Exhibit
10.49


LOAN
AGREEMENT [28139]


DATED
AS OF DECEMBER 21, 2006


AMONG


HAWAIIAN AIRLINES, INC.,

As Borrower


C.I.T.
LEASING CORPORATION,

as Administrative Agent and

as Original Lender,


C.I.T.
LEASING CORPORATION,

as Security Agent


AND


THE
LENDERS

FROM TIME TO TIME PARTY HERETO


 
















 


Table
of Contents


	
  

  	
   

  	
  Page

  
	
  Article I  The
  Loan

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section
  1.1.  The Loan

  	
   

  	
  1

  
	
  Section
  1.2.  Making the Loan

  	
   

  	
  3

  
	
  Section
  1.3.  Commitment Termination

  	
   

  	
  3

  
	
  Section
  1.4.  Substitute Lenders

  	
   

  	
  3

  
	
  Section
  1.5.  Special Provisions Governing the Loan

  	
   

  	
  4

  
	
  Section
  1.6.  Payments and Computations

  	
   

  	
  6

  
	
  Section
  1.7.  Sharing of Payments, Etc.

  	
   

  	
  6

  
	
  Section
  1.8.  Secured Obligation of Lenders to Mitigate

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Article
  II  Interest

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section
  2.1.  Rate of Interest

  	
   

  	
  7

  
	
  Section
  2.2.  Interest Periods

  	
   

  	
  7

  
	
  Section
  2.3.  Interest Payments

  	
   

  	
  7

  
	
  Section
  2.4.  Default Rate

  	
   

  	
  8

  
	
  Section
  2.5.  Computation of Interest

  	
   

  	
  8

  
	
  Section
  2.6.  Maximum Rate

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Article
  III  Representations and Warranties

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section
  3.1.  Representations and Warranties

  	
   

  	
  8

  
	
  (a) Organization;
  Powers

  	
   

  	
  8

  
	
  (b) Authorization;
  Enforceability

  	
   

  	
  8

  
	
  (c) No
  Violation

  	
   

  	
  9

  
	
  (d) Governmental
  Approvals

  	
   

  	
  9

  
	
  (e) Litigation

  	
   

  	
  9

  
	
  (f)  Financial
  Condition

  	
   

  	
  9

  
	
  (g) No
  Default

  	
   

  	
  10

  
	
  (h) Investment
  and Holding Company Status

  	
   

  	
  10

  
	
  (i) Use of
  Proceeds

  	
   

  	
  10

  
	
  (j) Licenses,
  Permits, etc.

  	
   

  	
  10

  
	
  (k) Compliance
  with Laws

  	
   

  	
  10

  
	
  (l) Tax
  Returns

  	
   

  	
  10

  
	
  (m) Information

  	
   

  	
  10

  
	
  Section
  3.2. The Aircraft

  	
   

  	
  11

  
	
  (a) Good
  Title

  	
   

  	
  11

  
	
  (b) Filings

  	
   

  	
  11

  
	
  (c) No
  Event of Loss

  	
   

  	
  11

  
	
  (d) Section
  1110

  	
   

  	
  11

  
	
  (e) Condition

  	
   

  	
  11

  
	
  Section 3.3.  Representations
  and Warranties of the Lenders

  	
   

  	
  11

  




 i
 









 


	
  Article IV  Covenants

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.1.Covenants of the Borrower

  	
   

  	
  12

  
	
  (a)  Financial Statements and Other
  Information

  	
   

  	
  12

  
	
  (b)  Existence; Conduct of Business

  	
   

  	
  13

  
	
  (c)  Mergers and Consolidations

  	
   

  	
  13

  
	
  (d)  Delivery of Post-Recording FAA
  Opinion and Post-Registration IR Opinion

  	
   

  	
  15

  
	
  (e)  Compliance with the Security
  Agreement

  	
   

  	
  15

  
	
  (f)  Notice of Default under PBH Agreement

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  Article V  Increased Costs; General Indemnity

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 5.1.  Increased Costs

  	
   

  	
  15

  
	
  Section 5.2.  Capital Adequacy

  	
   

  	
  16

  
	
  Section 5.3.  Withholding of Taxes

  	
   

  	
  17

  
	
  (a)  Payments to Be Free and Clear

  	
   

  	
  17

  
	
  (b)  Grossing-up of Payments

  	
   

  	
  17

  
	
  (c)  Evidence of Exemption from U.S.
  Withholding Tax

  	
   

  	
  18

  
	
  Section 5.4.       (a)
    Other Taxes

  	
   

  	
  20

  
	
            (b)
    Contest of Tax Claims

  	
   

  	
  20

  
	
            (c)
    Non-Parties

  	
   

  	
  22

  
	
  Section 5.5.   Indemnity

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  Article VI  Conditions Precedent

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 6.1.  General Conditions

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Article VII  Events of Default

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 7.1.  Events of Default

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Article VIII  The Security Agent and the Administrative
  Agent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 8.1.  Appointment and
  Authorization

  	
   

  	
  28

  
	
  Section 8.2.  Delegation of Duties

  	
   

  	
  28

  
	
  Section 8.3.  Exculpatory Provisions

  	
   

  	
  29

  
	
  Section 8.4.  Reliance by Agents

  	
   

  	
  29

  
	
  Section 8.5.  Notice of Events of Default

  	
   

  	
  29

  
	
  Section 8.6.  Non-Reliance on Agents and
  Other Lenders; Lender Representations

  	
   

  	
  29

  
	
  Section 8.7.  Agents and Affiliates

  	
   

  	
  30

  
	
  Section 8.8.  Indemnification

  	
   

  	
  30

  
	
  Section 8.9.  Successor Agents

  	
   

  	
  30

  




 ii
 









 


	
  ARTICLE IX  Miscellaneous

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section
  9.1.  Amendments

  	
   

  	
  30

  
	
  Section
  9.2.  Notices

  	
   

  	
  31

  
	
  Section
  9.3.  Costs and Expenses

  	
   

  	
  31

  
	
  Section
  9.4.  Certain Agreements

  	
   

  	
  31

  
	
  Section
  9.5.  Entire Agreement

  	
   

  	
  32

  
	
  Section
  9.6.  Cumulative Rights and Severability

  	
   

  	
  32

  
	
  Section
  9.7.  Waivers

  	
   

  	
  32

  
	
  Section
  9.8.  Successors and Assigns; Participations; Assignments

  	
   

  	
  32

  
	
  (a)  Successors
  and Assigns

  	
   

  	
  32

  
	
  (b)  Participations

  	
   

  	
  32

  
	
  (c)  Assignments

  	
   

  	
  33

  
	
  (d)  Note
  Register

  	
   

  	
  33

  
	
  Section
  9.9.    Confidentiality

  	
   

  	
  34

  
	
  Section
  9.10.  Counterparts

  	
   

  	
  34

  
	
  Section
  9.11.  Governing Law; Submission to Jurisdiction; Venue

  	
   

  	
  34

  
	
  Section
  9.12.  Waiver of Trial by Jury

  	
   

  	
  35

  
	
  Section
  9.13.  Headings

  	
   

  	
  35

  



 


Schedule 1            Definitions


 


	
  

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Security
  Agreement

  
	
  Exhibit B

  	
   

  	
  Form of Promissory Note

  
	
  Exhibit C

  	
   

  	
  Form of Notice of
  Borrowing

  
	
  Exhibit D

  	
   

  	
  Form of Opinion of
  Special Counsel to the Borrower for Closing

  
	
  Exhibit E

  	
   

  	
  Form of Opinion of
  Borrower’s In-House Legal Counsel for Closing

  
	
  Exhibit F

  	
   

  	
  Form of Transfer
  Supplement

  
	
  Exhibit G

  	
   

  	
  Form of Certificate of
  Non-Bank Status

  
	
  Exhibit H

  	
   

  	
  Form of FAA Counsel’s
  Opinion

  
	
  Exhibit I

  	
   

  	
  Form of Special
  Regulatory Counsel Opinion

  



 


 



 iii














LOAN AGREEMENT
[28139]


THIS LOAN AGREEMENT [28139], dated as of December 21,
2006 (as the same may be amended, modified or supplemented from time to time,
this “Agreement”), is among HAWAIIAN AIRLINES, INC., a Delaware
corporation, as borrower (the “Borrower”), C.I.T. LEASING CORPORATION,
as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”) and as original lender (in such capacity, the “Original Lender”), C.I.T. LEASING
CORPORATION, as the security agent (the “Security Agent”), and such
other lenders as may from time to time be party hereto (together with the
Original Lender, the “Lenders”). 
Certain capitalized terms used herein are defined, and certain rules of
construction are specified, in Schedule 1.


BACKGROUND


l.              The
Lenders have agreed to make a loan to the Borrower to be secured by a Lien on a
certain aircraft and related property owned by the Borrower.


2.             In
connection with such loan, the parties hereto wish to enter into certain
related understandings, as set forth herein.


The parties hereto agree as follows:


ARTICLE I


THE LOAN


Section
1.1.                                The
Loan.


(a)           Commitments.  Subject
to the terms and conditions of this Loan Agreement, on the Funding Date the
Original Lender shall make a loan to the Borrower in the principal amount equal
to the Commitment.  As evidence of the
loan advanced by the Original Lender, on the Funding Date the Borrower shall
issue and deliver to the Original Lender, as provided hereunder, a Note payable
to the Original Lender in an original principal amount equal to the amount of
its Commitment.  The Note shall be
substantially in the form set forth in Exhibit B.


(b)           The Notes:  Amortization.  The
Loan, as evidenced by each Note, shall mature on the Maturity Date, and the
principal of the Loan, as evidenced by each Note, shall be payable in 84
consecutive monthly installments on the Payment Dates, each such installment to
be in the amount set forth in Annex A to such Note opposite the
Payment Date on which such installment is due. 
Annex A to each Note shall be completed based on a mortgage style
amortization based on the Interest Rate applicable on the Funding Date, and
shall include a balloon payment on the Maturity Date in the amount of Seventeen
Million Dollars ($17,000,000), which is forty point five percent (40.5%) of the
original principal amount of the Loan. 
Each payment of the principal amount, if any, and interest or other
amounts due in respect of the Loan shall be applied, first, to the
payment of any amounts due in respect of the Loan (other than principal and
accrued interest on the Loan) to the date of such payment; second, to
the payment of accrued interest on the Loan then due (including any interest on
overdue principal amount, and to the extent permitted by law, interest and
other amounts thereunder); and third, the balance, if any, remaining
thereafter, to the payment of the principal amount of the Loan remaining unpaid
(provided that the Loan shall not be subject to prepayment, except as
provided in Sections 1.1(c), 1.1(d) and 1.5 hereof).












(c)           Optional
Prepayment.


(i)           In
General.  On any
Business Day (a “Prepayment Date”), on not less than three (3) Business
Days’ prior irrevocable written notice from the Borrower to the Administrative
Agent, the Borrower may prepay all, of the outstanding principal amount of the
Loan.  If the Borrower elects to prepay
the Loan, the Borrower shall pay on the Prepayment Date to the Administrative
Agent the outstanding principal amount of the Loan subject to prepayment
together with all accrued and unpaid interest thereon, the Prepayment Fee (if
applicable), and all other amounts then due and payable under the Transaction
Documents.  For the avoidance of doubt if
prepayment is made on or prior to the first anniversary of the Funding Date,
the Prepayment Fee shall be payable together with such prepayment.


(ii)          Limited
Optional Prepayment. 
Notwithstanding anything to the contrary in Section 1.1(c)(i) above and
without limiting the Borrower’s obligations under Sections 5.1, 5.2, 5.3, and
5.4 in the event that the Borrower receives notice from any Lender of any costs
or other amounts that the Borrower is required to pay to such Lender pursuant
to any of Sections 5.1, 5.2, 5.3 or 5.4, the Borrower and such Lender shall
negotiate in good faith in order to arrive at a mutually acceptable alternative
means of restructuring the Loan Amount held by such Lender in order to
mitigate, minimize or eliminate such costs in the future.  In the event that the Borrower and such
Lender are not able to agree, within thirty (30) days following the date of the
notice to the Borrower of amounts due under any of Sections 5.1, 5.2, 5.3 or
5.4, as the case may be, on an alternative means of restructuring the Loan
Amount held by such Lender, then the Borrower shall have the right, exercisable
upon not less than three (3) Business Days’ prior notice to the applicable
Lender (with a copy to the Administrative Agent), to prepay in full the Loan
Amount held by such Lender, together with accrued interest thereon, and any
amounts due to such Lender pursuant to Sections 5.1, 5.2, 5.3 or 5.4, as
applicable.  Any prepayment by the
Borrower pursuant to this Section 1.1(c)(ii) shall be made by the Borrower
directly to the Administrative Agent for the benefit of the applicable Lender,
and no prepayment by the Borrower pursuant to this Section 1.1(c)(ii)
shall have any effect on the Borrower’s obligations with respect to the
remaining outstanding balance of the Loan to any of the other Lenders
hereunder.  For the avoidance of doubt
such prepayment shall not be subject to any Prepayment Fee.


(d)           Mandatory Prepayment.  If an Event of Loss occurs with
respect to the Airframe, the Borrower shall, on the date specified for payment
with respect to such Event of Loss in Section 5.01 of the Security
Agreement (the “Loss Payment Date”), prepay the outstanding principal
amount of the Loan in full, together with accrued interest thereon to the date
of such prepayment.  For the avoidance of
doubt such prepayment shall not be subject to any Prepayment Fee.


(e)           Pro Rata Treatment. 
Except to the extent otherwise provided herein (including, but not
limited to, as otherwise specified in Section 1.1(c)(ii) above and Section 1.4
below):  (a) the borrowing of the
Loan from the Lenders under Section 1.2 shall be made from the Lenders pro
rata according to the amounts of their respective Commitments; (b) each
payment or prepayment of principal of the Loan shall be made for account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Loan held by them (as evidenced by the Notes held by them); and
(c) each payment of interest on the Loan shall be made for account of the
Lenders pro rata in accordance with the amounts of interest on the Loan then
due and payable to the Lenders.



 2
 








Section
1.2.                                Making
the Loan.


(a)           The
Loan shall be requested by the delivery of a Notice of Borrowing in the form of
Exhibit C by the Borrower to the Administrative Agent not later than 4:00 p.m.
(New York City time) at least one (1) Business Day prior to the Funding Date
specified in such notice.  The
Administrative Agent shall give to each Lender prompt notice thereof.  The Notice of Borrowing shall be irrevocable
and binding on the Borrower.  The Notice
of Borrowing shall be in writing specifying therein the (i) the aggregate
amount of the Loan to be funded, (ii) the proposed Funding Date and (iii)
payment instructions.  The Original
Lender shall, before 10:00 a.m. (New York City time) on the scheduled Funding
Date, make available for the account of its Lending Office to the
Administrative Agent’s Account, in immediately available funds, the
Commitment.  After the Administrative
Agent’s receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article VI as confirmed during a closing conference call pursuant
to which the Administrative Agent or its counsel shall indicate such
fulfillment, the Administrative Agent shall transfer such funds to the Borrower
at such account (including an account of the Seller) as is specified in a
written notice given by the Borrower to the Administrative Agent.


(b)           If
for any reason a Closing is not consummated on the Funding Date set forth in
the Notice of Borrowing, the Borrower may, by written notice to the
Administrative Agent given by 5:00 p.m., New York City time on the
scheduled Funding Date, designate a delayed Funding Date for such Closing on or
prior to the Commitment Termination Date.


Section 1.3.           Commitment
Termination.  The
Aggregate Commitment and the Commitment of each Lender shall terminate on the earlier
of (i) the making of the Loan pursuant to Section 1.2(a) above, or (ii) at 5:00
p.m. (New York time) on the Commitment Termination Date.


Section 1.4.           Substitute
Lenders.  In the event
the Borrower is required under the provisions of Sections 5.1, 5.2, 5.3 or 5.4
to make payments to any Lender, a notice has been given to the Borrower under
Section 1.5(e) and the Borrower and a Lender are unable to agree on a
Substitute Basis or an Affected Lender has given notice to the Borrower under
Section 1.5(b) and the Borrower and the Affected Lender are unable to agree on
a Substitute Basis, the Borrower may, so long as no Potential Default or Event
of Default shall have occurred and be continuing, elect to terminate such
Lender (or Affected Lender) as a party to this Agreement; provided that
concurrently with such termination, (i) the Borrower shall pay or cause to be
paid to that Lender (or Affected Lender) all principal, interest, and other
Secured Obligations (including, without limitation, amounts, if any, owed under
Sections 5.1, 5.2, 5.3 or 5.4), but 



 3
 








excluding any Prepayment
Fee, due to such Lender (or Affected Lender) through such date of termination,
(ii) another financial institution reasonably satisfactory to the Borrower and
the Administrative Agent shall agree, as of such date, to become a Lender for
all purposes under this Agreement (whether by assignment or otherwise) and to
assume all obligations of the Lender (or Affected Lender) to be terminated as
of such date, and (iii) all documents necessary, in the reasonable judgment of
the Administrative Agent, to evidence the substitution of such Lender shall
have been received and approved by the Administrative Agent as of such date.


Section 1.5.           Special
Provisions Governing the Loan.  Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall govern with respect
to the Loans as to the matters covered:


(a)           As
soon as practicable after 11:00 a.m. (London time) on each Interest Rate
Determination Date, the Administrative Agent shall determine the interest rate
that shall apply to the Loan and the Notes for the applicable Interest Period
in accordance with Section 2.2 (which determination shall be prima  facie
evidence of such rate) and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to the Borrower, the Security Trustee and each
Lender; provided that failure by the Borrower to pay interest on the
Notes in the absence of such notice from the Administrative Agent shall not be
deemed an Event of Default until two (2) Business Days after such notice is
actually given.


(b)           In
the event that on any date the making, maintaining or continuation by any
Lender of its Percentage Share of the Loan as evidenced by its Note has become
unlawful as a result of compliance by such Lender in good faith with any change
that becomes effective after the date hereof in any law, treaty, governmental
rule, regulation, guideline or order (whether or not having the force of law),
then, and in any such event, such Lender shall be an “Affected Lender”
and it shall promptly so notify (by facsimile or by telephone confirmed in
writing) the Borrower, the Administrative Agent, and the Security Trustee.  Thereafter (i) the obligation of the Affected
Lender to make its Percentage Share of the Loan as evidenced by its Note (if
not yet funded) shall be suspended until such notice shall be withdrawn by the
Affected Lender, (ii) the Affected Lender’s obligation to maintain its
outstanding Loan Amount as evidenced by its Note (the “Affected Loan Amount”)
shall be suspended with respect to the Affected Loan Amount until such notice
shall be withdrawn by the Affected Lender, and (iii) the parties shall follow
the procedures set forth in Section 1.5(d) with respect to the Affected Loan
Amount so long as, if following such procedures, the maintaining continuation
of such Affected Loan Amount or the balance of the Loan is not unlawful.  The Borrower may elect to terminate such
Affected Lender as a party to this Agreement in compliance with Section
1.4.  Except as provided in the
immediately preceding sentence, nothing in this Section 1.5(b) shall affect the
obligation of any Lender other than an Affected Lender to make its Percentage
Share of the Loan or maintain its Loan Amount as evidenced by its Notes in
accordance with the terms of this Agreement.


(c)           The
Borrower shall compensate each Lender, within ten (10) Business Days after
written request by such Lender (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all reasonable losses,
costs, expenses and liabilities sustained by such Lender in connection with the
liquidation or re-employment of funds used by it to make or carry its Loan
Amount (collectively, “LIBOR Breakage Costs”) (i) if for any reason
(other than a default by that Lender) a borrowing of the Loan does not occur on
a date specified therefor in a Notice of Borrowing as set forth in Section
1.2(b) and (ii) as a consequence of any default by the Borrower in the
repayment of the Loan when required by the terms of this Agreement.



 4
 








(d)           During
the thirty (30) days following the date of any notice given to the Borrower
pursuant to Section 1.5(b) or 1.5(e), each Affected Lender (or, in the case of
Section 1.5(e), each Lender) and the Borrower shall negotiate in good
faith in order to arrive at a mutually acceptable alternative basis for
determining the interest rate from time to time applicable to the Affected Loan
Amount (or, in the case of Section 1.5(e), the Loan) (the “Substitute Basis”),
such interest rate to be based on an agreed cost-of-funds benchmark plus the
Applicable Margin.  If within the thirty
(30) days following the date of any such notice to the Borrower, any Affected
Lender (or, in the case of Section 1.5(e), any Lender) and the Borrower
shall agree upon a Substitute Basis, such Substitute Basis shall be retroactive
to and effective from the first day of the applicable Interest Periods until
and including the last day of such Interest Periods.  If after thirty (30) days from the date of
such notice, any Affected Lender (or, in the case of Section 1.5(e), any
Lender) and the Borrower shall have failed to agree upon a Substitute Basis,
then each such Affected Lender (or, in the case of Section 1.5(e), each
such Lender) shall certify in writing to the Borrower through the
Administrative Agent (such certification to be conclusive and binding on all of
the parties hereto absent manifest error) the interest rate at which such
Affected Lender (or, in the case of Section 1.5(e), such Lender) is prepared to
make or maintain the Affected Loan Amount (or, in the case of
Section 1.5(e), its Loan Amount) for such Interest Periods, such interest
rate to be retroactive to and effective from the first day of such Interest
Periods.  If no Substitute Basis is
established, upon receipt of notice of the interest rates at which an Affected
Lender (or, in the case of Section 1.5(e), a Lender) is prepared to make or
maintain its affected Loans, the Borrower shall have the right (i) exercisable
upon five (5) Business Days’ prior notice to such Affected Lender (or such
Lender) through the Administrative Agent (A) to continue to borrow the relevant
Loan Amount at the interest rates so advised by such Affected Lender (or such
Lender) (as such rates may be modified, from time to time, at the outset of
each subsequent Interest Period) or (B) to prepay in full the affected Loan
Amount of any such Affected Lender (or any such Lender), together with accrued
interest thereon at the LIBOR Rate plus the Applicable Margin in effect for the
most recent Interest Period and any LIBOR Breakage Costs, but excluding any
Prepayment Fee, whereupon such affected Loan Amount shall become due and
payable on the date specified by the Borrower in such notice or (ii) to substitute
any such Affected Lender (or such Lender) pursuant to the provisions of, and
subject to the conditions contained in, Section 1.4.


(e)           In the event that on any Interest
Rate Determination Date, by reason of circumstances affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining the
interest rate applicable to the Loan on the basis provided for in the
definition of LIBOR Rate, the Administrative Agent shall on such date give
notice (by facsimile or by telephone confirmed in writing) to the Borrower and
each Lender of such circumstance, whereupon the relevant provisions of Section
1.5(d) shall be applicable.



 5
 








Section
1.6.                                Payments
and Computations.


(a)           The
Borrower shall make each payment hereunder and under the Notes not later than
3:00 p.m. (New York City time) on the day when due in Dollars to the
Administrative Agent’s Account (or such other account or accounts as the
Administrative Agent directs in writing) in immediately available funds,
without set-off or counterclaim (except for any required withholding taxes not
subject to indemnification hereunder). 
Any amounts received after such time may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for the purpose of calculating interest thereon.  Unless funds have been paid directly by the
Borrower to each Lender, the Administrative Agent will promptly thereafter but
in no event later than 4:00 p.m. (New York City time) on the date such funds
are received by the Administrative Agent from the Borrower cause to be
distributed like funds to the Lenders for the account of their respective
Lending Offices, in each case to be applied in accordance with the terms of
this Agreement.  If the payment by the
Borrower is received by the Administrative Agent after 3:00 p.m., New York
time, at the place of payment, the Administrative Agent shall make payment
promptly, but not later than 2:00 p.m. New York time on the next succeeding
Business Day.  Upon its acceptance of any
Transfer Supplement and recording of the information contained therein in the
Register pursuant to Section 9.8(d), from and after the effective date
specified in such Transfer Supplement, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder.


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


Section 1.7.           Sharing
of Payments, Etc.  If
any Lender shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of the Loan
owing to it in excess of its proportionate share of payments on account of the
Secured Obligations, such Lender shall forthwith purchase from the other
Lenders such participation in the applicable Secured Obligations as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and such Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender’s proportionate share (according
to the proportion of (i) the amount of such Lender’s required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered.  The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 1.7 may, to the fullest extent permitted by law, exercise its
rights of set-off with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.



 6
 








Section 1.8.           Obligation
of Lenders to Mitigate. 
If an event or the existence of a condition occurs that would cause any
Lender to become an Affected Lender or that would entitle such Lender to
receive payments under Section 5.1, 5.2, 5.3 or 5.4, then, upon the request of
the Borrower, such Lender will to the extent not inconsistent with any
applicable legal or regulatory restrictions, use reasonable efforts (i) to
make, fund or maintain the Commitment of such Lender or the Loan Amount of such
Lender through another lending office of such Lender or (ii) take such other
reasonable measures, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
Sections 5.1, 5.2, 5.3 or 5.4 would be reduced and if the making, funding or
maintaining of such Commitment or Loan Amount through such other lending office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitment or Loan Amount or the
interests of such Lender; provided that such Lender will not be
obligated to utilize such other lending office pursuant to this Section 1.8
unless the Borrower agrees to pay all incremental expenses, if any, incurred by
such Lender as a result of utilizing such other lending office as described in
clause (i) above; provided, further, that such Lender shall have no obligation to designate
another lending office that does not maintain loans comparable to the
Loan.  A certificate as to the amount of
any such expenses (setting forth in reasonable detail the basis for requesting
such amount and the calculation thereof) submitted by such Lender to the
Borrower (with a copy to the Administrative Agent) shall be prima facie evidence of such expenses.


ARTICLE II


INTEREST


Section 2.1.           Rate
of Interest.  Subject
to Section 1.5 hereof, each Note shall bear interest on the unpaid principal
amount thereof for each Interest Period from the date made through maturity
(whether by acceleration or otherwise) at a rate equal to the sum of the LIBOR
Rate for such Interest Period plus  the Applicable
Margin (the “Interest Rate”).  The
applicable Interest Period for determining the rate of interest shall be
established in accordance with Section 2.2.


Section 2.2.           Interest
Periods.  The first
Interest Period shall be the period commencing on the Funding Date, and shall
end on, but shall exclude, the next Interest Payment Date, and thereafter each
successive Interest Period shall commence on (and shall include) the last day
of the next preceding Interest Period and shall end on (but shall exclude) the
next succeeding Interest Payment Date, provided, however, that
notwithstanding anything in this Agreement to the contrary, the final Interest
Period shall end on the Maturity Date; provided, further, however,
that if any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, except that, notwithstanding anything to the contrary contained herein, if
any Interest Period would otherwise expire on a day which is not a Business Day
but is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business Day.


Section 2.3.           Interest Payments.  Accrued interest on the Loan and each Note
shall be payable in arrears on the last day of each Interest Period; provided,
that (i) interest accrued pursuant to Section 2.4 shall be payable on
demand and (ii) in the event of any repayment or prepayment of the Loan
and any Note (or any portion thereof), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment.



 7
 








Section 2.4.           Default
Rate.  Notwithstanding
Section 2.1, the Borrower shall pay the Lenders and the Administrative
Agent on demand interest on any principal, interest, fee or other amount not
paid hereunder, under any Note or under any other Transaction Document when due
at a rate per annum that is two percent (2%) per annum in excess of the LIBOR
Rate for the relevant Interest Period plus the Applicable Margin (the “Default
Rate”).


Section 2.5.           Computation
of Interest.  Interest
on the Notes shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which such amount accrues.  In computing such amounts, the first day of
the applicable period shall be included, and the last day of the applicable
period shall be excluded; provided that if the Loan or a Note (or any
portion thereof) is repaid on the same day on which it is made, one day’s
interest shall be paid on that Note or the relevant portion thereof.


Section 2.6.           Maximum
Rate.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
the Loan or any Note, together with all fees, charges and other amounts which
are treated as interest on the Loan or such Note under applicable law
(collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by
the Lender holding the Loan or the relevant portion thereof in accordance with
applicable law, the rate of interest payable in respect of the Loan or such
Note or the relevant portion thereof hereunder, together with all Charges payable
in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of the
Loan or such Note or the relevant portion thereof but were not payable as a
result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other periods shall
be increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the LIBOR Rate to the date of
repayment, shall have been received by such Lender.


ARTICLE III


REPRESENTATIONS AND
WARRANTIES


Section 3.1.           Representations
and Warranties.  The
Borrower represents and warrants to the Administrative Agent and each Lender as
of the date of this Agreement that:


(a)           Organization; Powers. 
The Borrower is duly incorporated, validly existing and in good standing
under the laws of Delaware, has all requisite corporate power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Change, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.  The Borrower is “situated in a Contracting
State” within the meaning and for the purposes of Article 3(1) of the
Consolidated Text.


(b)           Authorization; Enforceability.  The execution and delivery of the Transaction
Documents by the Borrower and the performance by the Borrower of its
obligations thereunder are within the Borrower’s corporate powers, have been
duly authorized by all necessary corporate action of Borrower and do not
require any stockholder approval, or approval or consent of any trustee or
holder of indebtedness or obligations of the Borrower except such as have been
duly 



 8
 








obtained.  This Agreement has been duly executed and
delivered by the Borrower and the other Transaction Documents will be duly
executed and delivered by the Borrower when required by this Agreement.  This Agreement constitutes, and each of the
other Transaction Documents when executed and delivered by the Borrower will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.


(c)           No Violation.  The
execution and delivery by the Borrower of the Transaction Documents and the
performance by the Borrower of its obligations thereunder do not and will not
(i) violate any provision of the Certificate of Incorporation or By-Laws of the
Borrower, (ii) violate any provision of foreign, federal, state or local law
applicable to or binding on the Borrower or (iii) violate or constitute any
default under, or result in the creation of any Lien (other than as permitted
under the Security Agreement) upon the Aircraft, the Airframe or any Engine
under, any indenture, deed of trust, conditional sales contract, lease, loan or
other material agreement, instrument or document to which the Borrower is party
or by which the Borrower or any of its properties is bound, except for the
lease of the Aircraft by the Seller to the Borrower which shall be terminated
upon the Closing.


(d)           Governmental Approvals. 
The execution and delivery by the Borrower of the Transaction Documents
and the performance by the Borrower of its obligations thereunder do not and
will not require the consent or approval of, or the giving of notice to, or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, any Governmental Authority, other
than (i) the filings, recordings, notices and other ministerial actions
pursuant to any routine recording, and contractual or regulatory requirements
applicable to it, each of which has been effected or obtained, and (ii) the filings
described in Section 3.2(b).


(e)           Litigation.  Except as
set forth in Holdings’ Annual Report on Form 10-K for 2005 (as amended through
the Funding Date), or in any Quarterly Report on Form 10-Q or Current Report on
Form 8-K filed by Holdings with the SEC subsequent to such Form 10-K (in each
case as amended through the Funding Date), no action, claim or proceeding is
now pending or, to the Actual Knowledge of the Borrower, threatened against the
Borrower before any court, governmental body, arbitration board, tribunal or
administrative agency which, if determined adversely to the Borrower, would be
expected to result in a Material Adverse Change.


(f)            Financial Condition. 
The audited consolidated (from and after June 2, 2005) balance sheet of
Holdings and the Borrower with respect to its most recent fiscal year included
in its Annual Report on Form 10-K for 2005 (as amended through the Funding
Date) filed by Holdings with the SEC, and the related consolidated (from and
after June 2, 2005) statements of operations and cash flows for the year then
ended have been prepared in accordance with GAAP and fairly present in all
material respects the financial condition of Holdings and its consolidated
Subsidiaries (including the Borrower) as of such date and the results of its
operations and cash flows for such period. 
The consolidated balance sheet of Holdings and the Borrower as of June
30, 2006 included in Holdings’ Quarterly Report on Form 10-Q for the period
ended June 30, 2006, and the related consolidated statement of operations and
cash flows for the three months 



 9
 








then ended have been
prepared in accordance with GAAP (subject to normal year-end adjustments) and
fairly present in all material respects the financial condition of Holdings and
its consolidated Subsidiaries (including the Borrower) as of such date and the
results of its operations and cash flows for such period.


(g)           No Default.  No Event
of Default or Potential Default has occurred and is continuing.


(h)           Investment and Holding Company Status.  The Borrower is not (i) an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940 or (ii) a “holding company” as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.


(i)            Use of Proceeds.  No
part of the proceeds of the Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of Regulations U or X of the Board of
Governors of the Federal Reserve System.


(j)            Licenses, Permits, etc. 
The Borrower is a U.S. Air Carrier and holds all licenses, permits and
franchises from the appropriate Governmental Authorities necessary to authorize
the Borrower to lawfully engage in air transportation and to carry on scheduled
commercial passenger service as currently conducted, except where the failure
to so hold any such license, permit or franchise would not be expected to give
rise to a Material Adverse Change.


(k)           Compliance with Laws. 
Each of the Borrower and its Subsidiaries is in compliance with all
laws, regulations and orders of any governmental or regulatory authority or
agency applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change.


(l)            Tax Returns.  The
Borrower and its Subsidiaries have timely filed all Federal income tax returns
and all other material tax returns that are required to be filed by them and
have paid all Taxes that are material in amount shown to be due pursuant to
such returns or pursuant to any assessment received by the Borrower or any of
its Subsidiaries, other than any such assessment that is being contested in
good faith through appropriate proceedings and against which adequate reserves
are being maintained and the nonpayment of which (individually or in the
aggregate) could not reasonably be expected to cause a material impairment of
the ability of the Borrower to perform, or the Administrative Agent, the
Security Agent or the Lenders to enforce, the obligations of the Borrower under
the Transaction Documents.  The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Borrower, adequate.


(m)          Information.  Holdings’
Annual Report on Form 10-K for 2005 filed with the SEC and each of Holdings’
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K subsequently
filed by Holdings with the SEC, as of the date it was filed with the SEC (or,
if such report has been amended, in each case as amended through the Funding
Date), did not contain any untrue statement of material fact or omit to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.



 10














(n)           ERISA.     All
the qualified retirement plans of the Borrower and its Affiliates are in
compliance with the minimum funding requirements of ERISA and the Internal
Revenue Code.


Section 3.2.           The
Aircraft.  The Borrower
represents and warrants to the Administrative Agent and each Lender, as of the
Funding Date and on and after giving effect to the Closing (in the case of
Section 3.2(a)), that:


(a)           Good Title.  The
Borrower has good title to the Aircraft free and clear of Liens other than
Permitted Liens.


(b)           Filings.  Except for
(i) the registration of the Aircraft in the name of the Borrower with the
FAA pursuant to the Federal Aviation Act, (ii) the filing with the FAA pursuant
to the FAA Regulations of an AC Form 8050-135 with respect to the sale under the
Warranty Bill of Sale and the international interests (or prospective
international interests) under the Cape Town Convention in the Airframe and the
procurement of an authorization code in respect thereof, (iii) the filing
for recording (and the recording) pursuant to the Federal Aviation Act of the
FAA Bill of Sale and the Security Agreement covering the Aircraft,
(iv) the registration with the International Registry of the sale under
the Warranty Bill of Sale and the international interests (or prospective
international interests) in the Airframe and Engines created by the Transaction
Documents and (v) the filing of financing statements (and continuation
statements at periodic intervals) with respect to the security interests
created by the Transaction Documents with the Secretary of State of Delaware,
no further action, including any filing or recording of any document (including
any financing statement in respect thereof under Article 9 of the Uniform
Commercial Code of any applicable jurisdiction), is necessary in order to
establish and perfect the first priority Lien on the Aircraft in favor of the
Security Agent pursuant to the Security Agreement in any applicable
jurisdiction in the United States.


(c)           No Event of Loss.  No
Event of Loss has occurred with respect to the Aircraft or any Engine, and no
circumstance, condition, act or event has occurred that, with the giving of
notice or lapse of time or both gives rise to or constitutes an Event of Loss
with respect to the Aircraft or any Engine.


(d)           Section 1110.  The
Security Agent is entitled to the benefits of Section 1110 of the Bankruptcy
Code with respect to the Aircraft as provided in the Security Agreement in the
event of a case under Chapter 11 of the Bankruptcy Code in which Borrower is a
debtor.


(e)           Condition.  The
Aircraft has been duly certified by the FAA as to type and airworthiness, has
been insured by the Borrower in accordance with the terms of the Security
Agreement, and is in the condition and state of repair required under the terms
of the Security Agreement.


Section 3.3            Representations
and Warranties of the Lenders.  Each Lender represents and warrants as of the
date hereof that:


(a)           it
has not sold, transferred, or assigned all of any part of its rights and
obligations under this Agreement and the Loan to any Person except as provided
in Section 9.8 hereof; and



 11
 








(b)           no
part of the funds used by it to acquire its Notes constitute the assets of any
Plan.  As used herein, “Plan”
means an “employee benefit plan (as such term is defined in Section 3(3) of
ERISA) or any “plan” (as such term is defined in Section 4975(e)(1) of the
Code) which has been established or maintained or contributed to by such Lender
or an Affiliate that, together with such Lender, is treated as a single
employer under Section 414(b), (c) or (m) of the Code; and


ARTICLE IV


COVENANTS


Section 4.1.           Covenants
of the Borrower.  The
Borrower shall comply with the following covenants and agreements, unless the
Required Lenders shall otherwise consent:


(a)           Financial Statements and Other Information.  The Borrower will furnish to the
Administrative Agent and each Lender:


(i)            within
one hundred twenty (120) days after the end of each fiscal year of the
Borrower, a copy of the Form 10-K (excluding exhibits) filed by Holdings with
the SEC for such fiscal year (or in lieu of such copy an e-mail notice that
such report has been filed with the SEC and providing a web site address at
which such report may be accessed, provided that such e-mail notice will
satisfy this requirement only if such report is in fact accessible at such web
site address), or, if no such Form 10-K was so filed, its audited consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
Holdings’ independent public accountants of recognized national standing to the
effect that such consolidated financial statements present fairly in all
material respects the consolidated financial condition and results of
operations of Holdings and its Subsidiaries (including the Borrower) on a
consolidated basis in accordance with GAAP;


(ii)           within
sixty (60) days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, a copy of the Form 10-Q (excluding exhibits)
filed by Holdings with the SEC for such quarterly period (or in lieu of such
copy an e-mail notice that such report has been filed with the SEC and providing
a web site address at which such report may be accessed, provided that
such e-mail notice will satisfy this requirement only if such report is in fact
accessible at such web site address), or if no such Form 10-Q was so filed, its
consolidated balance sheet and related statements of operations and cash flows
as of the end of and for such fiscal quarter (in the case of the statement of
operations) and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, prepared in accordance with GAAP, subject to normal
year-end audit adjustments; and



 12
 








(iii)        promptly following any request therefor,
such other nonconfidential information regarding the Aircraft, the operations,
business affairs and financial condition of the Borrower, or compliance with
the terms of the Transaction Documents, as the Administrative Agent may
reasonably request.


(b)        Existence; Conduct of
Business.  The Borrower will,
and will cause each of its Subsidiaries to:


(i)          do or cause to be done all things
necessary to preserve and maintain its legal existence; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 4.1(c); provided  further
that this Section 4.1(b)(i) shall apply to the Subsidiaries of Borrower, if
any, only to the extent that the dissolution, termination or other loss of
legal existence of such Subsidiaries would reasonably be expected to (either
individually or in the aggregate) cause a material impairment of the ability of
the Borrower to perform, or the Security Agent, the Administrative Agent or the
Lenders to enforce, the obligations of the Borrower under the Transaction
Documents.


(ii)         comply with the requirements of all
applicable laws, rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements would reasonably be
expected to (either individually or in the aggregate) cause a material
impairment of the ability of the Borrower to perform, or the Security Agent,
the Administrative Agent or the Lenders to enforce, the obligations of the
Borrower under the Transaction Documents;


(iii)        pay and discharge all Taxes imposed on
it or on its income or profits or on any of its property prior to the date on
which penalties attach thereto, except for any such Taxes the payment of which
are being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained, and the nonpayment of which (either
individually or in the aggregate) could reasonably be expected to cause a
material impairment of the ability of the Borrower to perform, or the Security
Agent, the Administrative Agent or the Lenders to enforce, the obligations of
the Borrower under the Transaction Documents; and


(iv)       permit representatives of any Lender,
during normal business hours and on reasonable notice, to discuss its business
and affairs and that of its Subsidiaries with the Borrower’s officers, all to
the extent reasonably requested by such Lender.


(c)         Mergers and
Consolidations.  The Borrower
will not consolidate with or merge into any other Person or convey, transfer or
lease all or substantially all of its assets as an entirety to any Person
unless:


(x)        if the Borrower is not the surviving
Person,



 13
 








(i)          the Person formed by such
consolidation or into which the Borrower is merged or the Person which acquires
by conveyance, transfer or lease substantially all of the assets of the
Borrower as an entirety shall be a U.S. Air Carrier;


(ii)         the Person formed by such consolidation
or into which the Borrower is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of the Borrower
as an entirety shall execute and deliver to the Security Agent a duly
authorized, valid, binding and enforceable agreement, in form and substance
reasonably satisfactory to the Security Agent, the Administrative Agent and the
Lenders, containing an assumption by such Person of the due and punctual
performance and observance of each covenant and condition of the Transaction
Documents to be performed or observed by the Borrower;


(iii)        immediately after giving effect to such
transaction, no Event of Default shall have occurred and be continuing;


(iv)       all filings and registrations shall have
been made as shall be necessary to preserve the perfection of the Lien of the
Security Agreement on the Aircraft on a first priority and perfected basis
(subject to Permitted Liens); and


(v)        promptly after the consummation of such
transaction, the Borrower shall deliver to the Security Agent a certificate of
the Secretary or an Assistant Secretary of Borrower certifying as to Borrower’s
compliance with the conditions of this Section 4.1(c) and an opinion of
Borrower’s Legal Department or its outside counsel as to Borrower’s compliance
with Sections 4.1(c)(i), 4.l(c)(ii) and 4.1(c)(iv, and


(y)        if the Borrower is the surviving Person,
immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing..


Upon any consolidation or merger, or any conveyance, transfer or lease
of all or substantially all of the assets of the Borrower as an entirety in
accordance with this Section 4.1(c), the Person formed by such consolidation or
into which the Borrower is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Borrower under this Agreement and the other Transaction
Documents with the same effect as if such Person had been named as the Borrower
herein.  No such conveyance, transfer or
lease of all or substantially all of the assets of the Borrower as an entirety
shall have the effect of releasing the Borrower or any Person which shall
theretofore have become such in the manner prescribed in this Section 4.1(c)
from the Borrower’s liability in respect of any Transaction Document to which
it is a party.



 14
 








(d)           Delivery of Post-Recording FAA Opinion and Post-Registration IR
Opinion.  Promptly upon the
recording of the FAA Bill of Sale and the Security Agreement covering the
Aircraft pursuant to the Federal Aviation Act and the registration with the
International Registry of the international interests in the Airframe and
Engines created by the Security Agreement, the Borrower will cause special FAA
counsel in Oklahoma City, Oklahoma, to deliver to the Security Agent, the
Administrative Agent and each Lender and the Borrower an opinion as to the due
and valid registration of the Aircraft by the FAA in the name of the Borrower,
the due recording of the Security Agreement and the lack of filing of any
intervening documents with respect to the Aircraft at the FAA, and the valid
registration of the international interests in the Airframe and Engines created
by the Security Agreement with the International Registry.


(e)           Compliance with the Security Agreement.  The Borrower will comply with the terms and
provisions of the Security Agreement.


(f)            Notice of Default under PBH Agreement.  The Borrower agrees to use its best efforts
to provide notice to the Administrative Agent of an event of default under and
as defined in the PBH Agreement promptly after receiving Actual Knowledge
thereof.


ARTICLE V


INCREASED COSTS; GENERAL
INDEMNITY


Section 5.1.           Increased
Costs.  The Borrower
shall pay to each Lender (through the Administrative Agent) from time to time,
within ten (10) Business Days after demand therefor, such additional amount or
amounts as may be necessary to compensate such Lender on a net After-Tax Basis
for any increased costs incurred by such Lender which are attributable to its
making or maintaining its Percentage Share or its Ratable Share of the Loan
hereunder, or any reduction in any amount receivable by such Lender under this
Agreement in respect of the Loan (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), resulting
from any change after the date hereof in U.S. federal, state, municipal, or
foreign or supranational laws or regulations (including Regulation D of the
Board of Governors of the Federal Reserve System), or the adoption or making
after the date hereof of any interpretations, directives, or requirements
applying to a class of banks including such Lender under any U.S. federal,
state, municipal, or any foreign laws or regulations (whether or not having the
force of law) by any court, central bank or monetary authority charged with the
interpretation or administration thereof (a “Regulatory Change”), which
imposes or modifies any reserve, special deposit, compulsory loan or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with other liabilities of, such Lender (including its Percentage Share
or its Ratable Share of the Loan or any deposits referred to in the definition
of LIBOR Rate or related definitions) which is not otherwise included in the
determination of the applicable interest rate hereunder.


Each Lender will notify the Borrower of any event
occurring after the date of this Agreement that will entitle such Lender to
compensation pursuant to this Section 5.1 as promptly as practicable, but in
any event within sixty (60) days, after such Lender obtains Actual Knowledge
thereof; provided, however, that such Lender shall be entitled to
payment under this Section 5.1 only for costs incurred from and after the date
sixty (60) days prior to the date that such Lender makes demand therefor; provided,
further that no compensation shall be payable by the Borrower to any
Lender pursuant to this Section 5.1 unless such Lender certifies to the



 15
 








Borrower that (x) such
Lender is assessing to its other borrowers (of loans similar to the Loans)
comparable allocable costs, and (y) such Lender believes that such costs are
generally applicable to lenders similarly situated to and in the same
jurisdiction as such Lender.  Such notice
shall describe in reasonable detail the calculation of the amounts owed under
this Section.  Determinations by a Lender
for purposes of this Section 5.1 of the effect of any Regulatory Change on its
costs of making or maintaining its Percentage Share or its Ratable Share of the
Loan or on amounts receivable by it in respect of the Loan, and of the
additional amounts required to compensate such Lender in respect of any
Additional Costs, shall be prima facie
evidence of the amount owed under this Section 5.1.


Any assignee of a Lender that is not an initial Lender
party to this Loan Agreement shall not be entitled to any greater compensation
under this Section 5.1 by reference to the laws and regulations in effect
as of the date the transfer or sale than that which would have been payable to
the transferor Lender as of the date of the transfer or sale of the Note to
such transferee Lender; provided, however, that, if subsequent to
the date of transfer or sale of the Note there occurs a Regulatory Change, such
transferee Lender shall be entitled to compensation under this Section 5.1 as a
result of such Regulatory Change.


Section 5.2.           Capital
Adequacy.  If (1) the
adoption, after the date of this Loan Agreement, of any applicable governmental
law, rule or regulation regarding capital adequacy, (2) any change, after the
date of this Loan Agreement, in the interpretation or administration of any
such law, rule or regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof or (3)
compliance by a Lender or any corporation or bank controlling a Lender with any
applicable guideline or request of general applicability, issued after the date
of this Loan Agreement, by any central bank or other Governmental Authority
(whether or not having the force of law) that constitutes a change of the
nature described in clause (2) (“Capital Adequacy Change”), has the
effect of (x) requiring an increase in the amount of capital required to
be maintained by a Lender or any corporation or bank controlling a Lender or
(y) reducing the rate of return on assets or capital of such Lender (or
such corporation or bank) and such adoption, change or compliance, as the case
may be, relates to a category of claims or assets that includes such Lender’s
Loan Amount, the Borrower shall pay to such Lender from time to time such
additional amount or amounts as are necessary to compensate such Lender for
such portion of such increase or reduction as shall be reasonably allocable to
such Lender’s Loan Amount; provided, that no such amounts shall be
payable by the Borrower to any Lender pursuant to this Section 5.2 unless
such Lender certifies to the Borrower that (A) such Lender is assessing to its
other borrowers (of loans similar to the Loan) comparable allocable costs, and
(B) such Lender believes that such costs are generally applicable to lenders
similarly situated to and in the same jurisdiction as such Lender.  For the avoidance of doubt, the matters set
forth in the Consultative Document titled “The New Basel Capital Accord” issued
by the Basel Committee on Banking Supervision in April 2003 will not be
treated, for purposes of determining whether any Lender is entitled to
compensation under this Section 5.2, as having been enacted or having come into
effect before the date of this Loan Agreement.


Each Lender will notify the Borrower of any event
occurring after the date of this Agreement that will entitle such Lender to
compensation pursuant to this Section 5.2 as promptly as practicable but in any
event within sixty (60) days, after such Lender obtains Actual Knowledge
thereof; provided, however, such Lender shall be entitled to
payment under this



 16
 








Section 5.2 only for
costs incurred from and after the date sixty (60) days prior to the date that
such Lender makes demand therefor.  Such
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section.  Determinations by a
Lender for purposes of this Section 5.2 of the effect of any increase in the
amount of capital required to be maintained by the bank and of the amount
allocable to such Lender’s obligations to the Borrower hereunder shall be prima facie evidence of the amounts owed under this Section.


Any assignee of a Lender that is not the initial
Lender party to this Loan Agreement shall not be entitled to any greater
compensation under this Section 5.2 by reference to the laws, rules and
regulations regarding capital adequacy in effect as of the date of the transfer
or sale than that which would have been payable to the transferor Lender as of
the date of the transfer or sale of the Note to such transferee Lender; provided,
however, that, if subsequent to the date of transfer or sale of the Note
there occurs a Capital Adequacy Change, such transferee Lender shall be
entitled to compensation under this Section 5.2 as a result of such Capital
Adequacy Change.


Section
5.3.                                Withholding
of Taxes.


(a)            Payments to Be Free and Clear.  All sums payable by the Borrower (or by any
other Person on account of any obligation of the Borrower) under this Agreement
and the other Transaction Documents to or for the benefit of any Lender, the
Administrative Agent, the Security Agent or any other Indemnitee shall (except
to the extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Taxes.


(b)            Grossing-up of Payments. 
If the Borrower or any other Person is required by law to make any
deduction or withholding on account of any Tax from any sum paid or payable by
the Borrower (or by any other Person on account of any obligation of the
Borrower) under any of the Transaction Documents to or for the benefit of any
Lender, the Administrative Agent, the Security Agent or any other Indemnitee:


(i)             the
Borrower shall pay such Tax before the date on which any interest, addition to
Tax or penalties attach thereto, such payment to be made (if the liability to
pay is imposed on the Borrower) for its own account or (if that liability is
imposed on the Administrative Agent, the Security Agent or such Lender, as the
case may be) on behalf of and in the name of the Administrative Agent, the
Security Agent or such Lender;


(ii)            in
the case of any Tax other than an Excluded Tax, the sum payable by the Borrower
(or by any other Person on account of any obligation of the Borrower under the
Transaction Documents) in respect of which the relevant deduction, withholding
or payment is required shall be increased or supplemented by the Borrower to
the extent necessary to ensure that, after the making of that deduction or
withholding, the Administrative Agent, the Security Agent, such Lender or such
other Indemnitee, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or payment
been required or made; and



 17















(iii)          as promptly as practicable (and in any
event within sixty (60) days) after the payment of the sum from which such
deduction or withholding is required by law, the Borrower shall deliver to the
Administrative Agent evidence reasonably satisfactory to the affected parties
of such deduction or withholding and of the remittance thereof to the relevant
taxing or other authority.


Any additional amount
payable in respect of Taxes pursuant to clause (ii) above shall be paid on an
After-Tax Basis.


(c)           Evidence of Exemption from
U.S. Withholding Tax.


(i)            Each Lender that is organized under
the laws of a jurisdiction other than the United States or any state or other
political subdivision thereof shall, to the extent it is entitled to do so,
deliver to the Administrative Agent for transmission to the Borrower, on or
prior to the date of the Closing (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the Transfer Supplement
pursuant to which it becomes a Lender (in the case of each other Lender), (x)
two copies of Internal Revenue Service Form W-8BEN or W-8ECI (or applicable
successor forms), completed and executed by such Lender, together with any
other certificate or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such Lender is
entitled to an exemption or reduction in the amount of United States federal
income tax required to be deducted or withheld from any payments to such Lender
of interest, fees or other amounts payable under any of the Transaction
Documents or (y) if such Lender is not a “bank” or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form W-8BEN claiming exemption under a treaty or
W-8ECI, pursuant to clause (x) above, a Certificate re Non-Bank Status together
with two copies of Internal Revenue Service Form W-8BEN (or applicable
successor form), completed and executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such Lender is entitled
to an exemption from, or reduction in the amount of, United States federal
income tax required to be withheld from payments to such Lender of interest
payable under any of the Transaction Documents.


Each Lender that is
organized under the laws of the United States or any state or other political
subdivision thereof shall deliver to the Administrative Agent for transmission
to the Borrower, at or prior to the Closing (in the case of each Lender listed
on the signature pages hereof) or on or prior to the date of the Transfer
Supplement pursuant to which it becomes a Lender (in the case of each other
Lender), two copies of Internal Revenue Service Form W-9 (or applicable
successor form) completed and executed by such Lender.


(ii)           Each Lender required to deliver any
forms, certificates or other evidence with respect to United States federal
income tax withholding matters pursuant to Section 5.3(c)(i) hereby agrees,
from time to time after the initial



 18
 









delivery by such Lender
of such forms, certificates or other evidence, if reasonably requested in good
faith by the Borrower, to the extent such Lender is entitled to do so, to
deliver to the Administrative Agent for transmission to the Borrower two new
copies of Internal Revenue Service Form W-8BEN or W-8ECI or W-9, or a
Certificate re Non-Bank Status and two new copies of Internal Revenue Service
Form W-8BEN, as the case may be, completed and executed by such Lender,
together with any other certificate or statement of exemption required in order
to confirm or establish that such Lender is entitled to an exemption from, or
reduction in the amount of, United States federal income tax required to be
withheld from payments to such Lender under the Transaction Documents or (y)
notify the Administrative Agent and the Borrower of its inability to deliver
any such forms, certificates or other evidence in which case such Lender shall
not be required to deliver any such form or certificate pursuant to this
Section 5.3(c).


(iii)          The Borrower shall not be required to
pay any additional amount to any Lender under clause (ii) of Section 5.3(b) if
such Lender shall have failed to satisfy the requirements of clause (i) or
(ii)(x) of this Section 5.3(c); provided that if such Lender shall have
satisfied the requirements of Section 5.3(c)(i) at or prior to the Closing (in
the case of each Lender listed on the signature pages hereof) or on the date of
the Transfer Supplement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this Section 5.3(c)(iii) shall relieve the
Borrower of its obligation to pay any additional amounts pursuant to Section
5.3(b) in the event that, as a result of any written change in any applicable
law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof by a Governmental
Authority, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described in Section 5.3(c)(i) or
(ii).


(iv)          If the Borrower pays any additional
amount under this Section 5.3 to a Lender and such Lender determines in its
sole discretion (exercised in good faith) that it has actually realized in
connection therewith a net cash benefit (including a net cash benefit which the
relevant taxing authority applies to satisfy any liability of such Lender for
Excluded Taxes) due to any refund or any reduction of, or credit against, its
liabilities for Excluded Taxes in any taxable year, provided no Event of
Default (or an event described in Section 7.1(b) or (f) which, after notice or
lapse of time, or both, would become an Event of Default) shall have occurred
and be continuing, such Lender shall, to the extent it can do so without
prejudice to the retention of such benefit, pay to the Borrower an amount that
the Lender shall, in its sole discretion, determine (subject to confirmation as
provided below) is equal to such net cash benefit which was obtained by the
Lender in such year as a consequence of such refund, reduction or credit
realized in connection with the payment of such additional amount.  A Lender shall, upon written request from the
Borrower, provide to the Borrower a letter from independent accountants
selected by the Lender and reasonably acceptable to the Borrower confirming the
accuracy of the Lender’s calculations



 19
 









of any amount due pursuant to the next-to-last
sentence of Section 5.3(b), or the amount of any net benefit determined by
Lender pursuant to the preceding sentence, provided that the
interpretation of this Agreement or any other Transaction Document shall not be
within the scope of the accountants’ confirmation.  Nothing contained in this Section 5.3(c)(iv)
shall be construed as requiring any Lender to conduct its business or arrange
or alter in any respect its tax or financial affairs so that it is entitled to
receive a refund, reduction or credit or shall require any Lender to provide to
the Borrower or its agents copies of any tax returns or other information with
respect to the Lender’s income, assets or operations. The Borrower shall
reimburse each Lender for all costs and expenses incurred by such Lender in
obtaining such accountants’ letter, provided that the accountants’
letter confirms, in all material respects, such Lender’s determination.


(v)           The
Borrower shall have no obligation to pay to any Lender any additional amount
under Section 5.3(b)(ii) or to indemnify any Lender under Section 5.4 for any
United States federal income tax or withholding tax which was required by law
to be deducted or withheld by the Borrower or the Administrative Agent from any
prior payment to or for the benefit of such Lender pursuant to the Transaction
Documents but which was not deducted or withheld due to the Borrower’s or the
Administrative Agent’s reasonable reliance on an Internal Revenue Service Form
W-8BEN or W-8ECI or W-9 (or applicable successor form) theretofore delivered by
such Lender pursuant to Section 5.3(c)(i) or (ii) if such form was inaccurate
in any material respect when delivered by such Lender and such Lender had
actual knowledge of such inaccuracy at the time such Lender delivered such
form.


Section 5.4.           (a)  Other Taxes. 
In addition to the amounts described elsewhere in this
Article V, the Borrower shall pay, and indemnify and hold harmless on a net
After-Tax Basis, each Lender, the Security Agent and the Administrative Agent
from and against all Other Taxes (other than (i) Taxes imposed by deduction or
withholding from amounts payable by the Borrower to the Security Agent, the
Administrative Agent or Lender, (ii) Excluded Taxes and (iii) Taxes imposed on
or with respect to a transfer (including a participation) of any interest in a
Loan unless such transfer is in connection with an Event of Default or at the
Borrower’s request).


(b)          Contest of Tax
Claims.  If a Lender, the
Security Agent or the Administrative Agent (each a “Tax Indemnitee”)
receives a written claim from any taxing authority for any Tax for which the
Borrower is liable pursuant to Section 5.3 or 5.4 (a “Tax Claim”), such
Tax Indemnitee shall promptly notify the Borrower in writing.  If requested by the Borrower in writing
within thirty (30) days after receipt of such Tax Indemnitee’s written notice (provided
that if a response to such Tax Claim is due less than forty (40) days after the
Borrower’s receipt of such Tax Indemnitee’s notice, the Borrower’s request must
be made within fifteen (15) days or, if longer, the period ending not later
than the tenth (10th) day before the day on which the response to
such Tax Claim is due), such Tax Indemnitee shall in good faith contest or, at
such Tax Indemnitee’s election, permit the Borrower to contest (unless such
contest involves Excluded Taxes or, in such Tax Indemnitee’s reasonable, good
faith judgment, permitting the Borrower to contest may have an adverse effect
on such Tax Indemnitee), in each case in accordance



 20
 









with and to the extent permitted by applicable law and
at the Borrower’s expense, such Tax Claim, provided that no Tax Indemnitee shall have any obligation to
commence or continue the contest of any such Tax Claim unless the following
conditions are satisfied at the time the contest is to be commenced and at all
times during the contest:


(i)            no
Event of Default (or event described in Section 7.1(b) or (f) which, after
notice or lapse of time, or both, would become an Event of Default) shall have
occurred and be continuing,


(ii)           contesting
such Tax Claim would not result in (A) any risk of sale, forfeiture,
confiscation, seizure or loss of, or the imposition of a Lien (other than a
Lien for the Tax that is the subject of such contest, provided that
enforcement of such Lien is stayed until the final determination of such
contest and the Borrower maintains adequate reserves with respect to such Lien)
on, the Aircraft or any part thereof or (B) any risk of imposition of criminal
liability,


(iii)          the
aggregate amount of the Taxes that are to be contested exceeds Twenty-Five
Thousand Dollars ($25,000),


(iv)          such
Tax Indemnitee shall have received a written confirmation of the Borrower that
the Taxes that are the subject of such Tax Claim are Taxes for which the
Borrower is liable pursuant to Section 5.3 or 5.4, provided that the
Borrower shall not be bound by such confirmation to the extent that the final
determination of the contest demonstrates that the Taxes that are the subject
of such Tax Claim are Excluded Taxes,


(v)           the
Borrower, upon the written request of such Tax Indemnitee, shall have provided
such Tax Indemnitee, at the expense of the Borrower, with an opinion of counsel
selected by the Borrower and reasonably acceptable to such Tax Indemnitee to
the effect that there is a substantial basis in law and fact to contest such
Tax Claim and a realistic expectation that a contest of such Tax Claim would be
successful,


(vi)          if
such Tax Indemnitee decides to contest such Tax Claim by paying the Taxes that
are the subject of such Tax Claim and taking action to obtain a refund thereof,
the Borrower shall have made an interest-free advance to such Tax Indemnitee in
an amount equal to the amount of those Taxes and shall indemnify such Tax Indemnitee
and its Affiliates on an After-Tax Basis for any adverse Tax consequences
(taking into account all relevant Tax benefits and Tax detriments) to such Tax
Indemnitee or any of its Affiliates resulting from such interest-free advance,
and


(vii)         the
Borrower shall be paying, on demand and on an After-Tax Basis, all costs and
expenses incurred by such Tax Indemnitee, the Security Agent, the
Administrative Agent or any Lender in connection with the conduct of such
contest (including, without limitation, reasonable attorneys’ and accountants’
fees and disbursements).



 21
 









(c)           Non-Parties.  If a Tax Indemnitee is not a party
to this Agreement, the Borrower may require such Tax Indemnitee to agree in
writing to the terms of Sections 5.3 and 5.4 prior to making any payment to
such Tax Indemnitee under Section 5.3 or 5.4.


Section
5.5.           Indemnity.  (a)  Indemnity Obligation. 
The Borrower agrees to indemnify and hold harmless each Lender, the Security
Agent, the Administrative Agent, and their respective successors, assigns,
directors, officers, employees and agents (hereinafter in this Section 5.5
referred to individually as an “Indemnitee,” and collectively as “Indemnitees”)
on an After-Tax Basis against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, suits, judgments and any and all
costs and expenses (including reasonable attorneys’ fees, disbursements and
other charges) (for the purposes of this Section 5.5 the foregoing are
collectively called “Losses”) of whatsoever kind and nature imposed on,
asserted against or incurred or suffered by any of the Indemnitees arising out
of or by reason of any actual or threatened investigation, litigation, or other
similar proceedings relating to the Security Agreement or the exercise or enforcement
by the Security Agent of any of the terms, rights, or remedies thereunder, or
in any way relating to or arising out of the manufacture, ownership, ordering,
purchase, delivery, control, acceptance, lease, possession, operation,
condition, sale, return or other disposition, or use of the Estate (including
latent or other defects, whether or not discoverable), the violation of the
Laws of any country, state or other governmental authority with respect to or
arising otherwise in connection with the Estate, or any tort (including claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) with respect to or arising otherwise in connection with the Estate (but
excluding any such Losses to the extent incurred by reason of (i) the
gross negligence or willful misconduct of such Indemnitee or any related
Indemnitee (as defined below), (ii) Taxes, reserve requirements or similar
regulatory requirements imposed by banking authorities except as otherwise
provided in Sections 5.1, 5.2, 5.3 and 5.4 hereof, (iii) breaches by
such Indemnitee or any related Indemnitee of any Transaction Document to which
it is a party, (iv) any representation or warranty made by such Indemnitee
or any related Indemnitee being false in any material respect when made or
deemed made, or (v) to the extent attributable to the failure of the
Security Agent or the Administrative Agent to distribute funds received and
distributable by it in accordance any such Transaction Documents).  For purposes of subclauses (i), (iii) and
(iv) above, an Indemnitee shall be considered a “related” Indemnitee with
respect to another Indemnitee if such Indemnitee is an Affiliate or employer of
such other Indemnitee or a director, officer, employee or agent of such other
Indemnitee, or a successor or assignee of such other Indemnitee.


(b)          Indemnification Procedures.


(i)            Notice.  In case any
action, suit or proceeding shall be brought against any Indemnitee for which
such Indemnitee will seek indemnification under Section 5.5(a), such
Indemnitee shall notify the Borrower within sixty (60) days of the commencement
thereof and the Borrower (or its insurer(s)) may,



 22
 









subject to the
provisions of this Section 5.5, at its expense, participate in and to the
extent that it shall wish (subject to the provisions of the following
subsections), assume and control the defense thereof and, subject to
Section 5.5(b)(iii), settle or compromise the same.  Notwithstanding
the foregoing, the failure of any Indemnitee to notify the Borrower as provided
in this Section 5.5(b)(i) shall not release the Borrower from any of its
obligations to indemnify such Indemnitee hereunder, except to the extent that
such failure results in any additional Losses to the Borrower (in which event
the Borrower shall not be responsible for such additional Losses) or materially
impairs the Borrower’s ability to contest such claim.


(ii)           Control.  The Borrower or
its insurer(s) shall have the right, at its or their expense, to investigate
and, if the Borrower or its insurer(s) shall agree not to dispute liability to
the Indemnitee giving notice of such action, suit or proceeding under
Section 5.5(a) or under any insurance policies pursuant to which coverage
is sought, control the defense of any action, suit or proceeding relating to
any Losses for which indemnification is sought pursuant to this
Section 5.5, and each Indemnitee shall cooperate with the Borrower or its
insurer(s) with respect thereto; provided, that the Borrower shall not
be entitled to control the defense of any such action, suit, proceeding or
compromise any such Losses during the continuance of any Event of Default and
so long as no such cooperation shall entail a material risk of (A) criminal
liability of such Indemnitee, (B) unindemnified civil liability of such
Indemnitee or (C) the sale, loss, forfeiture or seizure of any part of the
Estate.  In connection with any such action, suit or proceeding being
controlled by the Borrower, such Indemnitee shall have the right to participate
therein, at its sole cost and expense.


(iii)          Settlement.  In no event
shall any Indemnitee enter into a settlement or other compromise with respect
to any Losses without the prior written consent of the Borrower, unless such
Indemnitee waives its right to be indemnified with respect to such Losses under
this Section 5.5.


(iv)          Cooperation.  Each
Indemnitee agrees to cooperate with the Borrower and its insurers in the
exercise of their rights to investigate, defend or compromise Losses for which
indemnification may be claimed hereunder.


(v)           Nonparties.  If an
Indemnitee is not a party to this Agreement, the Borrower may require such
Indemnitee to agree in writing to the terms of this Section 5.5 prior to making
any payment to such Indemnitee under this Section 5.5.


(vi)          No Requirement.  Nothing
contained in this Section 5.5(b) shall be deemed to require an Indemnitee to
assume responsibility for or control of any judicial proceeding with respect to
any Losses.



 23
 









ARTICLE
VI


CONDITIONS PRECEDENT


Section 6.1.           General
Conditions.  The
obligation of the Original Lender to make the Loan is subject to the conditions
that on or prior to the Funding Date (unless otherwise indicated):


(a)           The
Borrower shall have delivered to the Administrative Agent (with a copy for each
Original Lender) the following:


(i)            an executed counterpart of this
Agreement;


(ii)           an executed counterpart of the
Security Agreement;


(iii)          a Note (duly executed by the Borrower)
in an original principal amount equal to the Original Lender’s Commitment shall
have been issued to the Original Lender;


(iv)          the broker’s report and insurance
certificate required by Annex B of the Security Agreement;


(v)           copies of the FAA Bill of Sale,
Warranty Bill of Sale and FAA Application for Registration;


(vi)          a copy of the fully executed purchase
agreement respecting the Aircraft between the Borrower and the Seller showing
the amount of the purchase price paid by the Borrower;


(vii)         an opinion of Dow Lohnes PLLC, special regulatory
counsel to the Borrower, substantially in the form of Exhibit I.


(viii)        an opinion of Orrick, Herrington &
Sutcliffe LLP, special counsel to the Borrower, substantially in the form of
Exhibit D to this Agreement;


(ix)           an opinion of the Borrower’s in-house
counsel, substantially in the form of Exhibit E to this Agreement;


(x)            an opinion of FAA Counsel,
substantially in the form of Exhibit H to this Agreement;


(xi)           (1) a certificate of the Secretary or
an Assistant Secretary of the Borrower certifying (i) the resolutions of the
Borrower’s board of directors or executive committee of such board approving
the transactions contemplated by this Agreement, (ii) the name and signature of
each officer who executes a Transaction Document on the Borrower’s behalf (on
which certificate the Administrative Agent, the Security Agent and each Lender
may conclusively rely until a revised certificate is received), (iii) the
Borrower’s certificate of incorporation and (iv) a copy of the Borrower’s
By-Laws and (2) a good standing certificate of the Borrower from the
Secretary of State of the State of Delaware.



 24
 









(xii)          an Officer’s Certificate of the
Borrower, dated as of the Funding Date, stating that its representations and
warranties set forth in Sections 3.1 and 3.2 of this Agreement are true and
correct as of the Funding Date (or, to the extent that any such representation
and warranty expressly relates to an earlier date, true and correct as of such
earlier date); and


(xiii)         within ninety (90) days of the Closing,
the Borrower shall use its reasonable best efforts to procure that the PBH
Agreement Assignment shall have been executed and delivered in favor of the
Security Agent.


(b)           The
Borrower shall have paid to the Original Lender an upfront fee equal to the 25
basis points of the Loan.


(c)           On
the Funding Date, after giving effect to the filing of the FAA Filed Documents,
the Registrations and the Financing Statements, the Security Agent shall have
received a duly perfected first priority security interest in all of the
Borrower’s right, title and interest in the Aircraft, subject only to Inchoate
Liens, and a first priority international interest in the Aircraft and each
Engine.


(d)           No
change shall have occurred after the date of this Agreement in any applicable
law that makes it a violation of law for (a) the Borrower, the Security Agent,
the Administrative Agent or any Lender to execute, deliver and perform the
Transaction Documents to which any of them is a party or (b) any Lender to make
the Loans with respect to the Aircraft.


(e)           On
the Funding Date, no event shall have occurred and be continuing, or would
result from the transactions contemplated hereby, which constitutes an Event of
Default or a Potential Default.


(f)            No
Event of Loss (as defined in the Security Agreement) with respect to the
Airframe or any Engine shall have occurred and no circumstance, condition, act
or event that, with the giving of notice or lapse of time or both, would give
rise to or constitute an Event of Loss with respect to the Aircraft or any
Engine shall have occurred.


(g)           The
Borrower shall have good title to the Aircraft, free and clear of all Liens,
except Permitted Liens.


(h)           The
Security Trustee shall be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to the Aircraft as provided in the Security
Agreement in the event of a case under Chapter 11 of the Bankruptcy Code in
which the Borrower is a debtor.


(i)            On
the Funding Date (i) the FAA Filed Documents with respect to the Estate shall
have been duly filed for recordation (or shall be in the process of being so
duly filed for recordation) with the FAA in accordance with the Act, (ii) the
registrations of a prospective international interest relating to the Security
Agreement as to the Airframe and Engines (with no stated lapse date) (the “Registrations”) will have been
made and consented to with the International Registry between Borrower and
Security Agent, in favor of Security Agent, and there shall be no other registrations
with respect to the Airframe or either Engine, which remain effective, with the
International Registry, and (iii) the Financing Statements with respect to the
Estate shall have been duly filed (or shall be in the process of being so duly
filed) in the appropriate jurisdiction.



 25
 









(j)            No
action or proceeding shall have been instituted, nor shall any action be
threatened in writing, before any Governmental Authority, nor shall any order,
judgment or decree have been issued or proposed to be issued by any
Governmental Authority, to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or any other Transaction Document
or the transactions contemplated hereby or thereby.


(k)           The
representations and warranties in Sections 3.1 and 3.2 shall be true and
correct in all material respects on and as of such date (except to the extent
such representations and warranties relate solely to an earlier date but then
as of such earlier date).


ARTICLE
VII


EVENTS OF DEFAULT


Section 7.1.           Events
of Default.  Each of
the following events shall constitute an “Event of Default,”
and, to the extent the Cape Town Convention is applicable, shall be the
circumstances that shall constitute a “default” as referred to in Article 17(1)
of the Consolidated Text, in each case whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body:


(a)           The Borrower shall fail to make any
payment of principal of the Loan or Prepayment Fee on the due date thereof or
the Borrower shall fail to make any payment of interest on the loan within two
(2) days after the due date thereof; or


(b)           The Borrower shall fail to pay any
other amount payable hereunder or under any other Transaction Document when due
and such failure shall continue for a period of five (5) Business Days after
receipt by the Borrower of written notice that such payment is overdue given to
the Borrower by the Security Agent, the Administrative Agent or any Lender; or


(c)           Any representation or warranty made
by the Borrower herein or in any other Transaction Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, or in any
report, certificate or other document (other than financial statements and
other documents, including exhibits, filed with the SEC) prepared by the
Borrower and furnished pursuant to or in connection with this Agreement or any
other Transaction Document or any amendment or modification hereof or thereof
or waiver hereunder or thereunder shall prove to have been untrue in any
material respect when made or deemed made; or


(d)           The Borrower shall fail to perform or
observe any term, covenant or agreement contained in this Agreement or any
other Transaction Document on its part to be performed or observed and such
failure shall remain unremedied for a period of thirty (30) days after the
earlier of (i) Actual Knowledge of the Borrower or (ii) written notice thereof
is given to the Borrower by the Administrative Agent or any Lender; provided,
however, that if Borrower shall be diligently undertaking to cure any
such failure which



 26
 









as it relates to
maintenance, service, repair or overhaul of the Aircraft, the Engines or Parts
and, notwithstanding the diligence of Borrower in attempting to cure such
failure, such failure is not cured within said thirty-day period but is curable
with future due diligence, there shall exist no Event of Default under this Section
7.1 so long as Borrower is proceeding with due diligence to cure such failure
and such failure is remedied not later than ninety (90) days after such
original failure; or


(e)           The Borrower shall consent to the
appointment of or the taking of possession by a receiver, trustee or liquidator
of itself or of substantially all of its property, or the Borrower shall admit
in writing its inability to pay its debts generally as they come due, or does
not pay its debts generally as they become due or shall make a general
assignment for the benefit of creditors, or the Borrower shall file a voluntary
petition in bankruptcy or a voluntary petition or an answer seeking
reorganization, liquidation or other relief in a case under any bankruptcy laws
or other insolvency laws (as in effect at such time), or the Borrower shall
seek relief by voluntary petition, answer or consent, under the provisions of
any other bankruptcy or other similar law providing for the reorganization or
winding-up of corporations (as in effect at such time) or the Borrower’s board
of directors shall adopt a resolution authorizing any of the foregoing; or


(f)            An order, judgment or decree shall
be entered by any court of competent jurisdiction appointing, without the
consent of the Borrower, a receiver, trustee or liquidator of the Borrower or
of substantially all of its property, or substantially all of the property of
the Borrower shall be sequestered, and any such order, judgment or decree of
appointment or sequestration shall remain in force undismissed, unstayed and
unvacated for a period of sixty (60) days after the date of entry thereof; or a
petition against the Borrower in a case under any bankruptcy laws or other
insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed
within sixty (60) days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of corporations which may apply to
the Borrower, any court of competent jurisdiction assumes jurisdiction, custody
or control of the Borrower or of substantially all of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed and
unterminated for a period of sixty (60) days; or


(g)           The Borrower shall fail to carry and
maintain, or cause to be carried and maintained, insurance on and in respect of
the Aircraft or any Engine in accordance with the provisions of Article VII of
the Security Agreement; or


(h)           The Borrower shall cease to be a U.S.
Air Carrier; or


(i)            The Security Agreement shall for any
reason cease to be a valid first priority perfected security interest (subject
to Permitted Liens) in favor of the Security Agent in the Borrower’s right,
title and interest in and to the Aircraft under the laws of the United States
of America (assuming the Aircraft is registered with the FAA) and, if the
Aircraft is subject to a lease to a lessee domiciled in any other jurisdiction,
such jurisdiction.



 27















then, if an Event of Default referred to in clause (e) or (f) of this
Section 7.1 shall have occurred and be continuing, (x) the principal of the
Loan then outstanding, together with interest accrued but unpaid thereon, LIBOR
Breakage Costs and all other amounts owing to the Security Agent, the
Administrative Agent and any Lender hereunder or under any other Transaction
Document, shall immediately and without further act become due and payable, and
(y) the Commitments shall automatically terminate, in each case without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower and, if any other Event of Default shall have
occurred and be continuing, then the Administrative Agent shall, upon request
of the Required Lenders, by notice to the Borrower, terminate the Commitments
and declare the unpaid principal of the Loans then outstanding, together with
interest accrued but unpaid thereon, LIBOR Breakage Costs and all other amounts
due to the Security Agent, the Administrative Agent and any Lender hereunder or
under any other Transaction Document, to be forthwith due and payable,
whereupon the Commitments shall terminate and the Loans, all such interest and
all other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower. 
In addition to any other remedies available to the Security Agent, the
Administrative Agent and the Lenders under the Transaction Documents or at law
or otherwise, if an Event of Default shall have occurred and so long as the
same shall be continuing unremedied, then and in every such case the Security
Agent may exercise any or all of the rights and powers and pursue any and all
of the remedies set forth in the Security Agreement.


ARTICLE
VIII


THE
SECURITY AGENT AND THE ADMINISTRATIVE AGENT


Section 8.1.           Appointment
and Authorization. 
(a)  Each Lender hereby
irrevocably designates and appoints C.I.T. Leasing Corporation as the “Administrative
Agent” and C.I.T. Leasing Corporation as the “Security Agent”
(collectively, the “Agents”) under the Transaction Documents and
authorizes each Agent to take such actions and to exercise such powers as are
delegated to it thereby and to exercise such other powers as are reasonably
incidental thereto.  Neither Agent shall
have any duties other than those expressly set forth in a Transaction Document
or any fiduciary relationship with any Lender, and no implied obligations or
liabilities shall be read into this Agreement, or otherwise exist, against
either Agent.  Neither Agent assumes, nor
shall either Agent be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Borrower.  Notwithstanding any provision of this
Agreement or any other Transaction Document, in no event shall either Agent
ever be required to take any action which exposes it to personal liability or
which is contrary to the provision of any Transaction Document or applicable
law.


(b)           The
provisions of Articles X and XI of the Security Agreement are agreed by the
Lenders to set forth the duties and responsibilities, and limitations of
liability, of the Security Agent under the Security Agreement.


Section 8.2.           Delegation
of Duties.  Each of the
Agents may execute any of its duties through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties.



 28
 









Section 8.3.           Exculpatory
Provisions.  Neither
Agent and none of their respective directors, officers, agents or employees
shall be liable to any Lender for any action taken or omitted (i) with the
consent or at the direction of the Required Lenders or (ii) in the absence of
such Agent’s gross negligence or willful misconduct.  Neither Agent shall be responsible to any
Lender or other Person for (a) any recitals, representations, warranties or
other statements made by the Borrower or any of its Affiliates, (b) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any Transaction
Document, (c) any failure of the Borrower or any of its Affiliates to perform
any obligation or (d) the satisfaction of any condition specified in Article
VI.  Neither Agent shall have any
obligation to any Lender to ascertain or inquire about the observance or
performance of any agreement contained in any Transaction Document or to
inspect the properties, books or records of the Borrower or any of its
Affiliates.


Section 8.4.           Reliance
by Agents.  As between
either Agent and the Lenders, each of the Agents shall in all cases be entitled
to rely, and shall be fully protected in relying, upon any document, other
writing or conversation reasonably believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person and upon advice and
statements of legal counsel (including counsel to the Borrower or any of its
Affiliates), independent accountants and other experts selected by such
Agent.  Each of the Agents shall in all
cases be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence
of the Lenders, and assurance of its indemnification, as it deems
appropriate.  Subject to
Section 9.1, neither Agent shall effect any waiver or grant any consent or
make any determination (except as provided in Section 1.5(a)) without the
direction of the Required Lenders.


Section 8.5.           Notice
of Events of Default. 
Neither Agent shall be deemed to have knowledge or notice of the
occurrence of any Potential Default unless it has received notice from any
Lender or the Borrower stating that a Potential Default has occurred hereunder
and describing such Potential Default. 
Promptly upon receiving notice of the occurrence of any Potential
Default, the relevant Agent shall notify each Lender and the other Agent of
such occurrence.  The Agents shall take
such action concerning a Potential Default as may be directed by the Required
Lenders (or, if required for such action, all of the Lenders), but until an
Agent receives such directions, such Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, as such Agent deems
advisable and in the best interests of the Lenders.


Section 8.6.           Non-Reliance
on Agents and Other Lenders; Lender Representations.  Each Lender expressly acknowledges that
neither Agent and none of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by either Agent hereafter taken, including any
review of the affairs of the Borrower or any of its Affiliates, shall be deemed
to constitute any representation or warranty by such Agent.  Each Lender represents and warrants to each of
the Agents that, independently and without reliance upon either Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower and its own decision to
enter into this Agreement and to take, or omit, action under any Transaction
Document.  Except for items specifically
required to be delivered hereunder, neither Agent shall have any duty or



 29
 









responsibility to provide
any Lender with any information concerning the Borrower or any of its
Affiliates that comes into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.


Section 8.7.           Agents
and Affiliates.  Each
of the Agents and its Affiliates may extend credit to, accept deposits from and
generally engage in any kind of business with the Borrower or any of its
Affiliates and, in its role as a Lender, C.I.T. Leasing Corporation may
exercise or refrain from exercising its rights and powers as if it were not
Administrative Agent or Security Agent.


Section 8.8.           Indemnification.  Each Lender shall indemnify and hold harmless
each of the Agents and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably in accordance with its Percentage
Share (or, after the Commitments have been terminated, its Ratable Share) from
and against any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind
whatsoever (including in connection with any investigative or threatened
proceeding, whether or not such Agent or such Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against such Agent or such Person as a result of, or related to, any of the
transactions contemplated by the Transaction Documents or the execution,
delivery or performance of the Transaction Documents or any other document
furnished in connection therewith (but excluding any such liabilities,
obligations, losses, damages, penalties, judgments, settlements, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of such Agent or such Person as finally determined by a court of
competent jurisdiction).


Section 8.9.           Successor
Agents. 
(a)  The Security Agent may resign or be removed and shall be
replaced in accordance with the terms of Article XIII of the Security
Agreement.


(b)           Each
Agent may, upon at least thirty (30) days notice to the Borrower, the other
Agent and each Lender, resign its position as an Agent.  Such resignation shall not become effective
until a successor Agent acceptable to the Borrower is appointed by the Required
Lenders and has accepted such appointment. 
Upon such acceptance of its appointment as an Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations under the Transaction
Documents.  After any retiring Agent’s
resignation hereunder, the provisions of Article V and this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was an Agent.


ARTICLE
IX


MISCELLANEOUS


Section 9.1.           Amendments.  Neither this Agreement nor
any other Transaction Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Borrower and the Required Lenders, provided
that no such change, waiver, discharge or termination shall, without the
consent of each Lender affected thereby, (i) extend the final scheduled
maturity of



 30
 









the Loan or any Note, or
reduce the rate or extend the time of payment of interest or fees thereon, or
reduce the principal amount thereof, (ii) increase the Commitment of any
Lender, (iii) release any part of the Estate (except as expressly provided
in the Security Agreement), (iv) amend, modify or waive any provision of this
Section 9.1, (v) reduce the percentage specified in the definition of Required
Lenders, (vi) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (vii) impair any indemnity
under a Transaction Document in favor of such Lender; provided, further, that no such change, waiver, discharge or
termination shall without the consent of the relevant Agent, amend, modify or
waive any provision of Article VIII as same applies to either the Security
Agent or the Administrative Agent or any other provision as same relates to the
rights or obligations of such Agent.


Section 9.2.           Notices.  Unless otherwise specified,
all notices and other communications hereunder shall be in writing (including
by facsimile communication), given to the appropriate Person at its address or
facsimile number set forth on the signature pages hereof, or at such other
address or facsimile number as such Person may specify, and effective when
received at the address specified by such Person.  The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Security Agent, the consent of
each Person to which the Security Agent is required to forward such notice.


Section 9.3.           Costs
and Expenses.  The
Borrower agrees to pay promptly after receipt of reasonably detailed invoices,
all reasonable and actual costs and expenses of the Original Lender, the
Security Agent and the Administrative Agent in connection with the preparation,
execution and delivery of the Transaction Documents (whether or not any such
Transaction Document is entered into), including, without limitation the
reasonable fees and expenses of (a) Holland & Knight LLP, special counsel
to the Lenders and the Agents (provided that the Borrower shall not be
obligated to pay any amount in excess of $75,000 respecting such counsel’s
fees) and (b) FAA counsel.  The Borrower
further agrees to pay on demand all reasonable and actual costs and expenses of
the Agents, if any (including, without limitation, reasonable counsel fees and
expenses for one counsel), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Transaction Documents
after the occurrence of a Potential Default or an Event of Default.  The Borrower shall pay all reasonable and
actual costs and expenses of the Agents (including, without limitation,
reasonable counsel fees and expenses for one counsel) incurred after the
Closing in connection with any supplements or amendments of the Transaction
Documents (including, without limitation, any related recording and
registration costs) which are (x) requested by the Borrower, or
(y) necessary or required to effectuate the intent of the Transaction
Documents or waivers or consents requested by the Borrower


Section 9.4.           Certain
Agreements.  Each
Lender and each of the Security Agent and the Administrative Agent agrees as to
itself with the Borrower that, so long as no Event of Default shall have
occurred and be continuing, such person shall not (and shall not permit any
Affiliate or other person claiming by, through or under it to) take or cause to
be taken any action contrary to the Borrower’s right to quiet enjoyment of the
Estate, and to possess, use, retain and control the Estate and all revenues,
income and profits derived therefrom without hindrance.



 31
 









Section 9.5.           Entire
Agreement.  The
Transaction Documents constitute the entire understanding of the parties
thereto concerning the subject matter thereof. 
Any previous agreements, whether written or oral, concerning such
matters are superseded thereby.


Section 9.6.           Cumulative
Rights and Severability.  All
rights and remedies of the Lenders, the Security Agent and the Administrative
Agent hereunder and under any other Transaction Document shall be cumulative
and non-exclusive of any rights or remedies such Persons have under law or
otherwise.  To the fullest extent
permitted by law, any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


Section 9.7.           Waivers.  No failure or delay of any
party hereto in exercising any power, right, privilege or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right, privilege or remedy preclude any other or further
exercise thereof or the exercise of any other power, right, privilege or
remedy.  Any waiver hereof shall be
effective only in the specific instance and for the specific purpose for which
such waiver was given.  After any waiver,
each of the Borrower, the Lenders and, the Security Agent and the
Administrative Agent shall be restored to its former position and rights and
any Potential Default waived shall be deemed to be cured and not continuing,
but no such waiver shall extend to (or impair any right consequent upon) any
subsequent or other Potential Default.


Section 9.8.           Successors
and Assigns; Participations; Assignments.


(a)           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.  Except as otherwise provided
herein, the Borrower may not assign or transfer any of its rights or delegate
any of its duties without the prior consent of the Security Agent and the
Administrative Agent and each of the Lenders.


(b)           Participations.  Any Lender may sell to one or more Persons
(each a “Participant”) participating interests in the interests of such
Lender hereunder.  Such Lender shall
remain solely responsible for performing its obligations hereunder, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations hereunder.  Each Participant shall be entitled to the
benefits of Article V; provided that (x) such Participant shall not be
entitled to any greater benefit under Article V than the Lender that sold the
participating interest to the Participant would have been entitled to
thereunder, (y) the Borrower shall not be liable for the payment of amounts
under Article V in respect of the same event, condition or circumstance to
both the Lender that sold the participating interest to the Participant and the
Participant, and (z) no Participant shall be entitled to any benefit thereunder
unless it shall perform such obligations as are imposed on the Lenders under
Article V.  Any claim by such Participant
shall be derivative through the Lender that sold the participating interest to
it and no Participant shall have any direct rights as to the Borrower or
otherwise in respect of the Secured Obligations.  A Lender shall not agreewith a Participant to
restrict such Lender’s right to agree to any amendment, waiver or modification
hereto, except amendments described in the proviso to Section 9.1.



 32
 









(c)           Assignments.  Notwithstanding the foregoing, any Lender may
assign all or a portion of its Commitment and its outstanding Notes to a
Qualified Affiliate of such Lender or assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate face amount of Notes and
of such Commitment (and related Secured Obligations) to one or more Eligible
Assignees, each of which assignees referred to in this Section 9.8(c) shall
become a party to this Agreement as a Lender by execution of a supplement
hereto in the form of Exhibit F (a “Transfer Supplement”) hereto, provided
that such transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 9.8(d) hereof.  To the extent of any assignment pursuant to
this Section 9.8(c) (other than an assignment to a Qualified Affiliate pursuant
to the preceding sentence), the assigning Lender shall be relieved of its
obligations hereunder with respect to its assigned Commitment.  At the time of each assignment pursuant to
this Section 9.8(c) to a Person which is not already a Lender hereunder, the
respective assignee Lender shall provide to the Borrower and the Administrative
Agent the Internal Revenue Service forms (and, if applicable, a Certificate re
Non-Bank Status) required by Section 5.3 (c)(i).


(d)           Note Register.  The Borrower hereby designates the
Administrative Agent to serve as the Borrower’s agent, solely for purposes of
this Section 9.8(d), to maintain a register (the “Note Register”) on
which it will record the registered holder of the Notes and the registration of
transfers of Notes made pursuant to and in accordance with Section 9.8(c).  The Note Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice, and the Administrative Agent shall,
reasonably promptly after (a) any person becomes a Lender after the date hereof
and (b) any Lender alters or modifies its name or address, notify the Borrower
of and deliver to the Borrower a written update of the names and addresses of
all Lenders.  Failure to make any such
recordation or any error in such recordation shall not affect the Borrower’s
obligations in respect of the Loan Amount of any Lender.  With respect to any Lender, the transfer of
the Commitment of such Lender and the rights to the principal of, and interest
on, the Loan Amount made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Note Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loan
Amount and prior to such recordation all amounts owing to the transferor with
respect to such Commitment and Loan Amount shall remain owing to the
transferor.  The registration of
assignment or transfer of all or part of the Commitment and the Loan Amount
shall be recorded by the Administrative Agent on the Note Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Transfer Supplement.  Coincident with the
delivery of such a Transfer Supplement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan
Amount, or as soon thereafter as practicable, the assigning or transferor
Lender shall surrender the Notes evidencing such Loan Amount, and thereupon one
or more new Notes of the same series of Notes in the same aggregate principal
amount shall be issued by the Borrower to the assigning or transferor Lender
and/or the new Lender, as appropriate to reflect such assignment.



 33
 









Section 9.9.           Confidentiality.  None of the Security Agent, the
Administrative Agent or any Lender shall disclose any nonpublic information
relating to the Borrower (provided to it by the Borrower) or any Transaction
Document to any other Person without the consent of the Borrower, other than
(a) to such Agent’s or Lender’s Affiliates and its officers, directors,
employees, agents and advisors and, as contemplated by Section 9.8, to actual
or prospective assignees and participants, and then, in all such cases, only
with an undertaking by the party to whom such information is disclosed to keep
such information confidential, (b) as required by any law, rule or regulation
or judicial process, (c) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking, and (d) to the
extent reasonably necessary in connection with any dispute related to, or
enforcement of, the Transaction Documents.


Section 9.10.        Counterparts.  This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument..


Section
9.11.                         Governing
Law; Submission to Jurisdiction; Venue.


(a)           THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE
WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICT OF LAWS THAT MIGHT APPLY THE LAWS
OF ANY OTHER JURISDICTION.  Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
other Transaction Document, or for recognition or enforcement of any judgment,
and each of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement or the other
Transaction Documents against any other party hereto, or such party’s
properties, in the courts of any jurisdiction. 
Each party hereto further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
it at its address specified pursuant to Section 9.2, such service to become effective
thirty (30) days after such mailing.


(b)           Each
party hereto hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in clause (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.



 34
 









Section 9.12.        Waiver
of Trial by Jury.  EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


Section 9.13.        Headings   The headings of the various Articles and
Sections herein and in the table of contents hereto are for the
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.


 



 35














 


IN WITNESS WHEREOF,
the parties hereto have caused this Loan Agreement [28139] to be executed and
delivered by their duly authorized officers as of the date hereof.


	
  

  	
   

  	
  C.I.T. LEASING CORPORATION,

  
	
   

  	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Kathleen Park

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:     300 South
  Grand Avenue

  
	
   

  	
   

  	
  Los Angeles, CA
  90071

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:  Kathleen Park

  
	
   

  	
   

  	
  Telephone:  213-613-2532

  
	
   

  	
   

  	
  Facsimile:  213-613-3566

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.I.T. Leasing Corporation

  
	
   

  	
   

  	
  11 West 42nd Street, 12th Floor

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Chief Counsel

  
	
   

  	
   

  	
  Telephone: 212-461-5504

  
	
   

  	
   

  	
  Facsimile: 212-461-5402

  












 


	
  

  	
   

  	
  C.I.T. LEASING CORPORATION,

  
	
   

  	
   

  	
  as Security
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Kathleen Park

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:   300 South Grand Avenue

  
	
   

  	
   

  	
       Los
  Angeles, CA 90071

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Kathleen Park

  
	
   

  	
   

  	
  Telephone: 213-613-2532

  
	
   

  	
   

  	
  Facsimile: 213-613-3566

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.I.T. Leasing Corporation

  
	
   

  	
   

  	
  11 West 42nd Street, 12th Floor

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Chief Counsel

  
	
   

  	
   

  	
  Telephone: 212-461-5504

  
	
   

  	
   

  	
  Facsimile: 212-461-5402

  



 











 


	
  

  	
   

  	
  HAWAIIAN AIRLINES, INC.,

  
	
   

  	
   

  	
  as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:   3375 Koapaka Street

  
	
   

  	
   

  	
   Honolulu,
  HI 96819

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Executive Vice President, Chief

  
	
   

  	
   

  	
                   Financial
  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: 808-835-3030

  
	
   

  	
   

  	
  Facsimile:  808-835-3699

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Orrick, Herrington & Sutcliffe LLP

  
	
   

  	
   

  	
  777 S. Figueroa Street, Suite 3200

  
	
   

  	
   

  	
  Los Angeles, CA 90017

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Ronald W. Goldberg

  
	
   

  	
   

  	
  Telephone: 213-629-2020

  
	
   

  	
   

  	
  Facsimile: 213-612 2499

  



 











 


	
  

  	
   

  	
  C.I.T. LEASING CORPORATION,

  
	
   

  	
   

  	
  as Original
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Kathleen Park

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:  300 South Grand Avenue

  
	
   

  	
   

  	
   Los
  Angeles, CA 90071

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Kathleen Park

  
	
   

  	
   

  	
  Telephone: 213-613-2532

  
	
   

  	
   

  	
  Facsimile: 213-613-3566

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.I.T. Leasing Corporation

  
	
   

  	
   

  	
  11 West 42nd Street, 12th Floor

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Chief Counsel

  
	
   

  	
   

  	
  Telephone: 212-461-5504

  
	
   

  	
   

  	
  Facsimile: 212-461-5402