent pursuant to the Security Agreement to secure
the Obligations.


 


“Letter of
Credit Collateralization Amount” means, in respect of any Letter of Credit
requested by the Borrower or issued by the Letter of Credit Issuer hereunder,
an amount equal to 103% of the maximum amount that would be available to be
drawn under such Letter of Credit if issued or is available to be drawn under
an issued Letter of Credit, as applicable, as the same shall be reduced, if
applicable, from time to time in accordance with the terms of the applicable
Letter of Credit.


 


“Letter of
Credit Collateralization Requirement” has the meaning given in Section 2.13.


 


“Letter of Credit Exposure” means the sum of (a) the aggregate remaining available
amount of all issued and outstanding Letters of Credit and (b) Unpaid
Drawings.


 


“Letter of Credit Issuer” means U.S. Bank National Association.


 


“Letter of Credit Sub-Limit” means $50,000,000.


 


“LIBOR Advance” means an Advance designated as such in a notice
of borrowing under Section 2.2
or a notice of continuation or conversion under Section 2.6, which Advance shall have an interest
period of one, two or three months.


 


 


18

















 


“LIBOR Rate” means, with respect to each Interest Period applicable to a
LIBOR Advance, the average offered rate for deposits in United States Dollars
for delivery of such deposits on the first day of such Interest Period, for the
number of days in such Interest Period, which appears on Reuters Screen,
LIBOR01 Page, or any successor thereto, as of 11:00 a.m. London time (or
such other time as of which such rate appears) two Business Days prior to the
first day of such Interest Period, or the rate for such deposits determined by
the Agent at such time based on such other published service of general
application as shall be selected by the Agent for such purpose; provided,
however, that in lieu of determining the rate in the foregoing manner, the
Agent may determine the rate based on rates at which United States Dollar
deposits are offered to the Agent in the interbank Eurodollar market at such
time for delivery in Immediately Available Funds on the first day of such
Interest Period in an amount approximately equal to the Advance by the Agent to
which such Interest Period is to apply.


 


“LIBOR Reserve Percentage” means, as of any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board, for determining the maximum reserve requirement (including any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System, with deposits comparable in amount to those held by the Agent, in
respect of “Eurocurrency Liabilities” as such term is defined in Regulation D
of the Board. The rate of interest applicable to any outstanding LIBOR Advances
shall be adjusted automatically on and as of the effective date of any change
in the LIBOR Reserve Percentage.


 


“Lien” means any mortgage, pledge, hypothecation, assignment,
security deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any capital lease having substantially the same economic effect
as any of the foregoing).


 


“Loan” and “Loans” each have the meaning given in Section 2.1.


 


“Loan Date” means the date of the making of any Loans hereunder.


 


“Loan Documents” means this Agreement, the Notes and each
Security Document.


 


“Material Adverse Effect” means a material adverse effect
on the financial condition or results of operations of the Borrower, the
Guarantors and their Subsidiaries taken as a whole.


 


“Merger
Agreement” means that certain Agreement and Plan of Merger dated as of April 14,
2008, by and among Delta, Nautilus Merger Corporation and Holdings, as the same
may be amended, restated, modified, supplemented or amended and restated from
time to time.


 


“Mesaba”
has the meaning given in the preamble.


 


 


19

















 


“Mesaba Aircraft Mortgage” means that certain Equipment Mortgage
and Security Agreement dated as of the date hereof, between Mesaba and the
Agent, as the same may be amended, supplemented, restated or otherwise modified
from time to time, including by way of any Mortgage Supplement (as defined
therein).


 


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


 


“Mortgaged
Aircraft Collateral” shall mean all of the “Collateral”, as defined in any
of the Aircraft Mortgages.


 


“Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA with respect to which the Borrower or any of its ERISA Affiliates is an “employer”
as defined in Section 3(5) of ERISA.


 


“Non-Real Estate Appraisers” means (a) Simat, Helliesen &
Eichner, Inc., (b) BK Associates, Inc. and (c) Morton,
Beyer & Agnew, and such other appraisal firm or firms as may be retained by the Agent, in
consultation with the Borrower, from time to time.


 


“Note” means a promissory note of the Borrower in the form of Exhibit E
hereto, in each case as the same may be amended, restated, replaced or modified
from time to time.


 


“NWA Aircraft Mortgage” means that certain Equipment Mortgage
and Security Agreement dated as of the date hereof, between the Borrower and
the Agent, as the same may be amended, supplemented, restated or otherwise
modified from time to time, including by way of any Mortgage Supplement (as
defined therein).


 


“Obligations”
means the Borrower’s and each Guarantor’s obligations in respect of the due and
punctual payment of principal and interest on the Loans and Unpaid Drawings
when and as due, whether by acceleration or otherwise and all fees, expenses,
indemnities, reimbursements and other obligations of the Borrower and each
Guarantor under this Agreement or any other Loan Document (including all
interest, fees, costs and other charges accruing after the commencement of any
case, proceeding or other action relating to the bankruptcy insolvency or
reorganization of the Borrower or any Guarantor, whether or not allowed in such
proceeding or other action), in all cases whether now existing or hereafter
arising or incurred and whether direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or unliquidated, or
sole, joint, several or joint and several, and including, without limitation,
any Letter of Credit Exposure.


 


“Officer’s
Certificate” means, with respect to the Borrower or any Guarantor, a
certificate executed by a Responsible Officer of such Person in his/her
capacity as such.


 


“One-Month LIBOR Advance” means a LIBOR Advance with an Interest
Period of one month.


 


 


20
















 


“Parked”
means, as to any Aircraft, that such Aircraft has been removed from service,
other than (a) Aircraft temporarily grounded for maintenance being
actively conducted and (b) Aircraft that are included as part of a
long-term FAA approved storage plan.


 


“Payroll Accounts” means deposit accounts used only for payroll.


 


“PBGC” means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).


 


“Pension Plan”
means any plan (other than a Multiemployer Plan) described in Section 4021(a) of
ERISA, and not excluded pursuant to Section 4021(b) of ERISA, with
respect to which the Borrower or any Guarantor or any of such Person’s ERISA
Affiliates is a “contributing sponsor” as defined in Section 4001(a)(l3)
of ERISA and each such plan for the five year period immediately following the
last date on which the Borrower or any of its ERISA Affiliates contributed or
had an obligation to contribute to such plan.


 


“Percentage” means, with respect to any Lender, the percentage
equivalent of a fraction, the numerator of which is the Commitment Amount of
such Lender and the denominator of which is the Aggregate Commitment Amount.


 


“Permitted Liens” has the meaning given in Section 6.3.


 


“Person” means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.


 


“Petty Cash Accounts” means deposit or securities accounts of
the Borrower and Guarantors holding aggregate balances in an amount not to
exceed $15,000,000 at any time.


 


“Pledged Account” means each deposit account, sweep account
linked thereto and other securities account (not including any Escrow Account,
Petty Cash Account or Payroll Account or any account described in Schedule
1.1-B hereto that, prior to the Effective Date, was pledged to secure
obligations or liabilities of the Borrower or any Guarantor or any of their
Subsidiaries that do not arise under the Loan Documents) from time to time
owned by the Borrower or a Guarantor or any of their respective Subsidiaries
and located in the United States, including, without limitation each of the
Pledged Exclusive-Control Accounts and each of the Pledged Dual-Control
Accounts.


 


“Pledged Cash” means, at a specified time, the value of deposit accounts, sweep accounts linked
thereto and other securities accounts, other than the Pledged Dual-Control
Accounts, owned by the Borrower and the Guarantors in which, in each case, the
Agent has a perfected first priority security interest securing the
Obligations.


 


“Pledged Dual-Control Accounts” means each deposit account,
sweep account linked thereto and other securities account listed on Schedule
1.1-C hereto.


 


 


21

















 


“Pledged Exclusive-Control Accounts” means each deposit account,
sweep account linked thereto and other securities account listed on Schedule
1.1-D hereto.


 


“Prime Rate” means the rate of interest from time to time
publicly announced by the Agent as its “prime rate”. The Agent may lend to its
customers at rates that are at, above or below the Prime Rate. Such rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. U.S. Bank or any other Lender may make
commercial or other loans at, above or below such rate.


 


“Rating Agency” means S&P or Moody’s, as the case may be.


 


“Real Estate Appraisers” means HIRO & REAS Network, Inc.
and such other
appraisal firm or firms as may be retained by the Agent, in consultation with
the Borrower, from time to time.


 


“Receivables”
has the meaning given in the Security Agreement.


 


“Regulatory Change” means any change after the Effective Date in
federal, state or foreign laws or regulations or the adoption or making after
such date of any interpretations, directives or requests applying to a class of
banks including any Lender under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.


 


“Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping, or
disposing into the indoor or outdoor environment (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
hazardous substance or pollutant or contaminant).


 


“Replaced Lender” has the meaning set forth in Section 2.29.


 


“Replacement Lender” has the meaning set forth in Section 2.29.


 


“Required Lenders” means, at any time, (i) in respect of
matters affecting only the Tranche 2 Commitments or the Tranche 2
Loans, the holder or all of the holders of the Tranche 2 Commitments or
the Tranche 2 Loans, and (ii) in respect of other matters, one or
more Lenders the sum of whose Commitment Amounts constitutes 50% or more of the
Aggregate Commitment Amount, unless any Lender has a Commitment Amount equal to
50% or more of the Aggregate Commitment Amount, in which case “Required Lenders”
means one or more Lenders the sum of whose Commitment Amounts constitutes more
than 66 2/3 % of the Aggregate Commitment Amount, and unless any Lender
has a Commitment Amount equal to more than 66 2/3 % thereof, in which case “Required
Lenders” means the Lender with the largest Commitment Amount plus one other
Lender; provided, however, that (i) for purposes of this definition, “Lender”
shall be deemed to exclude any Defaulting Lender and “Aggregate Commitment
Amount” shall be deemed to exclude the Commitment Amount of any Defaulting
Lender and (ii) after each of the 


 


 


22

















 


Applicable
Termination Dates has been reached, all the references in the foregoing
definition to Commitments shall be deemed to be references to the Total
Outstandings.


 


“Requirement of Law” means, as to any Person, the
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.


 


“Responsible Officer” means, as to any Person, the chief
executive officer, president, chief financial officer, treasurer or chief
accounting officer of such Person, but in any event, with respect to financial
matters, the chief financial officer, treasurer or chief accounting officer of
such Person.


 


“Restricted Payments” has the meaning given in Section 6.6.


 


“Routes” means the routes for which the Borrower or, if applicable, a
Guarantor, holds or hereafter acquires the requisite authority to operate
pursuant to Title 49 or other applicable law, including, without limitation,
applicable frequencies, exemption and certificate authorities, Fifth-Freedom
Rights and “behind/beyond rights”.


 


“S&P” means Standard & Poor’s Ratings Services, a
division of the McGraw-Hill Companies.


 


“Safekeeping
Agreement” means an agreement between the Borrower and U.S. Bank in respect
of an account maintained with U.S. Bank.


 


“SEC” means the Securities and Exchange Commission.


 


“Secured Creditors” means the Agent, the Lenders and the Letter
of Credit Issuer.


 


“Security Agreement” means the Security Agreement dated as of
the date hereof, executed and delivered by the Borrower and certain Guarantors
in favor of the Agent, as the same may be amended, supplemented, restated or
otherwise modified from time to time.


 


“Security Documents” means the Security Agreement, the Slot and Gate Security
Agreement, the Japanese Real Property Mortgage, the Japanese Insurance Pledge
Agreement, the Aircraft Mortgages, and any other document or instrument made by
any Person in favor of any of the Secured Creditors or the Agent for the
benefit of the Secured Creditors to secure or guaranty all or any portion of
the Obligations.


 


“Significant
Subsidiary” means any Subsidiary that would be a “significant subsidiary”
of the Borrower or any Guarantor within the meaning of the SEC’s Regulation
S-X.


 


 


23

















 


“Slot and Gate Security Agreement” means the Slot and Gate
Security Agreement dated as of the date hereof, executed and delivered by the
Borrower in favor of the Agent, as the same may be amended, supplemented,
restated or otherwise modified from time to time.


 


“Spare Parts” means “Spare Parts”, as defined in any of the
Aircraft Mortgages.


 


“Spare Parts Locations” means, with respect to the Borrower,
Compass and Mesaba, “Designated Locations”, as such term is defined in the NWA
Aircraft Mortgage, the Compass Aircraft Mortgage or the Mesaba Aircraft
Mortgage, as applicable.


 


“Specified Investment Account” means account no. 410000797
maintained by the Borrower with U.S. Bank captioned “NWA Specified Investment
Account”, as such account may be re-numbered or re-captioned from time to time,
all sub-accounts of such account, and any duplicate, corollary or replacement
account of such account, which in all events shall be a restricted account
subject to an Account Control Agreement and a Safekeeping Agreement and pledged
to the Agent pursuant to the Security Agreement to secure the Obligations.


 


“Subsidiary” means (i) any corporation more than 50% of
whose stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether or not
at the time stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person and/or one or more Subsidiaries of such Person
and (ii) any partnership, limited liability company, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time; provided, however,
that (a) LAX Two and its Subsidiaries shall be deemed not to be
Subsidiaries of Holdings or any of its Subsidiaries for all purposes of this
Agreement (including the calculation of the financial covenants and the
definitions relating thereto) and the other Loan Documents.


 


“Supporting Route Facilities” means gates, ticket counters and other facilities assigned,
allocated, leased, or made available to the Borrower at airports used in the
operation of scheduled service over a Route.


 


“Termination Event” means a “reportable event”
described in Section 4043 of ERISA or in the regulations thereunder
(excluding events for which the requirement for notice of such reportable event
has been waived by the PBGC).


 


“Three-Month LIBOR Advance” means a LIBOR Advance with an
Interest Period of three months.


 


“Title 49” means Title 49 of the United States Code, which,
among other things, recodified and replaced the U.S. Federal Aviation Act of
1958, and the regulations promulgated pursuant thereto or any subsequent
legislation that amends, supplements or supersedes such provisions.


 


 


24

















 


“Total Outstandings” means, as of any date of determination, the
aggregate unpaid principal balance of the Loans outstanding on such date.


 


“Tranche 1 Commitment” means each Lender’s Commitment in respect
of Tranche 1 Loans.


 


“Tranche 2 Commitment” means each Lender’s Commitment in respect
of Tranche 2 Loans.


 


“Tranche 1 Commitment Amount” means, with respect to a Lender,
initially the amount set forth opposite such Lender’s name on Exhibit A
in the column entitled “Tranche 1 Commitment Amount”, but as the same may
be reduced from time to time hereunder, pursuant to Sections 2.9, 2.17, 7.2
or otherwise.


 


“Tranche 2 Commitment Amount” means, with respect to a Lender,
initially the amount (if any) set forth opposite such Lender’s name on Exhibit A
in the column entitled “Tranche 2 Commitment Amounts”, but as the same may
be reduced from time to time hereunder, pursuant Sections 2.9, 2.17, 7.2
or otherwise.


 


“Tranche 1 Loans” means Loans made pursuant to the
Tranche 1 Commitments.


 


“Tranche 2 Loans” means Loans made pursuant to the
Tranche 2 Commitments.


 


“Tranche 1 Termination Date” means October 28, 2009.


 


“Tranche 2 Termination Date” means October 28, 2011.


 


“Tranches” means the Tranche 1 Commitments and the
Tranche 2 Commitments.


 


“Two-Month LIBOR Advance” means a LIBOR Advance with an Interest
Period of two months.


 


“Undrawn Facility Amount” means, at any time, the aggregate
amount of the Unused Commitments.


 


“United States” or “U.S.” means the United States of
America.


 


“Unpaid Drawing” has the meaning specified in Section 2.15.


 


“Unused Commitment” means, with respect to any Lender as of any
date of determination, the amount by which such Lender’s Commitment Amount
exceeds such Lender’s Percentage of the Total Outstandings as of such date.


 


“U.S. Bank” has the meaning given in the preamble.


 


“Use or Lose Rule” means, with respect to the Slots, the terms of 14 C.F.R.
Sections 93.44 and 93.227.


 


25

















 


 


Section 1.2  Accounting Terms and Calculations.
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP; provided
that, if the Borrower notifies the Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Effective Date  in
GAAP or in the application thereof, including as a result of fresh start
accounting principles, on the operation of such provision (or if 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, including as a result of fresh start
accounting principles, 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.


 


Section 1.3  Computation of Time Periods. In this
Agreement, in the computation of a period of time from a specified date to a
later specified date, unless otherwise stated the word “from” means “from and
including” and the word “to” or “until” each means “to but excluding”.


 


Section 1.4  Times of Day.  All references to times of day in this Agreement
shall be references to Minneapolis, Minnesota time unless otherwise
specifically provided.


 


Section 1.5  Other Definitional Terms. The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to Sections, Exhibits, schedules and
like references are to this Agreement unless otherwise expressly provided and
shall be deemed to include any modification, amendment or restatement of the
same. The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.” Unless the context in which used
herein otherwise clearly requires, “or” has the inclusive meaning represented
by the phrase “and/or.” The singular includes the plural and the plural, the
singular unless the context otherwise clearly requires. All incorporations by
reference of covenants, terms, definitions or other provisions from other
agreements are incorporated into this Agreement as if such provisions were
fully set forth herein, and such incorporation shall include all necessary
definitions and related provisions from such other agreements but including
only amendments thereto agreed to by the Required Lenders (or, if the consent
of all of the Lenders to such amendments is required by Section 10.1, all of the Lenders), and shall
survive any termination of such other agreements until such time as no
Commitment or obligation to issue Letters of Credit hereunder is in effect, the
Notes and all of the other Obligations have been paid in full and no Letters of
Credit remain outstanding.


 


 


26

















 


ARTICLE
II


 


CREDIT
FACILITY


 


Terms of Lending


 


Section 2.1  Lending Commitments.  On the terms and subject to the conditions
hereof, each Lender severally agrees to make loans (each a “Loan” and
collectively, “Loans”) to the Borrower from time to time during the
period from the Effective Date to the Applicable Termination Date, in an
aggregate amount at any time outstanding not to exceed such Lender’s Percentage
of the Aggregate Commitment Amount (and in no event exceeding such Lender’s
Commitment Amount). Loans hereunder shall be made by the several Lenders
ratably in the proportion of their respective Percentages.  Loans may be obtained and maintained, at the
election of the Borrower but subject to the limitations hereof, as LIBOR
Advances or Base Rate Advances.


 


Section 2.2  Procedures for Loans.  Any request by the Borrower for a Loan shall
be irrevocable and shall be in writing, or by telephone promptly confirmed in
writing or by e-mail or fax, and must be given so as to be received by the
Agent not later than (i) 1:00 p.m. on a Business Day that is three
Business Days prior to the date of any Loan requested as a LIBOR Advance or (ii) 1:00 p.m.
on a Business Day that is the date of any Loan requested as a Base Rate
Advance. Each request for Loans hereunder shall include a Borrowing Request and
shall specify (i) the requested Loan Date, (ii) the aggregate amount
of Loans to be made on such date, and (iii) whether such Loans are to be
funded as LIBOR Advances (and, if so, whether the duration of the initial
Interest Rate applicable thereto is to be one month, two months or three months)
or as Base Rate Advances. The aggregate amount of Loans specified in any such
request shall be in a minimum amount of (x) in the case of Base Rate
Advances, $1,000,000 or a whole multiple thereof and (y) in the case of
LIBOR Advances, $10,000,000 and whole multiples of $5,000,000 in excess
thereof.  The Agent may rely on any
telephone request for Loans hereunder which it believes in good faith to be
genuine; and the Borrower hereby waives the right to dispute the Agent’s record
of the terms of such telephone request. The Agent shall promptly notify each
other Lender of the receipt of such request, the matters specified therein, and
of such Lender’s ratable share of the requested Loans. On the requested Loan
Date, each Lender shall provide its share of the requested Loans to the Agent
in Immediately Available Funds not later than 2:30 p.m.  Unless either the Agent or the Required
Lenders determine that any applicable condition specified in Article III
has not been satisfied, the Agent will make available to the Borrower at the
Agent’s principal office in Minneapolis, Minnesota in Immediately Available
Funds not later than 3:00 p.m. on the requested Loan Date the amount of
the requested Loans to the extent that the Lenders have funded their respective
shares thereof (other than the proceeds of the Loans made pursuant to Section 2.13,
which, on the applicable Loan Date, shall not be made available to the Borrower
but shall be deposited by the Agent into the Letter of Credit Collateral
Account in accordance with Section 2.13).  Each request for a Loan hereunder shall be
deemed a representation by the Borrower that on the date of such request and
the applicable Loan Date and after giving effect to such Loan, the applicable
conditions specified in Article III have been and will be satisfied.


 


 


27

















 


Section 2.3  Distributions by Agent.  The Agent shall not be required to make any
amount available to the Borrower hereunder except to the extent the Agent shall
have received such amounts from the Lenders as set forth herein, provided,
however, that unless the Agent shall have been notified by a Lender prior to
the time any Loan is to be made hereunder that such Lender does not intend to
make its pro rata share of such Loan available to the Agent, the Agent may (but
is not required to) assume that such Lender has made such pro rata share
available to the Agent prior to such time, and the Agent may in reliance upon
such assumption make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable borrowing
available to the Agent, then the applicable Lender and the Borrower severally
agree to pay to the Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Agent, at (i) in
the case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Agent in accordance with banking
industry rules on interbank compensation and (ii) in the case of a
payment to be made by the Borrower, the interest rate applicable to Base Rate
Advances. If the Borrower and such Lender shall pay such interest to the Agent
for the same or an overlapping period, the Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable borrowing to the Agent, then the
amount so paid shall constitute such Lender’s Loan included in such borrowing.
Any payment by the Borrower under this Section 2.3 shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Agent.


 


Section 2.4  Pro Rata Allocation of Loans Between
Tranches.


 


(a)           Any Loan hereunder shall be deemed to
have been made (i) pursuant to each Lender’s Tranche 1 Commitment in an
amount equal to the product of the principal amount of such Loan and a fraction
the numerator of which is such Lender’s Tranche 1 Commitment Amount (or zero in
the absence of such a Commitment) and the denominator of which is such Lender’s
Commitment Amount, in each case as of the date when such Loan is made, and (ii) pursuant
to each Lender’s Tranche 2 Commitment in an amount equal to the product of the
principal amount of such Loan and a fraction the numerator of which is such
Lender’s Tranche 2 Commitment Amount (or zero in the absence of such a
Commitment) and the denominator of which is such Lender’s Commitment Amount, in
each case as of the date when such Loan is made.


 


(b)           Any reduction in the Commitment
Amount of any Lender hereunder (except a reduction of its Tranche 1
Commitment Amount to zero as a result of the occurrence of the Tranche 1
Termination Date) shall be a reduction of both such Lender’s Tranche 1
Commitment Amount and such Lender’s Tranche 2 Commitment Amount, in
proportion to the ratio of such Lender’s Tranche 1 Commitment Amount or
such Lender’s Tranche 2 Commitment Amount, as applicable, to such
Commitment Amount.


 


Section 2.5  Notes. The Loans of each Lender shall
be evidenced by a single Note payable to the order of such Lender in a
principal amount equal to such Lender’s Commitment Amount originally in effect
(except that the Loans of any Lender whose Tranche 1 Commitment Amount and
Tranche 2 Commitment Amount each exceed zero shall be evidenced by a separate 


 


 


28

















 


Note
in a principal amount equal to such Lender’s Tranche 1 Commitment Amount and
such Lender’s Tranche 2 Commitment Amount, as applicable). Upon receipt of any
Lender’s Note from the Borrower, the Agent shall transmit such Note to such
Lender. Each Lender shall enter in its ledgers and records the amounts of the
various Loans and Advances made, converted or continued and the payments made
in respect thereof, and each Lender is authorized by the Borrower to enter on a
schedule attached to its Note a record of such Loans, Advances and payments;
provided, however, that the failure by any Lender to make any such entry or any
error in making such entry shall not limit or otherwise affect the obligation
of the Borrower hereunder or on the Notes, and, in all events, the principal
amounts owing by the Borrower in respect of the Notes shall be the aggregate
amount of all Loans made by the Lenders less all payments of principal thereof
made by the Borrower.


 


Section 2.6  Conversions and Continuations. On the
terms and subject to the limitations hereof, the Borrower shall have the option
at any time and from time to time to convert all or any portion of the Advances
into Base Rate Advance or LIBOR Advances (whether One-Month LIBOR Advances,
Two-Month LIBOR Advances or Three-Month LIBOR Advances), or to continue a LIBOR
Advance as such; provided, however, that a LIBOR Advance may be so converted or
continued only on the last day of the Interest Period applicable thereto and,
if the Required Lenders so notify the Borrower, no Advance may be converted to
or continued as a LIBOR Advance if a Default or Event of Default has occurred
and is continuing on the proposed date of conversion or continuation. Advances
may be converted to, or continued as, LIBOR Advances as to the aggregate amount
of the Advances of all Lenders so converted or continued, of $10,000,000 or in
whole multiples of $5,000,000 in excess thereof.  The Borrower shall give the Agent written
notice of any conversion or continuation of any Advances and such notice must
be given so as to be received by the Agent not later than 1:00 p.m. on a
Business Day that is three Business Days prior to requested date of such
conversion or continuation in the case of a continuation of, or conversion to,
LIBOR Advances and on the date of the requested conversion to Base Rate
Advances. Each such notice shall specify (a) the amount to be continued or
converted, (b) the date for the continuation or conversion (which must be (i) the
last day of the preceding Interest Period for any continuation or conversion of
LIBOR Advances, and (ii) a Business Day in the case of continuations as or
conversions to LIBOR Advances and a Business Day in the case of conversions to
Base Rate Advances), and (c) in the case of conversions to or
continuations of LIBOR Advances, the Interest Period applicable thereto. Any
notice given by the Borrower under this Section 2.6 shall be
irrevocable. If the Borrower shall fail to notify the Agent of the continuation
of any LIBOR Advances within the time required by this Section 2.6,
such Advances shall, after the last day of the Interest Period applicable
thereto, be converted to Base Rate Advances. All conversions and continuations
of Advances must be made uniformly and ratably among the Lenders.  Notwithstanding anything to the contrary, the
Borrower shall not maintain more than five outstanding LIBOR Advances at any
time.


 


Section 2.7  Interest Rates, Interest Payments and
Default Interest. Interest shall accrue and be payable on the Loans as
follows:


 


(a)           Subject to subparagraph (c) below,
each LIBOR Advance shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal to the
sum of (i) the Adjusted LIBOR Rate for such Interest Period, plus (ii) the
Applicable Margin.


 


 


29

















 


(b)           Subject to subparagraph (c) below,
each Base Rate Advance shall bear interest on the unpaid principal amount
thereof at a variable rate per annum equal to the sum of (i) the Base
Rate, plus (ii) the Applicable Margin.


 


(c)           Upon the occurrence and during the
continuation of any Event of Default, each Advance shall, at the option of the
Required Lenders, as notified to the Borrower, bear interest (i) during
the balance of any Interest Period applicable to such Advance and in any event
until such Event of Default is cured or waived in accordance herewith, at a
rate per annum equal to the sum of the rate applicable to such Advance during
such Interest Period plus 2.0%, and (ii) otherwise, at a rate per annum
equal to the sum of (1) the Base Rate, plus (2) the Applicable Margin
for Base Rate Advances, plus (3) 2.0%.


 


(d)           Interest shall be payable (i) with
respect to each LIBOR Advance on the last day of the Interest Period applicable
thereto, (ii) with respect to any Base Rate Advance, on the last day of
each month, and (iii) with respect to each Advance, on the Applicable
Termination Date for the related Loan (or, if earlier, the date on which the
amount of such Advance is otherwise due hereunder); provided that interest
under Section 2.7(c) shall be payable on demand.


 


Section 2.8  Repayment.  Unless required to be paid earlier hereunder,
whether under Section 2.9(b) or otherwise, the unpaid
principal balance of each of the Loans, together with all accrued and unpaid
interest thereon, shall be due and payable on the Applicable Termination Date.


 


Section 2.9   Mandatory Prepayments and Related
Reductions of Commitments; Simultaneous and Pro Rata Payments Across Tranches.


 


(a)           Notwithstanding any other provision
hereof, if at any time Cash Liquidity is less than $2,750,000,000, then (i) each
Lender’s Commitment Amount shall immediately, automatically and permanently be
reduced to an amount equal to 50% of such Lender’s Commitment Amount at such
time and (ii) if the Total Outstandings exceed 50% of the Aggregate
Commitment Amount immediately prior to the reduction of the Commitments under
clause (i), the Borrower shall prepay Loans within two Business Days of such
occurrence in an aggregate principal amount equal to the amount of such excess.


 


(b)           Notwithstanding any other provision
hereof but without prejudice to any right under Section 2.11 to
reborrow amounts prepaid, if at any time any principal amount or interest (or
fee or other amount) in respect of a Tranche 1 Loan (or a related Advance)
becomes due and payable hereunder, the principal of and interest on (and each
fee and other amount in respect of) each outstanding Tranche 2 Loan (or
related Advance) that originally was required to be made simultaneously with
such Tranche 1 Loan under Sections 2.2 and 2.4(a), and would
not otherwise be due and payable hereunder, shall be due and payable at the
same time as such Tranche 1 Loan.


 


(c)           If at any time Total Outstandings
exceed the Aggregate Commitment Amount, the Borrower shall immediately repay to
the Agent for the account of the Lenders the amount of such excess.


 


 


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(d)                                 Any amounts paid or prepaid on the Loans
under this Section 2.9 or Section 2.15(c) shall be paid to the Agent for
distribution to each Lender in proportion to its share of outstanding Loans.
Any such payments shall be applied first against any Base Rate Advances and
then to LIBOR Advances in order starting with the LIBOR Advances having the
shortest time to the end of the applicable Interest Period. If any payment or
prepayment of Loans is required under this Section 2.9  or Section 2.15(c), the Borrower shall pay any related
amounts required to be paid under Section 2.26.


 


Section 2.10  Deposit Requirement and Commitment
Termination — Cash Liquidity.


 


(a)                                  If (i) at any time Cash Liquidity is
less than $2,250,000,000, or (ii) an Event of Default has occurred and is
continuing, the Borrower shall deposit, within two Business Days thereafter in
the case of clause (i), and immediately in the case of clause (ii), Cash
Equivalent Securities having a value (as determined by the Agent in its
reasonable discretion) at least equal to 103% of Total Outstandings (including
accrued and unpaid interest, fees and other amounts due hereunder) in the
Specified Investment Account (such requirement being referred to as the “Deposit
Requirement”); provided, however, that for purposes of determining
compliance with the Deposit Requirement, the amount of any Collateral Coverage
Shortfall Deposits then on deposit in the Specified Investment Account shall be
excluded. If the Borrower’s obligation to make such deposit arose solely under
the foregoing clause (i), no Event of Default has occurred that is continuing
and the Current Appraised Value of the Eligible Collateral is not less than the
Collateral Coverage Threshold, immediately after the Borrower is able to
demonstrate to the Agent’s satisfaction that Cash Liquidity is greater than
$2,250,000,000, the Borrower shall be entitled to withdraw Cash Equivalent
Securities on deposit in the Specified Investment Account to the extent that
the value thereof (as determined by the Agent in its reasonable discretion)
exceeds the amount of any Collateral Coverage Shortfall Deposits then on
deposit in the Specified Investment Account.


 


(b)                                 Without limiting any other right or
remedy, if the Borrower fails to comply with the Deposit Requirement the Agent
may transfer cash and other property held in any of the Pledged Accounts to the
Specified Investment Account in an amount sufficient to satisfy the Deposit
Requirement.


 


Section 2.11  Optional Prepayments.  The Borrower may prepay Base Rate Advances
and LIBOR Advances, in whole or in part, at any time, without premium or
penalty; provided that such prepayment shall be made on a Business Day and the
Borrower shall give prior notice to the Agent of any such prepayment under this
Section 2.11 not later than
1:00 p.m. on such Business Day. 
Each partial prepayment shall be in an aggregate amount for all the
Lenders of (x) in the case of Base Rate Advances, $1,000,000 or a whole
multiple thereof, and (y) in the case of LIBOR Advances, $10,000,000, or if
greater, in whole multiples of $5,000,000 in excess thereof; provided that if a
LIBOR Advance is prepaid on a day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.26.  Amounts paid or prepaid on Loans under this Section 2.11 may be reborrowed upon the terms and
subject to the conditions and limitations of this Agreement.


 


 


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Terms
of the Letter of Credit Facility


 


Section 2.12  Letters of Credit. Upon the terms and
subject to the conditions of this Agreement, the Letter of Credit Issuer agrees
to issue Letters of Credit for the account of the Borrower from time to time
between the Effective Date and the second anniversary of the Effective Date, in
such amounts in U.S. Dollars as the Borrower shall request; provided, however,
that no Letter of Credit will be issued in any amount that, after giving effect
to such issuance and the concomitant Loans to be made pursuant to Section 2.13 in connection
with such issuance,
would cause (i) the Letter of Credit Exposure to exceed the Letter of
Credit Sub-Limit or (ii) Total Outstandings to exceed the Aggregate
Commitment Amount.


 


Section 2.13  Procedures for Letters of Credit; Letter
of Credit Collateral Account.  Each
request for a Letter of Credit shall be made by the Borrower in writing, by
facsimile transmission or electronic conveyance received by the Agent together
with a request pursuant to Section 2.2 for Loans in an aggregate principal
amount equal to the Letter of Credit Collateralization Amount for the requested
Letter of Credit, for the purpose of funding the Letter of Credit Collateral
Account as provided below, and specifying the requested issuance date for such
Letter of Credit, no later than 2:00 p.m. on a Business Day that is not
later than one Business Day prior to the last day specified in Section 2.2 for
making such request for Loans. Without limiting the provisions of Section 2.2 in
respect of such request for Loans, each request for a Letter of Credit shall be
deemed a representation by the Borrower that on the date of issuance of such
Letter of Credit and after giving effect thereto the applicable conditions
specified in Article III have been and will be satisfied. The Letter of
Credit Issuer may require that the related request for the issuance of a Letter
of Credit be made on such letter of credit application and reimbursement
agreement form as the Letter of Credit Issuer may from time to time specify,
along with satisfactory evidence of the authority and incumbency of the
officials of the Borrower making such request. The Agent shall promptly notify
the Letter of Credit Issuer and the other Lenders of the receipt of such
request and the matters specified therein, including the related request for
Loans and such other matters as the Agent is to notify the Lenders under Section 2.2. On the
requested Loan Date, the Agent shall deposit the proceeds of the Loans so
requested by the Borrower into the Letter of Credit Collateral Account, and the
Borrower hereby requests, directs and authorizes the Agent to so deposit the
proceeds of such Loans and agrees that each disbursement of the proceeds of
such Loans shall constitute delivery of those funds at the Borrower’s direction
and for the Borrower’s benefit as if such funds had been advanced to the
Borrower.  The Letter of Credit Issuer
shall not be obligated to issue any Letter of Credit hereunder unless the
amount so deposited is equal to the Letter of Credit Collateralization Amount
for the requested Letter of Credit (such condition being referred to herein as
the “Letter of Credit Collateralization Requirement”) and each other
condition thereto set forth in Article III has been satisfied. On the date
of each issuance of a Letter of Credit the Agent shall send notice to the other
Lenders of such issuance.


 


Section 2.14  Terms of Letters of Credit. Letters of
Credit shall not have a term longer than one year, except as otherwise agreed
by the Borrower and the Letter of Credit Issuer. All Letters of Credit must expire not later than five
days prior to the Tranche 2 Termination Date.


 


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Section 2.15  Agreement to Repay Letter of Credit
Drawings; Withdrawals from Letter of Credit Collateral Account.


 


(a)                                  If the Letter of Credit Issuer has
received documents purporting to draw under a Letter of Credit that the Letter
of Credit Issuer believes conform to the requirements of the Letter of Credit,
or if the Letter of Credit Issuer has decided that it will comply with the
Borrower’s written or oral request or authorization to pay a drawing on any
Letter of Credit that the Letter of Credit Issuer does not believe conforms to
the requirements of the Letter of Credit, it will notify the Borrower of that
fact. The Borrower shall reimburse the Letter of Credit Issuer by 10:30 a.m.
on the day on which such drawing is to be paid in Immediately Available Funds
in an amount equal to the amount of such drawing. Any portion of a drawing
under a Letter of Credit not reimbursed as set forth above on the date of such
drawing is an “Unpaid Drawing.”


 


(b)                                 Without limiting any other right of the
Letter of Credit Issuer, the Borrower authorizes the Agent to transfer, for the
benefit of the Letter of Credit Issuer, net proceeds of Cash Equivalent Securities on deposit
in the Letter of Credit Collateral Account at any time in the amount of any
Unpaid Drawing.


 


(c)                                  Upon the expiration or return (undrawn)
of any Letter of Credit, the reduction of the stated amount of any applicable
Letter of Credit in accordance with the terms thereof and the resulting
reduction in the Letter of Credit Collateralization Amount, the reimbursement
in full of the Letter of Credit Issuer by the Borrower under this Section 2.15 following
one or more payments on account of draws under a Letter of Credit in an
aggregate amount equal to the stated amount of such Letter of Credit or any
transfer from the Letter of Credit Collateral Account by the Agent pursuant to Section 2.15(b), the Borrower shall immediately repay
Loans in an aggregate principal amount equal to the amount (if any) then
remaining on deposit in the Letter of Credit Collateral Account pursuant to the
deposit under Section 2.13 of the
Letter of Credit Collateralization Amount in respect of such Letter of Credit
(or, in the case of such a reduction of such Letter of Credit Collateralization
Amount or such transfer from the Letter of Credit Collateral Account by the
Agent (without duplication), Loans in an aggregate principal amount equal to
the lesser of (i) the amount of such reduction or the amount so
transferred, as applicable, and (ii) the Total Outstandings).  If at any time the value (as determined in
the Agent’s reasonable discretion) of Cash Equivalent Securities on deposit in
the Letter of Credit Collateral Account exceeds the aggregate amount of the
Letter of Credit Collateralization Amounts for all then-outstanding Letters of
Credit, no Event of Default has occurred and is continuing and the Current
Appraised Value of the Eligible Collateral is not less than the Collateral
Coverage Threshold, the Agent shall promptly transfer to the Borrower net
proceeds of Cash Equivalent Securities therein to the extent necessary to
eliminate such excess.


 


Section 2.16  Obligations Absolute. The obligation
of the Borrower under Section 2.15
to repay the Letter of Credit Issuer for any amount drawn on any Letter of
Credit and to repay the Loans under Section 2.15(c) shall be absolute,
unconditional and irrevocable, shall continue for so long as any Letter of
Credit is outstanding notwithstanding any termination of this Agreement, and
shall be paid strictly in accordance with the terms of this Agreement, under
all circumstances whatsoever, including without limitation the following circumstances:


 


33

















 


(a)                                  any lack of validity or
enforceability of any Letter of Credit;


 


(b)                                 the existence of any claim, setoff, defense or
other right which the Borrower may have or claim at any time against any
beneficiary, transferee or holder of any Letter of Credit (or any Person for
whom any such beneficiary, transferee or holder may be acting), the Letter of
Credit Issuer, the Agent or any Lender or any other Person, whether in
connection with a Letter of Credit, this Agreement, the transactions
contemplated hereby, or any unrelated transaction; or


 


(c)                                  any statement or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever.


 


Neither
the Letter of Credit Issuer nor the Agent nor any Lender nor officers,
directors or employees of any thereof shall be liable or responsible for, and
the obligations of the Borrower to the Agent and the Lenders shall not be
impaired by:


 


(i)                                     the use which may be made of
any Letter of Credit or for any acts or omissions of any beneficiary,
transferee or holder thereof in connection therewith;


 


(ii)                                  the validity, sufficiency or
genuineness of documents, or of any endorsements thereon, even if such
documents or endorsements should, in fact, prove to be in any or all respects
invalid, insufficient, fraudulent or forged;


 


(iii)                               the acceptance by the Letter
of Credit Issuer of documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; or


 


(iv)                              any other action of the
Letter of Credit Issuer in making or failing to make payment under any Letter
of Credit if in good faith and in conformity with U.S. or foreign laws,
regulations or customs applicable thereto.


 


Notwithstanding
the foregoing, the Borrower shall have a claim against the Letter of Credit
Issuer, and the Letter of Credit Issuer shall be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by the Borrower which the Borrower proves were caused by the
Letter of Credit Issuer’s willful misconduct or gross negligence in determining
whether documents presented under any Letter of Credit comply with the terms
thereof.


 


General


 


Section 2.17  Optional Reduction of Commitment Amounts
or Termination of Commitments. The Borrower may, at any time, upon not less
than five Business Days’ prior written notice to the Agent, reduce the
Commitment Amounts, ratably (both among the Lenders and between the Tranches),
with any such reduction in a minimum aggregate amount for all the Lenders of
$10,000,000, or, if more, in an integral multiple of $5,000,000; provided,
however, that the Borrower may not at any time reduce the Aggregate Commitment
Amount below the 


 


34

















 


Total
Outstandings. The Borrower may, at any time when there is no Letter of Credit
or Unpaid Drawing outstanding, upon not less than three Business Days prior
written notice to the Agent, terminate the Commitments in their entirety. Upon
termination of the Commitments pursuant to this Section 2.17, the Borrower shall pay to the Agent
for the account of the Lenders the full amount of all outstanding Advances, all
accrued and unpaid interest thereon, all unpaid Commitment Fees accrued to the
date of such termination, any indemnities payable with respect to Advances
pursuant to Section 2.25 and
all other unpaid Obligations of the Borrower to the Agent, the Lenders and the
Letter of Credit Issuer hereunder.


 


Section 2.18  Certain Fees.


 


(a)                                  Upfront Fees. 
On or prior to the Effective Date, the Borrower shall pay to the Agent
for the account of each Lender an upfront fee in an amount equal to 2.00% of such Lender’s initial
Commitment Amount.


 


(b)                                 Commitment Fees. 
The Borrower shall pay to the Agent for the account of each Lender fees
(the “Commitment Fees”) in an amount determined by applying 0.50% per annum to the average daily
Unused Commitment of such Lender for each calendar quarter during the period
from the Effective Date to the date on which such Lender ceases to have any
Commitment. Such Commitment Fees are payable in arrears at the end of each
calendar quarter and, in the case of any Lender, on the date on which such
Lender ceases to have any Commitment.


 


(c)                                  Agent’s Fees. 
On or before the Effective Date, the Borrower will pay to the Agent the
fees that are payable as of the Effective Date plus, thereafter, all other fees
payable, as set forth in the Fee Letter.


 


(d)                                 Letter of Credit Fees. In respect of each Letter of Credit,
the Borrower shall pay to the Agent for the account of the Letter of Credit
Issuer, on demand, all issuance, amendment, drawing and other fees regularly
charged by the Letter of Credit Issuer to its letter of credit customers,
together with a fronting fee at the per annum rate of 0.125% of the original
face amount of each Letter of Credit for the period from the date of issuance
to the scheduled expiration date of such Letter of Credit, and all
out-of-pocket expenses incurred by the Agent in connection with the issuance,
amendment, administration or payment of any Letter of Credit.


 


Section 2.19  Computation.  Commitment Fees and interest on Loans shall be
computed on the basis of actual days elapsed and a year of 360 days (or, as to
Base Rate Advances, a year of 365/366 days).


 


Section 2.20  Payments. Payments and prepayments of
principal of, and interest on, the Loans and all fees, expenses and other
obligations under this Agreement payable to the Agent, the Lenders or the
Letter of Credit Issuer shall be made without setoff or counterclaim in
Immediately Available Funds not later than 11:00 a.m. on the dates called
for under this Agreement and the Notes to the Agent at its main office in
Minneapolis, Minnesota. Funds received after such time shall be deemed to have
been received on the next Business Day. The Agent will promptly distribute in
like funds to each Lender its ratable share of each such payment of principal,
interest and fees received by the Agent for the account of the Lenders. 


 


35

















 


Whenever
any payment to be made hereunder or on the Notes shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day (provided, however, that any such payment that is
stated to be due on the Tranche 1 Termination Date shall be made on the next
preceding Business Day) and, in the case of a payment of principal, such
extension or shortening of time shall be taken into account in the computation
of any interest thereon.


 


Section 2.21  Use of Loan Proceeds. The proceeds of
each Loan, and each Letter of Credit, shall be used for the Borrower’s general
business purposes in a manner not in conflict with any of the Borrower’s
covenants in this Agreement.


 


Section 2.22  Basis for Determining Interest Rate Not Ascertainable,
Inadequate or Unfair. If with respect to any Interest Period:


 


(a)                                  deposits in United States Dollars (in the applicable amounts) are not
being offered to any Lender in the relevant market for such Interest Period, or


 


(b)                                 the Agent, in consultation with the Lenders,
determines that the LIBOR Rate as determined pursuant to the definition thereof
will not adequately and fairly reflect the cost of maintaining or funding the
LIBOR Loans for such Interest Period,


 


the Agent shall forthwith
give notice thereof to the Borrower which notice shall set forth in detail the
basis for such notice, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
LIBOR Rate shall not be available to the Borrower as an interest rate option on
any Loans, and (ii) all of the then outstanding LIBOR Loans shall
automatically convert to Base Rate Loans immediately.  Interest accrued on
each such LIBOR Loan prior to any such conversion shall be due and payable on
the date of such conversion together with any funding losses and other amounts
due under Section 2.26.


 


Section 2.23  Increased Cost. If any Regulatory
Change:


 


(a)                                  shall subject any Lender (or
its Applicable Lending Office) to any tax, duty or other charge with respect to
its LIBOR Advances, its Notes or its obligation to make LIBOR Advances or shall
change the basis of taxation of payment to any Lender (or its Applicable
Lending Office) of the principal of or interest on its LIBOR Advances or any
other amounts due under this Agreement in respect of its LIBOR Advances or its
obligation to make LIBOR Advances (except for changes in the rate of tax on the
overall net income of such Lender or its Applicable Lending Office imposed by
the jurisdiction in which such Lender’s principal office or Applicable Lending
Office is located); or


 


(b)                                 shall impose, modify or deem
applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board, but excluding with respect to any LIBOR
Advance any such requirement to the extent included in calculating the
applicable Adjusted LIBOR Rate) against assets of, deposits with or for the
account of, or credit extended by, any Lender’s Applicable Lending Office or
against Letters of Credit or shall impose on any Lender (or its Applicable
Lending Office) or the interbank Eurodollar market any other condition
affecting its LIBOR Advances, its Notes or its obligation to make LIBOR
Advances or affecting any Letter of Credit; and


 


36

















 


(c)                                  the result of any of the
foregoing is to increase the cost to such Lender (or its Applicable Lending
Office) of making or maintaining any LIBOR Advance or issuing or maintaining
any Letter of Credit, or to reduce the amount of any sum received or receivable
by such Lender (or its Applicable Lending Office) under this Agreement or under
its Notes, then, within 30 days after demand by such Lender (with a copy to the Agent),


 


the
Borrower shall pay to the applicable Lender such additional amount or amounts
as will compensate such Lender for such increased cost or reduction. Each
Lender will promptly notify the Borrower and the Agent of any event of which it
has knowledge, occurring after the date hereof, which will entitle such Lender
to compensation pursuant to this Section 2.23 and will designate a different Applicable Lending Office
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. If any Lender fails to give such notice within
45 days after it obtains knowledge of such an event, such Lender shall, with
respect to compensation payable pursuant to this Section 2.23, only be entitled to payment under
this Section 2.23 for costs
incurred from and after the date 45 days prior to the date that such Lender
does give such notice. A certificate of any Lender claiming compensation under
this Section 2.23, setting
forth the additional amount or amounts to be paid to it hereunder and stating
in reasonable detail the basis for the charge and the method of computation,
shall be conclusive in the absence of error. In determining such amount, any
Lender may use any reasonable averaging and attribution methods. Failure on the
part of any Lender to demand compensation for any increased costs or reduction
in amounts received or receivable with respect to any Interest Period shall not
constitute a waiver of such Lender’s rights to demand compensation for any
increased costs or reduction in amounts received or receivable in any
subsequent Interest Period.


 


Section 2.24  Illegality. If any Regulatory Change
shall make it unlawful or impossible for any Lender to make, maintain or fund
any LIBOR Advances, such Lender shall notify the Borrower and the Agent,
whereupon the obligation of such Lender to make or continue, or to convert any
Advances to, LIBOR Advances shall be suspended until such Lender notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist. Before giving any such notice, such Lender shall designate a
different Applicable Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. If such Lender determines that it may not
lawfully continue to maintain any LIBOR Advances to the end of the applicable
Interest Periods, all of the affected Advances shall be automatically converted
to Base Rate Advances as of the date of such Lender’s notice, and upon such
conversion the Borrower shall indemnify such Lender in accordance with Section 2.26.


 


Section 2.25  Capital Adequacy. In the event that
any Regulatory Change reduces or shall have the effect of reducing the rate of
return on any Lender’s capital or the capital of its parent corporation (by an
amount such Lender deems material) as a consequence of its Commitments and/or
its Loans and/or any Letters of Credit to a level below that which such Lender
or its parent corporation could have achieved but for such Regulatory Change
(taking into account such Lender’s policies and the policies of its parent
corporation with respect to capital adequacy), then the Borrower shall, within
30 days after written notice and demand from such Lender (with a copy to the
Agent), pay to such Lender additional amounts sufficient to 


 


37

















 


compensate
such Lender or its parent corporation for such reduction. If any Lender fails
to give such notice within 45 days after it obtains knowledge of such an event,
such Lender shall, with respect to compensation payable pursuant to this Section 2.25, only be entitled to payment under
this Section 2.25 for
diminished returns as a result of such reduction for the period from and after
the date 45 days prior to the date that such Lender does give such notice. Any
determination by such Lender under this Section 2.25 and any certificate as to the amount of such reduction
given to the Borrower by such Lender shall be final, conclusive and binding for
all purposes, absent error.


 


Section 2.26  Funding Losses; LIBOR Advances. The
Borrower shall compensate each Lender, upon its written request, for all
losses, expenses and liabilities (including any interest paid by such Lender to
lenders of funds borrowed by it to make or carry LIBOR Advances to the extent
not recovered by such Lender in connection with the re-employment of such funds
and including loss of anticipated profits) which such Lender may sustain: (i) if
for any reason, other than a default by such Lender, a funding of a LIBOR
Advance does not occur on the date specified therefor in the Borrower’s request
or notice as to such Advance under Section 2.2 or 2.6, or (ii) if,
for whatever reason (including, but not limited to, acceleration of the
maturity of Advances following an Event of Default), any repayment of a LIBOR
Advance, or a conversion pursuant to Section 2.24, occurs on any day other than the last day of the Interest
Period applicable thereto. A Lender’s request for compensation shall set forth
the basis for the amount requested and shall be final, conclusive and binding,
absent error.


 


Section 2.27  Discretion of Lenders as to Manner of
Funding. Each Lender shall be entitled to fund and maintain its funding of
LIBOR Advances in any manner it may elect, it being understood, however, that
for the purposes of this Agreement all determinations hereunder (including, but
not limited to, determinations under Section 2.26) shall be made as if such Lender had actually funded and maintained
each LIBOR Advance during the Interest Period for such Advance through the
purchase of deposits having a maturity corresponding to the last day of the
Interest Period and bearing an interest rate equal to the LIBOR Rate for such
Interest Period.


 


Section 2.28  Taxes.


 


(a)                                  Any and all payments by the
Borrower hereunder or under the Notes shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges of withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on its
overall net income and franchise taxes imposed on it in lieu of net income
taxes (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as “Taxes”).


 


(b)                                 The Borrower agrees to pay
any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made
hereunder or under the Notes or from the execution, delivery or registration
of, performing under, or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as “Other Taxes”).


 


38
















 


(c)                                  The Borrower shall indemnify
each Lender and the Agent for the full amount of Taxes or Other Taxes imposed
on or paid by such Lender or the Agent and any penalties, interest and expenses
(except as such are attributable to the gross negligence or willful misconduct
of any Lender or the Agent) with respect thereto. Payments on this
indemnification shall be made within 30 days from the date such Lender or the
Agent makes written demand therefor, provided that such Lender or the Agent, as
the case may be, shall have provided the Borrower with evidence reasonably
satisfactory to the Borrower of payment of such Tax or Other Tax.


 


(d)                                 Within 30 days after the
date of any payment of Taxes, the Borrower shall furnish to the Agent, at its
address referred to on the signature page hereof, a certified copy of a
receipt evidencing payment thereof.  In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish or shall cause such payor to furnish to the Agent, at such
address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms “United States” and “United States person”
shall have the meanings specified in Section 7701 of the Code.


 


(e)                                  Each Lender, as of the date
it becomes a party hereto and as of the date on which it changes its Applicable
Lending Office, represents to the Borrower and the Agent that it is either (i) an
entity organized under the laws of the United States or any State thereof or (ii) is
entitled to complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made pursuant to this
Agreement (x) under an applicable provision of a tax convention to which
the United States is a party or (y) because it is acting through a branch,
agency or office in the United States and any payment to be received by it
hereunder is effectively connected with a trade or business in the United
States. Each Lender that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) shall submit to the Borrower and the
Agent, on or before the day on which such Lender becomes a Lender, a duly
completed and signed copy of either Form W-8BEN with Part II
completed or Form W-8ECI of the United States Internal Revenue Service. Form W-8BEN
shall include the foreign Lender’s United States taxpayer identification number
if required under the current regulations to claim exemption from withholding
pursuant to a tax convention. Thereafter and from time to time, each such
Lender shall submit to the Borrower and the Agent such additional duly
completed and signed copies of one or the other of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may be (i) reasonably requested by the
Borrower or the Agent and (ii) required and permitted under then-current
United States law or regulations to avoid United States withholding taxes on
payments in respect of all payments to be received by such Lender hereunder.
Upon the request of the Borrower or the Agent, each Lender that is a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
shall submit to the Borrower and the Agent a certificate on Internal Revenue
Service Form W-9 or such substitute form as is reasonably satisfactory to
the Borrower and the Agent to the effect that it is such a United States
person.


 


39

















 


(f)                                    Without duplication of any
amounts paid pursuant to Section 2.28(a),
if the Borrower shall be required by law or regulation to make any deduction,
withholding or backup withholding of any taxes, levies, imposts, duties, fees,
liabilities or similar charges of the United States of America, any possession
or territory of the United States of America (including the Commonwealth of
Puerto Rico) or any area subject to the jurisdiction of the United States of
America from any payments to a Lender pursuant to any Loan Document in respect
of the Obligations payable to such Lender then or thereafter outstanding, the
Borrower shall make such withholdings or deductions and pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.


 


(g)                                 If the 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 Borrower or with respect to which
the Borrower has paid additional amounts pursuant to this Section 2.28, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by such Borrower under this Section 2.28 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, however, that the Borrower, upon the request of the
Agent or such Lender, agrees to repay the amount paid over to such Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Agent or such Lender in the event the Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This subsection (g) shall
not be construed to require the Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.


 


(h)                                 Each Lender hereby agrees that, upon the
occurrence of any circumstances entitling such Lender to indemnification
pursuant to this Section 2.28, such Lender shall use reasonable efforts to designate a different lending office
if the making of such a change would avoid the need for, or materially reduce
the amount of, any such additional amounts that may thereafter accrue and would
not, in the sole discretion of such Lender, be materially disadvantageous to
such Lender.


 


Section 2.29  Replacement of Certain Lenders.  If any Lender shall be become and remain a
Defaulting Lender or shall avail itself of the benefits of Section 2.22, 2.23, 2.24, 2.25, or 2.28, then
the Borrower may, at its sole expense and effort, upon not less than five
Business Days’ notice to the applicable Lender and the Agent, require such
Lender (the “Replaced Lender”) to assign and delegate, without recourse
(pursuant to an assignment agreement substantially in the form of Exhibit G
hereto and in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.6),
all of its interests, rights and obligations under this Agreement and the other
Loan Documents to a replacement lender that qualifies as a “Transferee”
under Section 10.6(c) (a
“Replacement Lender”) that shall assume such obligations (which assignee
may be another Lender, if such other Lender accepts such assignment and
delegation), provided that: (a) the Borrower shall have paid to the Agent
any fee specified in Section 10.6
(c) and shall have paid the Replaced Lender any amounts payable under Section 2.26; (b) the
Replaced Lender shall have received payment of an amount equal to the 


 


40

















 


outstanding principal of
its Loans, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents from the Replacement Lender
or the Borrower; (c) in the case of any such assignment resulting from a
claim for compensation or payments required to be made, such assignment will
result in a reduction in such compensation or payments thereafter; and, in a
case to which Section 2.22 or 2.24 applies, such assignment will remove the
applicable impediment with respect to LIBOR Advances; (d) the interests,
rights, duties and obligations of all Lenders similarly situated are similarly
assigned to Replacement Lenders; and (e) no such assignment conflicts with
any Requirement of Law. Notwithstanding the foregoing, a Lender shall not be
required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.


 


Section 2.30  Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 9.9 are several and not joint. The failure
of any Lender to make any Loan or to make any payment under Section 9.9 on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan or to make its payment under Section 9.9.


 


ARTICLE III


 


CONDITIONS PRECEDENT


 


Section 3.1  Conditions
Precedent to Initial Loans.  The obligation of the Lenders to make any
Loans hereunder and of the Letter of Credit Issuer to issue any Letter of
Credit hereunder shall be subject to the fulfillment of the following
conditions:


 


(a)                                  Documents. The Agent shall have received the following in
sufficient counterparts (except for the items described in clauses (ii) and
(iii) below) for each Lender:


 


(i)                                     This Agreement, duly executed by a duly
authorized officer (or officers) of the Borrower, each Guarantor, each Lender
and the Agent and dated the Effective Date.


 


(ii)                                  A Note drawn to the order of each Lender
in the principal amount of such Lender’s Tranche 1 Commitment Amount and,
if applicable, a Note so drawn in the principal amount of such Lender’s
Tranche 2 Commitment Amount, in each case duly executed by a duly
authorized officer (or officers) of the Borrower and dated the Effective Date.


 


(iii)                               The Japanese Real Property Mortgage, duly
executed by a duly authorized officer (or officers) of the Borrower and U.S. Bank,
dated the Effective Date, together with:


 


41

















 


(A)                              payment by the Borrower of registration
taxes required for applications for registrations, preliminary registrations,
conversion of preliminary registrations into registrations, deletion of
registrations and other related applications contemplated therein;


 


(B)                                registration
certificates (toukizumishou) for title to the Japanese
Real Property Assets, and other registration certificates for security
interests and lease agreement regarding Japanese Real Property Assets as to
which the registrations and preliminary registrations shall be deleted
thereunder;


 


(C)                                related powers of attorney as executed by
the Borrower, Wings Finance Y.K., and Hibiya Enterprise Y.K.;


 


(D)                               a certificate of
impression of registered seal (inkan shoumei-sho)
of the Borrower issued by the
competent Legal Affairs Bureau of Japan;


 


(E)                                 a certificate of
matters registered on the commercial registry (rireki jikou
shoumei-sho) of the Borrower issued by the competent Legal
Affairs Bureau of Japan;


 


(F)                                 related
instruments evidencing grounds for registration (touki gen-in
shoumei jouhou) required for the applications contemplated therein,
as executed by the Borrower, Wings Finance Y.K., and Hibiya Enterprise Y.K.;


 


(G)                                certificates of
matters registered on closed commercial registry (heisa jikou
shoumei-sho) of Wings Finance Y.K. and Hibiya Enterprise Y.K. issued
by the competent Legal Affairs Bureau of Japan;


 


(H)                               any other
documents requested by the Agent or the judicial scrivener designated by the
Agent, which may be required for the applications for the registration,
preliminary registration, conversion of the preliminary registration into
registration, deletion of registrations and other related applications contemplated
therein;


 


(I)                                    an acceptance of
applications for (i) registration of the ne-teitou-ken
mortgages in favor of U.S. Bank and (ii) change of the
registered office of the Borrower in the past contemplated therein, issued by
the Narita Branch Office of the Chiba Legal Affairs Bureau; and


 


(J)                                   an acceptance of
application for (i) preliminary registration of the ne-teitou-ken
mortgage in favor of U.S. Bank, (ii) complete deletion of (a) the
registration of the ne-teitou-ken mortgage
in favor of Wings Finance Y.K., (b) the registration of the ten-teitou-ken mortgage in favor of Hibiya Enterprise Y.K., (c) the
preliminary registration of a lease 


 


42

















 


agreement in favor of Hibiya
Enterprise Y.K., and (d) the preliminary registration of transfer of the ne-teitou-ken mortgage referred to in item (a) above
from Wings Finance
Y.K. to Hibiya Enterprise Y.K., (iii) change of the registered office of the Borrower in relation to change of the registered office of Borrower in the past, and (iv) change of the corporate name of Wings Finance Y.K. in
relation to change of the corporate name of Wings Finance Y.K. in the past, issued by the
Minato Branch Office of the Tokyo Legal Affairs Bureau.


 


(iv)                              The Japanese
Insurance Pledge Agreement,
duly executed by a duly authorized officer (or officers) of the Borrower and
U.S. Bank and dated the Effective Date, together with:


 


(A)                              consents of the
insurance companies providing the insurance policies subject to the pledge
contemplated therein, with a date certification (kakutei
hizuke) by a notary public (koushounin) in
Japan; and


 


(B)                                the insurance
certificates for the insurance policies subject to the pledge contemplated
therein.


 


(v)                                 The NWA Aircraft Mortgage, the
Compass Aircraft Mortgage and the Mesaba Aircraft Mortgage, each duly executed
by a duly authorized officer (or officers)
of each party thereto and dated the Effective Date.


 


(vi)                              The Security Agreement, duly executed by
a duly authorized officer (or officers) of each party thereto and dated the
Effective Date.


 


(vii)                           The Slot and Gate Security Agreement,
duly executed by a duly authorized officer (or officers) of each party thereto
and dated the Effective Date.


 


(viii)                        Any pledged Collateral (together with
undated stock powers, endorsements and slot transfer documents, as applicable,
executed in blank to be held by the Agent) required to be delivered under the
Security Documents, and all other documents, certificates, forms and filing
fees necessary to perfect and protect the Liens created under the Security
Documents, including, without limitation, financing statements in form and
substance reasonably acceptable to the Agent, as may be required to grant,
continue and maintain an enforceable first priority security interest in the
Collateral (subject to the terms hereof and of the other Loan Documents) in
accordance with the Uniform Commercial Code as enacted in all relevant
jurisdictions and any other applicable law.


 


(ix)                                An Account Control Agreement in respect
of each Pledged Account, duly executed by a duly authorized officer (or
officers) of the Borrower or the Guarantor that owns such account, as
applicable, the relevant depository bank or securities intermediary or
financial institution, as applicable, and the Agent.


 


43

















 


(x)                                   A Safekeeping Agreement and an Account
Control Agreement with respect to the Specified Investment Account and with
respect to the Letter of Credit Collateral Account, each duly executed by a
duly authorized officer (or officers) of the Borrower, U.S. Bank and (in the
case of each such Account Control Agreement) the Agent, and dated the Effective
Date.


 


(xi)                                Appraisal Reports from (1) the
Non-Real Estate Appraisers in respect of all Appraised Collateral other than
the Japanese Real Property Assets, and (2) the Real Estate Appraisers in
respect of the Japanese Real Property Assets.


 


(xii)                             One or more certificates of insurance,
showing casualty and liability insurance coverage, in form and substance
reasonably satisfactory to the Agent, and evidence satisfactory to the Agent
that the Agent is named as lender’s loss payee, mortgagee and/or additional
insured, as applicable, with respect to the Collateral on such policies as to
which the Agent has reasonably requested that it be so named.


 


(xiii)                          A Bailee Letter from each Person other
than the Borrower that, pursuant to contractual or other arrangements in effect
as of the date hereof, from time to time possesses Aircraft Fuel owned by the
Borrower in any of the 15 locations identified in Schedule 3.2, in each
case duly executed by a duly authorized officer (or officers) of each party
thereto.


 


(xiv)                         A consent agreement from Pinnacle
Airlines, Inc. in respect of each Assigned Engine Lease, in each case in
form and substance reasonably satisfactory to the Agent and duly executed by a
duly authorized officer (or officers) of each party thereto.


 


(xv)                            The Fee Letter, duly executed by a duly
authorized officer (or officers) of each party thereto.


 


(xvi)                         the Agency Agreement, duly executed by a
duly authorized officer (or officers) of each party thereto.


 


(xvii)                      A certificate of an officer of the
Borrower and each Guarantor dated as of the Effective Date and certifying:


 


(A)                              as to the organizational documents of the
Borrower or such Guarantor;


 


(B)                                as to the incumbency, names, titles and
signatures of the officers of the Borrower or such Guarantor authorized to
execute the Loan Documents to which such Person is a party and, as to the
Borrower, to request Loans and Letters of Credit; and


 


44

















 


(C)                                a copy of the corporate resolutions of
the Borrower or such Guarantor authorizing the execution, delivery and
performance of the Loan Documents to which such Person is a party, certified as
of the Effective Date by the Secretary or an Assistant Secretary thereof.


 


(xviii)                   A certificate of good standing for the
Borrower and each Guarantor in the jurisdiction of its incorporation or other
organization, certified by the appropriate governmental officials as of a date
acceptable to the Agent.


 


(xix)                           An Officer’s Certificate from the
Borrower certifying:


 


(A)                              as to the truth of the representations
and warranties contained in the Loan Documents as though made on and as of the
date hereof, except to the extent that any such representation or warranty
relates to a specified date, in which case such representation or warranty
shall be or shall have been true and correct in all material respects as of
such date;


 


(B)                                as to the absence of any event occurring
and continuing, or resulting from the execution and delivery of the Loan
Documents, that constitutes a Default or an Event of Default; and


 


(C)                                as to the Current Appraised Value of the
Eligible Collateral.


 


(xx)                              An Officer’s Certificate of the Borrower
with respect to Cash Liquidity on the Effective Date, certified as of the
Effective Date and in form and substance reasonably satisfactory to the Agent.
Cash Liquidity on the Effective Date, as evidenced by such Officer’s Certificate,
shall not be less than $3,430,000,000.


 


(b)                                 Lien Searches; International Registry
Searches. The
Agent shall have received UCC, judgment and tax lien searches conducted in the
jurisdictions in which the Borrower and the Guarantors are incorporated or
otherwise organized or such other jurisdictions as the Agent may reasonably
require and Lien searches conducted in the recording office of the FAA and,
with respect to the applicable Mortgaged Aircraft Collateral, Lien searches
conducted with the International Registry and “priority search certificates”
(as defined in the Regulations and Procedures for the International Registry),
all as may be reasonably satisfactory to the Agent (dated as of a date
reasonably satisfactory to the Agent), reflecting the absence of Liens on the
applicable Mortgaged Aircraft Collateral other than Liens permitted hereunder
and as may be reasonably satisfactory to the Agent and the absence of
registrations on the International Registry with respect to the applicable
Mortgaged Aircraft Collateral other than the registrations contemplated herein,
and (in the case of the searches conducted at the recording office of the FAA
and the International Registry) indicating that the Borrower, Compass or
Mesaba, as applicable, is the registered owner of each of the aircraft and
other assets intended to be covered by the applicable Aircraft Mortgage.


 


45

















 


(c)                                  Financial Information and Appraisals. 
The Lenders shall have received and be satisfied with each Appraisal
Report and with such financial information as may be reasonably requested by
the Agent.


 


(d)                                 Opinions of Counsel. The Agent and the Lenders shall have
received from each of Thaddeus J. Marciniak, Esq., Dorsey &
Whitney LLP, Daugherty, Fowler, Peregrin, Haught & Jenson and
Nagashima Ohno & Tsunematsu, counsel to the Borrower and the
Guarantors, a written opinion, addressed to each of the Secured Creditors,
covering such matters as may reasonably be requested by the Agent, and each
such opinion shall have been delivered to the Agent in sufficient counterparts
for each Lender.


 


(e)                                  Security Documents; Filing and Recording. All Security Documents (or financing
statements with respect thereto) shall have been appropriately filed or
recorded to the satisfaction of the Agent, and the priority and perfection of
the Liens created by the Security Documents shall have been established to the
satisfaction of the Agent and its counsel; provided, however, that the
conditions set forth in this subsection (e) will be deemed to be satisfied
with respect to the Japanese Real Property Assets as of the date on which the
Agent receives the documents identified in subsections (a)(iii)(I) and (J) above.  Without limiting the foregoing, the Agent
shall have received evidence satisfactory to it of the filing for recordation
with the FAA of each of the Aircraft Mortgages and registration with the
International Registry of the International Interests, as defined in the Cape
Town Convention, intended to be created thereby (together with any other
necessary documents, instruments, affidavits or certificates) as the Agent may
deem reasonably necessary to perfect and protect the Liens created thereby.


 


(f)                                    Fees and Expenses. The Agent shall have received for
itself and for the account of the other Secured Creditors all fees and other
amounts due and payable by the Borrower on or prior to the Effective Date,
including the reasonable fees and expenses of counsel to the Agent payable
pursuant to Section 10.2.


 


Section 3.2  Conditions Precedent to all Loans and Letters of
Credit.  The obligation of the Lenders to make any
Loans hereunder and of the Letter of Credit Issuer to issue any Letter of
Credit hereunder shall be subject to the fulfillment of the following
additional conditions:


 


(a)                                  Notices and Requests. 
The Agent shall have received the Borrower’s request for such Loans as
required under Section 2.2 and, if applicable, its application for
such Letter of Credit as specified under Section 2.13.


 


(b)                                 Representations and Warranties. 
The representations and warranties contained in the Loan Documents shall
be true and correct in all material respects on and as of the date of each Loan
and the date of issuance of each Letter of Credit, with the same force and
effect as if made on such date, except to the extent that any such
representation or warranty relates to a specified date, in which case such
representation or warranty shall be true and correct in all material respects
as of such date.


 


(c)                                  No Default; Collateral Coverage; Related
Officer’s Certificate.  No Default or Event of Default
shall have occurred and be continuing on the Effective Date or on the date of
any Loan or the date of issuance of any Letter of Credit or will exist 


 


46

















 


after giving effect to any Loan or the issuance of any
Letter of Credit.  Without limiting the
foregoing, each of the Collateralization Requirements shall have be satisfied,
and the Current Appraised Value of the Eligible Collateral shall not be less
than the Collateral Coverage Threshold, in each case at the time of, and after
giving effect to, each Loan and the issuance of each Letter of Credit.  The Borrower shall have delivered to the
Agent, together with the request for such Loan or the issuance of such Letter
of Credit, as applicable,an Officer’s Certificate, certifying that each of the
conditions set forth in this Section 3.2(c) is satisfied on
such date.


 


(d)                                 Absence of Litigation and Other
Proceedings.  There shall be no actions, suits or
proceedings or investigations pending or threatened with respect to Holdings or any of
its Subsidiaries or any of their respective properties that have had,
or could reasonably be expected to have, a Material Adverse Effect
or affect the legality, validity, binding effect or enforceability of any Loan
Document.


 


(e)                                  Consents.  All
governmental and third party consents and approvals necessary in connection
with the financing contemplated hereby shall have been obtained, in form and
substance reasonably satisfactory to the Agent, and be in full force and
effect.


 


(f)                                    Fees and Expenses. 
The Agent shall have received for itself and for the account of the
other Secured Creditors all fees and other amounts due and payable by the
Borrower on or prior to the applicable Loan Date or the date of issuance of
such Letter of Credit, including the reasonable fees and expenses of counsel to
the Agent payable pursuant to Section 10.2
to the extent requested to be paid.


 


(g)                                 Compliance. The Borrower and each Guarantor shall have performed
and complied in all material respects with all agreements, terms and conditions
contained in this Agreement and the other Loan Documents required to be
performed or complied with by the Borrower or such Guarantor, as applicable,
prior to or simultaneously with the Effective Date.


 


(h)           Other Matters.
All corporate and legal proceedings relating to the Borrower and its
Subsidiaries, and all instruments and agreements in connection with the
transactions contemplated by this Agreement, shall be satisfactory in scope,
form and substance to the Agent, the Lenders and their respective counsel and
the Agent’s counsel, and the Agent shall have received all information and
copies of all documents, including records of corporate proceedings, as any Lender
or such counsel may reasonably have requested in connection therewith, such
documents where appropriate to be certified by proper corporate or governmental
authorities.


 


47
















 


ARTICLE
IV


 


REPRESENTATIONS
AND WARRANTIES


 


To induce the Agent and the
Lenders to enter into this Agreement and to make Loans and to induce the Letter
of Credit Issuer to issue Letters of Credit the Borrower and each Guarantor
hereby jointly and severally represent and warrant as follows:


 


Section 4.1  Financial
Condition.  The audited consolidated
balance sheets of Holdings and its Subsidiaries as at December 31, 2007,
and the related consolidated statements of operations, of common stockholders’
deficit and of cash flows for the fiscal year ended on such date, reported on
by Ernst & Young LLP present fairly in all material respects the
consolidated financial condition of such entities as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the respective fiscal years then ended. The unaudited condensed consolidated
balance sheets of Holdings and its Subsidiaries as at June 30, 2008, and
the related unaudited condensed consolidated statements of income and cash
flows for the six-month period ended on such date, present fairly in all
material respects the consolidated financial condition of such entities as at
such date and the consolidated results of their operations and their
consolidated cash flows for the six-month period then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto (in the case of such annual statements),
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein).


 


Section 4.2  No Change.  Since June 30, 2008, no event or
circumstance has arisen that constitutes a Material Adverse Effect.


 


Section 4.3  Corporate
Existence; Compliance.  The Borrower and each of
the Guarantors  (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged and
presently proposes to engage in, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where it
is required to be so qualified and where the failure to be so qualified would
have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law (including, without limitation, Environmental Laws) and
Contractual Obligations except to the extent that the failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect.


 


Section 4.4 
Corporate Power; Authorization; Enforceable Obligations.  The Borrower and each of the Guarantors has
the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to obtain extensions of credit hereunder.  The Borrower and each of the Guarantors has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of
the Borrower, to authorize the extensions of credit on the terms and conditions
of this Agreement.  No material consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person, is required in connection with
the extensions of credit hereunder 


 


48





















or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the other Loan Documents, except consents, authorizations, filings
and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and any such other consent, authorization, filing, notice or other act required
to be made or obtained after the Effective Date in the ordinary course of
business or in order to perfect the Liens granted under the Security Documents.  Each Loan Document to which the Borrower or
any of the Guarantors is a party has been duly executed and delivered on behalf
of the Borrower and each such Guarantor, as applicable. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each of the Borrower and any Guarantor
that is party thereto, enforceable against each such Person in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).


 


Section 4.5 
No Legal Bar.  The
execution, delivery and performance of this Agreement and the other Loan
Documents, the borrowings and other extensions of credit hereunder and the use
of the proceeds thereof will not violate in any material respect any material
Requirement of Law or any material Contractual Obligation of Holdings or any of
its Subsidiaries and will not result in, or require, the creation or imposition
of any Lien on any of their respective properties or revenues pursuant to any
such Requirement of Law or Contractual Obligation.


 


Section 4.6  Litigation;
Properties.


 


(a)           There
are no actions, suits or proceedings or investigations pending or threatened
with respect to Holdings or any of its Subsidiaries or any of their respective
properties that have had, or could reasonably be expected to have, a Material
Adverse Effect or affect the legality, validity, binding effect or
enforceability of any Loan Document.


 


(b)           Except with respect to any matters
that, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect, (i) the Borrower and each Guarantor
is currently in compliance with all, and has not violated any, Environmental
Laws and/or requirements of any Airport Authority with respect to environmental
matters and maintains and complies with all, and has not violated any,
Environmental Permits and (ii) none of the Borrower or the Guarantors has (x) become
subject to any Environmental Liability, or (y) received written or, to the
knowledge of the Borrower or the Guarantors, verbal notice of any pending or, to
the knowledge of the Borrower or the Guarantors, threatened claim with respect
to any Environmental Liability, and there is no reasonable basis for any
Environmental Liability.


 


(c)           The Borrower and the Guarantors have
good title to the Collateral and (except as would not reasonably be expected to
have a Material Adverse Effect) to each of the properties and assets reflected
on the financial statements referred to in Section 4.1 hereof; in each case subject to
Permitted Liens.


 


49





















(d)           Except as could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, (i) each of the Borrower and the Guarantors owns, or is licensed
to use, all trademarks, trade names, copyrights, patents and other intellectual
property material and necessary to its business and (ii) the use thereof
by such Borrower or Guarantor, to the Borrower’s or such Guarantor’s knowledge,
does not infringe upon the rights of any other Person in such rights or
property.


 


(e)           As of the Effective Date, neither the
Borrower nor any Guarantor has received any written notice of a pending or
contemplated condemnation proceeding affecting any Japanese Real Property
Asset.


 


Section 4.7  Federal
Regulation.  Not more
than 25% of the value of the assets of the Borrower, or of Holdings and its
Subsidiaries on a consolidated basis, constitutes “margin stock” within the
meaning of such term under Regulation U. 
Neither the making of any Loan nor the use of the proceeds of any
thereof will violate or be inconsistent with the provisions of Regulation T, U
or X of the Board.


 


Section 4.8  ERISA


 


(a)           As of each Loan Date: (i) each
Pension Plan has been operated and administered in compliance with all
applicable requirements of ERISA and, if intended to qualify under Section 401(a) or
403(a) of the Code, in compliance with all applicable requirements of such
provision except where the failure to so comply would not result in, taking all
instances in the aggregate, liability in excess of $2,000,000; (ii) full
payment has been made by each of Holdings and its Subsidiaries or any of its
ERISA Affiliates of all amounts which such Persons are required under the terms
of each Pension Plan and Multiemployer Plan to have paid as contributions to
such Pension Plan and Multiemployer Plan except where the failure to so comply,
taking all instances in the aggregate, would not result in liability in excess
of $2,000,000; (iii) none of the Pension Plans had an accumulated funding
deficiency as (defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent plan year
of such Pension Plan; (iv) no Termination Event has occurred or, to the
best knowledge of Holdings or any of its Subsidiaries, is expected by such
Person to occur with respect to any Pension Plan or Multiemployer Plan such
that any such Person or any of its ERISA Affiliates would incur, taking all
instances in the aggregate, liabilities in excess of $10,000,000 (such liability
to include, without limitation, any liability to the PBGC or to any other party
under Section 4062, 4063 and 4064 of ERISA or to any Multiemployer Plan
determined under Section 4201 et  seq. of ERISA) resulting
from or associated with all such Termination Events.


 


(b)           Neither Holdings nor any of its
Subsidiaries nor any of their ERISA Affiliates has engaged in any transaction
in connection with which any such entity has been or could be subjected to
either a tax imposed by Section 4975 of the Code or the corresponding
civil penalty assessed pursuant to Sections 502(i) and 502(l) of
ERISA, which penalties and taxes for all such transactions are in an aggregate
amount in excess of $2,500,000.  Using
actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of Holdings and its 


 


50





















Subsidiaries, the Borrower and its Subsidiaries and
their ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan ended prior to the Loan Date would not have a material
adverse effect upon the results of operation or financial condition of Holdings
or any of its Subsidiaries. Neither Holdings nor any of its Subsidiaries
maintains or contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA or any employee pension
benefit plan (as defined in Section 3(2) of ERISA) the obligations
with respect to which would have a material adverse effect on the ability of
any such Person to perform its obligations under this Agreement.


 


Section 4.9  Investment
Company Act.  Neither the Borrower
nor any Guarantor is an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.


 


Section 4.10  Subsidiaries.  As of the Effective Date, Schedule 4.10 correctly sets forth the
percentage ownership (direct and indirect) of the Borrower and each of the
Guarantors in each of their respective Subsidiaries.


 


Section 4.11  Use
of Proceeds.  The proceeds
of the Loans, and each Letter of Credit,
shall be used for the Borrower’s general business purposes in a manner not in
conflict with any of the Borrower’s covenants in this Agreement.


 


Section 4.12  True
and Complete Disclosure.  All factual
information (taken as a whole) furnished by or on behalf of the Borrower or any
Guarantor in writing to the Agent or any Lender for purposes of or in
connection with this Agreement, the other Loan Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Persons in
writing to any Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.


 


Section 4.13  Air Carrier.  The Borrower is a Certificated Air Carrier.  The Borrower possesses all
necessary certificates, franchises, licenses, permits, rights, designations,
authorizations, exemptions, concessions, frequencies and consents which relate
to the operation of the Routes flown by it and the conduct of its business and
operations as currently conducted except where failure to so possess would not,
in the aggregate, have a Material Adverse Effect.


 


Section 4.14  Slot
Utilization.  Except for matters
which would not reasonably be expected to have a Material Adverse Effect, the
Borrower and the Guarantors, as applicable, are utilizing, or causing to be
utilized, their FAA Slots and Foreign Slots in a manner consistent with
applicable rules, regulations, laws and contracts in order to preserve both
their respective right to hold and operate such FAA Slots and Foreign Slots,
taking into account any waivers or other relief granted by the FAA, other
applicable U.S. Governmental Authority, Airport Authority or Foreign Aviation Authorities.
Except as would not reasonably be expected to have a Material 


 


51





















Adverse Effect, neither
the Borrower nor any Guarantor has received any written notice from the FAA,
other applicable U.S. Governmental Authority, Airport Authority or Foreign
Aviation Authorities, or is aware of any other event or circumstance, that
would be reasonably likely to impair its right to hold and operate any of its
FAA Slots or Foreign Slots.


 


Section 4.15  Route
Utilization.  The Borrower and the
Guarantors, as applicable, hold the requisite authority to operate each of
their respective Routes pursuant to Title 49, applicable foreign law, and the
applicable rules and regulations of the FAA, the DOT and any applicable
Foreign Aviation Authorities, and have, at all times after being awarded each
such Route, complied with all of the terms, conditions and limitations of each
such certificate or order issued by the DOT and the applicable Foreign Aviation
Authorities regarding such Route and with all applicable provisions of Title
49, applicable foreign law, and the applicable rules and regulations of
the FAA, the DOT and any Foreign Aviation Authorities regarding such Route,
except to the extent that such non-compliance could not reasonably be expected
to have a Material Adverse Effect. There exists no failure of the Borrower or
any applicable Guarantor to comply with such terms, conditions or limitations
that gives the FAA, the DOT or any applicable Foreign Aviation Authorities the
right to terminate, cancel, suspend, withdraw or modify in any materially
adverse respect the rights of the Borrower or the Guarantors, as applicable, in
any such Route, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.


 


Section 4.16  Security
Documents.


 


(a)           Each of the Security Documents is in
full force and effect, is effective to secure the Obligations under this
Agreement, and is enforceable in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).


 


(b)           Except as expressly stated therein,
each security interest or other Lien that is purported to be granted under any
of the Security Documents constitutes a perfected first priority security
interest or other Lien, as applicable, in favor of the Agent for the benefit of
the Secured Creditors in the Collateral subject thereto (to the extent such
perfection and priority can be obtained under the Uniform Commercial Code or
any other applicable statute, or by filing any requisite filings with the FAA
or registration with the International Registry, and provided, with respect to
Equipment that is subject to a title registration statute, that neither
notation of the Agent on a title certificate issued under such statute nor
delivery of such a title certificate to the Agent shall be required hereunder
except to the extent that the Borrower asserts that such Equipment constitutes “Eligible
Collateral” hereunder) and such security interests (i) are continuing,
valid and enforceable, and (ii) are not subject to any defense,
counterclaim or setoff.


 


Section 4.17  Pledged
Accounts.  Each and every deposit
account, sweep account linked thereto and other securities account owned or
held by the Borrower or any of the Guarantors, except Escrow Accounts, Petty
Cash Accounts, Payroll Accounts and accounts 


 


52





















outside the United
States, is listed on Schedule 1.1-B, Schedule 1.1-C, Schedule
1.1-D or Schedule 1.1-E hereto.


 


ARTICLE V


 


AFFIRMATIVE COVENANTS


 


From the date hereof and until such time as no Commitment or obligation
to issue Letters of Credit hereunder is in effect, the Notes and all of the
other Obligations have been paid in full and no Letters of Credit remain
outstanding, unless the Required Lenders shall otherwise consent in writing,
the Borrower and each Guarantor shall, and shall cause each of their
Subsidiaries to:


 


Section 5.1  Financial
Statements.  Furnish to
the Agent and each of the Lenders:


 


(a)           as soon as available, but in any
event within 90 days after the end of each fiscal year of Holdings, a copy of
the SEC Form 10-K filed by Holdings with the SEC for such fiscal year, or,
if no such Form 10-K was so filed by Holdings for such fiscal year, the
audited consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such fiscal year and the related audited consolidated statements of
operations, of common stockholders’ equity and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported by Ernst & Young or other independent certified public
accountants of nationally recognized standing, which report shall be without a “going
concern” or like qualification or exception, or, in respect of any fiscal year,
without qualification arising out of the scope of the audit; and


 


(b)           as soon as available, but in any
event not later than 45 days after the end of each of the first three quarterly
periods of each fiscal year of Holdings, a copy of the SEC Form 10-Q filed
by Holdings with the SEC for such quarterly period, or, if no such Form 10-Q
was so filed by Holdings with respect to any such quarterly period, the
unaudited consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such quarter and the related unaudited consolidated statements of
operations for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer of Holdings, as the case
may be, as being fairly stated in all material respects (subject to normal
year-end audit adjustments).


 


All
such financial statements shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).  Information required
to be delivered pursuant to this Section 5.1 (to the extent
not made available as set forth above) shall be deemed to have been delivered
to the Agent or a Lender on the date on which the Borrower provides written
notice to the Agent or such Lender, as applicable, that such information has
been posted on the Borrower’s website on the Internet at http://www.nwa.com (to
the extent such information has been posted or is available as described in
such notice).


 


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Section 5.2  Certificates;
Other Information.  Furnish to
the Agent (and the Agent shall, subject to the final sentence of this Section 5.2, promptly following
receipt thereof furnish to the Lenders):


 


(a)           concurrently with the delivery of the
financial statements referred to in Section 5.1(a),
a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;


 


(b)           concurrently with the delivery of any
financial statements pursuant to Section 5.1,
(i) a certificate of a Responsible Officer of each of Holdings and the
Borrower stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (ii) a
Compliance Certificate as of the last day of the fiscal quarter or fiscal year
of the Borrower, as the case may be;


 


(c)           not more than 90 days following the
commencement of each fiscal year of the Borrower, a budget of the Borrower and
its Subsidiaries in reasonable detail for each fiscal month of such fiscal year
as is customarily prepared by management for its internal use setting forth,
with appropriate discussion, the principal assumptions upon which such budget
is based;


 


(d)           within five days after the same are
sent, copies of all financial statements and reports that Holdings sends to the
holders of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial statements
and reports that Holdings may make to, or file with, the SEC;


 


(e)           promptly after any senior financial
or legal officer of the Borrower or any Guarantor obtains knowledge of the
occurrence of an “Event of Default” as defined in the Citicorp Credit
Agreement, or, following the Initial Delta Merger Date, an “Event of Default”
as defined in the Delta-JPMCB Agreement or the Delta-GSCP Agreement, notice
thereof and a statement of such Responsible Officer setting forth the details
thereof and any action taken or proposed to be taken in respect thereof;


 


(f)            promptly after a Responsible Officer
obtains knowledge of the receipt of any environmental audits or reports
(whether prepared by personnel of the Borrower or any Affiliate thereof or by
independent consultants) that relate to (i) any Japanese Real Property
Assets or (ii) any Environmental Liability that relates to Japanese Real
Property Assets or could reasonably be expected to have a Material Adverse
Effect, notification thereof, together with copies thereof and a statement of a
Responsible Officer of the Borrower setting forth the details thereof and any
action taken or proposed to be taken in respect thereof;


 


(g)           (I) not more than 25 days after
the end of each calendar month, a Collateral Report as of the end of such
calendar month; (II) on the one-year anniversary hereof and on the
one-year anniversary of any Appraisal Report delivered to the Agent after the
Effective Date with respect to any Eligible Collateral except Japanese Real
Property Assets, one or more Appraisal Reports, (III) if an Event of
Default has occurred and is continuing, at the request of the Agent and from
time to time, one or more 


 


54





















Appraisal Reports in respect of any Appraised
Collateral, and (IV) promptly upon the occurrence of any Event of Loss or
other Collateral Event as a result of which the Current Appraised Value of the
Eligible Collateral is less than the Collateral Coverage Threshold, a revised
Collateral Report reflecting the corresponding change in the Current Appraised
Value of the Eligible Collateral;


 


(h)           on the first Business Day of each
calendar week, a Cash Liquidity Report as of the last Business Day of the
immediately preceding calendar week;


 


(i)            promptly after a Responsible Officer
obtains knowledge thereof, notice of any Collateral Event;


 


(j)            promptly, such information as to the
FAA Slots and the  Gate Interests as the Agent may
from time to time reasonably request; and


 


(k)           promptly, such additional financial
and other information as the Agent may from time to time reasonably request.


 


Information
required to be delivered pursuant to this Section 5.2 (to the extent
not made available as set forth above) shall be deemed to have been delivered
to the Agent on the date on which the Borrower provides written notice to the
Agent that such information has been posted on the Borrower’s website on the
Internet at http://www.nwa.com (to the extent such information has been posted
or is available as described in such notice).


 


If
any notice or other communication delivered pursuant to this Section 5.2, or otherwise
pursuant to this Agreement, contains any material non-public information, the
Borrower, or Affiliate thereof, if applicable, shall, at the time of such
delivery, notify the Agent that such communication or notice contains material
non-public information.  If a Lender has
notified the Agent that it does not want to receive material non-public
information, the Agent will not forward to such Lender any notice or communication
which is identified by the Borrower as including such information until such
Lender notifies the Agent otherwise.


 


Section 5.3  Payment
of Taxes.  Pay, discharge or
otherwise satisfy, all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which material penalties attach thereto,
and all material lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower, any Guarantor or any of their
Subsidiaries, provided that neither the Borrower nor any Guarantor nor any of
their Subsidiaries shall required to pay any such tax, assessment, charge, levy
or claim (i) which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment
of management) with respect thereto in accordance with GAAP or (ii) the
nonpayment of which would not have a Material Adverse Effect.


 


55




















 


Section 5.4  Maintenance
of Existence; Compliance.


 


(a)                                  Except
as permitted by Section 6.4, do all
things necessary to preserve and keep in full force and effect its existence
and material rights, authority and franchises, unless the failure to keep in full
force and effect any such right, authority or franchise would not have a
Material Adverse Effect.


 


(b)                                 Comply with all applicable laws, rules,
regulations and orders of any Airport Authority (with respect to environmental
matters) or Governmental Authority applicable to it or its property (including
Environmental Laws), and all Contractual Obligations, except where such
noncompliance, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.


 


(c)                                  To the extent the following are required
by Environmental Laws, any Governmental Authority or any requirements of an
Airport Authority relating to environmental matters, conduct any and all
investigations, studies, sampling and testing and take any and all necessary
remedial action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials for which the Borrower or
the Guarantors or their respective Subsidiaries is, or would reasonably be
expected to be, liable (except, in each case, to the extent, and only to the
extent, that (i) the Borrower’s or the Guarantors’ or their respective
Subsidiaries’ liability for or any requirement of an Airport Authority with
respect to any such presence, storage, use, disposal, transportation or Release
of any Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Persons, (ii) such remedial
action is taken by other Persons responsible for such remedial action through
an indemnification of the Borrower or the Guarantors or any Subsidiary thereof
or (iii) such non-compliance would not in any case or in the aggregate
have a Material Adverse Effect).  In the
event that the Borrower or the Guarantors or any of their respective Subsidiaries
undertakes any such investigation, study, sampling, testing or remedial action
with respect to any Hazardous Materials, the Borrower and the Guarantors will
cause such action to be completed in compliance in all material respects with
all applicable Environmental Laws and all applicable requirements of Airport
Authorities relating to environmental matters.


 


Section 5.5  Maintenance
of Property; Insurance.


 


(a)                                  Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and from time to time make in such
properties and equipment all needed and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and
in the manner customary for companies in similar businesses, except where the
failure to keep such properties and equipment in good repair, working order and
condition or to make such repairs, renewals, replacements, extensions,
additions, betterments or improvements would not have a Material Adverse
Effect.


 


(b)                                 In addition to the requirements of
subsection (c) below and any requirements set forth in the Security
Documents, (i) keep its properties (other than the Mortgaged Aircraft
Collateral, as to which only the provisions of the Aircraft Mortgages shall
apply) insured at all times, against such risks, including fire and other risks
insured 


 


56

















 


against by extended coverage, and on such term and
conditions, as is prudent and customary with U.S. based companies of the same
or similar size in the same or similar businesses provided that the Agent and
the Lenders agree and acknowledge that the insurance coverages provided as of
the Closing Date satisfy such criteria as of the Closing Date; (ii) maintain
in full force and effect public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by the Borrower or
any Guarantor, as the case may be, in such amounts and with such deductibles as
are customary with companies of the same or similar size in the same or similar
businesses and in the same geographic area provided that the Agent and the
Lenders agree and acknowledge that the insurance coverages provided as of the
Closing Date satisfy such criteria as of the Closing Date; and (iii) maintain
such other insurance or self insurance as may be required by law.


 


(c)                                  Maintain business interruption insurance
in amounts that are reasonably satisfactory to the Agent and as is customary in
the United States domestic airline industry for major United States air
carriers having both substantial domestic and international operations.


 


(d)                                 All such insurance referred to in subsection
(b) above with respect to the Collateral (other than the Mortgaged
Aircraft Collateral, as to which only the provisions of the Aircraft Mortgages
shall apply) shall (i) contain a lender’s loss payable or mortgagee
endorsement, as applicable, in favor of the Agent, on behalf of the Secured
Creditors, in all loss or damage insurance policies, (ii) name the Agent,
for the benefit of the Secured Creditors, as additional insured for liability
insurance policies, (iii) provide that no cancellation or material change
thereof shall be effective until at least thirty (30) days after written notice
thereof to the Agent and permit the Agent to cure any default with respect to
applicable outstanding premiums, (iv) provide that once the Agent has
given notice of the occurrence of an Event of Default, no loss in excess of
$5,000,000 shall be adjusted or otherwise settled without the prior written
consent of the Agent, and (v) state that none of the Agent, any of the
Lenders, nor any other Secured Creditor shall be responsible for premiums,
commissions, club calls, assessments or advances.


 


(e)                                  Promptly deliver to the Agent copies of
any material notices received from its insurers with respect to insurance
programs required by the Terrorism Risk Insurance Act of 2002 (as extended by
the Terrorism Risk Insurance Program Reauthorization Act of 2007) and procure
and maintain in force the insurance that is offered in such programs to the
same extent maintained by companies of the same or similar size in the same or
similar businesses.


 


(f)                                    No less frequently than annually, but in
any event prior to expiration of any insurance policy maintained in connection
herewith or in connection with any Security Document, furnish to the Agent
certificates of insurance with respect to insurance maintained by the Borrower
or any Guarantor, as the case may be, which certificates evidence compliance by
the Borrower and the Guarantors with the insurance requirements set forth
herein and in any of the Security Documents and contain signatures of duly
authorized representatives of Aon, Marsh & McLennan or another 


 


57

















 


insurance broker as may be reasonably acceptable to
the Agent, at all times prior to policy termination, cessation or cancellation.


 


(g)                                 Make available at the Borrower’s
headquarters, upon the reasonable request of the Agent and upon reasonable
prior notice, all insurance policies maintained by the Borrower and the
Guarantors for the review of the Agent and any agents or representatives
thereof.


 


Section 5.6  Inspection of Property; Books and Records;
Discussions; Appraisal and Audits.


 


(a)                                  Maintain or cause to be maintained at all
times true and complete books and records in all material respects in a manner
consistent with GAAP in all material respects of the financial operations of
the Borrower and the Guarantors and provide the Agent and its representatives
and advisors reasonable access to all such books and records (subject to
requirements under any confidentiality agreements, if applicable), as well as
any appraisals of the Collateral, during regular business hours, in order that
the Agent may upon reasonable prior notice and with reasonable frequency, but
in any event, so long as no Event of Default has occurred and is continuing, no
more than one time per year, examine and make abstracts from such books,
accounts, records, appraisals and other papers, and permit the Agent and its
representatives and advisors to confer with the officers of the Borrower and
the Guarantors and representatives (provided that the Borrower shall be given
the right to participate in such discussions with such representatives) of the
Borrower and the Guarantors, all for the purpose of verifying the accuracy of
the various reports delivered by the Borrower or the Guarantors to the Agent or
the Lenders pursuant to this Agreement or for otherwise ascertaining compliance
with this Agreement; and at any reasonable time and from time to time during
regular business hours, upon reasonable notice to the Borrower, permit the
Agent and any agents or representatives (including, without limitation,
appraisers) thereof to visit the properties of the Borrower and the Guarantors
and to conduct examinations of and to monitor the Collateral, in each case at
the expense of the Borrower (provided, that the Borrower shall only be required
to pay reasonable out-of-pocket expenses and shall not be required to pay the
expenses of more than one such visit a year unless an Event of Default has
occurred and is continuing).


 


(b)                                 Grant access to and the right to inspect
all final reports, final audits (and draft reports and audits where no final
reports or audits are available) and other similar internal information of the
Borrower or any Guarantor relating to the Japanese Real Property Assets with
respect to environmental matters upon reasonable notice, and obtain any third
party verification of matters relating to the Release or alleged Release of
Hazardous Materials at the Japanese Real Property Assets and compliance with
Environmental Laws and requirements of Airport Authorities with respect to
environmental matters reasonably requested by the Agent at any time and from
time to time.


 


(c)                                  Cooperate with the Field Auditor such
that the Agent shall receive one or more Field Audits establishing the value of
the Appraised Collateral or other Collateral, as the case may be, (i) on
the date upon which any additional property or assets may be 


 


58

















 


pledged as Collateral to the Agent to secure
Obligations, but only with respect to such additional Collateral, (ii) promptly
at the request of the Agent (which, so long as no Event of Default has occurred
and is continuing, shall occur no more than once per year) and (iii) upon
a change in any Requirements of Law applicable to any material assets that
constitute Collateral, which change could reasonably be expected to result in
the Current Appraised Value of the Eligible Collateral falling below the
Collateral Coverage Threshold. In addition to the foregoing requirements, if at
any time the Agent reasonably believes that a Collateral Event has occurred, it
may request the delivery of an updated Appraisal Report or Collateral Report,
as applicable, with respect to the affected Collateral, and the Borrower and
the Guarantors shall cooperate with the Appraiser or Field Auditor, as
applicable, to ensure that the Agent receives the same. The Borrower may from
time to time cause to be delivered subsequent Appraisal Reports if it believes
that the affected item of Appraised Collateral has a higher Current Appraised
Value than that reflected in the most recent Appraisal Report delivered.


 


Section 5.7  Notices.  Promptly give notice to the Agent and each Lender of:


 


(a)                                  (i) the occurrence of any Default or
Event of Default and (ii) any litigation or governmental proceeding
pending against or affecting the Borrower or any Guarantor or any of their
Subsidiaries or any of its or their respective properties which is likely to
have a Material Adverse Effect; and


 


(b)                                 the following events, as soon as possible
and in any event within 15 days after the Borrower or any Guarantor knows or
has reason to know thereof, if such events, individually or in the aggregate
have had or would have a Material Adverse Effect: (i) the occurrence of
any Termination Event with respect to any Pension Plan, a failure to make any
required contribution to a Pension Plan, the creation of any Lien in favor of
the PBGC or a Pension Plan or any withdrawal from, or the termination,
reorganization or insolvency of, any Multiemployer Plan or Pension Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, reorganization or
insolvency of, any Pension Plan.


 


Each
notice pursuant to this Section 5.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower and, if applicable,
any Affiliate thereof, proposes to take with respect thereto.


 


Section 5.8  Performance
of Obligations.  Perform all
of its obligations under the terms of each mortgage, indenture, security
agreement and other debt instrument by which it is bound, except where the
failure to perform would not have a Material Adverse Effect.


 


Section 5.9  End of Fiscal Years; Fiscal Quarters.  For financial reporting purposes, end Holdings’ and each of
its Subsidiaries’ (i) fiscal years on December 31 of each year and (ii) fiscal
quarters on March 31, June 30, September 30 and December 31
of each year.


 


Section 5.10 
Air Carrier Status; Maintenance. 
Ensure that at all times  (i) Borrower
is all times a Certificated Air Carrier and (ii) the Borrower and, if
applicable, any Guarantor, possesses and maintains all necessary certificates,
exemptions, franchises, licenses, 


 


59

















 


permits,
designations, rights, concessions, Gate Interests, authorizations, frequencies
and consents that are material to the operation of the FAA Slots, the Routes
and the Foreign Slots utilized by it and the conduct of its business and
operations as currently conducted except, in any case described in this clause
(ii), where the failure to do so, either individually or in the aggregate,
could not be reasonably likely to have a Material Adverse Effect.


 


Section 5.11  ERISA.


 


(a)                                  As soon as practicable and in any event
within fifteen days after the Borrower or any Guarantor or any of their ERISA
Affiliates knows or has reason to know of the occurrence of any (i) Termination
Event in connection with any Pension Plan, (ii) non-exempt “prohibited
transaction” as described in Section 406 of ERISA or Section 4975 of
the Code, (iii) accumulated funding deficiency or application to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code, (iv) institution
pursuant to Section 515 of ERISA to collect a delinquent contribution, or (v) material
liability by the Borrower or any Guarantor or any of their Subsidiaries
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension
benefit plan (as defined in Section 3(2) of ERISA) in addition to the
liability for benefits existing on the Effective Date pursuant to any such
welfare or pension plan or plans in connection with any Pension Plan or
Multiemployer Plan or any trust created thereunder, if as a result of such
event or transaction, considered together with other such events and transactions
occurring within the prior two years, the Borrower, the Guarantors and their
ERISA Affiliates incur or could reasonably expect to incur liabilities from all
such events and transactions in excess of $5,000,000, the Borrower or such
Guarantor, as applicable, shall deliver to each of the Lenders a certificate,
signed by an Authorized Officer of the Borrower or such Guarantor, specifying
the nature thereof, what action the Borrower or such Guarantor or such ERISA
Affiliate has taken, is taking or proposes to take with respect thereto, and
any action taken or threatened by the Internal Revenue Service, Department of
Labor, PBGC, Pension Plan or Multiemployer Plan, as applicable, to be taken
with respect thereto (together with copies of all relevant notices or other
communications received from such entity). 
For the purposes of this Section 5.11,
the Borrower or a Guarantor shall be deemed to have knowledge of all facts
known by the plan “administrator” (as defined in Section 3(16)(A) of
ERISA) of any Pension Plan of which such the Borrower or such Guarantor, as
applicable, or any of such Person’s ERISA Affiliates is the “plan sponsor” (as
defined in Section 3(16)(B) of ERISA).


 


(b)                                 To the extent reasonably requested by any
Lender, as soon as practicable and in any event within 30 days after the filing
of a Form 5500 series annual report by the Borrower, any Guarantor or any
of their ERISA Affiliates with the Internal Revenue Service with respect to
each Pension Plan, the Borrower or such Guarantor, as applicable, shall furnish
to such Lender a copy of such Form 5500 series annual report and the
Schedule B (Actuarial Information) thereto (and shall make available for
inspection by such Lender at reasonable times copies of the full annual report
with respect to each Pension Plan).


 


60

















 


Section 5.12 
Slot Utilization.  Utilize
the FAA Slots and Foreign Slots in a manner consistent in all material respects
with applicable regulations, rules, laws and contracts in order to preserve its
right to hold and operate the FAA Slots and Foreign Slots, taking into account
any waivers or other relief granted to the Borrower by the FAA, any other
applicable Governmental Authority or any Airport Authority or Foreign Aviation
Authorities, except, in each case, as would not reasonably be expected to have
a Material Adverse Effect.


 


Section 5.13  Route
Utilization.  Utilize the Routes in a
manner consistent in all material respects with applicable regulations, rules,
treaties, foreign law and contracts in order to preserve its right to hold and
operate the Routes and maintain access to the Supporting Route Facilities
sufficient to ensure its ability to retain its rights in and to the Routes,
taking into account any waivers or other relief granted to the Borrower by the
FAA, any other applicable Governmental Authority, any Airport Authority or any
applicable Foreign Aviation Authorities, except, in each case, as would not
reasonably be expected to have a Material Adverse Effect.


 


Section 5.14  Spare
Parts.  Segregate all Spare Parts
from any other spare parts, and keep all Spare Parts owned by the Borrower,
Compass and Mesaba in Spare Parts Locations under the applicable Aircraft
Mortgage, except to the extent permitted in such Aircraft Mortgage.  The Spare Parts will be maintained by or on
behalf of the Borrower or Compass or Mesaba, as applicable, as required by the
applicable Aircraft Mortgage.


 


Section 5.15  Additional
Collateral.  The Borrower may from
time to time submit a request to the Agent for additional assets owned by the
Borrower, any Guarantor or any of their Subsidiaries to be subjected to a Lien
in favor the Agent for the benefit of the Secured Creditors to secure the
Obligations, provided that such assets are of a similar type and nature and of
the same general classification or asset class as Eligible Collateral subject
to such Lien on the Effective Date and are otherwise acceptable to the Agent in
its reasonable discretion.  Any such
request shall be submitted in writing together with (i) a description of
the relevant owner and such assets, (ii) any related Appraisal Reports and
other information, and an Officer’s Certificate, demonstrating to the Agent’s
reasonable satisfaction that the foregoing requirements of this Section 5.15 are satisfied, and (iii) such
other information as the Agent may reasonably request.  If the Agent determines that the request
meets the requirements of this Section 5.15,
(a) the Borrower shall deliver to the Agent documentation sufficient to cause
such assets to be subjected to Lien in favor of the Agent and take such other
actions as may be required to demonstrate to the Agent’s reasonable
satisfaction that such Lien constitutes a perfected first priority Lien
(subject to Permitted Liens but no other Liens) securing the Obligations and (b) if
such assets are owned by a Person other than the Borrower that is not already a
Guarantor, the Borrower shall cause to be delivered to the Agent a joinder to
this Agreement in the form of Exhibit F (whereupon such owner shall be deemed a “Guarantor” hereunder).


 


Section 5.16  Further
Assurances.  Execute any and all
further documents and instruments, and take all further actions, that may be
required or advisable under applicable law, the Cape Town Convention or by the
FAA, or that the Agent may reasonably request, in order to create, grant,
establish, preserve, protect and perfect the validity, perfection and priority
of the Liens and security interests created or intended to be created by the
Security Documents, to the extent required under this Agreement or the Security
Documents, including, without limitation, 


 


61

















 


amending, amending
and restating, supplementing, assigning or otherwise modifying, renewing or
replacing (a) any Aircraft Mortgage or other agreements, instruments or
documents relating thereto, in each case as may be reasonably requested by the
Agent, in order to (i) create interests (including, but not limited to,
International Interests, Assignments, Prospective International Interests,
Prospective Assignments, Sales, Prospective Sales, Assignments of Associated
Rights and Subordinations, in each case as defined in the Cape Town Convention)
that may be registered and/or assigned under the Cape Town Convention, (ii) create,
grant, establish, preserve, protect and perfect the Liens in favor of the Agent
for the benefit of the Secured Creditors to the fullest extent possible under
the Cape Town Convention, including, where necessary, the subordination of
other rights or interests and (iii) realize the benefit of the remedial
provisions that are contemplated by the Cape Town Convention and (b) the
Japanese Insurance Pledge Agreement and any Japanese Mortgage, in order to
create, grant, establish, preserve, protect and perfect the Liens in favor of
the Secured Creditors, or the Agent for the benefit of the Secured Creditors,
from time to time, including in connection with any sale, assignment, transfer
or other Disposition hereunder of any portion of a Lender’s Commitments, Loans
and/or Advances to another Person or any such sale, assignment, transfer or
other Disposition that may be proposed from time to time.


 


ARTICLE VI


 


NEGATIVE COVENANTS


 


From the date
hereof and until such time as no Commitment or obligation to issue Letters of
Credit hereunder is in effect, the Notes and all of the other Obligations have
been paid in full and no Letters of Credit remain outstanding, unless the
Required Lenders shall otherwise consent in writing, the Borrower and each
Guarantor shall not, and shall cause each of their Subsidiaries not to,
directly or indirectly:


 


Section 6.1  Financial Condition Covenants.


 


(a)                                  Cash Liquidity.  Permit Cash Liquidity to be less than
$1,250,000,000 at any time.


 


(b)                                 Consolidated
EBITDAR to Consolidated Fixed Charges.  Permit the ratio of (A) Consolidated
EBITDAR (excluding from the calculation thereof one-time fees, costs, and
expenses incurred in connection with the transactions contemplated by the
Merger Agreement (whether or not consummated), provided that the portion of
such fees, costs and expenses payable in cash and excluded from the calculation
of Consolidated EBITDAR shall not exceed $150,000,000 in the aggregate), to (B) Consolidated
Fixed Charges for any period of four consecutive fiscal quarters ending with
any fiscal quarter set forth below (or with respect to the fiscal quarters
ending on June 30, 2009, September 30, 2009, and December 31, 2009, the period commencing on April 1,
2009, and ending on the last day of such fiscal quarter) to be less than the
ratio set forth below opposite such fiscal quarter:


 


62

















 




	
  Fiscal Quarter(s) Ended

  	
   

  	
  Consolidated EBITDAR to
  Consolidated Fixed Charges

  
	
  6/30/09

  	
   

  	
  1.00 to 1.00

  
	
  9/30/09

  	
   

  	
  1.10 to 1.00

  
	
  12/31/09

  	
   

  	
  1.20 to 1.00

  
	
  3/31/10

  	
   

  	
  1.30 to 1.00

  
	
  6/30/10

  	
   

  	
  1.40 to 1.00

  
	
  9/30/10 and thereafter

  	
   

  	
  1.50 to 1.00

  






 


For the avoidance of doubt,
compliance with the above ratio will not be tested for the fiscal quarters
ending  December 31, 2008, and March 31,
2009.


 


(c)                                  Collateral Coverage. 
Permit the Current Appraised Value of the Eligible Collateral to be less
than the Collateral Coverage Threshold; provided that if (x) upon (1) delivery
of an Appraisal Report, a Field Audit or a Collateral Report to the Agent in
accordance herewith, (2) the establishment of reserves or other criteria
by the Agent pursuant to clause (y) of the definition herein of “Current
Appraised Value”, or (3) the occurrence of any Event of Loss or other
Collateral Event, and (y) as a result thereof it is determined (solely
with respect to determining compliance with this Section 6.1(c)) that the Current Appraised Value of
the Eligible Collateral is less than the Collateral Coverage Threshold, neither
a Default nor an Event of Default shall be deemed to have occurred under this Section 6.1(c) if, within two Business Days
after the date (as applicable) of (i) the delivery of such Appraisal
Report, Field Audit or Collateral Report, (ii) the establishment of such
reserves or other criteria by the Agent or (iii) the occurrence of such
Event of Loss or other Collateral Event, the Borrower (or the Agent, in the
case of a deposit deemed to be in furtherance of a Collateral Coverage
Shortfall Deposit pursuant to the terms of any of the Aircraft Mortgages)
deposits in the Specified Investment Account Cash Equivalent Securities having
a value (as determined by the Agent in its reasonable discretion) at least
equal to the difference between the Collateral Coverage Threshold and the
Current Appraised Value of the Eligible Collateral (any such deposit being
referred to as a “Collateral Coverage Shortfall Deposit”); provided
further that if the Borrower thereafter provides additional Collateral that is
not a Collateral Coverage Shortfall Deposit and such additional Collateral
becomes “Eligible Collateral” under clause (b) of the definition of that
term and no Event of Default has occurred that is continuing, the Agent shall
promptly thereafter transfer to the Borrower in Immediately Available Funds net
proceeds of Cash Equivalent Securities then on deposit in the Specified
Investment Account in an amount equal to the lesser of the Current Appraised
Value of such additional Collateral and the amount of any Collateral Coverage
Shortfall Deposits then on deposit in the Specified Investment Account so long
as, after giving effect to such transfer, the Current Appraised Value of the
Eligible Collateral would be equal to or greater than the Collateral Coverage
Threshold.


 


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Section 6.2 
Indebtedness.  Create,
issue, incur, assume, become liable in respect of or suffer to exist any
Indebtedness secured by a Lien in excess in the aggregate for Holdings and its
Subsidiaries of $750,000,000 at any time outstanding except:


 


(a)                                  Indebtedness of the Borrower or a
Guarantor pursuant to any Loan Document;


 


(b)                                 intercompany Indebtedness among Holdings
and its Subsidiaries;


 


(c)                                  Indebtedness outstanding on the Effective
Date and listed on Schedule 6.2(c) and any refinancings, refundings,
renewals or extensions thereof but only to the extent that such refinancing,
refunding, renewal or extension does not increase the principal amount of such
Indebtedness outstanding immediately prior to such refinancing, refinancings,
renewal or extensions (except to the extent that such increase is permitted
under the $750,000,000 limitation set forth above in this Section) and that the
Lien securing such Indebtedness is not spread to cover any additional
properties;


 


(d)                                 Indebtedness (including industrial
revenue bonds) in respect of tax-exempt government sponsored financings
relating to the acquisition, leasing or improvement of property in connection
with its business and any refinancing, refunding, renewal or extension thereof
but only to the extent that such refinancing, refunding, renewal or extension
does not increase the principal amount of such Indebtedness outstanding
immediately prior to such refinancing, refunding, renewal or extension (except
to the extent such increase is permitted under the $750,000,000 limitation set
forth above in this Section) and that the Lien securing any such Indebtedness
shall only cover the property financed thereby;


 


(e)                                  Indebtedness of Holdings or any of its
Subsidiaries incurred in connection with (i) the acquisition of aircraft
(including Indebtedness secured by aircraft purchase agreements) so long as
such Indebtedness is incurred not later than 18 months after the acquisition
thereof and (ii) the acquisition of other assets so long as such
Indebtedness is incurred not later than 120 days after the acquisition thereof
and any refinancing, refunding, renewal or extension thereof but only to the
extent that such refinancing, refunding, renewal or extension does not increase
the principal amount of such Indebtedness outstanding immediately prior to such
refinancing, refunding, renewal or extension (except to the extent such
increase is permitted under the $750,000,000 limitation set forth above in this
Section), and that the Lien securing any such Indebtedness shall only cover the
property financed thereby;


 


(f)                                    Indebtedness in respect of margin
requirements under fuel hedging contracts, provided that the Liens securing
such Indebtedness shall be limited to such fuel hedging contracts;


 


(g)                                 existing Indebtedness to U.S. Bank;


 


(h)                                 from and after the Initial Delta Merger
Date, guaranties of the Delta Obligations; provided, however, that the
aggregate principal amount of the Delta Obligations guarantied pursuant to this
Section 6.2(h) shall not
exceed $2,500,000,000; and provided, further, that neither the Borrower nor any
Guarantor may grant a Lien on 


 


64

















 


any of the Collateral to secure the guaranty of the
Delta Obligations permitted under this Section 6.2(h);


 


(i)                                     Citicorp Credit Agreement Obligations;
and


 


(j)                                     Indebtedness incurred in connection with
financing the Borrower’s aircraft which were either (i) previously leased
by the Borrower and acquired by the Borrower during the Cases or (ii) released
from pre-petition Liens during the Cases.


 


Section 6.3  Liens.  Create, incur, assume or suffer to exist any Lien upon or
in respect of any Collateral or any proceeds or income in respect thereof,
whether now owned or hereafter acquired, except for (Liens described below are
herein referred to as “Permitted Liens”):


 


(a)                                  inchoate Liens for taxes not yet due or
Liens for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the management of
the Borrower) have been established in accordance with GAAP;


 


(b)                                 Liens (other than any Lien imposed by
ERISA) imposed by law which were incurred in the ordinary course of business
and which have not arisen to secure Indebtedness for borrowed money, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlord’s Liens, and
other similar Liens and governmental charges arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of the Collateral, or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries, and are
not, individually or together, reasonably likely to have a Material Adverse
Effect or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property or asset subject to such Lien;


 


(c)                                  Liens (where there has been no execution
or levy and no pledge or delivery of property as security therefor) arising out
of judgments or awards against the Borrower or any of its Subsidiaries with
respect to which an appeal or proceeding for review is being prosecuted in good
faith and which judgment or award shall be vacated, discharged, satisfied or
stayed or bonded pending appeal within 60 days from the entry thereof;


 


(d)                                 Liens created pursuant to the Security
Documents;


 


(e)                                  rights in respect of Mortgaged Aircraft
Collateral under agreements or arrangements to the extent permitted by the
terms of Sections 2.02(b) and 2.03(b) of each of the Aircraft
Mortgages;


 


(f)                                    rights of the lessees under leases of Appraised FAA
Slots, and rights of counterparties to trades with respect to Appraised FAA
Slots, in each case that are not prohibited by the Slot and Gate Security Agreement;


 


(g)                                 (i) any Liens or other interests of
any airport or Airport Authority on any Supporting Route Facilities arising out
of the Borrower’s use of such Supporting Route Facilities and (ii) any
Liens on any Supporting Route Facilities outside the United States imposed by
any Governmental Authority outside the United States so long as, in each 


 


65

















 


case, the Borrower is contesting the imposition of
such Lien in good faith by appropriate proceedings to the extent that such a
contest is permitted and the Borrower is disputing the imposition of such Lien;


 


(h)                                 from and after the Initial Delta Merger
Date, Liens on the Dual-Control Pledged Accounts and Liens on assets other than
the Collateral, in each case securing Indebtedness permitted under Section 6.2(h).


 


Section 6.4  Fundamental
Changes.  Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its property or business, except that, so long as no Default or Event of
Default exists, or would result therefrom, Holdings may consummate the Initial
Delta Merger.


 


Section 6.5  Disposition
of Collateral.


 


(a)                                  Convey, sell, lease, transfer or
otherwise dispose of (whether voluntarily or involuntarily (it being understood
that loss of property due to theft, destruction, confiscation, prohibition on
use or similar event shall constitute a disposal for purposes of this
covenant)), or remove or substitute, any Eligible Collateral or, except in the
ordinary course of its business, other Collateral, or take any action that
could materially diminish the fair market value of the Collateral taken as a
whole, or agree to do any of the foregoing other than, in each case, as set
forth in and in accordance with the Security Documents.


 


(b)                                 Directly or indirectly create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of the Borrower to create, incur, assume or suffer
to exist any Lien on any Collateral.


 


Section 6.6  Restricted
Payments.  Declare or pay any
dividend (other than stock dividends on its capital stock with the same or a
junior class of stock with respect to which such stock dividend is being paid)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of Holdings, the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings or any Subsidiary (collectively, “Restricted
Payments”), except that any Subsidiary of Holdings may
make Restricted Payments to the Borrower or any Subsidiary of Holdings.


 


Section 6.7  Transactions
with Affiliates.  Enter into
any transaction or series of related transactions with any Affiliate of the
Borrower or any Guarantor or any of their respective Subsidiaries, other than
on terms and conditions substantially as favorable to such Person or such
Subsidiary thereof as would reasonably be obtained by such Person or such
subsidiary at that time in a comparable arm’s length transaction with a Person
other than an Affiliate, provided that the foregoing restrictions shall not
apply to (a) customary fees paid to members of the Board of Directors (in
their capacity as such) of the Borrower and its Subsidiaries, (b) Restricted
Payments permitted by Section 6.6, (c) Indebtedness permitted
by Sections 6.2(b) and 6.2(i), (d) Investments permitted by  Sections 6.10(c), 6.10(d) and
6.10(g), 


 


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and (e) from
and after the Initial Delta Merger Date, transactions in connection with the
integration of the operations of the Borrower with the operations of Delta.


 


Section 6.8  Lines
of Business.  Make any
material change in the lines of business in which it is engaged as of the
Effective Date.


 


Section 6.9  ERISA.  Neither the Guarantor nor any of the Guarantors will, or
will permit any of their respective Subsidiaries or ERISA Affiliates to:


 


(a)                                  engage in any transaction in connection
with which Holdings or any of its ERISA Affiliates could be subject to either a
tax imposed by Section 4975(a) of the Code or the corresponding civil
penalty assessed pursuant to Section 502(i) of ERISA, which penalties
and taxes for all such transactions could be in an aggregate amount in excess
of $2,500,000;


 


(b)                                 permit to exist any accumulated funding
deficiency, for which a waiver has not been obtained from the Internal Revenue
Service, with respect to any Pension Plan in an aggregate amount greater than
$5,000,000; or


 


(c)                                  permit to exist any failure to make
contributions or any unfunded benefits liability which creates, or with the
passage of time would create, a statutory lien or requirement to provide
security under ERISA or the Code in favor of the PBGC or any Pension Plan,
Multiemployer Plan or other entity in an aggregate amount in excess of
$5,000,000.


 


Section 6.10  Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, “Investments”), except:


 


(a)                                  non-cash consideration received in
connection with sales and dispositions of assets;


 


(b)                                 investments in cash, Cash Equivalent
Securities and other cash equivalents and short term investments;


 


(c)                                  Investments consisting of loans advanced
by one or more of the Borrower and the Guarantors to any Person that owns,
directly or indirectly, all of the issued and outstanding equity interest in
Holdings in an aggregate outstanding principal amount not exceeding
$250,000,000 at any time, provided that after giving effect to any such
Investment, no Default or Event of Default shall have occurred and be
continuing;


 


(d)                                 intercompany loans permitted by Section 6.2(b);


 


(e)                                  any Acquisition permitted by Section 6.11;


 


(f)                                    other Investments in an aggregate
principal amount not exceeding $250,000,000 at any time, provided that after
giving effect to any such Investment, no Default or Event of Default shall have
occurred, and be continuing;


 


(g)                                 guaranties of the Delta Obligations under
Section 6.2(h);


 


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(h)                                 any other guaranties of Indebtedness
permitted under Section 6.2; and


 


(i)                                     on or after the Initial Delta Merger
Date, intercompany loans by the Borrower to Delta in an amount outstanding not
to exceed at any time the amount of the Total Outstandings, so long as (x) no
Event of Default has occurred and (y) the Agent has a valid and perfected
first priority Lien in the Borrower’s right, title and interest in and to such
loans and notes evidencing Delta’s obligations in respect of such loans.


 


Section 6.11  Acquisitions.  Make any Acquisition (excluding any
Acquisition permitted as an Investment under  Section 6.10(a), (b) or  (f) unless,
after giving effect to any such Acquisition, the sum of (x) Cash Liquidity
minus the Undrawn Facility Amount and (y) the
aggregate unused availability under committed credit facilities available to
Holdings and its Subsidiaries (including the Undrawn Facility Amount hereunder)
is at least $1,500,000,000 and no Default or Event of Default shall have
occurred and be continuing, provided, however, that any Acquisition of Flight
Equipment from any other Person (other than a manufacturer) in a single
transaction or series of related transactions may be made even if after giving
effect to any such Acquisition, the sum of (x) Cash Liquidity minus the Undrawn
Facility Amount and (y) the aggregate unused availability under
committed credit facilities available to Holdings and its Subsidiaries
(including the Undrawn Facility Amount hereunder) is less than $1,500,000,000,
as long as (i) no Event of Default shall have occurred and be continuing
immediately prior or after giving affect to such Acquisition, (ii) the
cash consideration for such Acquisition does not exceed $250,000,000 and (iii) if
the cash consideration for such Acquisition exceeds $100,000,000, such excess
is financed by a Person that is not an Affiliate of the Borrower or any
Guarantor within 180 days of such Acquisition.


 


Section 6.12  Restrictions
on Accounts; Foreign Accounts.


 


(a)                                  Open, acquire or own any deposit account,
sweep account linked thereto or other securities account (other than any Escrow
Account, Petty Cash Account, Payroll Account or account located outside the
United States) that was not owned by the Borrower or such Guarantor, as
applicable, on the Effective Date.


 


(b)                                 Permit the aggregate value of cash and
other assets held in any deposit account, sweep account linked thereto or other
securities account (other than any Petty Cash Accounts or Payroll Accounts)
outside of the United States by the Borrower, the Guarantors and their
Subsidiaries at any time (as converted to U.S. Dollars, if applicable, at
currency exchange rates prevailing at such time) to be more than $100,000,000
at any time.


 


Section 6.13  Aircraft
Fuel Supply.  Permit the supply of
Aircraft Fuel owned by the Borrower to be less than an amount sufficient to
operate the airline business or businesses of the Borrower and its Subsidiaries
in the ordinary course for at least seven days.


 


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ARTICLE VII


 


DEFAULTS


 


Section 7.1  Events
of Default.  If any of the following
events shall occur and be continuing:


 


(a)           the Borrower
shall fail to pay any principal of any Loan when due in accordance with the
terms hereof; or the Borrower shall fail to pay any interest on any Loan, or
any other amount payable hereunder or under any other Loan Document, within
five Business Days after any such interest or other amount becomes due in
accordance with the terms hereof, provided that the Agent shall have informed
the Borrower of the amount owing; or


 


(b)           any
representation or warranty made or deemed made the Borrower or any Guarantor
herein or in any other Loan Document or that is contained in any certificate
furnished by any such Person at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been inaccurate
in any material respect on or as of the date made or deemed made, and such
default shall continue unremedied for a period of 30 days after written notice to
the Borrower by the Agent or the Required Lenders; or


 


(c)           the Borrower or
any Guarantor shall default in the observance or performance of any agreement
contained in Section 2.9(a), Section 2.10(a), Section 2.15(c), Section 5.10, Section 6.1(c), Section 6.3 (other than a default
arising from a nonconsensual Lien), Section 6.4, Section 6.5,
or Section 6.6  or  (without
limiting the foregoing) shall fail to comply with either of the
Collateralization Requirements; or


 


(d)           the Borrower or
any Guarantor shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days (or 15 days with
respect to Section 6.1(a) or (b), or three Business Days in the case of Section 5.2(g)(I) or
(h)) after notice to the Borrower from the Agent or the Required
Lenders; or


 


(e)           an “Event of
Default”, as defined in the Citicorp Credit Agreement, shall occur and shall be
continuing, whether or not resulting in the exercise of any rights or remedies;
or


 


(f)            (i) the
Borrower or any Guarantor or any of their Significant Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, conservator,
custodian or other similar official for all or substantially all of its assets,
or the Borrower or any Guarantor or any of their Significant Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced 


 


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against the Borrower or any Guarantor or any of their
Significant Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged and unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any Guarantor or any of their
Significant Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or substantially all of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower
or any Guarantor or any of their Significant Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower or any Guarantor or any of their Significant Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or


 


(g)           (i)            any “reportable event” as described
in Section 4043 of ERISA or the regulations thereunder (excluding those
events for which the requirement for notice has been waived by the PBGC), or
any other event or condition, which the Required Lenders determine constitutes
reasonable grounds under Section 4042 of ERISA for the termination of any
Pension Plan by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer or liquidate any Pension Plan
shall occur; or


 


(ii)           a trustee shall
be appointed by a United States District Court to administer any Pension Plan;
or


 


(iii)          the PBGC shall
institute proceedings to terminate any Pension Plan or to appoint a trustee to
administer any Pension Plan; or


 


(iv)          Holdings or any
of its ERISA Affiliates shall become liable to the PBGC or any other party
under Section 4062, 4063 or 4064 of ERISA with respect to any Pension
Plan; or


 


(v)           Holdings or any
of its ERISA Affiliates shall become liable to any Multiemployer Plan under Section 4201
et  seq. of ERISA; or


 


(vi)          any Pension Plan
shall fail to satisfy the minimum funding standard required for any plan year
or part thereof unless a waiver of such standard or extension of any
amortization period is granted under Section 412 of the Code; or


 


(vii)         a contribution
required to be made to a Pension Plan or a Multiemployer Plan shall not be
timely made; or


 


(viii)        the Borrower or
any Guarantor or any Subsidiary of Holdings or any ERISA Affiliate has incurred
or is likely to incur a liability to or on account 


 


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of a Plan under Section 502(i), or 502(l) of
ERISA or Section 4975 of the Code; or


 


(ix)           the Borrower or
any Guarantor or any of their Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees
or other former employees (other than as required by Section 601 of ERISA)
or employee pension benefit plans (as defined in Section 3(2) of
ERISA) other than Pension Plans,


 


if as
of the date thereof or any subsequent date, the sum of each the Borrower and
the Guarantors and its ERISA Affiliates’ various liabilities (such liabilities
to include, without limitation, any liability to the PBGC or to any other party
under Section 4062, 4063 or 4064 of ERISA with respect to any Pension
Plan, or to any Multiemployer Plan under Section 4201 et  seq.
of ERISA, and to be calculated after giving effect to the tax consequences
thereof) as a result of such events listed in subclauses (i) through (ix) above
exceeds $100,000,000; or


 


(h)           one or more
judgments or decrees shall be entered against the Borrower or any Guarantor or
any of their Subsidiaries involving a liability of $25,000,000 or more in the
case of any one such judgment or decree or $50,000,000 or more in the aggregate
for all such judgments and decrees (in each case to the extent not paid or
fully covered by insurance provided by a carrier that has acknowledged
coverage) and any such judgments or decrees shall not have been vacated,
discharged, satisfied or stayed or bonded pending appeal within 60 days from
the entry thereof; or


 


(i)            the Guaranty
shall cease, for any reason, to be in full force and effect or the Borrower or
any Guarantor or any Affiliate of the Borrower or any Guarantor shall so
assert; or


 


(j)            any of the
Security Documents shall cease, for any reason, to be in full force and effect,
or the Borrower or any Guarantor, any Affiliate of the Borrower or any
Guarantor shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported to
be created thereby or the Borrower or any Guarantor shall assert in writing the
invalidity, unenforceability or lack of priority of such Liens; or


 


(k)           on the Initial
Delta Merger Date, or at any time thereafter until the Borrower and each
Guarantor becomes a guarantor under the Delta-JPMCB Agreement and the
Delta-GSCP Agreement, the amount of Pledged Cash shall be less than
$3,315,000,000,


 


then,
and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower or any Guarantor, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents shall
immediately become due and payable, or (B) if such event is any other
Event of Default, with the consent of the Required Lenders, the Agent may, or
upon the request of the Required Lenders, 


 


71

















 


the
Agent shall, by notice to the Borrower, declare the Commitments to be
terminated forthwith, and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement or any other Loan Document to
be due and payable forthwith, whereupon the same shall immediately terminate
and become due and payable, as the case may be; provided, however, that in
all events the Agent shall take such action as may be required to be taken by
the Agent under Section 7.2
hereof.  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.  In addition to the remedies set forth above,
the Agent may exercise any other remedies provided for by this Agreement and
the Security Documents in accordance with the terms hereof and thereof or any
other remedies provided by applicable law.


 


Section 7.2  Presumptive Prepayment and Commitment Reduction at
Lender’s Request Upon Event of Default — Specified Investment Account Proceeds. 
Without limiting any other right or remedy under this Agreement or any
other Loan Document, if an Event of Default has occurred and is continuing, the
Agent shall, upon notice from any Lender requesting such action, (i) by
giving notice to the Borrower (except in the case of an Event of Default
specified in clause (i) or (ii) of Section 7.1(f) with
respect to the Borrower), require the Borrower to immediately prepay
outstanding Loans in an aggregate principal amount equal to the lesser of (x) the
aggregate principal amount of the Loans then Outstanding and (y) the value
(as determined by the Agent in its reasonable discretion) of all Cash
Equivalent Securities then on deposit in the Specified Investment Account
reduced by an amount equal to the sum of all Collateral Coverage Shortfall
Deposits then on deposit in the Specified Investment Account, whereupon the
Borrower shall immediately prepay Loans in such aggregate principal amount (and any
amounts required to be paid under Section 2.26)
and the Commitments of all Lenders shall be permanently reduced accordingly,
and (ii) direct disposition of the net proceeds of such Cash Equivalent
Securities to each Lender in accordance with such Lender’s Percentage, in
furtherance of such prepayment obligation; provided, however, that the Agent
shall not be required to take such action if, prior 4:30 p.m. on the
second Business Day following the Agent’s receipt of such notice, Lenders whose
total Commitment Amounts are equal to more than 66 2/3% of the Aggregate
Commitment Amount advise the Agent in writing that such action should not be
taken.


 


Section 7.3  Offset. In addition to the remedies
set forth in Section 7.2, upon the occurrence of any Event of
Default and thereafter while the same be continuing, the Borrower and each
Guarantor hereby irrevocably authorize each Lender to set off any Obligations
owed to such Lender against all deposits and credits of the Borrower or any
Guarantor with, and any and all claims of the Borrower or any Guarantor
against, such Lender. Such right shall exist whether or not such Lender shall
have made any demand hereunder or under any other Loan Document, whether or not
the Obligations, or any part thereof, or deposits and credits held for the
account of the Borrower is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guaranty or any other security, right
or remedy available to such Lender or the Lenders. Each Lender agrees that, as
promptly as is reasonably possible after the exercise of any such setoff right,
it shall notify the Borrower and the Agent  of its
exercise of such setoff right; provided, however, that the failure of such
Lender to provide such notice shall not affect the validity of the exercise of
such setoff rights. Nothing in this Agreement shall be deemed a waiver 


 


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or prohibition of or
restriction on any Lender to all rights of banker’s lien, setoff and
counterclaim available pursuant to law.


 


ARTICLE
VIII


 


GUARANTY


 


Section 8.1  The Guaranty.  To induce the Agent and
Lenders to enter into this Agreement and to make the Loans and to induce the
Letter of Credit Issuer to issue Letters of Credit and in recognition of the
direct benefits to be received by the Guarantors herefrom and therefrom, each
Guarantor hereby jointly and severally, unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment and performance of the Obligations when due,
whether upon maturity, by acceleration or otherwise, to each of the Secured
Creditors.  If any or all of the
Obligations of the Borrower to any of the Secured Creditors becomes due and
payable hereunder, each Guarantor unconditionally promises on a joint and
several basis to pay such Obligations to such Secured Creditor, or order, on
demand, in lawful money of the United States, together with any and all
expenses that may be incurred by such Secured Creditor in collecting any of the
Obligations.


 


Section 8.2  Bankruptcy; Reinstatement.  Each Guarantor jointly and severally, unconditionally and
irrevocably guarantees the payment of any and all of the Obligations of the
Borrower to each of the Secured Creditors, whether or not due or payable by the
Borrower, upon the occurrence in respect to the Borrower of any of the events
specified in Section 7.1(f), and unconditionally promises to pay such Obligations to
such Secured Creditor, or order, on demand, in lawful money of the United
States.  Each Guarantor further agrees
that its guaranty hereunder shall continue
to be effective or reinstated if at any time payment, or any part thereof, of
the Obligations is rescinded or must otherwise be restored by any of the
Secured Creditors, upon the bankruptcy or reorganization of the Borrower or a
Guarantor, or otherwise.


 


Section 8.3  Nature of Liability.  The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Obligations of the Borrower,
whether executed by each Guarantor, any other guarantor or any other
Person.  The liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or any other Person; (b) any other
continuing or other guaranty, undertaking or maximum liability of a Guarantor
or of any other Person as to the Obligations of the
Borrower;  (c) any payment on or in
reduction of any such other guaranty or undertaking;  (d) any dissolution, termination,
increase or decrease, or change in personnel by the Borrower; or (e) any
payment made to any of the Secured Creditors on the Obligations that such
Secured Creditor repays to the Borrower or a Guarantor (including by depositing
the proceeds with a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or a Guarantor) pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.


 


Section 8.4  Independent Obligation.  The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor or the Borrower, and a 


 


73

















 


separate
action or actions may be brought and prosecuted against each Guarantor whether
or not action is brought against any other Guarantor or the Borrower and
whether or not any other Guarantor or the Borrower be joined in any such action
or actions.  Each Guarantor waives, to
the fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof.  Any payment by the Borrower or other
circumstances that operate to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.


 


Section 8.5  Authorization.  Each Guarantor
authorizes each of the Secured Creditors without notice or demand (except as
shall be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to (a) renew,
compromise, extend, increase, accelerate or otherwise change the time for
payment of, or otherwise change the terms of, the Obligations or any part
thereof in accordance with this Agreement, including any increase or decrease
of the rate of interest thereon; (b) take and hold security from any  Guarantor or any other
Person for the payment of this guaranty or the Obligations and exchange,
enforce, waive or release any such security; (c) apply such security and
direct the order or manner of sale thereof as the Secured Creditors in their
discretion may determine; and (d) release or substitute any one or more
endorsers, Guarantors, the Borrower or other obligors.


 


Section 8.6  Reliance.  It is not necessary for
any of the Secured Creditors to inquire into the capacity or powers of the
Borrower or the officers, directors, partners or agents acting or purporting to
act on its behalf, and any Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.


 


Section 8.7  Subordination.  Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the Obligations of the Borrower to the
Secured Creditors.  If the Agent, after
an Event of Default has occurred and is continuing, so requests, then such
indebtedness of the Borrower to such Guarantor shall be collected, enforced and
received by such Guarantor as trustee for the Secured Creditors and be paid
over to the Secured Creditors on account of the Obligations of the Borrower to
the Secured Creditors, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this guaranty.  Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination.


 


Section 8.8  Waiver.


 


(a)           Each Guarantor waives any right
(except as shall required by applicable statute and cannot be waived) to
require the Secured Creditors to (a) proceed against the Borrower, any
Guarantor or any other Person; (b) proceed against or exhaust any security
granted by the Borrower, any other Guarantor or any other Person; or (c) pursue
any other remedy in the Secured Creditors’ power whatsoever.  Each Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other Guarantor or any other Person other than payment in full of the
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor or any other Person, the
unenforceability of the Obligations or any part thereof 


 


74

















 


from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the Obligations. The
Secured Creditors may, at their election, foreclose on any security held by
them by one or more judicial or nonjudicial sales (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Secured
Creditors may have against the Borrower or any other Person, or any security,
without affecting or impairing in any way the liability of each Guarantor
hereunder except to the extent the Obligations have been paid.  Each Guarantor waives any defense arising out
of any such election by the Secured Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any other
Person or any security.  Until no
Commitment or obligation to issue Letters of Credit is in effect, the Notes and
all other Obligations have been paid in full and no Letters of Credit remain
outstanding, each Guarantor
agrees that it will not exercise any right of subrogation, waives any right to
enforce any remedy that any of the Secured Creditors now has or may hereafter
have against the Borrower, and waives any benefit of, and any right to participate
in, any security now or hereafter held by the Secured Creditors.


 


(b)           Each Guarantor waives all
presentments, demands for performance, protests and notices, including, without
limitation, notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this guaranty, and notices of the existence, creation
or incurring of new or additional Obligations. 
Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and extent of the risks that each Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.


 


Section 8.9  Limitation on Enforcement.  The Lenders
agree that no Lender shall have any right individually to seek to enforce or to
enforce this guaranty, it being understood and agreed that such rights and
remedies may be exercised only by the Agent for the benefit of the Secured
Creditors upon the terms of this Agreement.


 


ARTICLE IX


 


THE AGENT


 


The following provisions shall govern the relationship
of the Agent with the Lenders:


 


Section 9.1  Appointment and Authorization. Each
Lender appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such respective powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto. Neither the Agent nor any of its directors,
officers or employees shall be liable for any action taken or omitted to be
taken by it under or in connection with the Loan Documents, except for its own
gross negligence or willful misconduct. The Agent shall act as an independent
contractor in performing its obligations as Agent 


 


75

















 


hereunder and nothing
herein contained shall be deemed to create any fiduciary relationship among or
between the Agent, the Borrower or the Lenders.


 


Section 9.2  Note Holders. The Agent may treat the
payee of any Note as the holder thereof until written notice of transfer shall
have been filed with the Agent, signed by such payee and in form satisfactory
to the Agent.


 


Section 9.3  Consultation With Counsel. The Agent
may consult with legal counsel selected by it and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.


 


Section 9.4  Loan Documents. The Agent shall not be
under a duty to examine or pass upon the validity, effectiveness, genuineness
or value of any of the Loan Documents or any other instrument or document
furnished pursuant thereto, and the Agent shall be entitled to assume that the
same are valid, effective and genuine and what they purport to be.


 


Section 9.5  U.S. Bank and Affiliates. With respect
to its Commitments and the Loans made by it, U.S. Bank shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not the Agent consistently with the terms
thereof.  U.S. Bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Borrower, the Guarantors and/or their Affiliates and accept
payments or effect payments, by setoff or otherwise, in connection with any
other agreement or relationship with the Borrower, the Guarantors and/or their
Affiliates without having any obligation to account for or share such payments
with any Lender or any other Person, in each case as if U.S. Bank were not the
Agent.


 


Section 9.6  Action by Agent.


 


(a)           Except as may
otherwise be expressly stated in this Agreement, the Agent shall be entitled to
use its discretion with respect to exercising or refraining from exercising any
rights which may be vested in it by, or with respect to taking or refraining
from taking any action or actions which it may be able to take under or in
respect of, the Loan Documents. The  Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence as it deems appropriate of the Required Lenders or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.  The
Agent shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all holders of
Notes; provided, however, that the Agent shall not be required to take any
action which exposes the Agent to personal liability or which is contrary to
the Loan Documents or applicable law.  The Agent
shall be entitled to rely, and shall be fully protected and shall incur no
liability in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, electronic mail or other
message, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of 


 


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legal
counsel (including counsel to the Loan Parties), independent accountants and
other experts selected by the Agent.


 


(b)           The Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received
notice from a Lender, the Borrower or a Guarantor referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a “notice
of default”.  In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the
Lenders.  The Agent shall take such
action with respect to such Default or Event of Default as may be required
hereby or as shall be reasonably directed by the Required Lenders, provided
that unless and until the Agent shall have received such directions the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.


 


(c)           Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the Agent is
hereby irrevocably authorized by each relevant Lender (without requirement of
notice to or consent of any such Lender) to take any action requested by the
Borrower having the effect of releasing any Collateral or guarantee obligations
(i) to the extent necessary to permit consummation of any transaction not
prohibited by Section 6.5 or (ii) under
the circumstances described in paragraph (d) below.


 


(d)           At such time as
no Commitment or obligation to issue Letters of Credit hereunder is in effect,
the Notes and all of the other Obligations have been paid in full and no
Letters of Credit remain outstanding, the Collateral shall (without the
requirement of notice or consent of any Lender) be released from the Liens
created by the Security Documents,
and the Security Documents and all obligations (other than those expressly
stated to survive such termination) of the Agent and the Borrower under the
Security Documents shall terminate, all without delivery of any instrument or
performance of any act by any Person and the net proceeds of any Cash
Equivalent Securities remaining on deposit in the Specified Investment Account
and the Letter of Credit Collateral Account shall be promptly transferred to
the Borrower at its direction in Immediately Available Funds.


 


Section 9.7  Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the Borrower, any
Guarantor or any of their Affiliates, shall be deemed to constitute any
representation or warranty by the Agent to any Lender.  Each Lender represents to the Agent that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower, the
Guarantors and their Affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions 


 


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in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
Borrower, the Guarantors and their Affiliates. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower, any Guarantor or any of their Affiliates that may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.


 


Section 9.8  Notices of Event of Default. In the
event that the Agent shall have acquired actual knowledge of any Event of
Default or Default, the Agent shall promptly give notice thereof to the
Lenders.


 


Section 9.9  Indemnification. Each Lender severally
agrees to indemnify the Agent, as Agent (to the extent the Borrower is required
to reimburse or indemnify the Agent therefor hereunder but does not reimburse
or indemnify the Agent), ratably according to such Lender’s Percentage at the
time of the circumstances or conduct giving rise to such liability occurred
(or, if no Commitment was then in effect, such Lender’s Percentage as in effect
immediately prior to the date on which all of the Commitments ceased to be in
effect) from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on or incurred by the
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Agent under the Loan Documents, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent’s gross negligence or willful
misconduct. No payment by any Lender under this Section 9.9 shall relieve the Borrower of any of
its obligations under this Agreement.


 


Section 9.10  Payments and Collections. All funds
received by the Agent in respect of any payments made by the Borrower on the
Loans or Commitment Fees shall be distributed forthwith by the Agent among the
Lenders, in like currency and funds as received, ratably according to each
Lender’s Percentage (and, with respect to any Lender with both Tranche 1 Loans
and Tranche 2 Loans, ratably among such Lender’s Tranche 1 Loans and Tranche 2
Loans). If any Event of Default has occurred and is continuing, all funds
received by the Agent, whether as payments by the Borrower or any Guarantor or
as realization on Collateral or on any guaranties or otherwise, shall (except
as may otherwise be required by law) be distributed by the Agent in the
following order: (a) first to the Agent or any Lender who has incurred
unreimbursed costs of collection with respect to any Obligations hereunder,
ratably to the Agent and each Lender in the proportion that the costs incurred
by the Agent or such Lender bear to the total of all such costs incurred by the
Agent and all Lenders; (b) next to the Agent for the account of the
Lenders (in accordance with their respective Percentages or, if no Commitment
is in effect, such Lender’s Percentage as in effect immediately prior to the
date on which all of the Commitments ceased to be in effect (and, with respect
to any Lender with both Tranche 1 Loans and Tranche 2 Loans, ratably among such
Lender’s Tranche 1 Loans and Tranche 2 Loans) for application on the Loans; and
(c) next to the Agent for the account of the 


 


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Lenders (in accordance
with their respective Percentages or, if no Commitment is in effect, such
Lender’s Percentage as in effect immediately prior to the date on which all of
the Commitments ceased to be in effect) for any unpaid Commitment Fees owing by
the Borrower hereunder.


 


Section 9.11  Sharing of Payments. If any Lender
shall receive and retain any payment, voluntary or involuntary, whether by
setoff, application of deposit balance or security, or otherwise, in respect of
Indebtedness under this Agreement or the Notes in excess of such Lender’s share
thereof as determined under this Agreement, then such Lender shall purchase
from the other relevant Lenders (other than any Defaulting Lender) for cash and
at face value and without recourse, such participation in the Notes held by
such other Lenders as shall be necessary to cause such excess payment to be
shared ratably as aforesaid with such other Lenders; provided, however, that if
such excess payment or part thereof is thereafter recovered from such
purchasing Lender, the related purchases from the other Lenders shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest.  Without limiting the generality of the foregoing,
this Section shall apply to proceeds of the Japanese Real Property Assets
received by U.S. Bank including any such proceeds received pursuant to the
Japanese Real Property Mortgage or the Japanese Insurance Pledge Agreement;
provided, however, that any action taken by or on behalf of U.S. Bank in
respect of the Japanese Real Property Assets, the Japanese Real Property
Mortgage or the Japanese Insurance Pledge Agreement shall be deemed for
purposes of this Agreement to have been taken by U.S. Bank in its capacity as
Agent.


 


Section 9.12  Advice to Lenders. The Agent shall
forward to the Lenders copies of all notices, financial reports and other
communications received hereunder from the Borrower by it as Agent, excluding,
however, notices, reports and communications which by the terms hereof are to
be furnished by the Borrower directly to each Lender.


 


Section 9.13  Defaulting Lender.


 


(a)           Remedies
Against a Defaulting Lender. In addition to the rights and remedies that
may be available to the Agent or the Borrower under this Agreement or
applicable law, if at any time a Lender is a Defaulting Lender such Defaulting
Lender’s right to participate in the administration of the Loans, this
Agreement and the other Loan Documents, including without limitation, any right
to vote in respect of, to consent to or to direct any action or inaction of the
Agent or to be taken into account in the calculation of the Required Lenders,
shall be suspended while such Lender remains a Defaulting Lender. If a Lender
is a Defaulting Lender because it has failed to make timely payment to the
Agent of any amount required to be paid to the Agent hereunder (without giving
effect to any notice or cure periods), in addition to other rights and remedies
which the Agent or the Borrower may have under the immediately preceding
provisions or otherwise, the Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate, (ii) to withhold or setoff and to apply
in satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document until such defaulted payment and related interest has been paid
in full and such default no longer exists and (iii) to bring an action or
suit against such 


 


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Defaulting Lender in a court of competent jurisdiction
to recover the defaulted amount and any related interest. Any amounts received
by the Agent in respect of a Defaulting Lender’s Loans shall not be paid to
such Defaulting Lender and shall be held uninvested by the Agent and either
applied against the purchase price of such Loans under the following subsection
(b) or paid to such Defaulting Lender upon the default of such Defaulting
Lender being cured.


 


(b)           Purchase from
Defaulting Lender. Any Lender that is not a Defaulting Lender shall have
the right, but not the obligation, in its sole discretion, to acquire all of a
Defaulting Lender’s Commitments. If more than one Lender exercises such right,
each such Lender shall have the right to acquire such proportion of such
Defaulting Lender’s Commitments on a pro rata basis. Upon any such purchase,
the Defaulting Lender’s interest in its Loans and its rights hereunder (but not
its liability in respect thereof or under the Loan Documents or this Agreement
to the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof subject to and in accordance
with the requirements set forth in Section 10.6, including an assignment in form acceptable to the Agent.
The purchase price for the Commitments of a Defaulting Lender shall be equal to
the amount of the principal balance of the Loans outstanding and owed by the
Borrower to the Defaulting Lender. The purchaser shall pay to the Defaulting
Lender in Immediately Available Funds on the date of such purchase the
principal of and accrued and unpaid interest and fees on the Loans made by such
Defaulting Lender hereunder (it being understood that such accrued and unpaid
interest and fees may be paid pro rata to the purchasing Lender and the
Defaulting Lender by the Agent at a subsequent date upon receipt of payment of
such amounts from the Borrower). Prior to payment of such purchase price to a
Defaulting Lender, the Agent shall apply against such purchase price any
amounts retained by the Agent pursuant to the last sentence of the immediately
preceding subsection (a). The Defaulting Lender shall be entitled to receive
amounts owed to it by the Borrower under the Loan Documents which accrued prior
to the date of the default by the Defaulting Lender, to the extent the same are
received by the Agent from or on behalf of the Borrower. There shall be no
recourse against any Lender or the Agent for the payment of such sums except to
the extent of the receipt of payments from any other party or in respect of the
Loans.


 


Section 9.14  Resignation By Agent. If at any time
the Agent shall deem it advisable, in its sole discretion, it may submit to
each of the Lenders and the Borrower a written notification of its resignation
as Agent under this Agreement. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Agent, which successor Agent shall
(unless an Event of Default has occurred and is continuing) be reasonably
acceptable to the Borrower. If no successor Agent shall have been so appointed
and shall have accepted such appointment within 45 days after the retiring
Agent’s giving of notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint an Agent which shall be a Lender or a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $100,000,000. Any
such resignation shall be effective upon the appointment of a successor Agent.
Upon the acceptance of


 


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any appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations, under this Agreement and the other Loan Documents. After the
retiring Agent’s resignation hereunder as the Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
acting as the Agent under this Agreement and any other Loan Document.


 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1  Modifications.  Subject to the terms of this Section, any term of this
Agreement or any other Loan Document may be amended with the written consent of
the Borrower and any Guarantor that is a party thereto and the Required
Lenders; provided that no amendment, modification or waiver of any provision of
this Agreement or any other Loan Document or consent to any departure therefrom
by the Borrower or other party thereto shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the purpose for which given. The Agent may enter into
amendments or modifications of, and grant consents and waivers to departure
from the provisions of, those Loan Documents to which the Lenders are not
signatories without the Lenders’ joining therein, provided the Agent has first
obtained the separate prior written consent to such amendment, modification,
consent or waiver from the Required Lenders. Notwithstanding the foregoing, no
such amendment, modification, waiver or consent shall:


 


(a)                                  reduce the rate or extend the time of
payment of interest thereon, or reduce the amount of the principal thereof, or
modify any of the provisions of this Agreement or any Note (including any
reimbursement obligations for letters of credit) with respect to the payment or
repayment thereof, including without limitation, the extension of any time for
any scheduled payment of principal, without the consent of all Lenders affected
thereby; or


 


(b)                                 increase the amount or extend the time of
any Commitment of any Lender, without the consent of all Lenders; or


 


(c)                                  reduce the rate or extend the time of
payment of any fee payable to a Lender, without the consent of all Lenders
affected thereby; or


 


(d)                                 except as may otherwise be expressly
provided in Sections 9.6(c) or
9.6(d), release any material
portion of Collateral securing, or any guaranties for, all or any part of the
Obligations without the consent of all the Lenders (provided, however, that any
Collateral Disposed of in a transaction permitted hereby may be released by the
Agent without further consent from any Lender) or consent to the transfer or
assignment by the Borrower of any of its rights and obligations under this
Agreement or the other Loan Documents; or


 


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(e)                                  amend Section 6.5(a) or Section 9.6(d) without the consent of all the
Lenders; or


 


(f)                                    amend the definition of Required Lenders
or otherwise reduce the percentage of the Lenders required to approve or
effectuate any such amendment, modification, waiver, or consent, without the
consent of all the Lenders; or


 


(g)                                 amend Section 9.10 or Section 10.6(c) without the consent of all the
Lenders; or


 


(h)                                 amend Section 2.9, Section 6.1 or
either of the Collateralization Requirements without the consent of all the
Lenders; or


 


(i)                                     amend any of the foregoing Sections 10.1(a) through (h) without
the consent of all the Lenders; or


 


(j)                                     amend any provision of this Agreement
relating to the Agent in its capacity as Agent without the consent of the
Agent; or


 


(k)                                  amend the Letter of Credit
Collateralization Requirement or any other provision of this Agreement relating
to the issuance of Letters of Credit without the consent of the Agent, all
Lenders and the Letter of Credit Issuer.


 


Section 10.2  Expenses. Whether or not the
transactions contemplated hereby are consummated, the Borrower agrees to pay or
reimburse the Agent and each Lender upon demand for all reasonable
out-of-pocket expenses paid or incurred by the Agent and such Lender including
filing and recording costs and fees, charges and disbursements of outside
counsel to the Agent and such Lender (determined on the basis of such counsel’s
generally applicable rates, which may be higher than the rates such counsel
charges the Agent or such Lender in certain matters) and/or the allocated costs
of in-house counsel incurred from time to time, in connection with the
negotiation, preparation, approval, review, execution, delivery,
administration, amendment, modification, syndication, interpretation,
collection and enforcement of this Agreement and the other Loan Documents and
any commitment letters relating thereto. 
The Borrower shall also reimburse the Agent and each Lender upon demand
for all reasonable out-of-pocket expenses (including expenses of legal counsel)
paid or incurred by the Agent or any Lender in connection with (A) the
collection and enforcement of this Agreement and any other Loan Document and (B) the
collection of Loans made hereunder, reimbursement of Unpaid Drawings and other
Obligations, including all such out-of-pocket expenses paid or incurred during
any work-out, restructuring or negotiations in respect thereof. The obligations
of the Borrower under this Section shall survive any termination of this
Agreement.


 


Section 10.3  Waivers; Cumulative Remedies.  No failure on the part of the Agent or the
holder of a Note to exercise and no delay in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other power or
right.  The remedies herein and in the
other Loan Documents provided are cumulative and not exclusive of any remedies
provided by law.


 


Section 10.4  Notices. Except when telephonic notice
is expressly authorized by this Agreement, any notice or other communication to
any party in connection with this 


 


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Agreement shall be in
writing and shall be sent by manual delivery, facsimile transmission, overnight
courier or United States mail (postage prepaid) addressed to such party at the
address specified on the signature page hereof, or at such other address
as such party shall have specified to the other party hereto in writing.  All periods of notice shall be measured from
the date of delivery thereof if manually delivered, from the date of sending
thereof if sent by facsimile transmission, from the first Business Day after
the date of sending if sent by overnight courier, or from four days after the
date of mailing if mailed; provided, however, that any notice to the Agent or
any Lender under Article II hereof shall be deemed to have been given only
when received by the Agent or such Lender.


 


Section 10.5  Taxes. The Borrower agrees to pay, and
save the Secured Creditors harmless from all liability for, any stamp or other
taxes which may be payable with respect to the execution or delivery of this
Agreement or the other Loan Documents or the issuance of the Notes or Letters
of Credit hereunder, which obligation of the Borrower shall survive the
termination of this Agreement.


 


Section 10.6  Successors and Assigns; Disposition of
Loans; Transferees.


 


(a)                                  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign its rights or delegate its
obligations hereunder or under any other Loan Document without the prior
written consent of all the Lenders.


 


(b)                                 Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time sell to one or
more banks or other financial institutions or Affiliates of such Lender (“Participants”)
participating interests in any Loan or other Obligation owing to such Lender,
any Note held by such Lender, and any Commitment of such Lender, or any other
interest of such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, (i) such Lender’s obligations
under this Agreement to the other parties to this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible for the
performance thereof, (iii) such Lender shall remain the holder of any such
Note for all purposes under this Agreement, (iv) the Borrower and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement and (v) the
agreement pursuant to which such Participant acquires its participating
interest herein shall provide that such Lender shall retain the sole right and
responsibility to enforce the Obligations, including, without limitation the
right to consent or agree to any amendment, modification, consent or waiver
with respect to this Agreement or any other Loan Document, provided that such
agreement may provide that such Lender will not consent or agree to any such
amendment, modification, consent or waiver with respect to the matters set
forth in Sections 10.1(a) through
(i) without the prior consent of such Participant. Each Borrower
agrees that if amounts outstanding under this Agreement, the Notes and the Loan
Documents are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have, to the extent permitted by applicable law, the right
of setoff in respect of its participating interest in amounts owing under this
Agreement and any Note or other Loan Document to the same extent as if the
amount of its participating 


 


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interest were owing directly to it as a Lender under
this Agreement or any Note or other Loan Document; provided, however, that such
right of setoff shall be subject to the obligation of such Participant to share
with the Lenders, and the Lenders agree to share with such Participant, as
provided in Section 9.11. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Sections 2.22, 2.23, 2.24, 2.25, 2.26, 2.27, 2.28 and 10.2
with respect to its participation in the Commitments; provided, that no
Participant shall be entitled to receive any greater amount pursuant to such
subsections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.


 


(c)           Each Lender may
at any time sell, assign, transfer, or otherwise Dispose of any portion of its
Commitments, the Loans and/or Advances (each such interest so Disposed of being
herein called a “Transferred Interest”) only (i) to any
recognized U.S., Canadian, European, Australian, Chinese, Taiwanese or Japanese
bank, without consent, or (ii) to (A) any other bank or
financial institution (not including any hedge fund or private equity firm or
fund) or (B) if an Event of Default has occurred and is continuing, any
hedge fund or private equity firm or fund, in the case of either clause (A) or
clause (B) with the consent of the Agent and the Required Lenders (which
shall not include the Lender requesting approval thereof) and, unless an Event
of Default has occurred and is continuing, the consent of Borrower (any such
Person referred to in either clause (A) or clause (B) being referred
to as a “Transferee”); provided, however, that (x) such consent of
the Agent, the Required Lenders and, if applicable, the Borrower shall not be
unreasonably withheld, (y) the minimum aggregate amount of the sum of the
Commitments and/or Loans which are the subject of the assignment shall be
$25,000,000 unless such assignment while an Event of Default has occurred and
is continuing in which case the minimum aggregate sum shall be $5,000,000, and (z) a
Lender may Dispose of a Transferred Interest only pursuant to a written agreement
substantially in the form of Exhibit G hereto and upon payment to
the Agent by the parties to such disposition of a processing and recording fee
in the amount of $3,500 (provided such fee shall not be payable with respect to
assignments by a Lender to its Affiliates). The Borrower agrees that each
Transferee shall be entitled to the benefits of Sections 2.22, 2.23, 2.24, 2.25, 2.26, 2.27,  2.28 and 10.2
with respect to its Transferred Interest and that each Transferee may exercise
any and all rights of banker’s lien, setoff and counterclaim as if such
Transferee were a direct lender to the Borrower. If any Lender makes any
assignment to a Transferee, then upon notice to the Borrower such Transferee,
to the extent of such assignment (unless otherwise provided therein), shall
become a “Lender” hereunder and shall have all the rights and obligations of
such Lender hereunder and such Lender shall be released from its duties and
obligations under this Agreement to the extent of such assignment.


 


(d)           Each Lender may
disclose to any Transferee or Participant and to any prospective Transferee or
Participant any and all information in such Lender’s possession concerning the
Borrower, the Guarantors or any of their Subsidiaries that has been delivered
to such Lender by or on behalf of any such Person pursuant to this Agreement or
has been delivered to such Lender by or on behalf of such Person in connection
with such Lender’s credit evaluation of any such Person prior to entering into
this Agreement, 


 


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provided that prior to disclosing such information,
such Lender shall cause such prospective Transferee or Participant to execute
and deliver to the Borrower and the Agent a confidentiality agreement
substantially in the form of Exhibit H or such other form
reasonably acceptable to the Borrower and the Agent.


 


(e)           Notwithstanding
any other provision in this Agreement, any Lender may at any time create a
security interest in or pledge all or any portion of its rights under and
interest in this Agreement and any Note held by it in favor of any federal
reserve bank in accordance with Regulation A of the Board or U. S. Treasury
Regulation 31 CFR § 203.14, and such federal reserve bank may enforce such
pledge or security interest in any manner permitted under applicable law,
provided that any payment in respect of such rights made by the Borrower to or
for the account of such Lender in accordance with the terms of this Agreement
shall satisfy the Borrower’s obligations hereunder in respect of such rights to
the extent of such payment. No such grant of a security interest or pledge
shall release such Lender from its obligations hereunder.


 


(f)            The Agent shall,
on behalf of the Borrower, maintain at its address a copy of each assignment
agreement delivered to it and a register (the “Register”) for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of demonstrable error, and the
Borrower, the Guarantors, the Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of the Commitments, the
Loans and any Notes evidencing such Loans recorded therein for all purposes of
this Agreement and the other Loan Documents. Any assignment of any Commitment
and/or Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time during regular business hours and from time to time upon
reasonable prior notice.


 


Section 10.7  Confidentiality
of Information.


 


(a)           Subject to the
provisions of clause (b) of this Section, each Lender shall hold all
non-public information obtained pursuant to the requirements of this Agreement
that has been identified in writing as such by the Borrower or any Guarantor in
accordance with its customary procedure for handling confidential information
of this nature and in accordance with safe and sound banking practices and in
any event may make disclosure to affiliates of such Lender or disclosures to
any bona fide prospective transferee or participant in connection with the
contemplated transfer of any Loan or Commitment or participation therein or as
required or requested by any Governmental Authority or representative thereof
or pursuant to legal process or to such Lender’s attorneys, affiliates or
independent auditors, provided that unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any Governmental Authority or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender or Affiliate by such Governmental Authority) for disclosure to a
Governmental Authority of any such non-public information prior to disclosure
of such information; and provided further, that in no event shall any Lender be
obligated or required to return any materials furnished by 


 


85

















 


the Borrower or any Guarantor or any of their
Subsidiaries, provided that, in the case of disclosure to any prospective
transferee or participant, such Person executes an agreement with such Lender
containing provisions substantially in the form of Exhibit H or
such other form as may be reasonably acceptable to the Borrower and the Agent;
and provided further that neither any Lender nor the Agent shall be liable for
any damages arising from the use by others of non-public information or other
materials obtained through the internet, Intralinks or similar information
transmission systems in connection with the Loan Documents or any transactions
contemplated thereunder.


 


(b)           The Borrower and
each Guarantor hereby acknowledges and agrees that each Lender may share with
any of its affiliates any information related to Holdings or any of its
Subsidiaries (including, without limitation, any nonpublic customer information
regarding the creditworthiness of Holdings or any of its Subsidiaries),
provided such Persons shall be subject to the provisions of this Section to
the same extent as such Lender.


 


Section 10.8  Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT
GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO
FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.
Whenever possible, each provision of this Agreement and the other Loan
Documents and any other statement, instrument or transaction contemplated
hereby or thereby or relating hereto or thereto shall be interpreted in such
manner as to be effective and valid under such applicable law, but, if any
provision of this Agreement, the other Loan Documents or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited or invalid under such applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement, the other Loan Documents or any other
statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto.


 


Section 10.9  Consent to Jurisdiction. AT THE OPTION OF THE AGENT, THIS AGREEMENT AND (EXCEPT AS MAY OTHERWISE
BE SPECIFICALLY PROVIDED THEREIN) THE OTHER LOAN DOCUMENTS MAY BE ENFORCED
IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY; AND
THE BORROWER AND THE GUARANTORS EACH CONSENT TO THE JURISDICTION AND VENUE OF
ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN ANY SUCH FORUM IS NOT
CONVENIENT. IN THE EVENT THE BORROWER OR ANY GUARANTOR COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, THE AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE
CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF
SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED
WITHOUT PREJUDICE.


 


86

















 


Section 10.10  Waiver of Jury Trial. EACH OF THE BORROWER, THE GUARANTORS, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


Section 10.11  Survival of Agreement. All
representations, warranties, covenants and agreement made by the Borrower
herein or in the other Loan Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be deemed to have been relied upon
by the Lenders and shall survive the making of the Loans by the Lenders and the
execution and delivery to the Lenders by the Borrower of the Notes, regardless
of any investigation made by or on behalf of the Lenders, and shall continue in
full force and effect as long as any Obligation is outstanding and unpaid and
so long as the Commitments have not been terminated; provided, however, that
the obligations of the Borrower under Sections 10.2, 10.5 and 10.12
shall survive payment in full of the Obligations and the termination of the
Commitments.


 


Section 10.12  Indemnification. The Borrower and each
of the Guarantors hereby agrees to defend, protect, indemnify and hold harmless
each of the Secured Creditors and their respective Affiliates and the
directors, officers, employees, attorneys and agents of each of the Secured
Creditors and their respective Affiliates (each of the foregoing being an “Indemnitee”
and all of the foregoing being collectively the “Indemnitees”) from and against
any and all claims, actions, damages, liabilities, judgments, costs and
expenses (including all reasonable fees and disbursements of counsel which may
be incurred in the investigation or defense of any matter) imposed upon,
incurred by or asserted against any Indemnitee, whether direct, indirect or
consequential and whether based on any federal, state, local or foreign laws or
regulations (including securities laws, environmental laws, commercial laws and
regulations), under common law or on equitable cause, or on contract or
otherwise:


 


(a)                                  by reason of, relating to or in connection
with the execution, delivery, performance or enforcement of any Loan Document,
any commitments relating thereto, or any transaction contemplated by any Loan
Document; or


 


(b)                                 by reason of, relating to or in
connection with any credit extended or used under the Loan Documents or any act
done or omitted by any Person, or the exercise of any rights or remedies
thereunder, including the acquisition of any collateral by the Secured
Creditors by way of foreclosure of the Lien thereon, deed or bill of sale in
lieu of such foreclosure or otherwise;


 


provided, however, that
the Borrower shall not be liable to any Indemnitee for any portion of such
claims, damages, liabilities and expenses resulting from such Indemnitee’s
gross negligence or willful misconduct. In the event this indemnity is
unenforceable as a matter of law as to a particular matter or consequence
referred to herein, it shall be enforceable to the full extent permitted by
law.


 


This indemnification
applies, without limitation, to any act, omission, event or circumstance
existing or occurring on or prior to the later of each of the Applicable
Termination Dates or the 


 


87

















 


date of payment in full
of the Obligations, including specifically Obligations arising under clause (b) of
this Section. The indemnification provisions set forth above shall be in
addition to any liability the Borrower may otherwise have. Without prejudice to
the survival of any other obligation of the Borrower hereunder the indemnities
and obligations of the Borrower contained in this Section shall survive
the payment in full of the other Obligations.


 


Section 10.13  Captions. The captions or headings
herein and any table of contents hereto are for convenience only and in no way
define, limit or describe the scope or intent of any provision of this
Agreement.


 


Section 10.14  Entire Agreement. This Agreement and
the other Loan Documents embody the entire agreement and understanding between
the Borrower, the Guarantors, the Agent and the Lenders with respect to the
subject matter hereof and thereof. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Nothing
contained in this Agreement or in any other Loan Document, expressed or implied,
is intended to confer upon any Persons other than the parties hereto any
rights, remedies, obligations or liabilities hereunder or thereunder, except as
expressly provided herein or therein.


 


Section 10.15  Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.


 


Section 10.16  Borrower and Guarantor Acknowledgments.  The Borrower and each of the Guarantors
hereby acknowledges that (a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents, (b) neither the Agent nor any other Secured Creditor has any
fiduciary relationship to the Borrower, the relationship being solely that of
debtor and creditor, (c) no joint venture exists between the Borrower or
the Guarantors and any of the Secured Creditors, and (d) none of the
Secured Creditors undertakes any responsibility to the Borrower or any of the
Guarantors to review or inform such Person of any matter in connection with any
phase of the business or operations of such Person, and each such Person shall
rely entirely upon its own judgment with respect to its business, and any
review, inspection or supervision of, or information supplied to, the Borrower
or any Guarantor by any of the Secured Creditors is for the protection of the
Secured Creditors and neither the Borrower nor any Guarantor or third party is
entitled to rely thereon.


 


(Signature pages follow)


 


88
















 


IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.


 




	
  NORTHWEST AIRLINES, INC.  

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
   Daniel B. Matthews

  
	
   

  	
  Title:
   Sr. Vice President &
  Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  2700
  Lone Oak Parkway

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (612) 726-7123

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  NORTHWEST AIRLINES CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Sr. Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  2700
  Lone Oak Parkway

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (612) 726-7123

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  MCH, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  1000
  Blue Gentian Road

  
	
   

  	
  Suite 225

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (651) 367-5390

  
	
   

  	
  Attention:
  President

  






 


 

















 




	
  COMPASS AIRLINES, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  4501
  Singer Court

  
	
   

  	
  Suite 130

  
	
   

  	
  Chantilly,
  Virginia 20151

  
	
   

  	
  Fax:
  (703) 802-1436

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  MESABA AVIATION, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Michael L. Miller

  
	
   

  	
  Name:
  Michael L. Miller

  
	
   

  	
  Title:
  Vice President & Secretary

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  1000
  Blue Gentian Road

  
	
   

  	
  Suite 200

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (651) 367-5394

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  NWA FUEL SERVICES CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  David E. Zanussi

  
	
   

  	
  Name: David E. Zanussi

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Dept.
  A4192

  
	
   

  	
  2700
  Lone Oak Parkway

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (612) 726-4851

  
	
   

  	
  Attention:
  President

  






 


 

















 




	
  NORTHWEST AEROSPACE TRAINING

  
	
  CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  2600
  Lone Oak Point

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (612) 726-6046

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  NWA RETAIL SALES INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o
  Northwest Airlines, Inc.

  
	
   

  	
  2700
  Lone Oak Parkway

  
	
   

  	
  Eagan,
  Minnesota 55121

  
	
   

  	
  Fax:
  (612) 726-7123

  
	
   

  	
  Attention:
  President

  
	
   

  
	
  MLT INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel B. Matthews

  
	
   

  	
  Name:
  Daniel B. Matthews

  
	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  4660
  West 77th Street

  
	
   

  	
  Edina,
  Minnesota 55435

  
	
   

  	
  Fax:
  (651) 367-8462

  
	
   

  	
  Attention:
  President

  






 


 

















 




	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
  in
  its individual corporate capacity and as Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Mark R. Olmon

  
	
   

  	
  Name:
  Mark R. Olmon

  
	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  and Applicable Lending Office:

  
	
   

  	
  800
  Nicollet Mall

  
	
   

  	
  BC-MN-H03Q

  
	
   

  	
  Minneapolis,
  Minnesota 55402-4302

  
	
   

  	
  Fax:
  (612) 303-2257

  
	
   

  	
  Attention:
  Mark Olmon

  






 


 

















 




	
  CITIBANK, N.A.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  James J. McCarthy

  
	
   

  	
  Name:
  James J. McCarthy

  
	
   

  	
  Title:
  Managing Director & Vice President

  
	
   

  	
   

  
	
   

  	
  Address
  and Applicable Lending Office:

  
	
   

  	
  1615
  Brett Road

  
	
   

  	
  New
  Castle, Delaware 19720

  
	
   

  	
  Fax:
  (212) 994-0847

  
	
   

  	
  Attention:
  Dan Digiacobbe

  






 


 

















 




	
  MORGAN STANLEY BANK, N.A.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Daniel Twenge

  
	
   

  	
  Name:
  Daniel Twenge

  
	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  Address
  and Applicable Lending Office:

  
	
   

  	
  One
  Utah Center

  
	
   

  	
  201
  South Main Street, 5th Floor

  
	
   

  	
  Salt
  Lake City, Utah 84111

  
	
   

  	
  Fax:
  (718) 233-0967

  
	
   

  	
  Attention:
  Carrie D. Johnson

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  1000
  Lancaster Street

  
	
   

  	
  Baltimore,
  MD 21202

  
	
   

  	
  Fax:
  (718) 233-2140

  
	
   

  	
  Attention:
  Loan Servicing