Exhibit
      10.62(a)







AMENDED
AND RESTATED SENIOR SECURED CREDIT AGREEMENT




Dated as
of September 3, 2008




among




MIDWEST
AIRLINES, INC.,




as the
Borrower,




MIDWEST
AIR GROUP, INC.,




as
Parent,




THE
SUBSIDIARIES OF




MIDWEST
AIRLINES, INC.,




as
Guarantors,









WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,




as
Administrative Agent and as Collateral Agent,









and




The
Lenders Party Hereto






















TABLE OF
CONTENTS











ARTICLE
      IDEFINITIONS AND
      ACCOUNTING TERMS





1.01
                Defined
      Terms
 1.02
                Other
      Interpretive Provisions
 1.03
                Accounting
      Terms
 1.04
                References
      to Agreements and Laws
 1.05
                Times
      of Day
 1.06
                Uniform
      Commercial Code.
 ARTICLE
  IITHE TERM COMMITMENTS
      AND TERM LOANS


2.01
                The
      Term Loans
 2.02
                Prepayments
 2.03
                Repayment
      of Term Loans
 2.04
                Interest
 2.05
                Computation
      of Interest
 2.06
                Evidence
      of Indebtedness
 2.07
                Payments
      Generally.
 2.08
                Sharing
      of Payments




ARTICLE
  IIITAXES






3.01
              Taxes
 3.02
              Matters
      Applicable to All Requests for
Compensation
 3.03
              Survival


ARTICLE
  IVCONDITIONS PRECEDENT
      TO TERM LOANS





4.01
                Amendment
      and Restatement Effective Date
Conditions
 4.02
                Milestone
      Achievement Date Conditions






ARTICLE
  VREPRESENTATIONS AND
      WARRANTIES






5.01
              Existence,
      Qualification and Power; Compliance with Laws; “Air Carrier
      Status”
 5.02
              Authorization;
      No Contravention
 5.03
              Governmental
      Authorization; Other Consents
 5.04
              Binding
      Effect
 5.05
              Financial
      Statements
 5.06
              Litigation
 5.07
              No
      Default
 5.08
              Ownership
      of Property
 5.09
              Environmental
      Compliance
 5.10
              Insurance
 5.11
              Taxes
 5.12
              ERISA
      Compliance
 5.13
              Subsidiaries;
      Equity Interests
 5.14
              Margin
      Regulations; Investment Company
Act;
 5.15
              Disclosure
 5.16
              Compliance
      with Laws
 5.17
              Intellectual
      Property; Licenses, Etc
 5.18
              Security/Priority
 5.19
              Slot
      Utilization
 5.20
              Representations
      and Warranties as to Collateral
 5.21
              Indebtedness
      and Guaranteed Indebtedness
 5.22
              Deposit
      Accounts


ARTICLE
  VIAFFIRMATIVE
      COVENANTS


6.01
              Financial
      Statements
 6.02
              Certificates;
      Other Information
 6.03
              Notices
 6.04
              Payment
      of Obligations
 6.05
              Preservation
      of Existence, Etc
 6.06
              Maintenance
      of Properties
 6.07
              Maintenance
      of Insurance
 6.08
              Compliance
      with Laws
 6.09
              Books
      and Records
 6.10
              Inspection
      Rights
 6.11
              Use
      of Proceeds
 6.12
              Further
      Assurances
 6.13
              Compliance
      with Terms of Gate Leaseholds
 6.14
              Cash
      Management System; Controlled Accounts; Initial
  Drawing
 6.15
              FAA
      and DOT Matters; Citizenship
 6.16
              Slot
      Utilization
 6.17
              Gate
      Utilization
 6.18
              Cape
      Town Convention
 6.19
              Payment
      of Taxes




ARTICLE
  VIINEGATIVE
      COVENANTS




7.01
              Liens
 7.02
              Investments
 7.03
              Indebtedness
 7.04
              Guarantees
      and Other Liabilities
 7.05
              Fundamental
      Changes
 7.06
              Dispositions
 7.07
              Restricted
      Payments
 7.08
              Change
      in Nature of Business
 7.09
              Transactions
      with Affiliates
 7.10
              Use
      of Proceeds
 7.11
              Amendments
      of Organization Documents
 7.12
              Changes
      in Fiscal Year
 7.13
              Prepayments,
      Etc. of Indebtedness
 7.14
              Partnerships,
      Etc
 7.15
              Speculative
      Transactions
 7.16
              Formation
      of Subsidiaries
 7.17
              Change
      in Capital Structure
 7.18
              Repayments
      of Reimbursement Obligations
 7.19
              Amendments
      to Reimbursement Agreement
 7.20
              Sales
      and Leasebacks
 7.21
              Negative
      Pledge Clauses
 7.22
              Clauses
      Restricting Subsidiary
Distributions




ARTICLE
    VIIIEVENTS OF DEFAULT
      AND REMEDIES






8.01
              Events
      of Default
 8.02
              Remedies
      upon Event of Default
 8.03
              Application
      of Funds


ARTICLE
  IXADMINISTRATIVE AGENT
      AND COLLATERAL AGENT







9.01
                Appointment
      and Authorization of Administrative Agent and Collateral
    Agent
 9.02
                Delegation
      of Duties
 9.03
                Liability
      of Administrative Agent and Collateral
Agent
 9.04
                Reliance
      by Administrative Agent and Collateral
Agent
 9.05
                Notice
      of Default
 9.06
                Credit
      Decision; Disclosure of Information by Administrative Agent and Collateral
      Agent
 9.07
                Indemnification
      of Administrative Agent and the Collateral
Agent
 9.08
                Successor
      Administrative Agent
 9.09
                Collateral
      and Guaranty Matters










ARTICLE
  XSECURITY


10.01
              Grant
      of Security
 10.02
              Further
      Assurances
 10.03
              Rights
      of Lender; Limitations on Lenders’
Obligations
 10.04
              Covenants
      of the Loan Parties with Respect to Pledged
  Collateral
 10.05
              Performance
      by Collateral Agent of the Loan Parties’
  Obligations
 10.06
              The
      Collateral Agent’s Duties
 10.07
              Remedies
 10.08
              Modifications
 10.09
              Release;
      Termination




ARTICLE
  XIGUARANTY






11.01
              Guaranty
 11.02
              Guaranty
      Absolute
 11.03
              Waivers
      and Acknowledgments
 11.04
              Subrogation
 11.05
              Continuing
      Guarantee; Assignments
 11.06
              No
      Reliance


ARTICLE
  XIIMISCELLANEOUS






12.01
              Amendments,
      Etc.
 12.02
              Notices
      and Other Communications; Facsimile
Copies
 12.03
              No
      Waiver; Cumulative Remedies
 12.04
              Attorney
      Costs, Expenses and Taxes
 12.05
              Indemnification
      by the Borrower
 12.06
              Payments
      Set Aside
 12.07
              Successors
      and Assigns
 12.08
              Setoff
 12.09
              Interest
      Rate Limitation
 12.10
              Counterparts
 12.11
              Integration
 12.12
              Survival
      of Representations and Warranties
 12.13
              TPG
      Entities as Lenders
 12.14
              Severability
 12.15
              Tax
      Forms
 12.16
              Governing
      Law
 12.17
              Waiver
      of Right to Trial by Jury
 12.18
              Binding
      Effect
 12.19
              Reaffirmation
      of Guaranty and Grant of Security
 12.20
              Consent
      of Existing Lenders
 12.21
              No
      Novation







SIGNATURES
            S-1















SCHEDULESI.
            Initial Pledged
      EquityII.
            Initial Pledged
      DebtIII.
            OmittedIV.
            Reimbursement
      Obligation Collateral Account2.01
            Term
      Commitments5.02
            Defaults5.03
            Certain
      Authorizations5.08(b)
            Existing
    Slots5.08(c)
            Airport Gate
      Leaseholds5.13
            Subsidiaries and
      Other Equity Investments5.17(d)
            Third Party Rights
      and IP Agreements5.20(a)(1)
            UCC
      Information5.20(a)(2)
            UCC Information
      Changes5.22
            Deposit
      Accounts7.01
            Liens7.03
            Existing
      Indebtedness7.06
            Permitted
      Dispositions12.02
            Administrative
      Agent’s Office; Certain Addresses for NoticesEXHIBITSA
            Form of Loan
      NoticeB
            Form of Term
      NoteC
            Form of Assignment
      and AssumptionD
            Form of Intellectual
      Property Security AgreementD-1
            Form of IP Security
      Agreement SupplementF
            Form of Slot
      Security AgreementG
            Form of Aircraft
      MortgageH
            Form of Spare Parts
      Security AgreementI
            Form of Airline
      Service Agreement














AMENDED
AND RESTATED SENIOR SECURED CREDIT AGREEMENT




This
AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (“Agreement”)
is entered into as of September 3, 2008, among MIDWEST AIRLINES, INC., a
Wisconsin corporation (the “Borrower”),
MIDWEST AIR GROUP, INC., a Wisconsin corporation (“Parent”),
each of the Subsidiaries of the Borrower from time to time party hereto
(together with the Parent and any future direct and indirect Subsidiaries of the
Borrower, the “Guarantors”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”)
and Wells Fargo Bank Northwest, National Association (“Wells
Fargo”), as administrative agent to the Lenders (together with its
successors in such capacity, the “Administrative
Agent”) and as collateral agent to the Lenders (together with its
successors in such capacity, the “Collateral
Agent”).




PRELIMINARY
STATEMENTS




1.           The
Borrower, the Guarantors, the lenders party thereto (the “Existing
Lenders”) and the Agents entered into the Senior Secured Credit Agreement
(the “Initial Credit
Agreement”), dated as of July 11, 2008 (the “Initial Closing
Date”) whereby the Existing Lenders extended certain senior secured term
loans to the Borrower on the Initial Closing Date in an aggregate principal
amount of $10,000,000 (the “Initial Term
Loans”);




2.           The
Borrower, the Guarantors, Northwest Airlines, Inc., a Minnesota corporation
(“Northwest”)
and the Collateral Agent entered into the Reimbursement Agreement (the “Initial
Reimbursement Agreement”), dated as of July 24, 2008, whereby the
Borrower agreed to reimburse Northwest for any draws upon the letter of credit
issued by U.S. Bank National Association (in such capacity, the “U.S.
Bank”) to and for the benefit of U.S. Bank National Association (in such
capacity, the “Processing
Bank”) in the stated amount of $10,000,000, with Northwest being the
account party in respect of such letter of credit, such letter of credit having
been issued in order to induce the Processing Bank to release to Midwest
$10,000,000 of cash collateral supporting certain contingent credit card
processing obligations of Midwest to the Processing Bank;




3.           The
Borrower, the Guarantors, Northwest and the Collateral Agent have entered into
the Amended and Restated Reimbursement Agreement, dated as of September 3, 2008
as amended, restated, amended and restated, replaced, supplemented or otherwise
modified from time to time,  “Reimbursement
Agreement”), amending and restating the Initial Reimbursement
Agreement;




4.           The
Borrower, the Guarantors, the Existing Lenders and the Agents entered into the
First Amendment to the Initial Credit Agreement (the “First
Amendment”), dated as of July 24, 2008 whereby the Existing Lenders
agreed to amend certain provisions of the Initial Credit Agreement in connection
with the Reimbursement Agreement and to allocate payments between the Existing
Lenders and Northwest;




5.           The
Borrower, the Guarantors, the Existing Lenders and the Agents entered into the
Second Amendment to the Initial Credit Agreement (the “Second
Amendment”), dated as of August 1, 2008 (the “Second Amendment
Effective Date”) whereby the Existing Lenders extended certain additional
senior secured term loans to the Borrower on the Second Amendment Effective Date
in an aggregate principal amount of $5,000,000 (the “Second Term
Loans”, and together with the Initial Term Loans, the “Existing Term
Loans”);




6.           The
Borrower, the Guarantors, the Existing Lenders and the Agents entered into the
Third Amendment to the Initial Credit Agreement (the “Third
Amendment”), dated as of August 11, 2008 whereby the Existing Lenders
agreed to amend certain provisions of the Initial Credit Agreement in connection
with the extension of the maturity date of the Initial Credit
Agreement.




7.           The
Borrower, the Guarantors, the Existing Lenders and the Agents entered into the
Fourth Amendment to the Initial Credit Agreement (the “Fourth
Amendment”, and the Initial Credit Agreement, as amended by the First
Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment,
the “Existing Credit
Agreement”), dated as of August 15, 2008 whereby the Existing Lenders
agreed to amend certain provisions of the Initial Credit Agreement as set forth
therein.




8.           TPG
Midwest US V, LLC, a Delaware limited liability company has resigned as
Administrative Agent under the Existing Credit Agreement and Wells Fargo has
been appointed, and has accepted such appointment, as successor Administrative
Agent pursuant to Section 9.09 of the Existing Credit Agreement and shall act in
the capacity of Administrative Agent hereunder until such time as it resigns
pursuant to Section 9.08 hereof.




9.           The
Borrower desires that Republic extend, and Republic is willing to provide,
additional Term Loans on the Amendment and Restatement Effective Date in an
aggregate principal amount not to exceed $15,000,000 on the terms and conditions
set forth herein;




10.           The
Borrower desires that Republic and the Existing Lenders extend, and Republic and
the Existing Lenders are willing to provide, additional Term Loans on the
Milestone Achievement Date in an aggregate principal amount not to exceed
$20,000,000 on the terms and conditions set forth herein;




11.           It
is a condition to Republic and the Existing Lenders entering into this Agreement
and making the additional Term Loans (as defined below) provided for herein that
(i) the obligations of the Borrower under the Airline Service Agreement and (ii)
the obligation of the Borrower to pay damages resulting from certain
terminations thereof in an aggregate amount not to exceed (x) for the period
from the Amendment and Restatement Effective Date until the thirtieth day
thereafter, $5,800,000; (y) for the period from the thirty-first day following
the Amendment and Restatement Effective Date until the forty-fifth day following
the Amendment and Restatement Effective Date, $8,000,000; and (z) thereafter,
$10,200,000 shall constitute Secured Credit Obligations of the Borrower
hereunder;




12.           The
parties hereto have agreed to amend and restate the Existing Credit Agreement as
provided herein; and




13.           It
is the intent of the parties hereto that this Agreement not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement which shall remain outstanding, or evidence repayment of any such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of the
Borrower and each Guarantor outstanding thereunder.




NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto hereby agree that on the
Amendment and Restatement Effective Date, the Existing Credit Agreement shall
be, and hereby is, amended and restated in its entirety as follows:










ARTICLE
      IDEFINITIONS AND
      ACCOUNTING TERMS









1.01  Defined
Terms .  As
used in this Agreement, the following terms shall have the meanings set forth
below:




“Administrative
Agent” has the meaning specified in the preamble.




“Administrative
Agent’s Office” means the Administrative Agent’s address as set forth on
Schedule 12.02,
or such other address as the Administrative Agent may from time to time notify
the Borrower and the Lenders.




“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.




“After-Acquired
Intellectual Property” has the meaning specified in Section
10.04(h)(vi).




“Agent-Related
Persons” means the Administrative Agent, the Collateral Agent, together
with their respective Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.




“Agents”
means the Administrative Agent and the Collateral Agent.




“Agreement”
has the meaning specified in the preamble.




“Aircraft
Mortgages” means each amended and restated aircraft mortgage and security
agreement executed and delivered pursuant to Section 4.01(a)(xiii).




“Airframes”
has the meaning specified in the Aircraft Mortgages.




“Airline Service
Agreement” means the airline service agreement in the form attached
hereto as Exhibit
I as in effect on the date hereof.




“Airline Service
Agreement Obligations Cap” means (i) for the period from the Amendment
and Restatement Effective Date until the thirtieth day thereafter, $5,800,000;
(ii) for the period from the thirty-first day following the Amendment and
Restatement Effective Date until the forty-fifth day following the Amendment and
Restatement Effective Date, $8,000,000; and (iii) thereafter,
$10,200,000.




“Airline Service
Agreement Obligations” means any payment obligations that are outstanding
and owed to Republic by the Borrower pursuant to the terms of the Airline
Service Agreement with respect to claims for liquidated or actual damages
resulting from the termination of the Airline Service Agreement (other than
termination pursuant to Section 8.02(a), Section 8.02(b), or Section 8.02(d),
thereof); provided that the
Airline Services Obligations shall not exceed the Airline Service Agreement
Obligations Cap.




“Airline Service
Agreement Rejection Event” means (x) the occurrence of an Event of
Default under Section 8.01(m) or Section 8.01(n) and (y) either (A) the Borrower
fails to file, with the applicable bankruptcy court, a motion to assume the
Airline Service Agreement within 45 days of the date of the occurrence of such
Event of Default or (B) the Airline Service Agreement is rejected under Section
365 of the United States Bankruptcy Code.




“Airline Service
Agreement Termination Date” means the earliest of (a) the eighteen month
anniversary of the Amendment and Restatement Effective Date (unless a Default or
an Event of Default of the type described in Section 8.02(p) hereof shall have
occurred and is continuing) and (b) the termination of the Airline Service
Agreement in accordance with its terms pursuant to Section 8.02(a), (b) or (d)
of the Airline Service Agreement.




“Amendment and
Restatement Effective Date” means the first date on which all of the
conditions precedent set forth in Section 4.01 are
satisfied or waived.




“American
Express” means American Express Travel Related Services Company,
Inc.




“American Express
Agreement” means the Agreement Governing Acceptance of the American
Express Card By Airlines dated as of January 1, 2003 (as amended, supplemented
or otherwise modified through the date hereof) among American Express and
Midwest Express Airlines, Inc.




“Applicable
Rate” means a per annum rate equal to 10.25%.




“Assignment and
Assumption” means an Assignment and Assumption substantially in the form
of Exhibit
C.




“Associated Bank
Control Agreement” means the Amended and Restated Deposit Account Control
Agreement, dated as of the Amended and Restated Closing Date, among the
Borrower, Skyway, the Collateral Agent and Associated Bank, National
Association.




“Attorney
Costs” means and includes all reasonable fees, expenses and disbursements
of any law firm or other external counsel.




“Audited Financial
Statements” means the audited consolidated balance sheet of Parent and
its Subsidiaries for the fiscal year ended December 31, 2007, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year of Parent and its Subsidiaries, including the notes
thereto.




“Bankruptcy
Code” means Chapter 11 of 11 U.S.C. §§ 101 et seq. (as heretofore
and hereafter amended).




“Borrower”
has the meaning specified in the introductory paragraph hereto.




“Business
Day” means any day other than a Saturday, Sunday or day on which banks in
New York City, New York are authorized or required by law to close.




“Business
Plan” has the meaning specified in Section
4.2(h).




“Cape Town
Convention” means the official English language text of the Cape Town
Convention on International Interests in Mobile Equipment and the Cape Town
Protocol to the Convention on International Interests in Mobile Equipment on
Matters Specific to Aircraft Equipment prepared under the joint auspices of the
International Institute for the Unification of Private Law and the International
Civil Aviation Organization, which was signed in Cape Town South Africa on
November 16, 2001.




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




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




“Cash
Equivalents” means any of the following types of Investments, to the
extent owned by any Loan Party free and clear of all Liens (other than Liens
created under the Collateral Documents):




(i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency or
instrumentality of the United States the obligations of which are backed by the
full faith and credit of the United States, in each case maturing no more than
180 days after such date; (ii) commercial paper issued by domestic corporations
or institutions, states or municipalities maturing no more than 180 days after
such date if such commercial paper, at the time of the acquisition thereof, has
a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii)
certificates of deposit or bankers’ acceptances maturing no more than 180 days
after such date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia that (a) is at least “adequately capitalized” (as
defined in the regulations of its primary Federal banking regulator) and (b) has
net assets of not less than $1,000,000,000 and that has a rating of at least AA
from S&P or at least Aa from Moody’s; and (iv) shares of any money market
mutual fund registered with the SEC under Rule 2a-7 that guarantees 100% same
day liquidity and has net assets not less than
$1,000,000,000.




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




“CERCLIS”
means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection
Agency.




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




“Change of
Control” means an event or series of events by which:




(a) Parent
ceases to be the direct owner of record and the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) of 100% of
the Equity Interests of Borrower; or




(b) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) other than any Permitted Holder becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has a right
acquire (such right, an “option
right”), whether such option right is exercisable immediately or only
after the passage of time), directly or indirectly, of 20% or more of the voting
power or economic interests of the Equity Interests of Borrower, Parent, Midwest
Management Holdings, LLC, a Delaware limited liability company or Midwest Air
Partners, LLC,  a Delaware limited liability company (and taking into
account all such securities that such person or group has the right to acquire
pursuant to any option right).




“Code”
means the Internal Revenue Code of 1986.




“Collateral”
means all of the “Collateral” referred to in
the Collateral Documents, the Pledged Collateral, and all of the other property
and assets that are or are intended under the terms of the Collateral Documents
to be subject to Liens in favor of the Collateral Agent for the benefit of the
Secured Parties, which property and assets shall not include the Excluded
Assets.




“Collateral
Agent” has the meaning specified in the preamble.




“Collateral
Documents” means, collectively, the provisions of Article X of this
Agreement, the Intellectual Property Security Agreement, the Aircraft Mortgages,
the Slot Security Agreement, the Spare Parts Security Agreement, IP Security
Agreement Supplements, the Associated Bank Control Agreement, and each of the
other agreements, instruments or documents that creates or purports to create a
Lien in favor of the Collateral Agent for the benefit of the Secured Parties to
secure any of the Secured Credit Obligations or any control agreement entered
into by a Loan Party with respect to a Controlled Account.




“Collateral
Enforcement Event of Default” means (i) the occurrence of any Event of
Default under Section 8.01(m) or (n), automatically, (ii) the occurrence of any
other Event of Default, at the request of the Required Lenders, (iii) the
occurrence of any “Event of Default” under Section 8.01(m) or (n) of the
Reimbursement Agreement, automatically and (iv) the occurrence of any other
“Event of Default” under the Reimbursement Agreement, at the request of the
Required Northwest Parties.




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




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




“Controlled
Account” means a deposit account or securities account of any Loan Party
at a depository bank or other financial institution acceptable to the
Administrative Agent that has entered into account control agreements in form
and substance satisfactory to the Administrative Agent and each Significant
Lender, and otherwise established in a manner satisfactory to the Administrative
Agent and each Significant Lender.  For the avoidance of doubt, the
Special Controlled Account shall be a Controlled Account.




“Credit Pro Rata
Share” means, at any time, a fraction (expressed as a percentage, carried
out to the ninth decimal place), the numerator of which is the aggregate
principal amount of Term Loans outstanding at such time and the denominator of
which is the aggregate principal amount of all Secured Credit Obligations
outstanding at such time.  For purposes of the calculation of the
amount of Term Loans and Secured Credit Obligations outstanding under this
definition, (x) the aggregate principal amount of the Reimbursement Obligations
outstanding at such time shall be, subject to clause (z) below, (A) the sum of
(i) the undrawn face amount of the “Letter of Credit” (as such term is defined
in the Reimbursement Agreement) and (ii) the principal amount of the
Reimbursement Obligations then outstanding, to the extent such Letter of Credit
has been drawn, less (B) the sum (without duplication) of (i) the amount of any
portion thereof that has been cash collateralized pursuant to this Agreement or
the Reimbursement Agreement and (ii) the amount of funds on deposit in the
Reimbursement Obligation Collateral Account at such time, (y) the aggregate
principal amount of Term Loans shall not exceed $50,000,000 and (z) the
aggregate principal amount of Reimbursement Obligations outstanding shall not
exceed $10,000,000.




“Debtor Relief
Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally.




“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.




“Disposition”
or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith,
including Slot trades.




“Dollar”
and “$” mean
lawful money of the United States.




“DOT” means
the United States Department of Transportation.




“Engines”
has the meaning specified in the Aircraft Mortgages.




“Environmental
Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating in any
way to any Environmental Law, Environmental Permit or Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.




“Environmental
Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, noise, air emissions and discharges to waste or
public systems.




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




“Environmental
Permit” means any permit, approval, identification number, license or
other authorization required under any Environmental Law.




“Equity
Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are outstanding on any date
of determination.




“Equipment”
has the meaning specified in Section
10.01(a).




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




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




“ERISA
Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived), (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (d) the incurrence by Parent or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan or
the withdrawal or partial withdrawal of Parent or any of its ERISA Affiliates
from any Plan or Multiemployer Plan, (e) the receipt by Parent or any of its
ERISA Affiliates from the PBGC or a plan administrator of any notice relating to
the intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan, (f) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, (g) the receipt by Parent or any of its ERISA Affiliates
of any notice, or the receipt by any Multiemployer Plan from Parent or any of
its ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA, (h) the
occurrence of a “prohibited transaction” with respect to which Parent or any of
the Subsidiaries is a “disqualified person” (within the meaning of Section 4975
of the Code) or with respect to which Parent or any such Subsidiary could
otherwise be liable, or (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could result in liability of Parent or any
Subsidiary.




“Event of
Default” has the meaning specified in Section
8.01.




“Excluded Airline
Assets” means any assets in respect of which a security interest is
granted pursuant to the Slot Security Agreement, the Spare Parts Security
Agreement or the Aircraft Mortgages.




“Excluded
Assets” shall mean:




(a) funds
held in any account with U.S. Bank National Association as security for
obligations owing to (i) the Processing Bank under the U.S. Bank
Agreement  and (ii) American Express under the American Express
Agreement, in each case, to the extent that such agreement prohibits the
granting of a security interest therein to any Person other than the Processing
Bank or American Express, as applicable;




(b) the
Tax Trust Accounts and the contents thereof;




(c) any
permit or license issued by a Governmental Authority to any Loan Party or any
agreement or property subject to any agreement to which any Loan Party is a
party, in each case, only to the extent and for so long as the terms of such
permit, license or agreement or any Laws applicable thereto, validly prohibit
the creation by such Loan Party of a security interest in such permit, license,
agreement or property in favor of the Collateral Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor
provision or provisions) or any other applicable law (including the Bankruptcy
Code) or principles of equity);




(d) any
Loan Party’s leasehold interest in any aircraft, airframe, engine or part to the
extent that the applicable lease validly prohibits the creation by such Loan
Party of a security interest in such leasehold interest, and any aircraft,
airframe, engine or part subject to a Lien permitted under Section 7.01(b);
and




(e) all
Gates and Routes; provided,
however, that Excluded Assets shall not include any Proceeds (as defined in the
UCC), substitutions or replacements of any Excluded Assets referred to in clause
(a), (b), (c) or (d) (unless such Proceeds, substitutions or replacements would
constitute Excluded Assets referred to in clause (a), (b), (c) or
(d)).




“Existing Credit
Agreement” has the meaning set forth in the preliminary statements
hereto.




“Existing
Indebtedness” means the Loan Parties’ Indebtedness as of the Amendment
and Restatement Closing Date as set forth on Schedule 7.03
attached hereto.




“Existing
Lenders” has the meaning set forth in the preliminary statements
hereto.




“Extraordinary
Receipt” means any cash received by or paid to or for the account of any
Person not in the ordinary course of business and excluding the proceeds of
Dispositions, but including, without limitation, tax refunds, pension plan
reversions, insurance payable upon an “Event of Loss” (as defined in the
Aircraft Mortgages), condemnation awards (and payments in lieu thereof),
indemnity payments and any purchase price adjustments.




“FAA” means
the Federal Aviation Administration.




“First
Amendment” has the meaning set forth in the preliminary statements
hereto.




“Foreign
Person” has the meaning specified in Section
12.14(a)(i).




“Fourth
Amendment” has the meaning set forth in the preliminary statements
hereto.




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




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




“Gates”
means all of the right, title, privilege, interest and authority of the Loan
Parties with respect to premises used for the purpose of holdroom seating and
boarding space and related aircraft parking positions to enplane and deplane
passengers at any airport or terminal in the United States at which any Loan
Party conducts scheduled operations, arising under any lease, usufruct, use
agreement, facility agreement or similar agreement governing the right to use
that portion of the premises demised or covered by such lease, usufruct, use
agreement, facility agreement or similar agreement, including, without
limitation, those leases, usufructs, use agreements, facility agreements or
similar agreements.




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




“Guarantors”
means, collectively, Parent and each of the existing and future direct and
indirect Subsidiaries of the Borrower.




“Guaranty”
has the meaning specified in Section
11.01.




“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness, (ii)
to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness of the payment or
performance of such Indebtedness, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness, or (iv) entered into for the purpose of assuring in
any other manner the obligee in respect of such Indebtedness of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person securing any
Indebtedness of any other Person, whether or not such Indebtedness is assumed by
such Person (or any right, contingent or otherwise, of any holder of such
Indebtedness to obtain any such Lien).  The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of
the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith.  The term “Guarantee”
as a verb has a corresponding meaning.




“Guaranteed
Obligations” has the meaning specified in Section
11.01.




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




“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:




(a) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;




(b) all
direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;




(c) net
obligations of such Person under any Swap Contract;




(d) all
obligations of such Person to pay the deferred purchase price of property or
services (other than current trade accounts payable in the ordinary course of
business);




(e) indebtedness
secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;




(f) capital
leases, operating leases and Synthetic Lease Obligations;




(g) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such Equity Interests,
valued, in the case of redeemable preferred interests, at the greater of its
voluntary or involuntary liquidation preferenceplusaccrued and
unpaid dividends; and




(h) all
Guarantees of such Person in respect of any of the foregoing.




For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.




“Indemnified
Liabilities” has the meaning set forth in Section
12.05.




“Indemnitees”
has the meaning set forth in Section
12.05.




“International
Interest” has the meaning as expressed in the Cape Town
Convention.




“InitialClosing
Date” has the meaning set forth in the preliminary statements
hereto.




“Initial Credit
Agreement” has the meaning set forth in the preliminary statements
hereto.




“Initial Pledged
Debt” means the Indebtedness set forth opposite each Loan Party’s name on
and as otherwise described in Schedule II.




“Initial Pledged
Equity” means the shares of stock and other Equity Interests set forth
opposite each Loan Party’s name on and as otherwise described in Schedule I.




“Initial
Reimbursement Agreement” has the meaning set forth in the preliminary
statements hereto.




“Initial Term
Loans” has the meaning set forth in the preliminary statements
hereto.




“Intellectual
Property Security Agreement” has the meaning specified in Section 4.01(a)(iv).




“Interest Payment
Date” means the last Business Day of each month and the Maturity
Date.




“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of Equity
Interests or other securities of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other Person
and any arrangement pursuant to which the investor incurs debt of the type
referred to in clause (h) of the definition of “Indebtedness” set forth in
this Section
1.01 in respect of such Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute a business unit or all or a substantial part of the business of,
such Person.




“IP Security
Agreement Supplements” has the meaning specified in Section
10.01(f)(vi).




“IRS” means
the United States Internal Revenue Service.




“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, any Governmental Authority, in each case whether
or not having the force of law.




“Lender”
has the meaning specified in the introductory paragraph hereto.




“Lender Make
Whole” means the quotient (expressed as a percentage, carried out to the
ninth decimal place) of (x) the aggregate principal amount of Term Loans (not to
exceed $50,000,000) as of any date of determination over (y) the aggregate
amount of all Reimbursement Obligations (not to exceed $10,000,000) as of such
date of determination.  For purposes of the calculation of the amount
of Reimbursement Obligations outstanding under this definition, the aggregate
principal amount of the Reimbursement Obligations outstanding at such time shall
be (A) the sum of (i) the undrawn face amount of the “Letter of Credit” (as such
term is defined in the Reimbursement Agreement) and (ii) the principal amount of
the Reimbursement Obligations then outstanding, to the extent such Letter of
Credit has been drawn, less (B) the sum (without duplication) of (i) the amount
of any portion thereof that has been cash collateralized pursuant to this
Agreement or the Reimbursement Agreement and (ii) the amount of funds on deposit
in the Reimbursement Obligation Collateral Account at such time.




“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other
security interest or preferential arrangement of any kind or nature whatsoever
intended for security (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same economic effect
as any of the foregoing).




“Loan
Documents” means, collectively, (a) this Agreement, (b) the Term
Notes and (c) the Collateral Documents.




“Loan
Notice” means a notice of a Term Borrowing.




“Loan
Parties” means, collectively, the Borrower and each
Guarantor.




“Material Adverse
Effect” means (a) a material adverse effect upon the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Loan Parties taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent, the Collateral Agent or any Lender under
any Loan Document, or of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party; or (d) a
material impairment of the Collateral.




“Maturity
Date” means the earliest of (a) the one year anniversary of the Initial
Closing Date, (b) the date of termination in whole of the Term Commitment in
accordance with Section 8.02 and (c)
the acceleration of the maturity of the Term Loans in accordance with Section
8.02.




“Milestone
Achievement Date” means the first date on which all of the conditions
precedent set forth in Section 4.02 are satisfied or waived.




“Midwest Air LLC
Agreement” means the Amended and Restated Limited Liability Company
Agreement of Midwest Air Partners, LLC.




“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.




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




“ Net Cash
Proceeds” means:




(a)  with respect
to the sale of any asset by any Loan Party, the excess, if any, of (i) the sum
of cash and Cash Equivalents received in connection with such sale (including
any cash or Cash Equivalents received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any Indebtedness
that is secured by such asset and that is required to be repaid in connection
with the sale thereof (other than Indebtedness under the Loan Documents), (B)
the out-of-pocket expenses (including brokerage fees) actually incurred by such
Loan Party in connection with such sale and (C) taxes reasonably estimated
by the Borrower to be actually payable within one year of the date of the
relevant asset sale in connection therewith documented in form and substance
reasonably satisfactory to the Administrative Agent and each Significant Lender;
and




(b)  with
respect to the issuance of any capital stock or other Equity Interest by Loan
Party or the issuance of any Indebtedness by any Loan Party, the excess of (i)
the sum of the cash and Cash Equivalents received in connection with such sale
or issuance over (ii) the underwriting discounts and commissions, and other
out-of-pocket expenses, actually incurred by such Loan Party in connection with
such sale or issuance.




“Northwest”
has the meaning set forth in the preliminary statements hereto.




“Northwest
Parties” means, at any time, Northwest and each of Northwest’s successors
and assignees pursuant to Section 12.07 of the Reimbursement Agreement, to the
extent that any such Person has any of the Reimbursement Obligations (whether
contingent or outstanding) at such time.




“NPL” means
the National Priorities List under CERCLA.




“Obligations”
means (i) all advances to, and debts, liabilities, obligations, performance
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Term Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue (or would accrue but for the commencement of any case or proceeding
under any Debtor Relief Law) after the commencement by or against any Loan Party
or any Affiliate thereof of any case or proceeding under any Debtor Relief Laws
naming such Person as the debtor in such case or proceeding, regardless of
whether such interest and fees are allowed claims in such case or proceeding and
(ii) any Airline Service Agreement Obligations. Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys’ fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document and (b) the obligation of any Loan Party
to reimburse any amount in respect of any of the foregoing obligations under the
Loan Documents that any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.  Notwithstanding the foregoing,
the Obligations shall exclude any obligations under the Reimbursement Agreement
(including, without limitation, the Reimbursement Obligations).  The
foregoing notwithstanding, Airline Service Agreement Obligations shall not be
“Obligations” for purposes of Article III.




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




“Other
Taxes” has the meaning specified in Section
3.01(b).




“Participant”
has the meaning specified in Section
12.07(d).




“PBGC”
means the Pension Benefit Guaranty Corporation.




“Permitted
Holder” means any of (i) TPG Midwest US V, LLC, a Delaware limited
liability company, TPG Midwest International V, LLC, a Delaware limited
liability company and TPG Midwest Co-Investors, LLC, a Delaware limited
liability company, and their respective Affiliates and (ii) Northwest Airlines
Corp. and its wholly-owned Subsidiaries.




“Permitted
Liens” means Liens described (i) in Sections 7.01(a), and (c) (to the extent
such tax liens do not result in a material risk of loss of the applicable
asset), (ii) in  Section 7.01(d), with
respect to Airframes and Engines, to the extent permitted by the Aircraft
Mortgages, and (iii) on Schedule
7.01.




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




“Plan”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 307 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.




“Pledged
Collateral” has the meaning set forth in Section 10.01.




“Pledged Spare
Parts” has the meaning assigned to such term in the Spare Parts Security
Agreement.




“Processing
Bank” has the meaning set forth in the preliminary statements
hereto.




“Pro Rata
Share” means, with respect to each Lender at any time, (a) prior to the
extension of the Term Loans, a fraction (expressed as a percentage, carried out
to the ninth decimal place), the numerator of which is the amount of the Term
Commitment of such Lender under the Term Facility at such time and the
denominator of which is the amount of the Term Commitments under Term Facility
at such time and (b) after the extension of the Term Loans, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the aggregate principal amount of Term Loans owing to such
Lender at such time and the denominator of which is the aggregate principal
amount of all Term Loans owing to the Lenders at such time.




“Register”
has the meaning set forth in Section
12.07(c).




“Reimbursement
Agreement” has the meaning set forth in the preliminary statements
hereto.




“Reimbursement
Documents” means the “Transaction Documents”, as such term is defined in
the Reimbursement Agreement.




“Reimbursement
Obligations” means the “Obligations”, as such term is defined in the
Reimbursement Agreement.




“Reimbursement
Obligation Collateral Account” means a deposit account or securities
account held in the name of the Collateral Agent at a depository bank or other
financial institution acceptable to the Required Northwest Parties and the
Significant Lenders, with the funds deposited therein securing the payment in
full of (x) the Reimbursement Obligations and (y) after all of the Reimbursement
Obligations have been repaid in full in cash, the LC Commitment (as defined in
the Reimbursement Agreement) has terminated and the Letter of Credit (as defined
in the Reimbursement Agreement) has been cancelled or cash collateralized in an
amount equal to 105% of the undrawn and unexpired amount thereof, the
Obligations.  On the Amendment and Restatement Effective Date, the
Reimbursement Obligation Collateral Account is the account specified on Schedule IV
hereto.




“Reimbursement Pro
Rata Share” means, at any time, a fraction (expressed as a percentage,
carried out to the ninth decimal place), the numerator of which is the aggregate
principal amount of Reimbursement Obligations owing at such time and the
denominator of which is the aggregate principal amount of all Secured Credit
Obligations outstanding at such time.  For purposes of the calculation
of amount of Secured Credit Obligations and Reimbursement Obligations
outstanding under this definition, (x) the aggregate principal amount of the
Reimbursement Obligations outstanding at such time shall be, subject to clause
(z) below, (A) the sum of (i) the undrawn face amount of the “Letter of Credit”
(as such term is defined in the Reimbursement Agreement) and (ii) the principal
amount of the Reimbursement Obligations then outstanding, to the extent such
Letter of Credit has been drawn, less (B) the sum (without duplication) of (i)
the amount of any portion thereof that has been cash collateralized pursuant to
this Agreement or the Reimbursement Agreement and (ii) the amount of funds on
deposit in the Reimbursement Obligation Collateral Account at such time, (y) the
aggregate principal amount of Term Loans shall not exceed $50,000,000 and (z)
the aggregate principal amount of Reimbursement Obligations outstanding shall
not exceed $10,000,000.




“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been
waived.




“Republic”
means Republic Airways Holdings Inc., a Delaware corporation.




“Required
Lenders” means, as of any date of determination, Lenders having in the
aggregate more than 50% of the sum of (x) the aggregate outstanding principal
amount of the Term Loans and (y) the aggregate unfunded Term
Commitments.




“Required
Northwest Parties” means, as of any date of determination, Northwest
Parties having more than 50% of the outstanding principal amount of the
Reimbursement Obligations (whether contingent or outstanding).




“Required Secured
Parties” means, as of any date of determination, (i) either the TPG
Entities or Republic and (ii) the Required Northwest Parties; provided that, prior
to the Airline Service Agreement Termination Date, upon the occurrence of an
Airline Service Agreement Rejection Event until such time as the Airline Service
Agreement Obligations shall have been paid in full in cash (or otherwise
satisfied in a manner satisfactory to Republic), “Required Secured Parties”
shall mean Republic.




“Responsible
Officer” means, (i) the chief executive officer, president, chief
financial officer, executive vice president, treasurer or assistant treasurer of
a Loan Party, and (ii) with respect to each Loan Party (other than the
Borrower), any person authorized by the Board of Directors or shareholders of
such Loan Party to execute documents in connection with the Loan Documents on
behalf of such Loan Party.  Any document delivered hereunder or
thereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.




“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Loan Party, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to any Loan Party’s stockholders, partners or members (or
the equivalent Persons thereof).




“Routes”
means each right, license, permit, and other authorization whereby any Loan
Party is entitled or permitted to fly between two or more points, either within
one country or between two countries.




“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.




“SEC” means
the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.




“Second
Amendment” has the meaning set forth in the preliminary statements
hereto.




“Second Amendment
Effective Date” has the meaning set forth in the preliminary statements
hereto.




“Second Term
Loans” has the meaning set forth in the preliminary statements
hereto.




“Secured Credit
Documents” means, collectively, (i) the Loan Documents, (ii) the
Reimbursement Documents and (iii) the Airline Service Agreement.




“Secured Credit
Obligations” means, collectively, (i) the Obligations and (ii) the
Reimbursement Obligations.




“Secured
Parties” means, collectively, the Administrative Agent, the Collateral
Agent, the Lenders, the Northwest Parties, each co-agent or sub-agent appointed
by the Administrative Agent, Northwest or the Collateral Agent from time to time
pursuant to Section
9.02 or Section 9.02 of the Reimbursement Agreement, and the other
Persons the Obligations owing to which are or are purported to be secured by the
Collateral under the terms of the Collateral Documents (including, without
limitation, the holder of any Airline Service Agreement
Obligations).




“Significant
Lender” means, as of any date of determination, any Lender that holds in
the aggregate more than 25% of the sum of (x) the aggregate outstanding
principal amount of the Term Loans and (y) aggregate unfunded Term
Commitments.




“Skyway”
means Skyway Airlines, Inc., a Delaware corporation.




“Slot” has
the meaning specified in the Slot Security Agreement.




“Slot Security
Agreement” has the meaning specified in Section
4.01(a)(xii).




“Spare
Part” has the meaning specified in the Spare Parts Security
Agreement.




“Spare Parts
Security Agreement” has the meaning specified in Section
4.01(a)(xiv).




“Special
Controlled Account” means account no. 2183017033 at Associated Bank,
National Association.




“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities
or other interests having ordinary voting power for the election of directors or
other governing body (other than securities or interests having such power only
by reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person.  Unless
otherwise specified, all references herein to a “Subsidiary”
or to “Subsidiaries”
shall refer to a Subsidiary or Subsidiaries of the Borrower.




“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any
Master Agreement.




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




“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet lease in which the lessee is
contractually entitled to the tax benefits of ownership of the leased assets, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).




“Taxes” has
the meaning specified in Section
3.01(a).




“Tax Trust
Accounts” means (i) account numbers 65676/31468 (Excise Tax Account),
65677/31469 (Security Fee Account) and 65678/31470 (PVC Fund Account) at
Deutsche Bank Trust Company Americas and (ii) account number 2183061999 (PVC
Escrow & Disbursement Account) at Associated Bank, National
Association.




“Term
Borrowing” means the borrowing of (i) Term Loans on the Amendment and
Restatement Effective Date in accordance with Sections 2.01(a) and 2.01(b) and
(ii) the borrowing of Term Loans on or after the Milestone Achievement Date in
accordance with Sections 2.01(c) and 2.01(d).




“Term
Commitment” means, as to each Lender, its obligation to make Term Loans
to the Borrower pursuant to (i) Section 2.01(a) in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Lender’s name on Schedule 2.01(a) and (ii) Section 2.01(c) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender’s name on Schedule 2.01(c).




“Term
Facility” means, at any time, the aggregate amount of the Lenders’ Term
Commitments and outstanding Term Loans at such time.




“Term Loan”
means (x) the Existing Term Loans and (y) an extension of credit by a Lender to
the Borrower pursuant to (i) Section 2.01(a) and (ii) Section
2.01(c).




“Term Note”
means a promissory note of the Borrower payable to the order of any Lender, in
substantially the form of Exhibit B.




“Third
Amendment” has the meaning set forth in the preliminary statements
hereto.




“Title 49”
means Title 49 of the United States Code, as amended and in effect from time to
time, and the regulations promulgated pursuant thereto.




“TPG
Entities” means any of TPG Midwest US V, LLC, a Delaware limited
liability company, TPG Midwest International V, LLC, a Delaware limited
liability company and TPG Midwest Co-Investors, LLC, a Delaware limited
liability company, and their respective Affiliates.




“U.S. Bank”
has the meaning set forth in the preliminary statements hereto.




“U.S. Bank
Agreement” means the Amended and Restated Agreement dated as of March 31,
2006 (as amended, supplemented or otherwise modified through the date hereof)
among U.S. Bank, the Borrower and Skyway.




“UCC” shall
mean the Uniform Commercial Code as in effect from time to time in the State of
New York; provided, however, that, at any time, if by reason of mandatory
provisions of law, any or all of the perfection or priority of the Collateral
Agent’s and the Secured Parties’ security interest in any item or portion of the
Pledged Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or priority
and for purposes of definitions relating to such provisions.




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




“United States
Citizen” has the meaning specified in Section
5.01.




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




“Wells
Fargo” has the meaning specified in the preamble.




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




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




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




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




(iii)  The term
“including”
is by way of example and not limitation.




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




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




(d)  Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.




1.03  Accounting
Terms .  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP, as in
effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements.




1.04  References to Agreements and
Laws .  Unless
otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.




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




1.06  Uniform Commercial
Code.




Unless
otherwise defined herein, terms used in Article Xthat are
defined in the UCC shall have the meanings assigned to them in the
UCC.








ARTICLE
      IITHE TERM COMMITMENTS
      AND TERM LOANS







2.01  The Term
Loans .




(a)  Borrowing of Term Loans on
the Amendment and Restatement Effective Date.  Subject to the
terms and conditions hereof, each Lender severally agrees to make, on the
Amendment and Restatement Effective Date, a Term Loan to Borrower in an amount
equal to such Lender’s Term Commitment set forth opposite such Lender’s name on
Schedule 2.01(a).  Borrower may make only one Term Borrowing under
this Section 2.01(a) which Term Borrowing shall be on the Amendment and
Restatement Effective Date.  Any amount borrowed under this Section 2.01(a) and
subsequently repaid or prepaid may not be reborrowed.  Each Lender’s
Term Commitment set forth opposite such Lender’s name on Schedule 2.01(a) shall
terminate immediately and without further action on the Amendment and
Restatement Effective Date after giving effect to the funding of such Lender’s
Term Commitment set forth opposite such Lender’s name on Schedule 2.01(a) on
such date.




(b)  Borrowing Mechanics of Term
Loans on the Amendment and Restatement Effective
Date.  Borrower shall deliver to Administrative Agent a fully
executed Loan Notice no later than 10:00 a.m. (New York City time) on the
Amendment and Restatement Effective Date with respect to the Term Loan Borrowing
under Section 2.01(a).  Promptly upon receipt by Administrative Agent
of such Loan Notice, Administrative Agent shall notify each Lender of its Pro
Rata Share of the proposed Term Borrowing.  Each Lender shall make
such Term Loan available to Borrower not later than 3:00 p.m. (New York City
time) on the Amendment and Restatement Effective Date by wire transfer of same
day funds in Dollars to the Special Controlled Account.




(c)  Borrowing of Term Loans on
or after the Milestone Achievement Date.  Subject to the terms
and conditions hereof, each Lender severally agrees to make, on or after the
Milestone Achievement Date, a Term Loan to Borrower in an amount equal to such
Lender’s Term Commitment set forth opposite such Lender’s name on Schedule
2.01(c).  Borrower may make only one Term Borrowing under this Section
2.01(c) which Term Borrowing shall be on or (subject to the continued
satisfaction of the conditions set forth in Section 4.02) after the Milestone
Achievement Date.  Any amount borrowed under this Section 2.01(c) and
subsequently repaid or prepaid may not be reborrowed.  Each Lender’s
Term Commitment set forth opposite such Lender’s name on Schedule 2.01(c) shall
terminate immediately and without further action on or after the Milestone
Achievement Date after giving effect to the funding of such Lender’s Term
Commitment set forth opposite such Lender’s name on Schedule 2.01(c) on the date
of the Term Borrowing of such Term Loans.




(d)  Borrowing Mechanics of Term
Loans on or after the Milestone Achievement Date.  Borrower
shall deliver to Administrative Agent a fully executed Loan Notice no later than
10:00 a.m. (New York City time) on the Milestone Achievement Date (or, if the
Borrower elects to make such Term Borrowing under Section 2.01(c) on a date
after the Milestone Achievement Date, no later than 10:00 a.m. (New York City
time) on the date that is at least three Business Days prior to the proposed
date of such Term Borrowing) with respect to the Term Loan Borrowing under
Section 2.01(c).  Promptly upon receipt by Administrative Agent of
such Loan Notice, Administrative Agent shall notify each Lender of its Pro Rata
Share of the proposed Term Borrowing.  Each Lender shall make such
Term Loan available to Borrower not later than 3:00 p.m. (New York City time) on
the Milestone Achievement Date (or, if the Borrower elects to make such Term
Borrowing under Section 2.01(c) on a date after the Milestone Achievement Date,
the date for such Term Borrowing set forth on the Loan Notice for such Term
Borrowing subject to the continued satisfaction of the conditions set forth in
Section 4.02) by wire transfer of same day funds in Dollars to the Special
Controlled Account.




2.02  Prepayments .




(a)  Optional.  The
Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Term Loans in whole or in part without premium or
penalty; provided that such
notice must be received by the Administrative Agent not later than
11:00 a.m. three days prior to the date of prepayment. Each such notice shall
specify the date and amount of such prepayment.  The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender’s Pro Rata Share of such prepayment.  If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.  Each such prepayment shall be paid to the
Lenders in accordance with their respective Pro Rata Shares.




(b)  Mandatory.  (i)  If
any Loan Party Disposes of any property or assets permitted by Section 7.06 (other
than Section
7.06(b)), the Borrower shall prepay (x) an aggregate principal amount of
Term Loans equal to the Credit Pro Rata Share of 100% of all Net Cash Proceeds
received therefrom and (y) an aggregate principal amount of Reimbursement
Obligations equal to the Reimbursement Pro Rata Share of 100% of all Net Cash
Proceeds received therefrom, in each case, immediately upon receipt thereof by
any Loan Party.




(ii) Upon
the issuance by any Loan Party of any of its capital stock or other Equity
Interests to any Person other than another Loan Party (or the receipt of any
capital contribution by any Loan Party from any Person other than another Loan
Party), the Borrower shall prepay (x) an aggregate principal amount of Term
Loans equal to the Credit Pro Rata Share of 100% of all Net Cash Proceeds
received therefrom and (y) an aggregate principal amount of Reimbursement
Obligations equal to the Reimbursement Pro Rata Share of 100% of all Net Cash
Proceeds received therefrom, in each case, immediately upon receipt thereof by
any Loan Party.




(iii) Upon
the incurrence or issuance by any Loan Party of any Indebtedness (other than
Indebtedness permitted to be incurred underSection 7.03 of this
Agreement) to any Person other than another Loan Party, the Borrower shall
prepay (x) an aggregate principal amount of Term Loans equal to the Credit Pro
Rata Share of 100% of all Net Cash Proceeds received therefrom and (y) an
aggregate principal amount of Reimbursement Obligations equal to the
Reimbursement Pro Rata Share of 100% of all Net Cash Proceeds received
therefrom, in each case, immediately upon receipt thereof by any Loan
Party.




(iv) Upon
any Extraordinary Receipt (including proceeds in respect of an Event of Loss)
received by or paid to or for the account of any Loan Party and not otherwise
included in clause (i), (ii) or (iii) of thisSection 2.02(b), the
Borrower shall prepay (x) an aggregate principal amount of Term Loans equal to
the Credit Pro Rata Share of 100% of all net cash proceeds received therefrom
and (y) an aggregate principal amount of Reimbursement Obligations equal to the
Reimbursement Pro Rata Share of 100% of all net cash proceeds received
therefrom, in each case, immediately upon receipt thereof by any Loan
Party.




(v) Simultaneously
with any repayment of any Reimbursement Obligations (or any deposits into the
Reimbursement Obligation Collateral Account), except with respect to prepayments
to the extent set forth inSubsections
2.02(b)(i) through 2.02(b)(iv), the
Borrower shall prepay an aggregate principal amount of the Term Loans equal to
(x) the amount of such repayment of Reimbursement Obligations multiplied by (y)
the Lender Make Whole.




(c)  Prepayments to Include
Accrued Interest, Etc.  All prepayments under this Section 2.02shall be made together with accrued and unpaid interest to the date of
such prepayment on the principal amount so prepaid.




Notwithstanding
the foregoing, prepayments made with respect to the Reimbursement Obligations
pursuant to clauses (i) through (iv), to the extent that such prepayments were
made with respect to Reimbursement Obligations not yet due and owing, shall be
held by the Collateral Agent and deposited into the Reimbursement Obligation
Collateral Account.




2.03  Repayment of Term
Loans . The
Borrower shall repay to the Administrative Agent for the ratable account of the
Lenders on the Maturity Date the aggregate principal amount of all Term Loans
outstanding on such date.





2.04  Interest .




(a)  Interest
Rate.  Subject to the provisions of subsection (b) below, the
Term Loans shall bear interest on the outstanding principal amount thereof at a
rate per annum equal to the Applicable Rate.




(b)  Default
Rate.  Upon the occurrence and during the continuance of a
Event of Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Term Loan owing to each Lender, payable in arrears on
the dates referred to in clause (c) below and on demand, at a rate per
annum equal at all times to 2% per annum above the Applicable Rate and
(ii) to the fullest extent permitted by law, the amount of any interest,
fee or other amount payable under the Loan Documents that is not paid when due,
from the date such amount shall be due until such amount shall be paid in full,
payable on demand, at a rate per annum equal at all times to 2% above the
Applicable Rate.




(c)  Payment
Dates.  Interest on each Term Loan shall be due and payable in
arrears on each Interest Payment Date and, to the extent provided in Section 2.04(b), on
demand.




2.05  Computation of
Interest .  All
computations of interest shall be made on the basis of a 365-day year and actual
days elapsed.  Interest shall accrue on each Term Loan for the day on
which the Term Loan is made, and shall not accrue on a Term Loan, or any portion
thereof, for the day on which the Term Loan or such portion is paid, provided that any
Term Loan that is repaid on the same day on which it is made shall bear interest
for one day.  Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.




2.06  Evidence of
Indebtedness .




(a)  The Term
Loans made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Administrative Agent in the ordinary course
of business.  The accounts or records maintained by the Administrative
Agent and each Lender shall be conclusive absent manifest error of the amount of
the Term Loans made by the Lenders to the Borrower and the interest and payments
thereon.  Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Obligations.  In the event of
any conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.  Upon the request of any Lender, the Borrower shall
execute and deliver to such Lender a Term Note, which shall evidence such
Lender’s Term Loans in addition to such accounts or records.  Each
Lender may attach schedules to its Term Note and endorse thereon the date,
amount and maturity of its Term Loans and payments with respect
thereto.




(b)  Entries
made in good faith by the Administrative Agent in the Register or by any Lender
in its account or accounts pursuant to subsection (a) above, shall be conclusive
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this Agreement
and the other Loan Documents, absent manifest error; provided that the
failure of the Administrative Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement and the other Loan Documents.




2.07  Payments
Generally.




(a)  All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the account specified by the
Administrative Agent in Dollars and in immediately available funds not later
than 2:00 p.m. on the dates specified herein.  The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to the account specified by such Lender to the Administrative
Agent from time to time.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest shall continue to
accrue.




(b)  If any
payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest.




(c) If any
Lender makes available to the Administrative Agent funds for any Term Loan to be
made by such Lender as provided in the foregoing provisions of thisArticle II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the Term Borrowing set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall promptly return such funds (in like funds as received from such
Lender) to such Lender, without interest.




(d) The
obligations of the Lenders hereunder to make Term Loans are several and not
joint.  The failure of any Lender to make any Term Loan on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Term Loan.




(e)  Whenever
any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Administrative Agent and the Lenders under or in respect of this
Agreement and the other Loan Documents on any date, such payment shall be
distributed by the Administrative Agent and applied by the Administrative Agent
and the Lenders in the order of priority set forth in Section
8.03.  If the Administrative Agent receives funds for
application to the Obligations of the Loan Parties under or in respect of the
Loan Documents under circumstances for which the Loan Documents do not specify
the manner in which such funds are to be applied, the Administrative Agent may,
but shall not be obligated to, elect to distribute such funds to each of the
Lenders in accordance with such Lender’s Pro Rata Share of the sum of the
aggregate principal amount of all Term Loans outstanding at such time in
repayment or prepayment of such of the outstanding Term Loans or other
Obligations then owing to such Lender.












ARTICLE
  IIITAXES


3.01  Taxes .




(a)  Except as
otherwise provided in this Section 3.01 or Section 12.14, any
and all payments by the Borrower to or for the account of the Administrative
Agent, the Collateral Agent or any Lender under any Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of the Administrative Agent, the Collateral Agent and each Lender, (i)
taxes imposed on or measured by its overall net income, and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Administrative Agent,
the Collateral Agent or such Lender, as the case may be, is organized or
maintains its Lending Office or is otherwise a resident or doing business (other
than a jurisdiction in which such Person is deemed to be doing business solely
as a result of entering into, or performing its obligations under, any Loan
Document); and (ii) taxes other than taxes that are imposed as a result of a
change in applicable Law occurring after (A) the date that such Person became a
party to this Agreement, or (B) with respect to an assignment, acquisition,
grant of a participation or the appointment of a successor Administrative Agent
or Collateral Agent, the effective date of such assignment, acquisition,
participation or appointment, except to the extent that such Person's
predecessor was entitled to additional amounts with respect to such taxes under
this Section 3.01 (all non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”).  If
the Borrower shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Loan Document to the Administrative Agent,
the Collateral Agent or any Lender, then, except as otherwise provided in this
Section 3.01 or
Section 12.14,
(i) the sum payable shall be increased as necessary so that after making all
required deductions with respect to Taxes (including deductions applicable to
additional sums payable under this Section), each of the Administrative Agent,
the Collateral Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to the Administrative Agent (which shall forward a copy of the same to
the Collateral Agent and such Lender, as applicable) the original or a certified
copy of a receipt evidencing payment thereof to the extent such a receipt is
issued therefor, or other written proof of payment thereof that is satisfactory
to the Administrative Agent and each Significant Lender.




(b)  In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise or property, intangible, mortgage
recording taxes or similar charges or similar levies which arise from any
payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other
Taxes”).




(c)  If the
Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in
respect of any sum payable under any Loan Document to the Administrative Agent,
the Collateral Agent or any Lender, the Borrower shall also pay to the
Administrative Agent, the Collateral Agent or to such Lender, as the case may
be, at the time interest is paid, such additional amount that the Administrative
Agent, the Collateral Agent or such Lender specifies is necessary to preserve
the after-tax yield (after factoring in all taxes, including taxes imposed on or
measured by net income) that the Administrative Agent, the Collateral Agent or
such Lender would have received if such Taxes or Other Taxes had not been
imposed.




(d)  The
Borrower agrees to indemnify the Administrative Agent, the Collateral Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by the Administrative Agent, the Collateral Agent and
such Lender, (ii) amounts payable under Section 3.01(c)
without duplication and (iii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority; but excluding
amounts resulting from the failure to comply with the requirements of Section
12.05.  Payment under this subsection (d) shall be made within
30 days after the date such Lender, the Collateral Agent or the Administrative
Agent makes a demand therefor.




(e)  If the
Administrative Agent, the Collateral Agent or any Lender determines, in its sole
discretion, that is has actually received or realized any refund of tax, any
reduction of, or credit against, its withholding or payment of any additional
amount by the Borrower pursuant to this Section 3.01, such
Person shall reimburse the Borrower in an amount equal to the net benefit, after
tax, and net of all expenses incurred by such Person in connection with such
refund, reduction, credit or recovery; provided that nothing
in this Section
3.01(e) shall require any Person to make available its tax returns (or
any other information relating to its taxes which it deems to be confidential)
or interfere with any Person's right to arrange its tax affairs in whatever
manner it deems fit or to obligate any Person to claim any
credit.  The Borrower shall return such amount to the applicable
Person in the event that such Person is required to repay such refund of tax or
is not entitled to such reduction of, or credit against its tax
liabilities.




3.02  Matters Applicable to All
Requests for Compensation .  A
certificate of the Administrative Agent or any Lender claiming compensation
under this Article
III and setting forth the additional amount or amounts to be paid to it
hereunder and the basis therefor shall be conclusive in the absence of manifest
error.  In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.




3.03  Survival .  All
of the Borrower’s obligations under this Article III shall
survive termination of the Term Commitments and repayment of all other
Obligations hereunder.








ARTICLE
      IVCONDITIONS PRECEDENT
      TO TERM LOANS







4.01  Amendment and Restatement
Effective Date Conditions .  The
obligation of Republic to make a Term Loan on the Amendment and Restatement
Effective Date pursuant to Sections 2.01(a) and 2.01(b) shall become effective
on the first date on which all of the following conditions precedent shall have
been satisfied to the satisfaction of each Significant
Lender:




(a)  The
Administrative Agent’s and each Significant Lender’s (or, in the case of
Subsections 4.01(a)(iii)(A) and 4.01(a)(xix), the Collateral Agent’s) receipt of
the following, each of which shall be originals, facsimiles or in ‘PDF’ format
by electronic mail (followed promptly by originals) unless otherwise specified,
each properly executed by a Responsible Officer of the signing Loan Party, each
dated the Amendment and Restatement Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Amendment and
Restatement Effective Date) and each in form and substance satisfactory to the
Administrative Agent and each Significant Lender:




(i)  duly
executed and completed counterparts hereof (in the form provided and specified
by the Administrative Agent) that, when taken together, bear the signatures
of (1) the Borrower, (2) each Guarantor, (3) the Administrative Agent, (4) the
Collateral Agent and (5) each Lender;




(ii)  a Term
Note executed by the Borrower in favor of each Lender requesting a Term
Note;




(iii)  Each of
the following:




(A)  to the
extent consisting of shares of stock or other certificated securities,
certificates representing the Initial Pledged Equity accompanied by undated
stock powers executed in blank;




(B)  evidence
(1) of the insurance required by the terms of this Agreement and the other Loan
Documents and (2) that Collateral Agent on behalf of the Lenders has been named
as additional insured and/or loss payee thereunder to the extent required under
Section 6.07;
and




(C)  completed
requests for information, dated on or before the Amendment and Restatement
Effective Date, listing all effective financing statements that name any Loan
Party as debtor, together with copies of such financing
statements.




(iv)  an
amended and restated intellectual property security agreement, in substantially
the form of Exhibit D hereto
(the “Intellectual
Property Security Agreement”), duly executed by each Loan
Party;




(v)  such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent or any Significant Lender may reasonably require evidencing
the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement and
the other Loan Documents to which such Loan Party is a party or is to be a
party;




(vi)  such
documents and certifications as the Administrative Agent or any Significant
Lender may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each of the Loan Parties is validly existing and in good
standing in its jurisdiction of organization;




(vii)  a
favorable opinion of Cadwalader Wickersham & Taft LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, in form and
substance satisfactory to the Administrative Agent and each Significant
Lender;




(viii)  a
favorable opinion of Godfrey & Kahn, S.C., special Wisconsin counsel to the
Loan Parties, addressed to the Administrative Agent and each Lender, in form and
substance satisfactory to the Administrative Agent and each Significant
Lender;




(ix)  a
favorable opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special
aviation counsel to the Lenders with regard to, among other things, (A) the
granting of a security interest and perfection of the security interest in
aircraft and engines owned by the Loan Parties in favor of the Collateral Agent,
for itself and for the ratable benefit of the Secured Parties and (B) the
absence of Liens (other than Liens granted in connection with this Agreement and
the Reimbursement Agreement) on aircraft and engines and aircraft spare parts on
which the Collateral Agent, for the benefit of the Secured Parties, is entitled
to have a Lien, in each case, in form and substance satisfactory to the
Administrative Agent and each Significant Lender;




(x)  a
favorable opinion of the general counsel of the Borrower, addressed to the
Administrative Agent and each Lender, in form and substance satisfactory to the
Administrative Agent and each Significant Lender;




(xi)  a
certificate of a Responsible Officer of each Loan Party either (A) listing all
consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such Loan
Party of the Loan Documents to which it is a party, and such consents, licenses
and approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;




(xii)  an
amended and restated slot security agreement, in substantially the form attached
hereto as Exhibit
F (the “Slot Security
Agreement”), duly executed by each Loan Party that owns Slots as of the
Amendment and Restatement Effective Date;




(xiii)  amended
and restated aircraft mortgage and security agreements, in substantially the
form attached hereto as Exhibit G, duly
executed by each Loan Party that owns any Airframes or Engines as of the
Amendment and Restatement Effective Date;




(xiv)  an
amended and restated spare parts security agreement, in substantially the form
attached hereto as Exhibit H (the “Spare Parts
Security Agreement”), duly executed by the Borrower;




(xv)  a copy of
the the Associated Bank Control Agreement;




(xvi)  a copy of
the Airline Service Agreement duly executed by each party
thereto;




(xvii)  evidence
that all registrations requested by Administrative Agent, Collateral Agent or
any Significant Lender in accordance with the Cape Town Convention have been
made and are (or will be) effective pursuant to the terms of the Cape Town
Convention;




(xviii)  evidence
that all FAA filings for Airframes, Engines and Pledged Spare Parts requested by
Administrative Agent, Collateral Agent or any Significant Lender have been made
and are (or will be) effective to perfect the Collateral Agent’s security
interest in such Airframes, Engines and Pledged Spare Parts, as
applicable;




(xix)  financing
statements, in proper form for filing under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent and the Collateral Agent may deem
necessary or desirable in order to perfect and protect the first priority liens
and security interests created hereunder, covering the Collateral described in
Article
X;




(b)  The
Borrower shall have paid all Attorney Costs of (x) the Lenders, Administrative
Agent and the Collateral Agent and (y) Republic relating to the negotiation and
execution of the Airline Service Agreement;




(c)  The
representations and warranties of the Borrower and each other Loan Party
contained in Article
V and each other Loan Document, and which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the Amendment and
Restatement Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier
date;




(d)  No
Default shall exist or would result from the making of the Term Loans pursuant
to Sections 2.01(a) and 2.01(b); and




(e)  No
material work disruptions or stoppages by employees of any of the Loan Parties
shall have occurred and be continuing.




4.02  Milestone Achievement Date
Conditions .  The
obligation of each Lender to make a Term Loan pursuant to Sections 2.01(c) and
2.01(d) shall become effective on the first date (the “Milestone
Achievement Date”)on
which all of the following conditions precedent shall have been satisfied to the
satisfaction of each Significant Lender:




(a)  The
Amendment and Restatement Effective Date shall have occurred;




(b)  A Term
Note executed by the Borrower in favor of each Lender requesting a Term Note
shall have been received by the Administrative Agent on behalf of each such
Lender;




(c)  The
Borrower shall have paid all Attorney Costs of the Lenders, Administrative Agent
and the Collateral Agent;




(d)  The
representations and warranties of the Borrower and each other Loan Party
contained in Article
V and each other Loan Document, and which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the Milestone Achievement
Date and the date of the Term Borrowing pursuant to Section 2.01(c) as certified
by a Responsible Officer of each Loan Party to the Administrative Agent and each
Lender;




(e)  No
Default shall exist or would result from the making of the Term Loans pursuant
to Sections 2.01(c) and 2.01(d);




(f)  No
material work disruptions or stoppages by employees of any of the Loan Parties
shall have occurred and be continuing;




(g)  The Loan
Parties shall have entered into binding agreements with Skywest Airlines, Inc.
and Boeing Capital Corporation in form and substance acceptable to the TPG
Entities and Republic, in each of their sole discretion, that include provisions
to effectuate the cash flow and permanent cost reductions described in the
Business Plan or otherwise acceptable to the TPG Entities and Republic, in each
of their sole discretion;




(h)  The
Borrower shall have delivered to the TPG Entities and Republic a business plan
in form and substance acceptable to the TPG Entities and Republic, in each of
their sole discretion, (the “Business
Plan”) and the TPG Entities and Republic shall have determined that the
Loan Parties are capable of achieving the cash flow and permanent cost reduction
targets set forth in the Business Plan;




(i)  The
Borrower shall have implemented a fuel hedging strategy in form and substance
acceptable to the TPG Entities and Republic, in each of their sole
discretion,;




(j)  No event
or circumstance shall have occurred since the Amendment and Restatement
Effective Date that, in the view of each of the TPG Entities and Republic, in
each of their sole discretion, has resulted in a Material Adverse Effect that is
continuing or that would be reasonably expected to result in a Material Adverse
Effect; and




(k)  The
Borrower shall have delivered to the Administrative Agent and each Significant
Lender a certificate from a Responsible Officer of the Borrower certifying that
the conditions precedent to the Milestone Achievement Date have been satisfied
(except as to matters that require the approval or satisfaction of the
Administrative Agent, the Collateral Agent and/or the Lenders), together with
such evidence with respect thereto as the Administrative Agent or any
Significant Lender may request.








ARTICLE
      VREPRESENTATIONS AND
      WARRANTIES







The Loan
Parties jointly and severally represent and warrant to the Administrative Agent,
the Collateral Agent and the Lenders that:




5.01  Existence, Qualification and
Power; Compliance with Laws; “Air Carrier
Status” .  Each
Loan Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own or lease its assets and carry on its business and
(ii) execute, deliver and perform its obligations under the Loan Documents
and (c) is duly qualified and is licensed and in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license; except in
the case of clause (c), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.  The Borrower (and no
other Loan Party) is an “air carrier” within the meaning of Section 40102 of
Title 49 and holds a certificate under Section 41102 of Title 49 or commuter air
carrier authorizations.  Each such Person holds air carrier operating
certificates issued pursuant to Chapter 447 of Title 49.  Parent, the
Borrower and each Subsidiary that is an “air carrier” are each a “citizen of the
United States” as defined in Section 40102(a)(15) of Title 49 (a “United States
Citizen”).  Parent, the Borrower and each Subsidiary that is an
“air carrier” possess all necessary certificates, franchises, licenses, permits,
rights, authorizations and concessions and consents which are material to the
operation of the routes flown by it and the conduct of its business and
operations as currently conducted.







5.02  Authorization; No
Contravention .  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is or is to be a party are within such Loan Party’s corporate
or other powers, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of
any of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under, or require
any payment to be made under (i) any Contractual Obligation to which such
Person is a party or affecting such Person or the properties of such Person or
(ii) any order, injunction, writ or decree of any Governmental Authority or
any arbitral award to which such Person or its property is subject; or
(c) violate any Law.  Except as set forth on Schedule 5.02, no
Loan Party is in material breach of any material Contractual
Obligation.




5.03  Governmental Authorization;
Other Consents .  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with (i) the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document, (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents or (iii) the perfection or maintenance
of the Liens created under the Collateral Documents except in each case for such
consents, exemptions, authorizations, approvals, actions, notices and filings
listed on Schedule 5.03
hereto, all of which have been duly obtained, taken, given or made and are in
full force and effect.




5.04  Binding
Effect .    This
Agreement and each other Loan Document has been duly executed and delivered by
each Loan Party that is party thereto.  This Agreement constitutes and
each other Loan Document constitutes a legal, valid and binding obligation of
such Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to
enforceability.




5.05  Financial
Statements .




(a)  The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, and (ii) fairly
present the financial condition of the Parent and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby.




(b)  The
unaudited consolidated financial statements of the Borrower and its Subsidiaries
dated May 31, 2008, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal quarter ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.




5.06  Litigation .  There
are no actions, suits, proceedings, claims or disputes pending or, to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against Parent, the
Borrower or any of the Borrower’s Subsidiaries or against any of their
properties or revenues that either individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.  The
performance of any action by any Loan Party required or contemplated by any of
the Loan Documents is not restrained or enjoined (either temporarily,
preliminary or permanently).  There are no actions, suits or
proceedings pending that challenge the validity of any Loan Document or the
applicability or enforceability of any Loan Document which seek to void, avoid,
limit, or otherwise adversely affect the security interest created by or in any
Loan Document or any payment made pursuant thereto.




5.07  No
Default .  No
Default has occurred and is continuing or would result from the execution,
delivery or performance of this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby.




5.08  Ownership of
Property .




(a)  The
Collateral subject to each Aircraft Mortgage and the Spare Parts Security
Agreement is free and clear of all Liens other than Permitted
Liens.




(b)  Set forth
on Schedule 5.08(b)
hereto is a complete and accurate list of all Slots held by any Loan Party on
the date hereof.




(c)  Set forth
on Schedule 5.08(c)
hereto is a complete and accurate list of all airport gate leaseholds contracted
or licensed to any Loan Party on the date hereof.




(d)  No Loan
Party (other than the Borrower and Skyway) currently owns or will own any
interest in any Spare Part.




(e)  No Loan
Party (other than the Borrower and YX Properties, LLC, a Nebraska limited
liability company) currently owns or will own any interest in any
Slots.




(f)  No Loan
Party (other than the Borrower and Skyway) currently owns or will own any
interest in any Engine or Airframe.




5.09  Environmental
Compliance .




(a)           The
Loan Parties conduct in the ordinary course of business a review of the effect
of existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Borrower has
reasonably concluded that such effects of Environmental Laws and claims could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.




(b)           None
of the properties currently owned or operated by any Loan Party, and, to the
best of the Borrower’s knowledge, formerly owned or operated by any Loan Party,
is listed or proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list; there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan Party
or, to the best of the Borrower’s knowledge, on any property formerly owned or
operated by any Loan Party, which treatment, storage or disposal could
individually, or in the aggregate reasonably be expected to have a Material
Adverse Effect; there is no asbestos or asbestos-containing material on any
property currently owned by any Loan Party as could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect; and to the
best of the Borrower’s knowledge Hazardous Materials have not been released,
discharged or disposed of on any property currently or formerly owned or
operated by any Loan Party in each case as could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.




(c)           No
Loan Party is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law; and all Hazardous
Materials generated, used, treated, handled or stored at, or transported to or
from, any property currently or formerly owned or operated by any Loan Party
have been disposed of in a manner not reasonably expected to result in Material
Adverse Effect.




5.10  Insurance .  The
properties of the Loan Parties are insured or reinsured with financially sound
and reputable insurance companies not Affiliates of the Borrower (other than
Cardinal Insurance Company, Cayman Ltd.), in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the
applicable Loan Party operates.




5.11  Taxes .  The
Loan Parties have filed all Federal, state and other material tax returns and
reports required to be filed, and have paid or made adequate provision for
payment of all Federal, state and other taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets that are due and payable, except, in each case, those which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP.  There is no proposed tax assessment against any
Loan Party that would, if made, have a Material Adverse Effect.  No
Loan Party is party to any tax sharing agreement with any Person other than
another Loan Party other than the tax allocation and separation agreement dated
as of September 27, 1995 among certain of the Loan Parties, Kimberly-Clark
Corporation, a Delaware corporation, K-C Nevada, Inc., a Nevada corporation and
Astral Aviation, Inc., a Delaware corporation




5.12  ERISA
Compliance . Each of
Parent and its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to result in material liability of the
Borrower or any of its ERISA Affiliates.




5.13  Subsidiaries; Equity
Interests .  Each
Loan Party has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries
have been validly issued, are fully paid and non-assessable, except in the case
of any Wisconsin corporation, subject to personal liability which may be imposed
on shareholders by former Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law for debts incurred prior to June 14, 2006 (for debts incurred on
or after such date, such Section has been repealed), and are owned by a Loan
Party in the amounts specified on Part (a) of Schedule 5.13
free and clear of all Liens except those created under the Collateral
Documents.  Set forth in Part (b) of Schedule 5.13 is a
complete and accurate list of all Investments (other than (i) Cash Equivalents
and (ii) those Investments set forth in Part (a) of Schedule 5.13) held
by any Loan Party on the date hereof, showing as of the date hereof the amount,
obligor or issuer and maturity, if any, thereof.  No Loan Party has
any equity investments in any other corporation or entity other than those
specifically disclosed in Part (a) or Part (b) of Schedule
5.13.




5.14  Margin Regulations;
Investment Company Act; .




(a)  The
Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock and no proceeds of the Term
Loans will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock.




(b)  None of
Parent, the Borrower or any Subsidiary is or is required to be registered as an
“investment company” under the Investment Company Act of 1940 (the “ICA”).  Neither
the making of any Term Loan nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other transactions
contemplated by the Loan Documents, will violate any provision of any the ICA or
any rule, regulation or order of the SEC thereunder.




5.15  Disclosure .  All
information that has been made available to the Administrative Agent or any
Lender by the Borrower or any of its representatives in connection with the
transactions contemplated hereby is complete and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such statements
were made.




5.16  Compliance with
Laws .  Each
Loan Party is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, or (b) the
failure to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.




5.17  Intellectual Property;
Licenses, Etc .




(a)           The
Loan Parties own all right, title and interest in and to, or possess the right
to use, the Intellectual Property Collateral (as defined in Section 10.01(f))
that are reasonably necessary for the operation of their respective
businesses.




(b)           The
operation of the Loan Parties’ respective businesses as currently conducted, or
as contemplated to be conducted and the use of the Intellectual Property
Collateral in connection therewith do not infringe, misappropriate, conflict
with, or otherwise violate the rights of any other Person.  The
Intellectual Property Collateral is subsisting and has not been adjudicated
invalid or unenforceable in whole or in part, and is valid and
enforceable.




(c)           No
claim or litigation has been asserted or is pending or, to the best knowledge of
the Loan Parties, threatened, that, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, alleging that
the Loan Parties’ rights in or use of the Intellectual Property Collateral or
the operation of the businesses of the Loan Parties infringe, misappropriate, or
otherwise violate the rights of any other Person.  To the Borrower’s
best knowledge, no Person is engaging in any activity that infringes,
misappropriates, or otherwise violates the Intellectual Property
Collateral.




(d)           With
respect to each IP Agreement (as defined in Section 10.01(f)):
(i) such IP Agreement is valid and binding and in full force and effect; (ii)
such IP Agreement will not cease to be valid and binding and in full force and
effect on terms identical to those currently in effect as a result of the rights
and interest granted herein, nor will the grant of such rights and interest
constitute a breach or default under such IP Agreement or otherwise give any
party thereto a right to terminate such IP Agreement; (iii) Borrower has not
received any notice of termination, cancellation or received any notice of a
breach or default under such IP Agreement; (iv) except as set forth on Schedule 5.17(d),
Borrower has not granted to any other third party any rights, adverse or
otherwise, under such IP Agreement; and (v) neither the Borrower nor, to the
best of the Borrower’s knowledge, any other party to such IP Agreement is in
breach or default thereof in any material respect, and, to the best of the
Borrower’s knowledge, no event has occurred that, with notice or lapse of time
or both, would constitute such a breach or default or permit termination,
modification or acceleration under such IP Agreement.




5.18  Security/Priority .




The
provisions of the Loan Documents are effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, legal, valid and first
priority perfected Liens (subject, in the case of priority, to Permitted Liens)
on and security interests in all right, title and interest in the Collateral,
enforceable against each Loan Party that owns an interest in such Collateral and
any other Person.




5.19  Slot
Utilization .  The
Borrower and its Subsidiaries are utilizing the Slots in a manner consistent
with applicable regulations and contracts in order to preserve the value of the
Slots, taking into account any waivers or other relief granted to the Borrower
and/or its Subsidiaries by the FAA.  None of Parent, the Borrower or
any of the Borrower’s Subsidiaries has received any notice from the FAA, or is
aware of any other event or circumstance, that would be reasonably likely to
impair the Slots or the value thereof.




5.20  Representations and
Warrantiesas
to Collateral .  (a)  Each
Loan Party’s exact legal name, as defined in Section 9-503(a) of the Uniform
Commercial Code, is correctly set forth in Schedule 5.20(a)(1)
hereto.  Each Loan Party has only the trade names, domain names and
marks listed on Schedule B of the Intellectual Property Security
Agreement.  Each Loan Party is located (within the meaning of section
9-307 of the Uniform Commercial Code) and has its chief executive office in the
state or jurisdiction set forth in Schedule 5.20(a)(1)
hereto.  The information set forth in Schedule 5.20(a)(1)
hereto with respect to each Loan Party is true and accurate in all
respects.  Except as set forth in Schedule 5.20(a)(1),
no Loan Party has previously changed its name, location, chief executive office,
type of organization, jurisdiction of organization or organizational
identification number during the 5 years preceding the execution of this
Agreement from those set forth in Schedule 5.20(a)(1)
hereto except as disclosed in Schedule 5.20(a)(2)
hereto.




(b)  Each Loan
Party is the legal and beneficial owner of the Collateral of such Loan Party
free and clear of any Lien of others, except for Permitted Liens.




(c)  Except
for possessory interests of landlords and warehousemen, each Loan Party has
exclusive possession and control of the Equipment.  In the case of
Equipment located on leased premises or in warehouses, no lessor or warehouseman
of any premises or warehouse upon or in which such Equipment is located has (i)
issued any warehouse receipt or other receipt in the nature of a warehouse
receipt in respect of any Equipment, (ii) to the best knowledge of any Loan
Party, issued any document for any of any Loan Party’s Equipment and
(iii) to the best knowledge of any Loan Party, received notification of any
secured party’s interest (other than the security interest granted hereunder) in
any Loan Party’s Equipment.




(d)  The
Pledged Equity of any Subsidiary of any Loan Party pledged by each Loan Party
hereunder has been duly authorized and validly issued and is fully paid and
non-assessable, except in the case of any Wisconsin corporation, subject to
personal liability which may be imposed on shareholders by former Section
180.0622(2)(b) of the Wisconsin Business Corporation Law for debts incurred
prior to June 14, 2006 (for debts incurred on or after such date, such Section
has been repealed).  If any Loan Party is an issuer of Pledged Equity,
such Loan Party confirms that it has received notice of such security
interest.




(e)  The
Pledged Equity of any Subsidiary of any Loan Party pledged by each Loan Party
constitutes the percentage of the issued and outstanding Equity Interests of the
issuers thereof indicated on Schedule I
hereto.  The Pledged Debt constitutes all of the outstanding
indebtedness owed to each Loan Party by the issuers thereof and, as of the
Amendment and Restatement Effective Date, is outstanding in the principal amount
indicated on Schedule II
hereto.




5.21  Indebtedness and Guaranteed
Indebtedness .  All
Indebtedness and Guaranteed Indebtedness outstanding as of the Amended and
Restated Effective Date for each Loan Party (other than the Obligations) is
described on Schedule
7.03.




5.22  Deposit
Accounts .  Schedule 5.22 lists
all banks and other financial institutions at which any Loan Party maintains
deposit or other accounts in the United States, and such Schedule correctly
identifies the name, address and telephone number of each depository, the name
in which the account is held and the complete account number
therefor.








ARTICLE
      VIAFFIRMATIVE
      COVENANTS







So long
as (i) any Lender shall have any Term Commitment hereunder, (ii) any Term Loan
remains outstanding, (iii) any other Obligation (other than Airline Service
Agreement Obligations outstanding after the Maturity Date) hereunder which is
accrued and payable shall remain unpaid or unsatisfied or (iv) solely with
respect to Sections 6.01, 6.05,6.07, 6.10, 6.12, 6.13,
6.14, 6.15 6.16, 6.17 and 6.18, any Airline Service Agreement Obligations shall
remain outstanding prior to the Airline Service Agreement Termination Date,
Parent and the Borrower shall, and shall (except in the case of the covenants
set forth in Sections
6.01, 6.02, and 6.03) cause each Loan
Party to:




6.01  Financial
Statements .  Deliver
to the Administrative Agent and each Lender, in form and detail reasonably
satisfactory to the Administrative Agent:




(a)  as soon
as available, but in any event within 90 days after the end of each fiscal year
of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries
as at the end of such fiscal year, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of an independent certified
public accountant of nationally recognized standing acceptable to the
Administrative Agent and each Significant Lender, which report and opinion shall
be prepared in accordance with generally accepted auditing standards and shall
not be qualified in any material respect except with respect to a “going
concern” or like qualification or exception;




(b)  as soon
as available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Parent, a consolidated balance
sheet of the Parent and its Subsidiaries as at the end of such fiscal quarter,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal quarter and for the portion of the
Parent’s fiscal year then ended, setting forth in each case in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable detail
and certified by the Chief Executive Officer or the Chief Financial Officer of
the Parent as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Parent and its Subsidiaries in
accordance with GAAP, subject only to normal year end audit adjustments and the
absence of footnotes;




(c)  as soon
as available, but in any event within 30 days after the end of each month, other
than the third month of any fiscal quarter, a consolidated balance sheet of the
Parent and its Subsidiaries as at the end of such fiscal month, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal month and for the portion of the Parent’s fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal month of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by
the Chief Executive Officer or the Chief Financial Officer of the Parent as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Parent and its Subsidiaries in accordance with
GAAP, subject only to normal year end audit adjustments and the absence of
footnotes; and




(d)  (i) as
soon as available, but no more than five (5) Business Days after the end of each
calendar week a cash balance report for such calendar week, which report shall
show, among other things, the aggregate amount of cash and Cash Equivalents that
any of the Loan Parties has unrestricted access to on each day of such calendar
week, and the aggregate amount of cash that the Loan Parties are restricted from
accessing on each day of such calendar week and (ii) a flash cash report as of
the day preceding such report.




6.02  Certificates; Other
Information .  Deliver
to the Administrative Agent and each Lender, in form and detail reasonably
satisfactory to the Administrative Agent and each Significant
Lender:




(a)  promptly
after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of any
Loan Party by independent accountants in connection with the accounts or books
of any Loan Party, or any audit of any of them;




(b)  promptly
after the furnishing thereof, copies of any statement or report furnished to any
holder of debt securities of any Loan Party pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6.02;




(c)  promptly
after the assertion or occurrence thereof, notice of any Environmental Action
against or of any noncompliance by any Loan Party with any Environmental Law or
Environmental Permit that could reasonably be expected to have a Material
Adverse Effect.




(d)  promptly,
such additional information regarding the business, financial or corporate
affairs of any Loan Party, or compliance with the terms of the Loan Documents,
as the Administrative Agent or any Lender may from time to time reasonably
request; and




(e)  promptly
upon request of Administrative Agent or any Significant Lender a schedule
listing all locations at which $1,000,000 or more of Equipment of any Loan Party
is located.




6.03  Notices .  Promptly
notify the Administrative Agent and each Significant Lender:




(a)  of the
occurrence of any Default;




(b)  of any
matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect;




(c)  of the
occurrence of any ERISA Event;




(d)  of the
occurrence of any event for which the Borrower is required to make a mandatory
repayment pursuant to Section
2.02(b);




(e)  of a
breach of the Use or Lose Rule; and




(f)  of any
material setoff, claims (including with respect to material environmental
claims), withholdings or other defenses to which any of the Collateral, or any
of the Agents’ or the Lenders’ rights with respect to the Collateral, in any
material respect, are subject.




Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.




6.04  Payment of
Obligations .  Pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such tax, assessment, charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (i) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (ii) such proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such charge or
claim.




6.05  Preservation of Existence,
Etc .  (a)  Preserve,
renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization except in a
transaction permitted by Section 7.05 or 7.06; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse
Effect.




6.06  Maintenance of
Properties .  (a)  Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear
and tear excepted; (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) use the standard of care
typical in the industry in the operation and maintenance of its
facilities.




6.07  Maintenance of
Insurance .  Maintain
with financially sound and reputable insurance companies not Affiliates of the
Borrower (other than Cardinal Insurance Company, Cayman Ltd.), insurance or
reinsurance in accordance with the terms of the Collateral Documents and
otherwise with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and providing for not less than 30
days’ prior notice to the Collateral Agent of termination, modification, lapse
or cancellation of such insurance or reinsurance.  Each such policy of
insurance shall (a) name the Collateral Agent for the benefit of the Lenders as
an additional insured thereunder as its interests may appear and (b) in the case
of each business interruption and casualty insurance policy, contain a loss
payable clause or endorsement, satisfactory in form and substance to Collateral
Agent and each Significant Lender, that names Collateral Agent for the benefit
of Lenders as the loss payee thereunder for any covered loss.




6.08  Compliance with
Laws .  Comply
in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.




6.09  Books and
Records .  (a)  Maintain
proper books of record and account, in which full, true and correct entries
consistent with GAAP shall be made of all financial transactions and matters
involving the assets and business of the Parent and its Subsidiaries; and (b)
maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Parent and its Subsidiaries.




6.10  Inspection
Rights .  Permit
representatives and independent contractors of the Administrative Agent and the
Collateral Agent and representatives of each Lender, at the expense of the
Borrower, to visit and inspect any of its properties, to inspect the Collateral,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants (with
the Borrower having the right to have a representative present at all such
communications) and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an
Event of Default exists the Administrative Agent, Collateral Agent or any Lender
(or any of their respective representatives or independent contractors) may do
any of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.




6.11  Use of
Proceeds .  Use
the proceeds of the Term Loans to provide general working capital and to pay
ordinary operating costs and expenses of the Loan Parties.




6.12  Further
Assurances .  Promptly
upon request by the Administrative Agent, the Collateral Agent or any
Significant Lender (a) correct any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and (b) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, the Collateral Agent or any Lender may reasonably require
from time to time in order to (i) carry out more effectively the purposes of the
Loan Documents, (ii) to the fullest extent permitted by applicable law, subject
any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of the
Collateral Documents, (iii) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and any of the Liens intended to be
created thereunder and (iv) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the rights granted
or now or hereafter intended to be granted to the Secured Parties under any Loan
Document or under any other instrument executed in connection with any Loan
Document to which any Loan Party or any of its Subsidiaries is or is to be a
party, and cause each of its Subsidiaries to do so.




6.13  Compliance with Terms of
Gate Leaseholds .  Make
all payments and otherwise perform all obligations in respect of all leases of
real property (including, without limitation, arrangements with respect to
airport gate leaseholds to which the Borrower or any of its Subsidiaries is a
party), to the extent necessary to keep such leases in full force and effect and
not allow such leases to lapse or be terminated or any rights to renew such
leases to be forfeited or cancelled, notify the Administrative Agent and each
Significant Lender of any default by any party with respect to such leases and
cooperate with the Administrative Agent and each Significant Lender in all
respects to cure any such default, and cause each of its Subsidiaries to do so,
except, in any case, where the failure to do so, either individually or in the
aggregate, could not be reasonably likely to have a Material Adverse
Effect.




6.14  Cash Management System;
Controlled Accounts; Initial
Drawing .  Maintain
and cause each of its Subsidiaries to maintain (a) a cash management system
reasonably acceptable to the Administrative Agent, the Collateral Agent and each
Significant Lender (provided that, in the event the cash management system in
place as of the Amendment and Restatement Effective Date is deemed after the
Amendment and Restatement Effective Date to be unacceptable to the
Administrative Agent, the Collateral Agent or any Significant Lender, then the
Borrower and its Subsidiaries shall be provided a reasonable period of time to
modify such cash management system to satisfy the requirements of the
Administrative Agent, the Collateral Agent and each Significant Lender) and (b)
all cash in Controlled Accounts (except to the extent held in accounts not at
any time having an aggregate balance in excess of $200,000); provided
that  to the extent consistent with agreements with the Processing
Bank and American Express, the Loan Parties shall be permitted to hold accounts
that are not Controlled Accounts with U.S. Bank National Association so long as
the amounts on deposit in such accounts are intended solely to cash
collateralize holdback obligations and other obligations in connection with
payments of credit card processing or clearinghouse services to the Processing
Bank.  The foregoing notwithstanding, the Loan Parties shall maintain
all proceeds of the Term Loans in the Special Controlled Account except for (i)
proceeds of Term Loans used to fund operating expenses in the ordinary course of
business and (ii) proceeds of Term Loans used to fund payroll and disbursement
accounts so long as the funds transferred from the Special Controlled Account
are used within one (1) Business Day of the transfer thereof to satisfy payroll
and disbursement obligations, as applicable.




6.15  FAA and DOT Matters;
Citizenship .  (a)
possess and maintain, and cause each other Loan Party to possess and maintain,
all necessary franchises, licenses, permits, rights, concessions, authorizations
and consents which are material to the operation of the routes flown by it and
the conduct of its business and operations as currently conducted except in any
case described in this clause (a), where the failure to do so, either
individually or in the aggregate, could not be reasonably likely to have a
Material Adverse Effect and (b) solely with respect to the Borrower, (i)
maintain at all times its status at the DOT, as applicable, as an “air carrier”
within the meaning of Section 40102(a)(2) of Title 49, and hold a certificate
under Section 41102(a)(1) of Title 49, or a commuter air carrier authorization,
as applicable; (ii) at all times hereunder be a citizen of the United States as
defined by Section 40102(a)15 of Title 49 and as that statutory provision has
been interpreted by the DOT pursuant to its policies; and (iii) maintain at all
times its status at the FAA as an air carrier and hold air carrier operating
certificates and other operating authorizations issued by the FAA pursuant to 14
C.F.R. Sections 119, 121 or 135 as currently in effect or as may be amended or
recodified from time to time.




6.16  Slot
Utilization .  Each
Loan Party shall utilize its Slots in a manner that does not breach, violate, or
conflict with the Use or Lose Rule or result in the loss of any Slot under the
Use or Lose Rule.




6.17  Gate
Utilization .  Utilize
all of its airport gate leaseholds in a manner sufficient to comply with
applicable lease provisions governing such airport gate leaseholds.




6.18  Cape Town
Convention .  With
respect to the Cape Town Convention which has been ratified by, and is in full
force and effect in the United States of America, the parties hereto hereby
agree to permit the interests created under the Loan Documents to constitute
International Interests under the Cape Town Convention. Upon request by the
Administrative Agent or any Significant Lender, the Borrower at its own cost and
expense shall from time to time do or cause to be done any and all acts and
things (other than acts and things under the control of the Collateral Agent)
which may be required or desirable (in the opinion of Collateral Agent or any
Significant Lender) to ensure that each of the Secured Parties has the full
benefit of the Cape Town Convention in connection with any Airframes and
Engines, including:




(a)  any
matters connected with registering, perfecting, preserving and/or enhancing any
International Interest vested in the Secured Parties with respect to any
Airframes and Engines and constituted by the Loan Documents;




(b)  entry in
to agreements (subordination or otherwise) to protect and/or enhance and/or,
improve the priority of any International Interest referred to in the foregoing
paragraph;




(c)  excluding,
in writing, the application of any provisions of the Cape Town Convention that
the Collateral Agent may deem desirable in connection with the foregoing;
and




(d)  if any
subsequent action taken by any party, including any permitted sublease or
re-registration of any Airframes or Engines, gives rise to a new International
Interest under the Cape Town Convention, registering such interest with the
International Registry (as such term is defined in the Cape Town Convention)
with the consent of the Collateral Agent, any Significant Lender, or any duly
authorized agent thereof, and any other party hereto as necessary to complete
such registration.




6.19  Payment of
Taxes .  Each
Loan Party shall pay and discharge or cause to be paid and discharged promptly
all taxes payable by it, including taxes imposed upon it, its income and
profits, or any of its operations, its property (real, personal or mixed) and
all taxes with respect to tax, social security and unemployment withholding with
respect to its employees, before any thereof shall become past due, except in
each case, (i) to the extent such taxes are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(x) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (y) such proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such taxes or (ii) where the failure to pay or discharge such taxes
would not result in aggregate liabilities in excess of $1,000,000.








ARTICLE
      VIINEGATIVE
      COVENANTS







So long
as (i) any Lender shall have any Term Commitment hereunder, (ii) any Term Loan
remains outstanding, or (iii) any other Obligation (other than Airline Service
Agreement Obligations outstanding after the Maturity Date) hereunder which is
accrued and payable shall remain unpaid or unsatisfied or (iv) solely with
respect to Sections 7.01, 7.05, 7.06, 7.07, 7.13, 7.18 and 7.21, any Airline
Service Agreement Obligations shall remain outstanding prior to the Airline
Service Agreement Termination Date, Parent and the Borrower shall not, nor shall
they permit any other Loan Party to, directly or indirectly:




7.01  Liens .  Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, or sign or file or suffer to
exist under the Uniform Commercial Code of any jurisdiction a financing
statement that names Parent, the Borrower or any of the Borrower’s Subsidiaries
as debtor, or sign or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any
accounts or other right to receive income, other than the
following:




(a)  Liens
pursuant to any Loan Document;




(b)  Liens
existing on the Initial Closing Date and set forth on Schedule
7.01;




(c)  Liens for
taxes, assessments or governmental charges or claims not delinquent or which are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;




(d)  Liens of
landlords, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue or which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;




(e)  Liens
incurred or pledges or deposits in the ordinary course of business made in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;




(f)  Liens
incurred or deposits made to secure the performance of tenders, bids, trade
contracts, leases (real and personal) (other than Indebtedness), statutory
obligations, surety bonds (other than bonds related to judgments or litigation),
performance and return of money (but not borrowed money) bonds, reimbursement
obligations and chargeback rights of Persons performing credit card processing
services for a Loan Party and other obligations of a like nature incurred in the
ordinary course of business;




(g)  easements,
rights-of-way, restrictions, minor defects, encroachments or irregularities of
title and other similar charges or encumbrances affecting real property which do
not materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the applicable
Person;




(h)  Liens
securing judgments and attachments not constituting an Event of Default under
Section 8.01(g)
or securing appeal or other surety bonds related to such judgments;




(i)  operating
leases or subleases of real or personal property granted to others not
interfering in any material respect with the business of the Loan Parties, taken
as a whole;




(j)  Liens in
favor of collecting or payor banks and credit card processors having a right of
setoff, revocation, refund or chargeback with respect to money or instruments of
any Loan Party on deposit with or in possession of such bank; and




(k)  Liens
securing Indebtedness permitted under Section
7.03(c)(v).




7.02  Investments .  Make
or hold any Investments, except:




(a)  Investments
held by any Loan Party in the form of Cash Equivalents;




(b)  equity
Investments of the Borrower in any Guarantor and Investments of any Guarantor in
the Borrower or in another Guarantor;




(c)  Investments
in accounts, contract rights and chattel paper (each as defined in the UCC),
notes receivable and similar items arising or acquired in the ordinary course of
business and Investments received in settlement of amounts due to any Loan Party
effected in the ordinary course of business (including as a result of
Dispositions not prohibited by Section
7.06);




(d)  Guarantees
permitted by Section
7.03;




(e)  Investments
(other than Cash Equivalents) existing on the Initial Closing Date and set forth
on Schedule
5.13 hereof; and




(f)  Investments
consisting of intercompany debt permitted under Section 7.03.




7.03  Indebtedness .  Create,
incur, assume or suffer to exist any Indebtedness, except:




(a)  in the
case of the Borrower, Indebtedness owed to a Guarantor; provided that any such
Indebtedness (i) shall be subordinated to the Obligations on terms satisfactory
to the Administrative Agent and each Significant Lender, (ii) a Lien on all such
Indebtedness shall have been granted to Collateral Agent for the benefit of
Lenders, and (iii) such Indebtedness shall be evidenced by a promissory note or
other instrument and such promissory note or instrument shall have been pledged
and delivered to the Collateral Agent;




(b)  in the
case of any Loan Party (other than the Borrower), Indebtedness owed to the
Borrower;




(c)  in the
case of the Loan Parties,




(i)  Indebtedness
under the Loan Documents;




(ii)  Existing
Indebtedness;




(iii)  Indebtedness
incurred after the Initial Closing Date consisting of Guarantees permitted by
Section
7.04;




(iv)  Indebtedness
consisting of rent deferrals under aircraft leases;




(v)  Indebtedness
in respect of aircraft leases entered into with Republic and contemplated by the
Business Plan;




(vi)  Indebtedness
incurred by any Loan Party to any TPG Entity in connection with the financing by
such TPG Entity of payments due by the Borrower under the Airline Service
Agreement; provided that such
Indebtedness is not secured by any Lien on the Collateral; and




(vii)  Indebtedness
incurred in the ordinary course of business in connection with letters of credit
or surety bonds required by Law or third parties in connection with the Loan
Parties’ operations.




7.04  Guarantees and Other
Liabilities .  Purchase
or repurchase (or agree, contingently or otherwise, so to do) the Indebtedness
of, or assume, guarantee (directly or indirectly or by an instrument having the
effect of assuring another’s payment or performance of any obligation or
capability of so doing, or otherwise), endorse or otherwise become liable,
directly or indirectly, in connection with the Indebtedness, stock or dividends
of any Person, except (a) for any guaranty of Indebtedness or other obligations
of the Borrower or any Guarantor if the Borrower or such Guarantor could have
incurred such Indebtedness or obligations under this Agreement, (b) by
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (c) customary indemnities in favor of officers, employees,
directors, consultants, attorneys, accountants or other advisors, (d) guarantees
of Obligations or Secured Credit Obligations under the Loan Documents and the
Reimbursement Agreement and (e) guarantees of Indebtedness permitted under Section
7.03(c)(v).




7.05  Fundamental
Changes .  Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person.




7.06  Dispositions .  Make
any Disposition of Collateral, except:




(a)  Dispositions
of unused, obsolete or worn out property and surplus aircraft, engines and parts
related thereto, whether now owned or hereafter acquired, in the ordinary course
of business;




(b)  Dispositions
of inventory in the ordinary course of business (which, for the avoidance of
doubt shall not include the assets set forth on Schedule 7.06 or any Spare Parts
related thereto);




(c)  abandonment
of Intellectual Property Collateral pursuant to Section
10.04;




(d)  licensing
and sublicensing of Intellectual Property Collateral consistent with the
Borrower’s past practices in the ordinary course of business;




(e)  Dispositions
of the assets set forth on Schedule 7.06 and any Spare Parts related
thereto;




(f)  So long
as no Event of Default shall occur and be continuing, and (i) with respect to
any replacements of Slots, subject to the satisfaction of the terms and
conditions of Section 6(d) of the Slot Security Agreement, and (ii) with respect
to any trades (or similar arrangements) with respect to Slots, subject to the
satisfaction the terms and conditions of Section 6(b) of the Slot Security
Agreement, the Loan Parties may transfer Slots in exchange for other Slots (and
no other consideration); provided, however, that any
Disposition pursuant to this Section 7.06 shall be
for fair market value.




7.07  Restricted
Payments .  Declare
or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, or issue or sell any Equity Interests or
accept any capital contributions, except that, so long as no Default shall have
occurred and be continuing at the time of any action described below or would
result therefrom:




(a)  each Loan
Party (other than the Borrower) may make Restricted Payments to any Loan Party
which is its direct parent;




(b)  each Loan
Party may declare and make dividend payments or other distributions payable
solely in the common stock or other common Equity Interests of such
Person;




(c)  any Loan
Party may issue Equity Interests, or make capital contributions, to another Loan
Party and Parent may accept capital contributions;




(d)  Borrower
may make Restricted Payments to Parent to enable Parent to pay taxes which are
due; and




(e)  Borrower
may make Restricted Payments to Parent to enable Parent to make compensation and
indemnification payments owing to directors and officers of Parent.




7.08  Change in Nature of
Business .  Engage
in any line of business different from those lines of business conducted by the
Borrower and its Subsidiaries on the Initial Closing Date.




7.09  Transactions with
Affiliates .  Enter
into any transaction of any kind with any Affiliate of the Borrower, whether or
not in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Borrower or such Loan Party as would be
obtainable by the Borrower or such Loan Party at the time in a comparable arm’s
length transaction with a Person other than an Affiliate, provided that the
foregoing restriction shall not apply to (a) transactions between or among the
Borrower and any of the Guarantors or between and among any of the Guarantors;
(b) reasonable and customary fees and compensation paid to, and indemnity
provided on behalf of, officers, directors or employees of any Loan Party; (c)
any Restricted Payments not prohibited by Section 7.07; (d) any
payments or other distributions by a Subsidiary to its direct or indirect parent
to enable such parent to pay its liabilities for taxes attributable to such
Subsidiary; and (e) the Loan Documents and the transactions contemplated
thereby.




7.10  Use of
Proceeds .  Use
the proceeds of any Term Loan, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund Indebtedness
originally incurred for such purpose.




7.11  Amendments of Organization
Documents .  Amend
any of its Organization Documents.




7.12  Changesin Fiscal
Year .  Make
any change in fiscal year.




7.13  Prepayments, Etc. of
Indebtedness .  Prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination
terms of, any Indebtedness, except for the prepayment of the Term Loans and
the Reimbursement Obligations in accordance with the terms of this
Agreement.




7.14  Partnerships,
Etc .  Become
a general partner in any general or limited partnership or joint
venture.




7.15  Speculative
Transactions .  Engage
in any transaction involving any Swap Contract, except Swap Contracts relating
to fuel in accordance with the Loan Parties’ current business practice or as
contemplated by Section 4.02.




7.16  Formation of
Subsidiaries .  Organize
or invest in any new Subsidiary.




7.17  Change in Capital
Structure .  Make
any material change in its equity capital structure as in existence on the
Initial Closing Date.




7.18  Repayments of Reimbursement
Obligations .  Make
any repayment in respect of Reimbursement Obligations except (x) to the extent
set forth in Subsections 2.02(b)(i) through 2.02(b)(iv) or (y) concurrently with
a prepayment of the Term Loans as set forth in Section 2.02(b)(v).




7.19  Amendments to Reimbursement
Agreement .  Make
any amendment, supplement, modification or any other change to the Reimbursement
Agreement in a manner that is adverse to the interests of any Lender or any
Agent under any Loan Document without the prior written consent of the Required
Lenders.




7.20  Sales and
Leasebacks .  Enter
into any arrangement with any Person providing for the leasing by any Loan Party
of real or personal property that has been or is to be sold or transferred by
such Loan Party to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of such Loan Party.




7.21  Negative Pledge
Clauses .  Enter
into or suffer to exist or become effective any agreement that prohibits or
limits the ability of any Loan Party to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party other than (a) this Agreement and the other Loan Documents and the
Reimbursement Documents and (b) any agreements governing any purchase money
Liens or Capital Lease Obligations not prohibited hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby).




7.22  Clauses Restricting
Subsidiary Distributions .  Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, any Loan Party, (b) make loans or advances to,
or other Investments in, any Loan Party or (c) transfer any of its assets to any
Loan Party, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and the
Reimbursement Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.








ARTICLE
      VIIIEVENTS OF DEFAULT
      AND REMEDIES







8.01  Events of
Default .  Any
of the following shall constitute an Event of Default:




(a)  Non-Payment.  The
Borrower or any other Loan Party fails to pay when and as required to be paid
herein, any amount of principal of, or interest on, any Term Loan, or when and
as the same becomes due, any other amount payable hereunder or under any other
Loan Document; or




(b)  Specific
Covenants.  The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.03, 6.05, 6.07, 6.10, 6.11, 6.14, 6.15, 6.16, 6.17 or 6.18, or Article VII;
or




(c)  Other
Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or
(b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues unremedied for five (5) Business Days after the earlier of the
date on which (A) a Responsible Officer becomes aware of such failure or
(B) written notice thereof shall have been given to the Borrower by the
Administrative Agent, the Collateral Agent or any Lender; or




(d)  Representations and
Warranties.  Any representation, warranty, certification or
statement of fact made by or on behalf of the Borrower or any other Loan Party
herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect
when made; or




(e)  Cross-Default on
Indebtedness and Swap Contracts.  (i) Any event shall have
occurred that permits any holder or holders (or a trustee or agent on behalf of
such holder or holders) of Indebtedness (other than Indebtedness hereunder and
other than the Indebtedness listed on Schedule 5.02) to
demand the payment of such Indebtedness prior to its stated maturity, or cash
collateral in respect thereof; or (ii) with respect to any Indebtedness in an
amount greater than $1,000,000, any Loan Party or any Subsidiary fails to repay
such Indebtedness, in full, at or prior to the scheduled maturity thereof; or
(iii) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Borrower or any other Loan Party or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any other Loan Party or any Subsidiary is an Affected Party (as
defined in such Swap Contract) and, in either event, the Swap Termination Value
owed by the Loan Party or such Subsidiary as a result thereof is greater than
$1,000,000; or




(f)  Judgments.  There
is entered against any Loan Party or any Subsidiary (i) a final judgment or
order for the payment of money in an aggregate amount exceeding $1,000,000 (to
the extent not covered by independent third-party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of such
claim and does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, there is a period
of five (5) consecutive Business Days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect;
or




(g)  ERISA.  An
ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other such ERISA Events, could reasonably be
expected to result in liability of Parent and its ERISA Affiliates in an
aggregate amount exceeding $1,000,000; or




(h)  Invalidity of Loan
Documents.  Any provision of any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be valid and binding on or enforceable against any Loan
Party intended to be a party to it; any Loan Party files a motion or other
pleading seeking to challenge the validity of any Loan Document or the
applicability or enforceability of any Loan Document or which seeks to void,
avoid, limit, or otherwise adversely affect the security interest created by or
in any Loan Document or any payment made pursuant thereto; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document;
or




(i)  Change of
Control.  There occurs any Change of Control; or




(j)  Collateral
Document.  Any Collateral Document after delivery thereof
(other than pursuant to the terms thereof) ceases to create a valid and
perfected lien on and security interest in the Collateral purported to be
covered thereby having the priority contemplated by the Loan Documents;
or




(k)  Material Adverse
Effect.  There occurs any event or circumstance that would give
rise to a Material Adverse Effect since the Amendment and Restatement Effective
Date; or




(l)  Change in
Business.  The Borrower and its Subsidiaries cease to operate
their business as conducted on the date hereof or cease to operate flights
substantially in accordance with the flight schedule of the Borrower and its
Subsidiaries as of the Initial Closing Date (other than to the extent
contemplated in the Airline Service Agreement); or




(m)  Involuntary
Proceedings.  An involuntary proceeding shall be commenced or
an involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of Parent, the Borrower or any Subsidiary, or of a
substantial part of the property or assets of Parent, the Borrower or a
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Parent,
the Borrower or any Subsidiary or for a substantial part of the property or
assets of Parent, the Borrower or a Subsidiary or (iii) the winding-up or
liquidation of Parent, the Borrower or any Subsidiary; or




(n)  Voluntary
Proceedings.  Parent, the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition described
in (m) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Parent,
the Borrower or any Subsidiary  or for a substantial part of the
property or assets of Parent, the Borrower or any Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due (other than with respect to Indebtedness described on
Schedule 5.02); or




(o)  Reimbursement Agreement
Cross Default.  Any “Event of Default” under the Reimbursement
Agreement has occurred and is continuing; or




(p)  Cross Default on Airline
Service Agreement.  Any (i) default under the Airline Service
Agreement which permits Republic to terminate the Airline Service Agreement
(pursuant to Section 8.02(c) or 5.03 of the Airline Service Agreement) or (ii)
an Airline Service Agreement Rejection Event has occurred and is continuing;
or




(q)  Midwest Air LLC
Agreement .  The Borrower or any Subsidiary shall engage
in any transaction or take any action that would violate the terms of Section
3.2 of the Midwest Air LLC Agreement.




8.02  Remedies upon Event of
Default .  (a)
Upon the occurrence of any Event of Default described in Section 8.01(m) or (n)
above, automatically, and upon the occurrence and during the continuance of any
other Event of Default, at the request of the Required Lenders:




(i) the
commitment of each Lender to make Term Loans shall immediately
terminate;




(ii) the
unpaid principal amount of all outstanding Term Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document shall be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; and




(iii)  the
Administrative Agent shall exercise on behalf of the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
laws; provided
that remedies in respect of the Collateral shall only be exercised pursuant to
and in the manner set forth in Section 8.02(b).




(b) Upon
the occurrence and during the continuance of any Collateral Enforcement Event of
Default, the Collateral Agent (subject to the consent, and at the direction, of
the Required Secured Parties) shall exercise on behalf of the Secured Parties
all rights and remedies available to it in respect of the Collateral under the
Secured Credit Documents or applicable Laws.




8.03  Application of
Funds .  After
the exercise of remedies provided for in Section 8.02 or upon
the commencement of any case or proceeding under any Debtor Relief Law, any
amounts received on account of any Secured Credit Obligations from or with
respect to the Collateral or any enforcement proceedings with respect thereto
shall be applied by the Collateral Agent in the following order:




First, to payment of
that portion of the Secured Credit Obligations constituting fees, indemnities,
expenses and other amounts (including Attorney Costs) payable to the
Administrative Agent and the Collateral Agent in their capacities as
such;




Second, to payment of
that portion of the Secured Credit Obligations constituting amounts payable
under Article III of this Agreement and Article III of the Reimbursement
Agreement ratably among the Northwest Parties and the Lenders in proportion to
the amounts described in this clause Second payable to
them;




Third, to payment of
that portion of the Secured Credit Obligations constituting Reimbursement
Obligations up to a maximum principal amount of $10,000,000 (whether currently
owing or contingent) and any accrued and unpaid interest thereon (less the sum
(without duplication) of (i) the amount of any portion thereof that has been
cash collateralized pursuant to this Agreement or the Reimbursement Agreement
and (ii) the amount of funds on deposit in the Reimbursement Obligation
Collateral Account at such time prior to giving effect to the release of such
funds pursuant to the penultimate sentence of the last paragraph in this Section
8.03), principal on the Term Loans up to a maximum principal amount of
$50,000,000 (whether currently due and payable or not), and accrued and unpaid
interest on the Term Loans, ratably among the Northwest Parties and the Lenders
in proportion to the respective amounts described in this clause Third payable to
them;




Fourth, to the
payment of all other Secured Credit Obligations of the Loan Parties owing under
or in respect of the Secured Credit Documents on such date (including any
Reimbursement Obligations in excess of a principal amount of $10,000,000
(whether currently owing or contingent) and any accrued and unpaid interest
thereon less the sum (without duplication) of (i) the amount of any portion
thereof that has been cash collateralized pursuant to this Agreement or the
Reimbursement Agreement and (ii) the amount of funds on deposit in the
Reimbursement Obligation Collateral Account at such time prior to giving effect
to the release of such funds pursuant to the penultimate sentence of the last
paragraph in this Section 8.03), ratably among the Northwest Parties and the
Lenders in proportion to the respective amounts described in this clause Fourth payable to
them;




Fifth, to the payment
of all Airline Service Agreement Obligations that are unpaid and outstanding on
such date payable to Republic; and




Last, the balance, if
any, after all of the Secured Credit Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.




All
payments made pursuant to this Section 8.03 (except
for those payments to be made to the Collateral Agent) shall be made to the
Administrative Agent (in respect of Secured Credit Obligations owing to the
Lenders and the Administrative Agent) and to Northwest (in respect of Secured
Credit Obligations owing to the Northwest Parties), and the Administrative Agent
shall distribute such payments in accordance with the provisions of this
Agreement and Northwest shall distribute such payments in accordance with the
provisions of the Reimbursement Agreement.  Any payments made pursuant
to clauses Third and Fourth with respect
to Reimbursement Obligations which are not yet due and owing shall be held by
the Collateral Agent in the Reimbursement Obligations Collateral Account, and
shall be paid upon such Reimbursement Obligations becoming due and
payable.  If any cash collateral remains on deposit in the
Reimbursement Obligations Collateral Account (or pursuant to any other
arrangement) at such time as any payment pursuant to clauses Third or Fourth with respect
to Reimbursement Obligations are due and payable, such cash collateral shall be
released to Northwest at such time on account of, and to the extent of, such
Reimbursement Obligations.  If any such cash collateral remains on
deposit in the Reimbursement Obligations Collateral Account after the Secured
Credit Obligations have been indefeasibly paid in full, such cash collateral
shall be paid in accordance with clause Last
above.




Prior to
the Airline Service Agreement Termination Date, any payments of the type
described in clause Fifth with respect to
Airline Service Agreement Obligations but that are not yet due and owing shall
be held as cash collateral in a separate account by the Collateral Agent (other
than the Reimbursement Obligations Collateral Account), and, if any Airline
Service Agreement Obligations become due prior to the Airline Service Agreement
Termination Date, such amount shall be released to Republic at such time on
account of, and to the extent of, such Airlines Service Agreement
Obligations.  If any such cash collateral described in the foregoing
sentence remains on deposit in such account on or after the Airline Service
Agreement Termination Date, such cash collateral shall be paid in accordance
with clause Last
above.








ARTICLE
      IXADMINISTRATIVE AGENT
      AND COLLATERAL AGENT







9.01  Appointment and
Authorization of Administrative Agentand Collateral
Agent .




(a)  Each
Lender hereby irrevocably appoints, designates and authorizes the Administrative
Agent and the Collateral Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent or the Collateral Agent, as the case may be, by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  Notwithstanding any provision to the
contrary contained elsewhere herein or in any other Loan Document, the
Administrative Agent and the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent or the Collateral Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or the Collateral Agent.  Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to the Administrative Agent or the
Collateral Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.




(b)  The
Collateral Agent shall act as the “collateral agent” under the Loan Documents,
and each of the Lenders (in its capacities as a Lender (if applicable)) hereby
irrevocably appoints and authorizes the Collateral Agent to act as the agent of
such Lender for purposes of acquiring, holding and enforcing any and all Liens
on Collateral granted by any of the Loan Parties to secure any of the Secured
Credit Obligations, together with such powers and discretion as are reasonably
incidental thereto.  In this connection, the Collateral Agent (and any
co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent
pursuant to Section 9.02 for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Collateral Documents, or
for exercising any rights and remedies thereunder at the direction of the
Collateral Agent), shall be entitled to the benefits of all provisions of this
Article IX (including, without limitation, Section 9.07, as though such
co-agents, sub-agents and attorneys-in-fact were the “Collateral Agent” under
the Loan Documents) as if set forth in full herein with respect
thereto.




9.02  Delegation of
Duties .  The
Administrative and the Collateral Agent may execute any of its duties under this
Agreement or any other Loan Document (including for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Collateral Documents or of exercising any rights and remedies thereunder at the
direction of the Administrative Agent and the Collateral Agent) by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties.  Neither the Administrative Agent nor the Collateral
Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.




9.03  Liability of Administrative
Agentand
Collateral Agent .  No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein as finally determined in a nonappealable judgment by a court of
competent jurisdiction), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by any
Loan Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent or the Collateral
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or the perfection or priority of any Lien
or security interest created or purported to be created under the Collateral
Documents or the existence of any Liens or security interests in the Collateral,
or for any failure of any Loan Party or any other party to any Loan Document to
perform its obligations hereunder or thereunder.  No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of any Loan Party or any Affiliate
thereof.




9.04  Reliance by Administrative
Agentand
Collateral Agent .




(a)  The
Administrative Agent and the Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent and the Collateral Agent.  The Administrative Agent and the
Collateral Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  The Administrative
Agent and the Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.




(b)  For
purposes of determining compliance with the conditions specified in Section 4.01 or Section 4.02, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Amendment and Restatement
Effective Date specifying its objection thereto.




9.05  Notice of
Default .  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a “notice of
default”.  The Administrative Agent will notify the Lenders of its
receipt of any such notice.  The Administrative Agent shall take such
action with respect to such Default as may be directed by the Required Lenders
in accordance with Article VIII; provided, however, that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.




9.06  Credit Decision; Disclosure
of Information by Administrative Agentand Collateral
Agent .  Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent or the Collateral
Agent hereafter taken, including any consent to and acceptance of any assignment
or review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession.  Each Lender
represents to the Administrative Agent and the Collateral Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower
hereunder.  Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties.  Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent herein, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any of the Loan Parties or
any of their respective Affiliates which may come into the possession of any
Agent-Related Person.




9.07  Indemnification of
Administrative Agentand the Collateral
Agent .  Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of any Loan Party and without limiting the obligation of any Loan
Party to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person’s own gross negligence or willful misconduct;
provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section.  In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person.  Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent and the Collateral Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent or the
Collateral Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower.  The undertaking in this Section shall survive termination
of the Term Commitments, the payment of all other Obligations and the
resignation of the Administrative Agent or the Collateral Agent.




9.08  Successor Administrative
Agent .




(a) The
Administrative Agent may resign as Administrative Agent upon thirty (30) days’
notice to the Lenders and the Borrower.  If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint a successor
administrative agent for the Lenders.  If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders, a successor administrative agent from among the
Lenders.  Upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor administrative agent and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of any other
Lender.  After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Article IX and Sections 12.04
and 12.05 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.  Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents.  If no
Person agrees to be a successor Administrative Agent, the resigning
Administrative Agent’s resignation shall be effective upon notice by the
resigning Administrative Agent to the Lenders, and the Lenders shall assume the
responsibilities of the Administrative Agent.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.




(b)  Successor Collateral
Agent .  The
Collateral Agent may resign as Collateral Agent upon 30 days’ notice to the
Lenders.  If the Collateral Agent resigns under this Agreement, the
Required Lenders shall appoint a successor collateral agent for the
Lenders.  If no successor collateral agent is appointed prior to the
effective date of the resignation of the Collateral Agent, the Collateral Agent
may appoint, after consulting with the Lenders, a successor collateral agent
from among the Lenders.  Upon the acceptance of its appointment as
successor collateral agent hereunder, the Person acting as such successor
collateral agent shall succeed to all the rights, powers and duties of the
retiring Collateral Agent and the term “Collateral Agent” shall mean such
successor collateral agent and the retiring Collateral Agent’s appointment,
powers and duties as Collateral Agent shall be terminated, without any other or
further act or deed on the part of any other Lender.  After any
retiring Collateral Agent’s resignation hereunder as Collateral Agent, the
provisions of this Article IX and Sections 12.04
and 12.05 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Agreement.  Upon the acceptance of
any appointment as Collateral Agent hereunder by a successor and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Collateral Agent, and the retiring Collateral Agent shall be discharged
from its duties and obligations under the Loan Documents.  If no
Person agrees to be a successor Collateral Agent, the resigning Collateral
Agent’s resignation shall be effective upon notice by the resigning Collateral
Agent to the Lenders, and the Lenders shall assume the responsibilities of the
Collateral Agent.   After any retiring Collateral Agent’s
resignation hereunder as Collateral Agent, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Collateral Agent.




9.09  Collateral and Guaranty
Matters .  The
Lenders irrevocably authorize the Collateral Agent




(a)  to
release any Lien on any property granted to or held by the Collateral Agent
under any Loan Document (i) in accordance with the terms of Section 10.09 or (ii)
subject to Section
12.01, if approved, authorized or ratified in writing by the Required
Lenders; and




(b)  to
release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted
hereunder.




Upon
request by the Collateral Agent at any time, the Required Lenders will confirm
in writing the Collateral Agent’s authority to release its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section
9.09.  In each case as specified in this Section 9.09, the
Collateral Agent will, at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such item of Collateral from the assignment and
security interest granted under the Collateral Documents, or to release such
Guarantor from its obligations under the Guaranty, in each case in accordance
with the terms of the Loan Documents and this Section
9.09.








ARTICLE
      XSECURITY




10.01  Grant of
Security .  To
induce the Lenders to make the Term Loans and the Northwest Parties to make the
extensions of credit described in the Reimbursement Agreement, each Loan Party
hereby grants to the Collateral Agent, for itself and the ratable benefit of the
Secured Parties, as security for the full and prompt payment when due of the
Secured Credit Obligations of such Loan Party a continuing Lien and security
interest in and to all Pledged Collateral of such Loan Party.  “Pledged
Collateral” means all of the property and assets (other than the Excluded
Assets and the Excluded Airline Assets) of each Loan Party and its estate, real
and personal, tangible and intangible, whether now owned or hereafter acquired
or arising and regardless of where located, including but not limited
to:




(a)  all
equipment in all of its forms, including, without limitation, all machinery,
tools, motor vehicles, vessels, aircraft, aircraft engines, aircraft propellers,
furniture and fixtures, and all parts thereof and all accessions thereto and all
software related thereto, including, without limitation, software that is
embedded in and is part of the equipment (any and all such property being the
“Equipment”);




(b)  all
inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in
which such Loan Party has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which such Loan Party
has an interest or right as consignee) and (iii) goods that are returned to
or repossessed or stopped in transit by such Loan Party), and all accessions
thereto and products thereof and documents therefore, and all software related
thereto, including, without limitation, software that is embedded in and is part
of the inventory (any and all such property being the “Inventory”);




(c)  all
accounts (including, without limitation, health-care-insurance receivables),
chattel paper (including, without limitation, tangible chattel paper and
electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles, the American
Express Agreement and the U.S. Bank Agreement) and other obligations of any
kind, whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services and whether or not earned by performance, and
all rights now or hereafter existing in and to all supporting obligations and in
and to all security agreements, mortgages, Liens, leases, letters of credit and
other contracts securing or otherwise relating to the foregoing property (any
and all of such accounts, chattel paper, instruments, deposit accounts,
letter-of-credit rights, general intangibles and other obligations, to the
extent not referred to in clause (d), (e) or (f) below, being the “Receivables”,
and any and all such supporting obligations, security agreements, mortgages,
Liens, leases, letters of credit and other contracts to the extent not referred
to in clause (d), (e) or (f) below being the “Related
Contracts”);




(d)  the
following (the “Security
Collateral”):




(i)  the
Initial Pledged Equity and the certificates, if any, representing the Initial
Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all subscription warrants, rights or options issued thereon
or with respect thereto and all rights with respect to such Initial Pledged
Equity, including all rights to vote such Initial Pledged Equity or exercise
rights under any partnership agreement, limited liability company agreement or
similar agreement relating to Initial Pledged Equity;




(ii)  the
Initial Pledged Debt and the instruments, if any, evidencing the Initial Pledged
Debt, and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Initial Pledged Debt;




(iii)  all
additional shares of stock and other Equity Interests from time to time acquired
by such Loan Party in any manner (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the “Pledged
Equity”), and the certificates, if any, representing such additional
shares or other Equity Interests, and all dividends, distributions, return of
capital, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares or other Equity Interests and all subscription warrants, rights
or options issued thereon or with respect thereto, and all rights to vote such
Pledged Equity or exercise rights under any partnership agreement, limited
liability company agreement or similar agreement relating to Pledged Equity;
provided that
no Loan Party shall be required to pledge any Equity Interest in any Subsidiary
that is a CFC owned or otherwise held by such Loan Party which, when aggregated
with all of the other shares of stock in such Subsidiary pledged by any Loan
Party, would result in more than 66% of the shares of stock in such Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section
1.956-2(c)(2) promulgated under the Code) (the “Voting Foreign
Stock”) (on a fully diluted basis) being pledged to the Collateral Agent,
on behalf of the Secured Parties, under this Agreement (although all of the
shares of stock in such Subsidiary not entitled to vote (within the meaning of
Treasury Regulation Section 1.956-2(c)(2) promulgated under the Code) (the
“Non-Voting
Foreign Stock”) shall be pledged by each of the Loan Parties that owns or
otherwise holds any such Non-Voting Foreign Stock therein); provided further that, if, as
a result of any change in the tax laws of the United States of America after the
date of this Agreement, the pledge by such Loan Party of any additional shares
of stock in any such Subsidiary to the Collateral Agent, on behalf of the
Secured Parties under this Agreement would not result in an increase in the
aggregate net consolidated tax liabilities of the Borrower and its Subsidiaries,
then, promptly after the change in such laws, all such additional shares of
stock shall be so pledged under this Agreement;




(iv)  all
additional indebtedness from time to time owed to such Loan Party (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged
Debt”) and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and




(v)  all other
investment property (including, without limitation, all (A) securities, whether
certificated or uncertificated, (B) security entitlements, (C) securities
accounts, (D) commodity contracts and (E) commodity accounts) in which such Loan
Party has now, or acquires from time to time hereafter, any right, title or
interest in any manner, and the certificates or instruments, if any,
representing or evidencing such investment property, and all dividends,
distributions, return of capital, interest, distributions, value, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
investment property and all subscription warrants, rights or options issued
thereon or with respect thereto;




(e)  the
following (collectively, the “Account
Collateral”):




(i)  all
deposit and other bank accounts and all funds and financial assets from time to
time credited thereto (including, without limitation, all cash equivalents), all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such funds and financial assets, and all certificates
and instruments, if any, from time to time representing or evidencing such
accounts;




(ii)  all
promissory notes, certificates of deposit, deposit accounts, checks and other
instruments from time to time delivered to or otherwise possessed by the
Collateral Agent for or on behalf of such Loan Party, including, without
limitation, those delivered or possessed in substitution for or in addition to
any or all of the then existing Account Collateral; and




(iii)  all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral;




(f)  the
following (collectively, the “Intellectual
Property Collateral”):




(i)  all
patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);




(ii)  all
trademarks, service marks, domain names, trade dress, logos, designs, slogans,
trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent
that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use
trademark applications under applicable federal law), together, in each case,
with the goodwill symbolized thereby (“Trademarks”);




(iii)  all
copyrights, including, without limitation, copyrights in Computer Software,
internet web sites and the content thereof, whether registered or unregistered
(“Copyrights”);




(iv)  all
computer software, programs and databases (including, without limitation, source
code, object code and all related applications and data files), firmware and
documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test
rights, improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and new
versions of any of the foregoing (“Computer
Software”);




(v)  all
confidential and proprietary information, including, without limitation,
know-how, trade secrets, manufacturing and production processes and techniques,
inventions, research and development information, databases and data, including,
without limitation, technical data, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade
Secrets”), and all other intellectual, industrial and intangible property
of any type, including, without limitation, industrial designs and mask
works;




(vi)  all
registrations and applications for registration for any of the foregoing,
including, without limitation, those registrations and applications for
registration set forth in Schedules A, B and C to the Intellectual Property
Security Agreement (as such Schedules may be supplemented from time to time by
supplements to the IP Security Agreement, each such supplement being
substantially in the form of Exhibit D-1 (an
“IP
Security Agreement Supplement”)), executed by such Loan Party to the
Collateral Agent from time to time), together with all reissues, divisions,
continuations, continuations-in-part, extensions, renewals and reexaminations
thereof;




(vii)  all
tangible embodiments of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such Loan
Party accruing thereunder or pertaining thereto;




(viii)  all
agreements, permits, consents, orders and franchises relating to the license,
development, use or disclosure of any of the foregoing to which such Loan Party,
now or hereafter, is a party or a beneficiary (“IP
Agreements”); and




(ix)  any and
all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue
for and collect, or otherwise recover, such damages;




(g)  all books
and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Loan Party
pertaining to any of the Pledged Collateral; and




(h)  all
proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Pledged Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property of the
types described in clauses (a) through (g) of this Section 10.01
and this clause (h)) and, to the extent not otherwise included, all
(A) payments under insurance (whether or not the Collateral Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing Pledged
Collateral, (B) tort claims, including, without limitation, all commercial tort
claims and (C) cash.




For the
avoidance of doubt, Excluded Assets and Excluded Airline Assets shall not
constitute Pledged Collateral.




10.02  Further
Assurances .




(a)Each Loan Party agrees
that from time to time, at the expense of such Loan Party, such Loan Party will
promptly execute and deliver, or otherwise authenticate, all further instruments
and documents, and take all further action that may be necessary or desirable,
or that the Collateral Agent or any Significant Lender may reasonably request,
in order to perfect and protect any pledge or security interest granted or
purported to be granted by such Loan Party hereunder or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral of such Loan Party.  Without limiting the
generality of the foregoing, each Loan Party will, within a commercially
reasonable time with respect to Pledged Collateral of such Loan
Party:  (i) at the request of the Collateral Agent or any
Significant Lender, mark conspicuously each document included in Inventory, each
chattel paper included in Receivables, each Related Contract, and each of its
records pertaining to such Pledged Collateral with a legend, in form and
substance satisfactory to the Collateral Agent and each Significant Lender,
indicating that such document, chattel paper, Related Contract, or Pledged
Collateral is subject to the security interest granted hereby; (ii) execute
or authenticate and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Collateral Agent or any Significant Lender may
reasonably request, in order to perfect and preserve the security interest
granted or purported to be granted by such Loan Party hereunder; (iii) at
the request of the Collateral Agent or any Significant Lender, deliver to the
Collateral Agent for the benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; (iv) at the
request of the Collateral Agent or any Significant Lender, take all action
reasonably necessary to ensure within the time required hereunder that the
Collateral Agent has control of Pledged Collateral consisting of deposit
accounts, electronic chattel paper, investment property, letter-of-credit rights
and transferable records as provided in Sections 9-104, 9-105, 9-106 and 9-107
of the Uniform Commercial Code and in Section 16 of the Uniform Electronic
Transactions Act, as in effect in the jurisdiction governing such transferable
record; (v) at the request of the Collateral Agent or any Significant Lender,
take all action reasonably necessary to ensure that the Collateral Agent’s
security interest is noted on any certificate of ownership related to any
Pledged Collateral evidenced by a certificate of ownership; (vi) at the
reasonable request of the Collateral Agent or any Significant Lender, cause the
Collateral Agent to be the beneficiary under all letters of credit that
constitute Pledged Collateral, with the exclusive right to make all draws under
such letters of credit, and with all rights of a transferee under Section
5-114(e) of the Uniform Commercial Code; and (viii) deliver to the Collateral
Agent evidence that all other action that the Collateral Agent may deem
reasonably necessary or desirable in order to perfect and protect the security
interest created by such Loan Party in the Pledged Collateral under this
Agreement has been taken.




(b)  Each Loan
Party hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation,
one or more financing statements indicating that such financing statements cover
all assets or all personal property (or words of similar effect) of such Loan
Party, in each case without the signature of such Loan Party, and regardless of
whether any particular asset described in such financing statements falls within
the scope of the Uniform Commercial Code or the granting clause of this
Agreement.  A photocopy or other reproduction of this Agreement or any
financing statement covering the Pledged Collateral or any part thereof shall be
sufficient as a financing statement where permitted by Law.  Each Loan
Party ratifies its authorization for the Collateral Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.




(c)  Each Loan
Party will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Pledged Collateral of such Loan
Party and such other reports in connection with such Pledged Collateral as the
Collateral Agent or any Significant Lender may reasonably request, all in
reasonable detail.




10.03  Rights of Lender;
Limitations on Lenders’ Obligations .




(a)  Each Loan Party
shall remain liable under the contracts and agreements included in such Loan
Party’s Pledged Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed (including paying cure costs if such contracts or agreements
are assumed), (ii) the exercise by the Collateral Agent of any of the
rights hereunder shall not release any Loan Party from any of its duties or
obligations under the contracts and agreements included in the Pledged
Collateral, and (iii) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Pledged Collateral
by reason of this Agreement or any other Loan Document, nor shall any Secured
Party be obligated to perform any of the obligations or duties of any Loan Party
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.




(b)  Except as
otherwise provided in this subsection (b), each Loan Party will continue to
collect, at its own expense, all amounts due or to become due such Loan Party
under the Receivables and Related Contracts.  In connection with such
collections, such Loan Party may take (and, at the Collateral Agent’s direction,
will take) such action as such Loan Party or the Collateral Agent may reasonably
deem necessary or advisable to enforce collection of the Receivables and Related
Contracts; provided, however, that,
subject to any requirement of notice provided in Section 8.02, the
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance of a Collateral Enforcement Event of Default, to notify
the obligors under any Receivables and Related Contracts of the assignment of
such Receivables and Related Contracts to the Collateral Agent and to direct
such obligors to make payment of all amounts due or to become due to such Loan
Party thereunder directly to the Collateral Agent and, upon such notification
and at the expense of such Loan Party, to enforce collection of any such
Receivables and Related Contracts, to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Loan Party
might have done, and to otherwise exercise all rights with respect to such
Receivables and Related Contracts, including, without limitation, those set
forth in Section 9-607 of the Uniform Commercial Code.  Upon and
during the exercise by the Collateral Agent on behalf of the Lenders of any of
the remedies described in the proviso of the immediately preceding sentence,
(i) any and all amounts and proceeds (including, without limitation,
instruments) received by such Loan Party in respect of the Receivables and
Related Contracts of such Loan Party shall be received in trust for the benefit
of the Collateral Agent hereunder, shall be segregated from other funds of such
Loan Party and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) to be deposited in a
collateral account maintained with the Collateral Agent and applied as provided
in Section 10.07(b)
and (ii) such Loan Party will not adjust, settle or compromise the amount
or payment of any Receivable or amount due on any Related Contract, release
wholly or partly any obligor thereof, or allow any credit or discount
thereon.  No Loan Party will permit or consent to the subordination of
its right to payment under any of the Receivables and Related Contracts to any
other indebtedness or obligations of the obligor thereof.




(c)  The
Collateral Agent shall have the right to make test verification of the
Receivables in any manner and through any medium that it considers advisable in
its reasonable discretion, and each Loan Party agrees to furnish all such
assistance and information as the Collateral Agent may reasonably require in
connection therewith.




10.04  Covenants of the Loan
Parties with Respect to Pledged Collateral .  Each
Loan Party hereby covenants and agrees with the Collateral Agent that from and
after the date of this Agreement and until the Secured Credit Obligations (other
than contingent indemnification obligations which are not then due and payable)
are fully satisfied:




(a)  Delivery and Control of
Pledged Equity .




(i)  All
certificates or instruments representing or evidencing Pledged Equity shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto at
the request of the Collateral Agent or any Significant Lender, and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Collateral Agent and each Significant
Lender.




(ii)  With
respect to any Pledged Equity in which any Loan Party has any right, title or
interest and that constitutes an uncertificated security, such Loan Party will
cause the issuer thereof either (i) to register the Collateral Agent as the
registered owner of such security or (ii) to agree in an authenticated record
with such Loan Party and the Collateral Agent that such issuer will comply with
instructions with respect to such security originated by the Collateral Agent
without further consent of such Loan Party, such authenticated record to be in
form and substance reasonably satisfactory to the Collateral Agent and each
Significant Lender.  With respect to any Security Collateral in which
any Loan Party has any right, title or interest and that is not an
uncertificated security, upon the request of the Collateral Agent or any
Significant Lender, such Loan Party will notify each such issuer of Pledged
Equity that such Pledged Equity is subject to the security interest granted
hereunder.




(iii)  Except as
provided in Section
10.07, such Loan Party shall be entitled to receive all cash dividends
paid in respect of the Pledged Equity with respect to the Pledged
Equity.




(iv)  Except as
provided in Section
10.07 and subject to Article VII, such Loan Party will be entitled to
exercise all voting, consent and corporate rights with respect to the Pledged
Equity.




(b)  Maintenance of
Records .  Such
Loan Party will keep and maintain, at its own cost and expense, satisfactory and
complete records of the Pledged Collateral, in all material respects, including,
without limitation, a record of all payments received and all credits granted
with respect to the Pledged Collateral and all other dealings concerning the
Pledged Collateral in each case in accordance with its normal business
practice.




(c)  Indemnification with Respect
to Pledged Collateral .  In
any suit, proceeding or action brought by the Collateral Agent relating to any
Pledged Collateral for any sum owing thereunder or to enforce any provision of
any Pledged Collateral in each case, brought by the Collateral Agent in
accordance with this Agreement, such Loan Party will save, indemnify and keep
the Secured Parties harmless from and against all expense, loss or damage
suffered by the Secured Parties by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the obligor thereunder,
arising out of a breach by such Loan Party of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to, or in favor of, such obligor or its successors from such Loan Party, and all
such obligations of such Loan Party shall be and remain enforceable against and
only against such Loan Party and shall not be enforceable against the Collateral
Agent.




(d)  Limitation on Liens on
Pledged Collateral .  Such
Loan Party will defend the Pledged Collateral against and take such other action
as is necessary to remove, any Lien on the Pledged Collateral except Liens
permitted under Section 7.01 and will
defend the right, title and interest of the Collateral Agent in and to all of
such Loan Party’s rights under the Pledged Collateral against the claims and
demands of all Persons whomsoever other than claims or demands arising out of
Liens permitted under Section
7.01.




(e)  Limitations on Modifications
of Receivables .  Except
with respect to intercompany Receivables among the Loan Parties, such Loan Party
will not, without the Collateral Agent’s prior written consent, grant any
extension of the time of payment under or in respect of any of the Receivables
or Related Contracts, compromise, compound or settle the same for less than the
full amount thereof, release, wholly or partly, any Person liable for the
payment thereof, or allow any credit or discount whatsoever thereon other than
any of the foregoing which are done in the ordinary course of business,
consistent with past practices, and trade discounts granted in the ordinary
course of business of such Loan Party.




(f)  Notices .  Such
Loan Party will advise the Collateral Agent promptly after it obtains knowledge
thereof, in reasonable detail, (i) of any Lien asserted against any of the
Pledged Collateral other than Liens permitted under Section 7.01, and
(ii) of the occurrence of any other event which would result in a material
adverse change with respect to the aggregate value of the Pledged Collateral or
on the security interests created hereunder.




(g)  Maintenance of
Equipment .  Such
Loan Party will keep and maintain the Equipment in good operating condition
sufficient for the continuation of the business conducted by such Loan Party on
a basis consistent with past practices, ordinary wear and tear
excepted.




(h)  As to Intellectual Property
Collateral .




(i)  With
respect to each item of its Intellectual Property Collateral, each Loan Party
agrees to take, at its expense, all necessary steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other applicable U.S. Governmental Authority, to (A) maintain the
validity and enforceability of such Intellectual Property Collateral and
maintain such Intellectual Property Collateral in full force and effect, and (B)
pursue the registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual
Property Collateral of such Loan Party, including, without limitation, the
payment of required fees and taxes, the filing of responses to office actions
issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office or
other applicable U.S. Governmental Authorities, the filing of applications for
renewal or extension, the filing of affidavits under Sections 8 and 15 of the
U.S. Trademark Act, the filing of divisional, continuation,
continuation-in-part, reissue and renewal applications or extensions, the
payment of maintenance fees and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings.  No Loan Party shall, without the written consent of the
Collateral Agent, discontinue use of or otherwise abandon any Intellectual
Property Collateral, or abandon any right to file an application for patent,
trademark, or copyright, unless such Loan Party shall have determined prior to
such cessation of use or abandonment that such use or the pursuit or maintenance
of such Intellectual Property Collateral is no longer desirable in the conduct
of such Loan Party’s business and that the loss thereof would not be reasonably
likely to have a Material Adverse Effect.




(ii)  Each Loan
Party agrees promptly to notify the Collateral Agent if such Loan Party becomes
aware (A) that any material item of the Intellectual Property Collateral has
become abandoned, placed in the public domain, invalid or unenforceable, or of
any adverse determination or development regarding such Loan Party’s ownership
of any of the material Intellectual Property Collateral or its right to register
the same or to keep and maintain and enforce the same, or (B) of any adverse
determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the U.S. Patent and Trademark
Office or any court) regarding any material item of the Intellectual Property
Collateral.




(iii)  In the
event that any Loan Party becomes aware that any item of the Intellectual
Property Collateral that is material to such Loan Party’s business is being
infringed or misappropriated by a third party, such Loan Party shall promptly
notify the Collateral Agent and shall take such actions, at its expense, as such
Loan Party or the Collateral Agent deems reasonable and appropriate under the
circumstances to protect or enforce such Intellectual Property Collateral,
including, without limitation, suing for infringement or misappropriation and
for an injunction against such infringement or misappropriation.




(iv)  Each Loan
Party shall use proper statutory notice (where necessary) in connection with its
use of each item of its Intellectual Property Collateral.  No Loan
Party shall do or permit any act or knowingly omit to do any act whereby any of
its Intellectual Property Collateral may lapse or become invalid or
unenforceable or placed in the public domain except to the extent that it is
commercially reasonable to do so.




(v)  Each Loan
Party shall take all reasonable steps which it or the Collateral Agent deems
appropriate under the circumstances to preserve and protect each item of its
Intellectual Property Collateral, including, without limitation, maintaining the
quality of any and all products or services used or provided in connection with
any of the Trademarks, consistent with the quality of the products and services
as of the date hereof, and taking all steps necessary to ensure that all
licensed users of any of the Trademarks use such consistent standards of
quality.




(vi)  Each Loan
Party agrees that should it obtain an ownership interest in any item of the type
set forth in Section
10.01(f) that is not on the date hereof a part of the Intellectual
Property Collateral (“After-Acquired
Intellectual Property”) (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect thereto.  Within
three days of acquiring After-Acquired Intellectual Property, the Loan Party
that acquired such After-Acquired Intellectual Property shall give prompt
written notice to the Collateral Agent identifying the After-Acquired
Intellectual Property acquired, and such Loan Party shall execute and deliver to
the Collateral Agent with such written notice, or otherwise authenticate, an IP
Security Agreement Supplement covering such After-Acquired Intellectual Property
which shall be recorded with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other applicable Governmental Authorities necessary to
perfect the security interest hereunder in such After-Acquired Intellectual
Property.




(i)  Delivery and Control of Slot
Transfer Documents .  In
order to facilitate a subsequent transfer, if any, of Slots held by the Loan
Parties, the applicable Loan Party (A) has, prior to the Initial Closing Date,
executed a blank, undated transfer document for each Pledged Slot (as defined in
the Slot Security Agreement) held by such Loan Party as of the Initial Closing
Date, and (B) shall, on the date of acquisition thereof, execute a blank,
undated transfer document for each Pledged Slot acquired by such Loan Party
after the Initial Closing Date, in each case, be held in escrow by the
Collateral Agent until (i) exercise by the Administrative Agent or the
Collateral Agent and the Lenders of their rights upon the occurrence and during
the continuance of a Collateral Enforcement Event of Default as set forth in and
subject to Section
8.02 and Section 10.07 of this
Agreement and Section
9 of the Slot Security Agreement or (ii) termination of, or release from,
the Liens of the Slot Security Agreement and this Agreement in accordance with
the terms thereof and hereof.




10.05  Performance by Collateral
Agent of the Loan Parties’ Obligations .




(a)  Collateral Agent Appointed
Attorney-in-Fact .  Each
Loan Party hereby irrevocably appoints the Collateral Agent such Loan Party’s
attorney-in-fact, with full authority in the place and stead of such Loan Party
and in the name of such Loan Party or otherwise, from time to time, in the
Collateral Agent’s discretion after the occurrence and during the continuance of
a Collateral Enforcement Event of Default, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation:




(i)  to obtain
and adjust insurance required to be paid to the Collateral Agent pursuant to
this Agreement,




(ii)  to ask
for, demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Pledged Collateral,




(iii)  to
receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (i) or (ii) above,
and




(iv)  to file
any claims or take any action or institute any proceedings that the Collateral
Agent may deem necessary or desirable for the collection of any of the Pledged
Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Pledged Collateral; provided that the
Collateral Agent shall not exercise any such rights under this Section 10.05(a)
except upon occurrence and during the continuance of a Collateral Enforcement
Event of Default.




(b)  Collateral Agent May
Perform .  If
any Loan Party fails to perform any agreement contained herein, the Collateral
Agent may, as the Collateral Agent deems necessary to protect the security
interest granted hereunder in the Pledged Collateral or to protect the value
thereof, but without any obligation to do so after the occurrence and during the
continuance of a Collateral Enforcement Event of Default, itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Loan Party under Section
12.04.




(c)  Collateral Agent Not
Liable.  The Collateral Agent shall in no way be responsible
for the payment of any costs incurred in connection with preserving or disposing
of Pledged Collateral.




10.06  The Collateral Agent’s
Duties .




(a)  The
powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties’ interest in the Pledged Collateral and shall not impose any
duty upon it to exercise any such powers.   Other than the
exercise of reasonable care to assure the safe custody of the Pledged Collateral
while being held by the Collateral Agent pursuant to the terms of the Secured
Credit Documents, the Collateral Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that the
grantor of such Pledged Collateral shall be responsible for preservation of all
rights in the Pledged Collateral, and the Collateral Agent shall be relieved of
all responsibility for the Pledged Collateral upon surrendering it or tendering
the surrender of it to such grantor.  The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its own
property, which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry, it being understood that the Collateral Agent
shall not have responsibility for taking any necessary steps to preserve rights
against any parties with respect to any of the Pledged Collateral.  In
the event of a public or private sale of Pledged Collateral pursuant to the
terms of the Secured Credit Documents, the Collateral Agent shall have no
obligation to clean-up, repair or otherwise prepare the Pledged Collateral for
sale.




(b)  Anything
contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent deems it to be necessary, appoint one or
more subagents (each a “Subagent”)
for the Collateral Agent hereunder with respect to all or any part of the
Pledged Collateral.  In the event that the Collateral Agent so
appoints any Subagent with respect to any Pledged Collateral, (i) the assignment
and pledge of such Pledged Collateral and the security interest granted in such
Pledged Collateral by each Loan Party hereunder shall be deemed for purposes of
this Agreement to have been made to such Subagent, in addition to the Collateral
Agent, for the ratable benefit of the Secured Parties, as security for the
Secured Credit Obligations of such Loan Party, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Pledged Collateral, and (iii) the term “Collateral Agent”,
when used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Pledged Collateral, shall
include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such Pledged
Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.




(c)  Notwithstanding
anything herein or in the other Secured Credit Documents to the contrary, the
Collateral Agent shall be fully justified in failing or refusing to take any
action under any Secured Credit Document unless it shall first receive direction
from the Required Secured Parties and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.




10.07  Remedies .  If
any Event of Default shall have occurred and be continuing:




(a)  The
Collateral Agent may, at the direction of the Required Secured Parties, exercise
in respect of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the Uniform Commercial Code (whether or not
the Uniform Commercial Code applies to the affected Pledged Collateral) and also
may:  (i) require each Loan Party to, and each Loan Party hereby
agrees that it will at its expense and upon request of the Collateral Agent or
any Significant Lender forthwith, assemble all or part of the Pledged Collateral
as directed by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent that is
reasonably convenient to such Loan Party and the Collateral Agent;
(ii) without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any of
the Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as are commercially reasonable; (iii) occupy
any premises owned or leased by any of the Loan Parties where the Pledged
Collateral or any part thereof is assembled or located for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Loan Party in respect of such occupation; and (iv) exercise
any and all rights and remedies of any of the Loan Parties under or in
connection with the Pledged Collateral, or otherwise in respect of the Pledged
Collateral, including, without limitation, (A) any and all rights of such Loan
Party to demand or otherwise require payment of any amount under, or performance
of any provision of, the Receivables, the Related Contracts and the other
Pledged Collateral, (B) withdraw, or cause or direct the withdrawal, of all
funds with respect to the Account Collateral and (C) exercise all other rights
and remedies with respect to the Receivables, the Related Contracts and the
other Pledged Collateral, including, without limitation, those set forth in
Section 9-607 of the Uniform Commercial Code.  To the extent not
inconsistent with the Federal Aviation Act, the DOT requirements and the FAA
requirements, the Collateral Agent or any other Secured Party may be the
purchasers of any or all of the Pledged Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at such sale, to
use and apply any of the Obligations owed to such Person as a credit on account
of the purchase price of any Collateral payable by such Person at such
sale.  Each purchaser at any such sale shall acquire the property sold
absolutely free from any claim or right on the part of the Grantors, and each
Grantor hereby waives, to the fullest extent permitted by law, all rights of
redemption, stay or appraisal which it now has or may at any time in the future
have under any rule of law or statute now existing or hereafter
enacted.  Each Loan Party agrees that, to the extent notice of sale
shall be required by law, at least 10 days’ notice to such Loan Party of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification.  The Collateral
Agent shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given.  The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.  Any Account Collateral
and any Proceeds of any Security Collateral may be applied by the Collateral
Agent towards payment of the Secured Credit Obligations.




(b)  Any cash
held by or on behalf of the Collateral Agent and all cash proceeds received by
or on behalf of the Collateral Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Pledged Collateral shall be
applied against the Secured Credit Obligations, in the manner set forth in Section
8.03.  Any surplus of such cash or cash proceeds held by the
Collateral Agent and remaining after payment in full of the Secured Credit
Obligations shall be paid over to the applicable Loan Party or to whomever may
be lawfully entitle to receive such surplus.




(c)  All
payments received by any Loan Party under or in connection with the Pledged
Collateral shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of such Loan Party and shall be forthwith
paid over to the Collateral Agent in the same form as so received (with any
necessary indorsement).




(d)  The
Collateral Agent may, without notice to any Loan Party except as required by law
or Section 8.02
and at any time or from time to time, charge, set off and otherwise apply all or
any part of the Secured Credit Obligations against any funds held with respect
to the Account Collateral or in any other deposit account.




(e)  In the
event of any sale or other disposition of any of the Intellectual Property
Collateral of any Loan Party, the goodwill symbolized by any Trademarks subject
to such sale or other disposition shall be included therein, and such Loan Party
shall supply to the Collateral Agent or its designee such Loan Party’s know-how
and expertise, and documents and things relating to any Intellectual Property
Collateral subject to such sale or other disposition, and such Loan Party’s
customer lists and other records and documents relating to such Intellectual
Property Collateral and to the manufacture, distribution, advertising and sale
of products and services of such Loan Party.




(f)  The
Collateral Agent is authorized, in connection with any sale of the Security
Collateral pursuant to this Section 10.07,
to deliver or otherwise disclose to any prospective purchaser of the Security
Collateral any information in its possession relating to such Security
Collateral.




10.08  Modifications .




The
Liens, lien priority and other rights and remedies granted to the Collateral
Agent for the benefit of the Lenders pursuant to this Agreement and the other
Secured Credit Documents shall not be modified, altered or impaired in any
manner by any other financing or extension of credit or incurrence of
Indebtedness by any of the Loan Parties or by any other act or omission
whatsoever.




10.09  Release;
Termination .




(a)  Upon
any sale, lease, transfer or other disposition of any item of Pledged Collateral
of any Loan Party in accordance with the terms of the Secured Credit Documents
to a Person other than a Loan Party or a Subsidiary thereof, such Pledged
Collateral shall be released from the assignment and security interest granted
hereby, and in connection therewith, the Collateral Agent will, at such Loan
Party’s expense, execute and deliver to such Loan Party such documents as such
Loan Party shall reasonably request to evidence the release of such item of
Pledged Collateral (other than Inventory sold in the ordinary course of
business) from the assignment and security interest granted hereby; provided, however, that
(i) at the time of such request and such release no Default shall have
occurred and be continuing, (ii) the proceeds of any such sale, lease,
transfer or other disposition required to be applied, or any payment to be made
in connection therewith, in accordance with Section 2.02
shall, to the extent so required, be paid or made to, or in accordance with the
instructions of, the Collateral Agent when and as required under Section 2.02, and
(iii) in the case of Pledged Collateral sold or disposed of, the release of a
Lien created hereby will not be effective until the receipt by the Collateral
Agent of the Net Cash Proceeds arising from the sale or disposition of such
Pledged Collateral.




Upon the
latest of (i) the payment in full in cash of the Secured Credit Obligations
(other than contingent indemnification obligations which are not then due and
payable) and (ii) the Maturity Date, the pledge and security interest
granted hereby shall terminate and all rights to the Pledged Collateral shall
revert to the applicable Loan Party; provided that, with
respect to that portion of the Secured Credit Obligations consisting of Airline
Service Agreement Obligations, the pledge and security interest granted hereby
(to the extent securing Airline Service Agreement Obligations) shall terminate
and all rights to such Pledged Collateral shall revert to the applicable Loan
Party on the Airline Service Agreement Termination Date.  Upon any
such termination, the Collateral Agent will, at the applicable Loan Party’s
expense, execute and deliver to such Loan Party such documents as such Loan
Party shall reasonably request to evidence such termination.








ARTICLE
  XIGUARANTY







11.01  Guaranty .  Each
Guarantor, severally, unconditionally and irrevocably guarantees (the
undertaking by each Guarantor under this Article XI being the
“Guaranty”)
the punctual payment when due, whether at scheduled maturity or on any date of a
required prepayment or by acceleration, demand or otherwise, of all of the
Obligations of each of the other Loan Parties now or hereafter existing under or
in respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnification payments,
contract causes of action, costs, expenses or otherwise (such Obligations being
the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent or any of the other Secured Parties in enforcing any rights
under this Guaranty or any other Loan Document.  Anything herein or in
any other Loan Document to the contrary notwithstanding, the maximum liability
of each Guarantor hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws relating to the insolvency of debtors.




11.02  Guaranty
Absolute .  Each
Guarantor guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Administrative Agent or any other Secured
Party with respect thereto.  The Obligations of each Guarantor under
this Guaranty are independent of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents, and a separate action or
actions may be brought and prosecuted against such Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against any other Loan
Party or whether any other Loan Party is joined in any such action or
actions.  The liability of each Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of, and such Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any and all of the following:




(a)  any lack
of validity or enforceability of any Loan Document or any other agreement or
instrument relating thereto;




(b)  any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in
the Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;




(c)  any
taking, exchange, release or nonperfection of any Collateral, or any taking,
release or amendment or waiver of or consent to departure from this Guaranty or
any other guaranty, for all or any of the Guaranteed Obligations;




(d)  any
manner of application of Collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any
Collateral for all or any of the Guaranteed Obligations or any other Obligations
of any Loan Party under the Loan Documents, or any other property and assets of
any other Loan Party or any of its Subsidiaries;




(e)  any
change, restructuring or termination of the corporate structure or existence of
any other Loan Party or any of its Subsidiaries;




(f)  any
failure of the Administrative Agent or any other Secured Party to disclose to
any Loan Party any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party now or hereafter known to the Administrative Agent or such other Secured
Party, as the case may be (such Guarantor waiving any duty on the part of the
Secured Parties to disclose such information);




(g)  the
failure of any other Person to execute this Agreement or any other guarantee or
agreement of the release or reduction of the liability of any of the other Loan
Parties or any other guarantor or surety with respect to the Guaranteed
Obligations; or




(h)  any other
circumstance (including, without limitation, any statute of limitations or any
existence of or reliance on any representation by the Administrative Agent or
any other Secured Party) that might otherwise constitute a defense available to,
or a discharge of, such Guarantor, any other Loan Party or any other guarantor
or surety.




This
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by the Administrative Agent or any other Secured
Party or by any other Person upon the insolvency, bankruptcy or reorganization
of any other Loan Party or otherwise, all as though such payment had not been
made.




11.03  Waivers and
Acknowledgments .




(a)  Each
Guarantor hereby unconditionally and irrevocably waives promptness, diligence,
notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty, and any
requirement that the Administrative Agent or any other Secured Party protect,
secure, perfect or insure any Lien or any property or assets subject thereto or
exhaust any right or take any action against any other Loan Party or any other
Person or any Collateral.




(b)  Each
Guarantor hereby unconditionally waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.  Each
Guarantor acknowledges and agrees that this Guaranty is a guarantee of payment
and not of collection.




(c)  Each
Guarantor hereby unconditionally and irrevocably waives (i) any defense arising
by reason of any claim or defense based upon an election of remedies by the
Secured Parties which in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights to proceed against any
of the other Loan Parties, any other guarantor or any other Person or any
Collateral, and (ii) any defense based on any right of setoff or counterclaim
against or in respect of the Obligations of such Guarantor
hereunder.




(d)  Each
Guarantor acknowledges that the Administrative Agent may, without notice to or
demand upon such Guarantor and without affecting the liability of such Guarantor
under this Guaranty, foreclose under any Collateral Document by nonjudicial
sale, and such Guarantor hereby waives any defense to the recovery by the
Administrative Agent and the other Secured Parties against such Guarantor of any
deficiency after such nonjudicial sale and any defense or benefits that may be
afforded by applicable law.




(e)  Each
Guarantor hereby unconditionally and irrevocably waives any duty on the part of
any Secured Party to disclose to such Guarantor any matter, fact or thing
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party or any of its
Subsidiaries now or hereafter known by such Secured Party.




(f)  Each
Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan Documents and
that the waivers set forth in Section 11.02 and this
Section 11.03
are knowingly made in contemplation of such benefits.




11.04  Subrogation .  Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or may hereafter acquire against any other Loan
Party or any other insider guarantor that arise from the existence, payment,
performance or enforcement of its Obligations under this Guaranty or under any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any other
Secured Party against such other Loan Party or any other insider guarantor or
any Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from such other Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, until
such time as all of the Guaranteed Obligations and all other amounts payable
under this Guaranty shall have been paid in full in cash and the Term
Commitments shall have expired or terminated.  If any amount shall be
paid to any Guarantor in violation of the immediately preceding sentence at any
time prior to the latest of (a) the payment in full in cash of all of the
Guaranteed Obligations and all other amounts payable under this Guaranty and (b)
the Maturity Date, such amount shall be received and held in trust for the
benefit of the Administrative Agent and the other Secured Parties (in the same
form as so received) and shall forthwith be paid to the Administrative Agent
(without any necessary endorsement or assignment) to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising.  If (i) any
Guarantor shall pay to the Administrative Agent all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash and
(iii) the Maturity Date shall have occurred, the Administrative Agent and the
other Secured Parties will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from the
payment made by such Guarantor pursuant to this Guaranty.




11.05  Continuing Guarantee;
Assignments .  This
Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of all of the
Guaranteed Obligations and all other amounts payable under this Guaranty and
(ii) the Maturity Date, (b) be binding upon each Guarantor and its
successors and assigns and (c) inure to the benefit of, and be enforceable
by, the Administrative Agent and the other Secured Parties and their respective
successors, transferees and assigns.  Without limiting the generality
of clause (c) of the immediately preceding sentence, any Lender may assign
or otherwise transfer all or any portion of its rights and obligations under
this Agreement (including, without limitation, all or any portion of its Term
Commitment, the Term Loans owing to it and the Term Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party under this Article XI or
otherwise, in each case as provided in Section
12.07.  Notwithstanding clause (b) of this Section 11.05, no
Guarantor may assign any of its obligations under this Guaranty.




11.06  No
Reliance .  Each
Guarantor has, independently and without reliance upon the Collateral Agent,
Administrative Agent or any Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Guaranty and each other Loan Document to which it is or is to be a
party, and such Guarantor has established adequate means of obtaining from each
other Loan Party on a continuing basis information pertaining to, and is now and
on a continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
such other Loan Party.








ARTICLE
      XIIMISCELLANEOUS







12.01  Amendments,
Etc. No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such
amendment, waiver or consent shall:




(a)  waive any
condition set forth in Section 4.01(a),
without the written consent of each Lender;




(b)  (i) extend
or increase the Term Commitment of any Lender (or reinstate any Term Commitment
terminated pursuant to Section 8.02) without
the written consent of all Lenders;




(c)  postpone
any date scheduled for any payment of principal or interest under this Agreement
without the written consent of each Lender directly affected
thereby;




(d)  reduce
the principal of, or the rate of interest specified herein on any Term Loan or
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided, however, that only
the consent of the Required Lenders shall be necessary to amend Section
2.04(b);




(e)  change
any provision of this Section 12.01 or the
definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;




(f)  release
all or substantially all of the Collateral in any transaction or series of
related transactions, without the written consent of each Lender;
and




(g)  release
all or substantially all of the value of the Guaranty, without the written
consent of each Lender;




and provided further that (i) no
amendment, waiver or consent shall, unless in writing and signed by the
Collateral Agent in addition to the Lenders required above, affect the rights or
duties of, or any fees or other amounts payable to, the Collateral Agent under
this Agreement or any other Loan Document; and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of, or any
fees or other amounts payable to, the Administrative Agent under this Agreement
or any other Loan Document.




Anything
to the contrary in this Agreement notwithstanding (except as provided in this
Section 12.01),
the Collateral Agent, the Administrative Agent, the Lenders and the Loan Parties
agree that no amendment, modification or other change to this Agreement that
increases the amount of Indebtedness that is permitted to be secured by the
Collateral or modifies Section 8.02 or Section 8.03 or this provision of Section
12.01 shall be made without the written consent of the Required Northwest
Parties. For the avoidance of doubt, the Northwest Parties are an express
third-party beneficiary of this Agreement.




12.02  Notices and Other
Communications; Facsimile Copies .




(a)  General.  Unless
otherwise expressly provided in this Agreement, all notices and other
communications provided for hereunder or any other Loan Document shall be in
writing (including by facsimile transmission).  All such written
notices shall be mailed, faxed or delivered to the applicable address, facsimile
number or electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:




(i)  if to the
Borrower, the Administrative Agent or the Collateral Agent, to the address,
facsimile number, electronic mail address or telephone number specified for such
Person on Schedule
12.02 or to such other address, facsimile number, electronic mail address
or telephone number as shall be designated by such party in a notice to the
other parties; and




(ii)  if to any
other Lender, to the address, facsimile number, electronic mail address or
telephone number provided by such Lender to the Administrative Agent and the
Borrower at the time such Person becomes a lender or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the Administrative Agent
and the Collateral Agent.




All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A)
if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, first-class postage prepaid; (C) if delivered by
facsimile, when sent; and (D) if delivered by electronic mail, when received;
provided, however, that notices
and other communications to the Administrative Agent or the Collateral Agent
pursuant to Article
II shall not be effective until actually received by such
Person.  In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.




(b)  Effectiveness of Facsimile
Documents and Signatures.  Loan Documents may be transmitted
and/or signed by facsimile.  The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on all Loan Parties, the
Administrative Agent, the Collateral Agent and the Lenders.  The
Administrative Agent and the Collateral Agent may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.




(c)  Reliance by Administrative
Agent, Collateral Agent and Lenders.  The Administrative Agent,
the Collateral Agent and the Lenders shall be entitled to rely and act upon any
notices purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrower shall indemnify each Agent-Related Person and
each Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower.




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




12.04  Attorney Costs, Expenses and
Taxes .  The
Borrower agrees (a) to pay or reimburse the Administrative Agent and the
Collateral Agent and each Lender for all out-of-pocket costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents (and, in the case of
Republic, in connection with previous alternative lending structures and any
related intercreditor arrangements), and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs (including, without limitation, specialty
and local counsel) and (b) to pay or reimburse the Administrative Agent,
the Collateral Agent and each Lender for all costs and expenses incurred in
connection with the enforcement of any rights or remedies under this Agreement
or the other Loan Documents (including all such costs and expenses incurred
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs.  The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent and each Lender and
the cost of independent public accountants and other outside experts retained by
the Administrative Agent, the Collateral Agent or any Lender.  All
amounts due under this Section 12.04 shall
be payable within two Business Days after demand therefor.  The
agreements in this Section shall survive the termination of the Term Commitments
and repayment of all other Obligations.  If any Loan Party fails to
pay when due any costs, expenses or other amounts payable by it hereunder or
under any Loan Document, including, without limitation, Attorney Costs and
indemnities, such amount may be paid on behalf of such Loan Party by the
Administrative Agent, the Collateral Agent or any Lender, in its sole discretion
and any such amounts so paid by the Administrative Agent, the Collateral Agent
or any Lender, shall constitute Obligations owing to such person.




12.05  Indemnification by the
Borrower .  Whether
or not the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”)
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including Attorney Costs) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (a)
the execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Term Commitment or Term Loan or the
use or proposed use of the proceeds therefrom, (c) any actual or alleged
presence or release of Hazardous Materials on or from any property currently or
formerly owned or operated by the Borrower, any Subsidiary or any other Loan
Party, or any Environmental Liability related in any way to any Loan Party, or
(d) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in
whole or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.  No
Indemnitee shall have any liability for any indirect, special or consequential
damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the
Initial Closing Date).  In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 12.05
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnitee or any other Person, whether or not
any Indemnitee is otherwise a party thereto and whether or not any of the
transactions contemplated hereunder or under any of the other Loan Documents is
consummated. All amounts due under this Section 12.05 shall
be payable within ten Business Days after demand therefor.  The
agreements in this Section shall survive the resignation of the Administrative
Agent, the Collateral Agent, the replacement of any Lender, the termination of
the Term Commitments, and the repayment, satisfaction or discharge of all the
other Obligations.




12.06  Payments Set
Aside .  To
the extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent, the Collateral Agent or any Lender, or the Administrative
Agent, the Collateral Agent or any Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent,
the Collateral Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to promptly
pay to the Administrative Agent and the Collateral Agent upon demand its Pro
Rata Share of any amount so recovered from or repaid by the Administrative Agent
and the Collateral Agent.




12.07  Successors and
Assigns .




(a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) in accordance with the provisions of subsection (b) of this
Section or (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this
Agreement.  In addition, no Guarantor may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender.




(b)  Any
Lender may, with the prior written consent of each Significant Lender, at any
time assign to any assignee (an “Assignee”)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Term Commitment and the Term Loans at the time owing to
it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Term Commitment and the Term Loans at the time owing to
it, the aggregate amount of the Term Commitment or, if the applicable Term
Commitment is not then in effect, the principal outstanding balance of the Term
Loan of the assigning Lender subject to each such assignment shall not be less
than $5,000,000 or an integral multiple of $50,000 in excess thereof; (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Term Loans or the Term Commitment assigned.  Subject to
acknowledgement and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections
3.01, 12.04 and 12.05 with respect to
facts and circumstances occurring prior to the effective date of such
assignment).  Upon request, the Borrower (at its expense) shall
execute and deliver a Term Note to the Assignee.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.




(c)  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Term Commitments of, and
principal amounts of the Term Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.




(d)  Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Subsidiaries) (each, a
“Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Term Commitment and/or the Term
Loans; provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Collateral Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 12.01 that
directly affects such Participant.  Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections
3.01to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 12.08as though it were a
Lender, provided such
Participant agrees to be subject to Section 2.08 as
though it were a Lender.




(e)  A
Participant shall not be entitled to receive any greater payment under Section
3.01 than the applicable Lender would have been entitled to receive with respect
to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.




12.08  Setoff .  In
addition to any rights and remedies of the Lenders provided by law, upon the
occurrence and during the continuance of any Event of Default, each Lender and
each of its Affiliates is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness or other obligations at any time owing by, such Lender to
or for the credit or the account of the respective Loan Parties against any and
all Obligations owing to such Lender hereunder or under any other Loan Document,
now or hereafter existing, irrespective of whether or not the Administrative
Agent, the Collateral Agent or such Lender shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness.  Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application.  The rights of the Administrative Agent, the Collateral
Agent and each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) that the Administrative Agent, the Collateral Agent, such
Lender and their respective Affiliates may have.




12.09  Interest Rate
Limitation .  Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum
Rate”).  If the Administrative Agent, the Collateral Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Term Loans or, if
it exceeds such unpaid principal, refunded to the Borrower.  In
determining whether the interest contracted for, charged, or received by the
Administrative Agent, the Collateral Agent or a Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.




12.10  Counterparts .  This
Agreement and each other Loan Document may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery by
telecopier or electronic image transmission (e.g., PDF) of an executed
counterpart of a signature page to this Agreement and each other Loan Document
shall be effective as delivery of an original executed counterpart of this
Agreement and such other Loan Document.  The Administrative Agent may
also require that any such documents and signatures delivered by telecopier or
electronic image transmission be confirmed by a manually-signed original
thereof; provided that the
failure to request or deliver the same shall not limit the effectiveness of any
document or signature delivered by telecopier or electronic image
transmission.




12.11  Integration .  This
Agreement, together with the other Loan Documents, comprises the complete and
integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject
matter.  In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the
inclusion of supplemental rights or remedies in favor of the Administrative
Agent, the Collateral Agent or the Lenders in any other Loan Document shall not
be deemed a conflict with this Agreement.  Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.




12.12  Survival of Representations
and Warranties .  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and
thereof.  Such representations and warranties have been or will be
relied upon by the Administrative Agent, the Collateral Agent and each Lender,
regardless of any investigation made by the Administrative Agent, the Collateral
Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent, the Collateral Agent or any Lender may have had notice or
knowledge of any Default or breach of such representation and warranty at the
time the Term Loans were extended, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.




12.13  TPG Entities as
Lenders .  Each
Lender acknowledges that the TPG Entities own a majority of the Equity Interests
of the Parent and, consequently, may receive information regarding any Loan
Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the TPG Entities shall be under no obligation to provide such
information to them.  With respect to the Term Loans, the TPG Entities
shall have the same rights and powers (and shall have the same rights to
exercise such rights and powers) under this Agreement as any other
Lender.




12.14  Severability .  If
any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.




12.15  Tax Forms .




(a)           (i)  Each
Lender, Administrative Agent and Collateral Agent that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Code (a “Foreign
Person”) shall deliver to each of the Borrower and the Administrative
Agent, as applicable, on or prior to the date of its execution and delivery of
this Agreement (or upon accepting an assignment of an interest herein), two duly
signed completed copies of the applicable IRS Form W-8 or any successor thereto
(entitling it to an exemption from, or reduction of, withholding tax on payments
to be made to or for the benefit of such Person pursuant to this Agreement) or
such other evidence satisfactory to the Borrower, the Administrative Agent and
each Significant Lender, as applicable, that such Foreign Person is entitled to
an exemption from, or reduction of, U.S. withholding tax, including any
exemption pursuant to Section 881(c) of the Code.  Thereafter and from
time to time, each such Foreign Person shall (A) promptly submit to the Borrower
and the Administrative Agent, as applicable, such additional duly completed and
signed copies of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States Laws and regulations to avoid or
reduce, or such evidence as is satisfactory to the Borrower, the Administrative
Agent and each Significant Lender of any available exemption from or reduction
of, United States withholding taxes in respect of all payments to be made to
such Foreign Person by the Borrower pursuant to this Agreement, (B) promptly
notify the Borrower and the Administrative Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Person, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Foreign Person or indemnification pursuant to Section
3.01.




(ii)  Each
Lender that is a Foreign Person, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to each of the Borrower and
the Administrative Agent on the date when such Lender ceases to act for its own
account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the determination of the Administrative
Agent (in the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not
subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any information such
Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under applicable Law, to establish that such
Lender is not acting for its own account with respect to a portion of any such
sums payable to such Lender.




(iii)  The Loan
Parties shall not be required to pay any additional amount to any Person under
Section 3.01
(A) with respect to any Taxes on the basis of the information, certificates or
statements of exemption such Person transmits with an IRS Form W-8IMY pursuant
to this Section
12.14(a) or (B) if such Person shall have failed to satisfy the
provisions of this Section 12.14(a) and
Section
12.14(b); provided that if such
Person is a Lender and shall have satisfied the requirement of this Section 12.14(a)
on the date it became a Lender or ceased to act for its own account with respect
to any payment under any of the Loan Documents, nothing in this Section 12.14(a)
shall relieve the Borrower of its obligation to pay any amounts pursuant to
Section 3.01 in
the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in governmental
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing that such Lender or other Person for the account of
which such Lender receives any sums payable under any of the Loan Documents is
not subject to withholding or is subject to withholding at a reduced
rate.




(b)  Each
Lender, Administrative Agent and Collateral Agent that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code shall deliver to
each of the Borrower and the Administrative Agent two duly signed completed
copies of IRS Form W-9.  If such Person fails to deliver such forms,
then each of the Borrower and the Administrative Agent may withhold from any
payment to such Person an amount equivalent to the applicable back-up
withholding tax imposed by Applicable Law.




(c)  If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify
the Administrative Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Administrative
Agent under this Section, and costs and expenses (including Attorney Costs) of
the Administrative Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Term Commitments, repayment of all
Obligations hereunder and the resignation of the Administrative
Agent.




12.16  Governing
Law .




(a)  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SUBSECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.




(b)  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER AND
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH LOAN PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH
LENDER, IRREVOCABLY




(i)  ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS;




(ii)  WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS;




(iii)  AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO BORROWER (IN THE
CASE OF ANY LOAN PARTY), OR TO ANY PERSON THAT IS NOT A LOAN PARTY, TO SUCH
PERSON AT THE APPLICABLE ADDRESS SET FORTH ON SCHEDULE 12.02;




(iv)  AGREES
THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER IT IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;




(v)  AGREES
THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO BRING PROCEEDINGS AGAINST IT IN THE COURTS OF ANY OTHER JURISDICTION;
AND




(vi)  AGREES
THAT THE PROVISIONS OF THIS SECTION 12.15 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW
YORK GENERAL OBLIGATIONS LAW SUBSECTION 5-1402 OR OTHERWISE.




12.17  Waiver of Right to Trial by
Jury .  EACH
OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER
ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT
IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, WHICH EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
12.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE TERM LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.




12.18  Binding
Effect .  This
Agreement shall become effective when it shall have been executed by the Loan
Parties, the Lenders and the Collateral Agent and thereafter, the Administrative
Agent, and shall be binding upon and inure to the benefit of the Loan Parties,
the Administrative Agent, the Collateral Agent and each Lender and their
respective successors and assigns, except that the Loan Parties shall not have
the right to assign their respective rights or obligations hereunder or any
interest herein without the prior written consent of each of the
Lenders.




12.19  Reaffirmation of Guaranty
and Grant of Security .




(a)           Each
Guarantor hereby (a) acknowledges that it has reviewed the terms and provisions
of this Agreement and consents to the amendments and modifications effected
hereby and (b) agrees and confirms, both before and after giving effect to the
amendment and restatement of the Existing Credit Agreement pursuant to this
Agreement, that it is a party to and is bound by the Guaranty as a guarantor
thereunder by virtue of its having been an original signatory thereto and that
its guaranty provided for in the Guaranty is hereby reaffirmed, remains in full
force and effect, after giving effect to this Agreement, and constitutes a
continuing guaranty to the Lenders and their respective successors, indorsees,
transferees and assigns, for the prompt and complete payment and performance by
the Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations with the same effect as if all terms of such
guaranty were set forth herein.  The Guaranty is and shall continue to
be in full force and effect and is hereby in all respects ratified and
confirmed.




(b)  Each Loan
Party hereby (a) acknowledges that it has reviewed the terms and provisions of
this Agreement and consents to the amendments and modifications effected hereby
and (b) agrees and confirms, both before and after giving effect to the
amendment and restatement of the Existing Credit Agreement pursuant to this
Agreement, that it is a party to and is bound by Article X of this Agreement and
each Collateral Document as a grantor of the Collateral thereunder by virtue of
its having been an original signatory thereto.  Article X of this
Agreement and the other Collateral Documents are and shall continue to be in
full force and effect and are hereby in all respects ratified and
confirmed.  Without limiting the generality of the foregoing, Article
X of this Agreement, each Collateral Document and all of the Collateral do and
shall continue to secure the payment of all Secured Credit
Obligations.  Each Loan Party, each as a grantor under each Collateral
Document that such Loan Party is a party to, hereby (x) reaffirms its grant of,
and hereby grants, a security interest in such Collateral to the Collateral
Agent, for the ratable benefit of the Secured Parties, as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of all the Secured Credit
Obligations with the same effect as if all terms of such grant contained in each
Collateral Document were set forth herein, (y) pursuant to any applicable law,
authorizes the Collateral Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Loan Party in such form and in such offices as the
Collateral Agent determines appropriate to perfect the security interests of the
Collateral Agent and the other Secured Parties and authorizes the Collateral
Agent to use the collateral description “all personal property, whether now
owned or hereafter acquired” or any other similar collateral description in any
such financing statements and (z) ratifies and authorizes the filing by the
Collateral Agent of any financing statement with respect to the Collateral made
prior to the date hereof.




12.20  Consent of Existing
Lenders .  Each
of the Existing Lenders hereby consents to the amendments and modifications
effected hereby, and to the execution and delivery by the Agents on or prior to
the Amendment and Restatement Effective Date, of this (i) Agreement and (ii)
such other Loan Documents as the Administrative Agent deems necessary in
connection with funding of the Term Loans on the Amendment and Restatement
Effective Date.




12.21  No
Novation .  Each
of the Agents, the Existing Lenders, the Lenders, Parent, Borrower and each
other Loan Party acknowledges and agrees that: (a) this Agreement supersedes the
Existing Credit Agreement and has been executed and delivered in renewal,
amendment, restatement and modification, but not in novation or extinguishment
of, the obligations under the Existing Credit Agreement; (b) all obligations
under the Existing Credit Agreement are continued and restated hereunder, as set
forth herein and in the other Loan Documents; and (c) the Liens securing the
Existing Credit Agreement have not been terminated and continue in effect, as
security for all of the Obligations and the Secured Credit
Obligations.






[signature pages
follow]
















MIDWEST
      AIRLINES, INC., as BorrowerBy:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle:
      SVP & CFO




MIDWEST
      AIR GROUP, INC., as ParentBy:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle:
      SVP & CFO




SKYWAY
      AIRLINES, INC.By:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawykerTitle:
      VP & Treasurer




BESTCARE
      HOLDINGS, INC.By:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle:
      Treasurer




MIDWEST
      EXPRESS SERVICES – KANSAS CITY, INC.By:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle: President




MIDWEST
      EXPRESS SERVICES – OMAHA, INC.By:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle:
      President
  MIDWEST EXPRESS SERVICES -
      OMAHA, INC.
                YX
      PROPERTIES, LLC.
                By:
      Midwest Express Services - Omaha, Inc., its sole
    memberBy:
              /s/ Curtis
      E. SawyerName:
      Curtis E. SawyerTitle;
      President





WELLS FARGO BANK NORTHWEST,
      NATIONAL ASSOCIATION,  as Administrative Agent and as Collateral
      Agent,By:
              /s/ Jon
      CroasmunName:
      Jon CroasmunTitle: Vice
      President
  TPG
      MIDWEST US V, LLC, as a LenderBy:
      PTG Advisors V, Inc.Its:
      Managing MemberBy:
              /s/ 
      Clive BodeNameTitle


TPG GenPar V,
    L.P.TPG
      Advisors V, Inc.Its:
      Managing MemberBy:
            /s/ Clive
      BodeNameTitle




REPUBLIC
      AIRWAYS HOLDINGS INC. , as a LenderBy:
              /s/ Bryan
      BedfordName:
      Bryan BedfordTitle:
      President & CEO