**Exhibit 10.4**

 

**CREDITAGREEMENT**

** **

Dated as ofJanuary 24, 2006

 

Among

 

**NORTHWESTAIRLINES, INC.,**

** **

as Borrower,

 

**THE LENDERSPARTY HERETO**

** **

and

 

**AIRBUSFINANCIAL SERVICES,**

** **

asAdministrative Agent

 

in respect ofone

 

AirbusA330-223 Aircraft

 

Manufacturer’sSerial Number 0718

 

FAARegistration No. N858NW

 

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**TABLE OFCONTENTS**

** **
| ** **                                                       | **PAGE**   |
|------------------------------------------------------------------|------------|
| ** **                                                       | ** ** |
| ARTICLE I DEFINITIONS AND ACCOUNTING TERMS                       | 1          |
|                                                             |       |
| SECTION  1.1.   Certain Defined Terms                  | 1          |
|                                                             |       |
| SECTION  1.2.   Terms Defined in Mortgage              | 13         |
|                                                             |       |
| SECTION  1.3.   Computation of Time Periods            | 13         |
|                                                             |       |
| SECTION  1.4.   Accounting Terms                       | 13         |
|                                                             |       |
| ARTICLE II AMOUNT AND TERMS OF THE LOAN                          | 13         |
|                                                             |       |
| SECTION  2.1.   The Loan                               | 13         |
|                                                             |       |
| SECTION  2.2.   Making the Loan                        | 13         |
|                                                             |       |
| SECTION  2.3.   Fees                                   | 14         |
|                                                             |       |
| SECTION  2.4.   [Intentionally Omitted]                | 14         |
|                                                             |       |
| SECTION  2.5.   Repayment                              | 14         |
|                                                             |       |
| SECTION  2.6.  (a)   Interest                | 15         |
|                                                             |       |
| SECTION  2.7.   Interest Rate and Period Determination | 16         |
|                                                             |       |
| SECTION  2.8.   Prepayments                            | 16         |
|                                                             |       |
| SECTION  2.9.   Increased Costs                        | 17         |
|                                                             |       |
| SECTION  2.10.   Illegality                            | 17         |
|                                                             |       |
| SECTION  2.11.   Payments and Computations             | 17         |
|                                                             |       |
| SECTION  2.12.   Taxes                                 | 19         |
|                                                             |       |
| SECTION  2.13.   Sharing of Payments, Etc              | 21         |
|                                                             |       |
| SECTION  2.14.   Use of Proceeds                       | 22         |
|                                                             |       |
| SECTION  2.15.   Lender Cooperation                    | 22         |
|                                                             |       |
| SECTION  2.16.   Replacement of Lenders                | 22         |
|                                                             |       |
| SECTION  2.17.   Airbus Lenders                        | 22         |

 

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| ** **                                                               | **PAGE**   |
|--------------------------------------------------------------------------|------------|
| ** **                                                               | ** ** |
| SECTION  2.18.   Funding Arrangements                          | 22         |
|                                                                     |       |
| ARTICLE III CONDITIONS TO MAKING THE LOAN                                | 23         |
|                                                                     |       |
| SECTION  3.1.   Conditions Precedent to the Loan               | 23         |
|                                                                     |       |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES                                | 27         |
|                                                                     |       |
| SECTION  4.1.   Representations and Warranties of the Borrower | 27         |
|                                                                     |       |
| ARTICLE V COVENANTS OF THE BORROWER                                      | 31         |
|                                                                     |       |
| SECTION  5.1.   Affirmative Covenants                          | 31         |
|                                                                     |       |
| SECTION  5.2.   Compliance with Mortgage                       | 33         |
|                                                                     |       |
| SECTION  5.3.   Maintenance of Office                          | 33         |
|                                                                     |       |
| SECTION 5.4.    Negative Covenants                             | 33         |
|                                                                     |       |
| ARTICLE VI EVENTS OF DEFAULT                                             | 33         |
|                                                                     |       |
| SECTION  6.1.   Events of Default                              | 33         |
|                                                                     |       |
| ARTICLE VII THE AGENTS                                                   | 36         |
|                                                                     |       |
| SECTION  7.1.   Authorization and Action                       | 36         |
|                                                                     |       |
| SECTION  7.2.   Each Agent’s Reliance, Etc                | 37         |
|                                                                     |       |
| SECTION  7.3.   The Agents and Their Affiliates                | 37         |
|                                                                     |       |
| SECTION  7.4.   Lender Credit Decision                         | 38         |
|                                                                     |       |
| SECTION  7.5.   Indemnification                                | 38         |
|                                                                     |       |
| SECTION  7.6.   Successor Agent                                | 38         |
|                                                                     |       |
| ARTICLE VIII MISCELLANEOUS                                               | 39         |
|                                                                     |       |
| SECTION  8.1.   Amendments, Etc                                | 39         |
|                                                                     |       |
| SECTION  8.2.   Notices, Etc                                   | 39         |
|                                                                     |       |
| SECTION  8.3.   No Waiver; Remedies                            | 39         |
|                                                                     |       |
| SECTION  8.4.   Costs and Expenses                             | 40         |
|                                                                     |       |
| SECTION  8.5.   Right of Setoff                                | 41         |

 

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| ** **                                                                                | **PAGE** |
|-------------------------------------------------------------------------------------------|----------|
|                                                                                      |     |
| SECTION  8.6.   Binding Effect                                                  | 41       |
|                                                                                      |     |
| SECTION  8.7.   Assignments and Participations                                  | 41       |
|                                                                                      |     |
| SECTION  8.8.   Confidentiality                                                 | 46       |
|                                                                                      |     |
| SECTION  8.9.   Certain Agreements and Representations of Lenders               | 46       |
|                                                                                      |     |
| SECTION  8.10.   GOVERNING LAW                                                  | 47       |
|                                                                                      |     |
| SECTION  8.11.   Execution in Counterparts                                      | 47       |
|                                                                                      |     |
| SECTION  8.12.   Jurisdiction, Etc                                              | 47       |
|                                                                                      |     |
| SECTION  8.13.   WAIVER OF JURY TRIAL                                           | 48       |
|                                                                                      |     |
| SECTION  8.14.   Severability                                                   | 48       |
|                                                                                      |     |
| SECTION  8.15.   Headings                                                       | 48       |
|                                                                                      |     |
| SECTION  8.16.   Interpretation of Term Sheet                                   | 48       |
|                                                                                      |     |
| SECTION  8.17.   Quiet Enjoyment                                                | 48       |
|                                                                                      |     |
| SECTION  8.18.   Concerning Clause (i)(y) of Section 3.6(a)(I) of the  Mortgage | 49       |

 

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| **Schedules** |   |   |                                                                                                          |
|---------------|--------|--------|---------------------------------------------------------------------------------------------------------------|
|          |   |   |                                                                                                          |
| Schedule I    | -      |   | List of  Lending Offices                                                                                      |
|          |   |   |                                                                                                          |
| Schedule II   | -      |   | Approved  Commercial Banks                                                                                    |
|          |   |   |                                                                                                          |
| Schedule III  | -      |   | Principal  Payment Schedule                                                                                   |
|          |   |   |                                                                                                          |
| Schedule IV   | -      |   | Approved  Countries for Re-registration                                                                       |
|          |   |   |                                                                                                          |
| Schedule V    | -      |   | AL Subleases                                                                                                  |
|          |   |   |                                                                                                          |
| **Exhibits**  |   |   |                                                                                                          |
|          |   |   |                                                                                                          |
| Exhibit A     | -      |   | Form of  Promissory Note                                                                                      |
|          |   |   |                                                                                                          |
| Exhibit B     | -      |   | Form of  Notice of Loan                                                                                       |
|          |   |   |                                                                                                          |
| Exhibit C     | -      |   | Form of  Assignment and Acceptance                                                                            |
|          |   |   |                                                                                                          |
| Exhibit D-1   | -      |   | Form of Opinion  of Associate General Counsel of the Borrower                                                 |
|          |   |   |                                                                                                          |
| Exhibit D-2   | -      |   | Form of  Opinion of Cadwalader, Wickersham & Taft LLP, Special Counsel for the  Borrower                  |
|          |   |   |                                                                                                          |
| Exhibit D-3   | -      |   | Form of  Opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, Special Aviation  Counsel for the Agent |
|          |   |   |                                                                                                          |
| Exhibit E     | -      |   | Form of  Confidentiality Agreement                                                                            |

 

iv

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CREDITAGREEMENT

 

Dated as ofJanuary 24, 2006

 

NORTHWEST AIRLINES, INC., a Minnesotacorporation (the “*Borrower*”), the lender or lendersparty to this Agreement from time to time (each, a “*Lender*”)and AIRBUS FINANCIAL SERVICES, an Irish limited liability company formerlyknown as Airbus Industrie Financial Services (“*AFS*”),as Administrative Agent (as hereinafter defined) for the Lenders hereunderagree as follows:

 

WHEREAS, the Borrower and AVSA, S.A.R.L., asociété à responsabilité limitée organized and existing under the laws of theRepublic of France (together with its successors, “*AVSA*”),have entered into the Airbus A330 Purchase Agreement, which covers, among othermatters, the sale by AVSA and the purchase by the Borrower of certain AirbusA330 aircraft;

 

WHEREAS, the Borrower and AVSA have agreedpursuant to the A330 Financing Letter Agreement, dated as of the date hereof(the “*Letter Agreement*”), to certainadditional terms and conditions regarding the financing of the Airbus A330Aircraft to be delivered under the Airbus A330 Purchase Agreement, includingthe responsibility of AVSA to arrange specified financing alternatives for upto ten of the Airbus A330 Aircraft to be delivered under the Airbus A330Purchase Agreement, including the Aircraft;

 

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

 

WHEREAS, on the basis of the foregoing andsubject to the terms and conditions of this Agreement, the Initial Lender isprepared to make the Loan in the amount of the Financed Amount for theAircraft;

 

NOW THEREFORE, in consideration of the mutualagreements herein contained, the parties hereto in such capacity agree asfollows:

 

# ARTICLE I

 

# DEFINITIONS AND ACCOUNTING TERMS

 

SECTION1.1.   Certain Defined Terms.  As used in this Agreement, the following termsshall have the following meanings (such meanings to be equally applicable toboth the singular and plural forms of the terms defined):

 

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

 

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

 

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

 

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

 

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

 

CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

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

 

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

 

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

 

“*Airbus A319 Purchase Agreement*” means that certain AirbusA319-100 Purchase Agreement dated as of September 19, 1997, together with allexhibits and letter agreements relating thereto, between AVSA and the Borroweras originally executed and as modified, amended or supplemented in accordancewith the terms thereof.

 

“*Airbus A330 Aircraft*” means an Airbus model A330-223 orA330-323 aircraft to be delivered, or delivered, as the context may require,pursuant to the Airbus A330 Purchase Agreement.

 

“*Airbus A330 Purchase Agreement*” means that certain AirbusA330 Purchase Agreement dated as of December 21, 2000, together with allexhibits and letter agreements relating thereto, between AVSA and the Borroweras originally executed and as modified, amended or supplemented in accordancewith the terms thereof.

 

“*Airbus Documentation*” means the Loan Documents, the AirbusPurchase Agreements and the Other Financing Documents andany amendment of or supplement to any of the foregoing and any otherdocument, instrument or agreement entered into by the Borrower or any ofits Affiliates with Airbus or any of its Affiliates pursuant to the TermSheet.

 

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

 

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

 

“*Airbus Leasing IV*” means Airbus Leasing IV, Inc., a Delawarecorporation formerly known as A.I. Leasing IV, Inc.

 

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

 

“*Airbus North America*” means Airbus North America CustomerService, Inc., a Delaware corporation.

 

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

 

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

 

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

 

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

 

“*Alternate Rate*” has the meaning given to it in Section2.7(b).

 

“*Applicable Date*” has the meaning given to it in Section2.12(b)(1).

 

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

 

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

 

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

 

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

 

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

 

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

 

CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

 

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

 

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

 

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

 

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average of thequotations for such day for such transactions received by the Agent from threeFederal funds brokers of recognized standing selected by it.

 

 “*BFE*” means allbuyer furnished equipment, if any, installed or loaded on the Aircraft on thedate of its purchase and financing hereunder.

 

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

 

“*Borrower*” has the meaning given to it in the preamblehereto.

 

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

 

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

 

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

 

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

 

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

 

“*Change in Law*” has the meaning given to it in Section2.12(b)(1).

 

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

 

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

 

“*Code*” means the Internal Revenue Code of 1986, as amendedfrom time to time.

 

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

 

5

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“*Committed A330 Financings*” means the financings of up to tenAirbus A330 Aircraft described in the Letter Agreement on the terms andconditions described therein, including the financing of the Aircraft contemplatedby this Agreement.

 

“*Confidential Information*” means any information that theBorrower furnishes to the Agent or any Lender in writing designated asconfidential, but does not include any such information (i) that is or becomesgenerally available to the public or (ii) that is or becomes available to theAgent or such Lender from a source other than the Borrower, unless the Agent orLender has the actual knowledge (without being obligated to conduct anyinvestigation) that such information has been made available by such source inbreach of a confidentiality agreement which such source is bound by withrespect to such information.

 

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

 

“*Consolidated*” refers to the consolidation of accounts inaccordance with GAAP.

 

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

 

“*Eligible Assignee*” has the meaning given to it Section8.7(a).

 

“*Engine*” means (A) each of the two Pratt & Whitney modelPW4168A engines installed on the Aircraft at the time of delivery to theBorrower of the Aircraft, as further specified in the Mortgage, whether or notfrom time to time installed on the Aircraft or installed on any other aircraftand (B) any Replacement Engine that may from time to time be substituted forsuch engine; together, in each case, with any and all Parts incorporated orinstalled in or attached thereto.

 

“*Engine Manufacturer*” means Pratt & Whitney.

 

“*Engine Manufacturer Financing Commitment*” means thecommitment by the Engine Manufacturer to finance the Airbus A330 Aircraft to bedelivered in CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT.

 

“*Engine Manufacturer Financings*” means any existing or futurelease, loan, trade receivable, or other extension of credit between the EngineManufacturer or any of its Affiliates, on the one hand, and the Borrower or anyof its Affiliates, on the other hand, whether such lease, loan, tradereceivable, or other extension of credit is direct or is indirect through alease, structured financing or otherwise, including, without limitation, thefinancings of the Airbus A330 Aircraft pursuant to the Engine ManufacturerFinancing Commitment.

 

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“*ERISA*” means the Employee Retirement Income Security Act of1974, as amended from time to time, and the regulations promulgated and rulingsissued thereunder.

 

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

 

“*Event of Default*” has the meaning given to it in Section6.1.

 

“*FAA*” means the United States Federal AviationAdministration, and any agency or instrumentality of the United Statesgovernment succeeding to its functions.

 

“*Final Order*” shall mean the OrderAuthorizing Debtor Northwest Airlines, Inc. to (I) Obtain PostpetitionFinancing and Grant Security Interests and Liens With Respect Thereto, (II)Assume Certain Amended Sublease and Purchase Agreements, (III) Use CashCollateral to Purchase and Lease Aircraft, (IV) Implement All Other Aspects ofTerm Sheet and (V) File Agreements Under Seal, entered by the Bankruptcy Courton December 22, 2005.

 

“*Financed Amount*” means $ CONFIDENTIAL MATERIAL OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT.

 

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

 

 “*GAAP*” has themeaning given to it in Section 1.4.

 

“*Governmental Authority*” means any nation or government, anystate or other political subdivision thereof and any entity exercisingexecutive, legislative, judicial, regulatory or administrative functions of orpertaining to government.

 

“*Indemnified Party*” has the meaning given to it in Section8.4(b).

 

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“*Initial Lender*” means AFS, as the initial lender under thisAgreement.

 

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

 

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

 

“*Interest Period*” means (a) in the case of the InterestPeriod beginning on the Funding Date, the period of one month commencing on theFunding Date and ending on (but excluding) the first Interest Payment Dateafter the Funding Date, (b) in the case of each succeeding Interest Period(other the Interest Period described in clause (c) of this definition), theperiod commencing on the Interest Payment Date at the beginning of eachInterest Period and ending on (but excluding) the next succeeding InterestPayment Date, and (c) in the case of the Interest Period that includes thefinal Principal Payment Date, the period beginning on the Interest Payment Dateat the beginning of such Interest Period and ending on (but excluding) suchfinal Principal Payment Date.

 

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

 

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

 

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

 

“*Letter Agreement Aircraft*” means the “Aircraft” that arespecified in the Letter Agreement as being eligible for financing with an “A330Financing,” each as defined in the Letter Agreement.

 

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

 

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

 

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

 

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

 

“*Manufacturer*” means Airbus.

 

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

 

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

 

“*NAC*” means Northwest Airlines Corporation, a Delawarecorporation.

 

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

 

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

 

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

 

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

 

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

 

“*Overpaid Lender*” has the meaning given to it in Section2.13.

 

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

 

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

 

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

 

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

 

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

 

*“PetitionDate”* has the meaning given to it in the recitalshereto.

 

*“Plan ofReorganization”* means a plan in the Case under chapter11 of the Bankruptcy Code.

 

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

 

*“PooledSell-Down”* means the acquisition, from one or moreAirbus Lenders, in one or more transactions, or from a single Pooled Sell-DownLender, in a single transaction or in a series of related transactions, of morethan 50% of the then outstanding principal amount of the Notes and more than50% of the then outstanding principal amount of one or more Airbus Financings(other than Airbus Financings that are AL Subleases) and/or all of theleasehold interests in one or more Airbus Financings that are AL Subleases.

 

*“PooledSell-Down Lender”* means a Person or Persons other thanan Airbus Lender that hold more than 50% of the then outstanding principalamount of the Notes and one or more Pooled Airbus Financings (other than PooledAirbus Financings that are AL Subleases) and/or all of the leasehold interestsin one or more Pooled Airbus Financings that are AL Subleases.

 

“*Post*-*Consummation Conditions*”means the following conditions:

 

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

 

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CONFIDENTIALTREATMENT, which with respect to all employees may take the form of, amongother things, wage reductions or benefit reductions, and which are reasonablyvalued by the Chief Financial Officer or Treasurer of Borrower in an annualizedamount of not less than $CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELYWITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FORCONFIDENTIAL TREATMENT, evidenced by a certificate of the Chief FinancialOfficer or Treasurer of the Borrower as to such valuation (which, if deliveredto any Affiliate of Airbus in connection with any Airbus Financing that is nota Pooled Airbus Financing, shall be deemed to have been delivered in connectionherewith);

 

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

 

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

 

“*Potential Competitor*” has the meaning given to it in Section8.7(a).

 

“*Pratt & Whitney*” means Pratt & Whitney, a divisionof United Technologies Corporation, a Delaware corporation.

 

“*Principal Payment Date*” has the meaning given to it inSection 2.5.

 

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“*Reference Banks*” means CONFIDENTIAL MATERIAL OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT, CONFIDENTIAL MATERIAL OMITTED AND FILEDSEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUESTFOR CONFIDENTIAL TREATMENT and CONFIDENTIAL MATERIAL OMITTED AND FILEDSEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUESTFOR CONFIDENTIAL TREATMENT.

 

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

 

“*Required Lenders*” means Lenders holding not less than662⁄3% of the aggregate outstanding principal amount of the Loan.

 

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

 

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

 

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

 

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

 

“*Transportation Code*” means Title 49 of the United StatesCode, comprising those provisions formerly referred to as the Federal AviationAct of 1958, as amended or any subsequent legislation that amends, supplementsor supersedes such provisions.

 

“*2005 A319 Financings*” means the financings of two A319Airbus Aircraft pursuant to two Credit Agreements, each dated as of December 23,2005, among Borrower, certain lenders and AFS, as Administrative Agentthereunder.

 

“*2005 A330 Financings*” means the financings of two A330Airbus Aircraft pursuant to two Credit Agreements, dated as of June 21, 2005and September 12, 2005, respectively, among Borrower, certain lenders andAirbus Finance Company Limited, as Administrative Agent thereunder.

 

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

 

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

 

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

 

SECTION1.2.   Terms Defined in Mortgage. Terms for which meanings areprovided in any Mortgage are, unless otherwise defined herein, used in thisAgreement with such meanings.

 

SECTION1.3.   Computation of Time Periods. In this Agreement in thecomputation of periods of time from a specified date to a later specified date,the word “from” means “from and including” and the words “to” and “until” eachmean to but excluding.”

 

SECTION1.4.   Accounting Terms. All accounting terms not specificallydefined herein shall be construed in accordance with generally acceptedaccounting principles in the United States (“*GAAP*”)consistent with those applied in the preparation of the financial statementsreferred to in Section 4.1(a)(v).

 

# ARTICLE IIAMOUNT AND TERMS OF THE LOAN

 

SECTION2.1.   The Loan. The Initial Lender agrees, on the terms andconditions hereinafter set forth, to make the Loan to the Borrower on aBusiness Day in an amount equal to the Financed Amount.

 

SECTION2.2.   Making the Loan. The Loan shall be made on notice,given not later than 5:00 P.M. (New York time) on the fourth Business Day priorto the proposed date of the Loan, by the Borrower to the Administrative Agent,which shall give prompt notice thereof to the Initial Lender. Such notice ofthe Loan (the “*Notice of Loan*”) shall be bytelephone, confirmed immediately in writing, or telecopier or telex, insubstantially the form of Exhibit B-1 hereto, specifying therein (i) therequested date of the Loan (which shall not be a legal holiday in Toulouse,France, Dublin, Ireland, or New York, New York), (ii) the aggregate amount ofthe Loan, (iii) the date of delivery to the Borrower of the Aircraft to befinanced with the Loan, if other than the requested date of the Loan, and (iv)identifying information for the Aircraft to be financed. The “*Funding Date*” of the Loan shall be the date on which theLoan is made. The Initial Lender shall, before 11:00 A.M. (New York time) onthe date specified in the Notice of Loan, make available for the account of itsLending Office to the Administrative Agent at the account of the AdministrativeAgent at CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT andABA routing number CONFIDENTIAL MATERIAL OMITTED AND

 

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FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT), in same day funds, the amount of the Loan, *provided*that, if the Funding Date does not occur on such date, the Borrower shallindemnify the Lender to the extent provided in Section 2.18, and *provided*, *further*, theFunding Date shall not occur later than January 31, 2006. After theAdministrative Agent’s receipt of such funds and upon fulfillment of theapplicable conditions set forth in Article III, the Administrative Agent willmake such funds available to the Borrower by transfer to AVSA at such accountas AVSA may direct.

 

SECTION2.3.   Fees. No commitment, arrangement or like fees shall bepayable by the Borrower in connection with this Agreement or any of the otherLoan Documents.

 

SECTION2.4.   [Intentionally Omitted]

 

SECTION2.5.   Repayment. The Borrower shall repay to theAdministrative Agent for the ratable account of each Lender the principalamount of the Loan in consecutive quarterly installments of principal on theInterest Payment Dates occurring in each April, July, October and January (eachsuch Interest Payment Date also being referred to as a “*PrincipalPayment Date*”), commencing on the Principal Payment Date in CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT and ending with apayment of all unpaid principal on the Principal Payment Date in CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, as set forth onSchedule III, *provided*, that if theConsummation Date occurs prior to the Principal Payment Date in CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, then notwithstandingthe scheduled principal payments in Schedule III for any Principal PaymentDates after the CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT anniversary of the Consummation Date, the unpaid principal amount ofthe Notes shall be due and payable in full on the first Principal Payment Dateafter the CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT) anniversary of the Consummation Date, and *provided*,*further*, that the amounts of thequarterly installments of principal payable on each Principal Payment Date,which are based on a mortgage style amortization of the initial principalamount of the loan at an assumed interest rate of CONFIDENTIAL MATERIAL OMITTEDAND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT % per annum over CONFIDENTIAL MATERIALOMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONPURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT (CONFIDENTIAL MATERIAL OMITTEDAND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT) quarterly payments in arrears to an agreedamount ending on the CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITHTHE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT (CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT) anniversary of the Funding Date, shall not be affected

 

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by any change in the ApplicableRate pursuant to the definition thereof or by the acceleration of the finalPrincipal Payment Date pursuant to the preceding proviso.

 

SECTION2.6.   (a)  Interest. The Borrower shall payinterest on the unpaid principal amount of the Loan from the Funding Date untilthe Loan shall be paid in full, payable in arrears, on the last day of eachInterest Period (each such date, an “*Interest Payment Date*”),at an interest rate per annum equal to the Applicable Rate, except as otherwiseprovided in Section 2.6(b), 2.7(b) or 2.10. The Applicable Rate shall beadjusted from time to time as provided in the definition thereof.

 

### (b)  ApplicableRate. The Borrower shall notify the Administrative Agent at least fifteen(15) Business Days prior to the expected Consummation Date of (x) such expectedConsummation Date and (y) the bank that it has nominated from among the bankslisted in Schedule II for purposes of determining the NWA Market Margin. TheAdministrative Agent shall notify the Borrower of the bank that it hasnominated for such purposes from among the banks listed in Schedule II notlater than the second (2nd) Business Day following its receipt ofthe foregoing notice from the Borrower. If the two banks so nominated have notreached agreement on the NWA Market Margin within five (5) Business Days afterthe foregoing nomination by the Administrative Agent, the Borrower and theAdministrative Agent shall nominate a third bank from among the banks listed onSchedule II to determine the NWA Market Margin, and the NWA Market Margin shallbe the average of the two closest rates for the NWA Market Margin selected fromamong the rates specified by the three banks, in each case as calculated by theAdministrative Agent. If the NWA Market Margin has not been determined inaccordance with the preceding three sentences of this Section 2.6(b) by theConsummation Date, the NWA Market Margin shall be deemed to be the percentagespecified in clause (b)(ii) of the definition of “Applicable Margin” until suchtime as the NWA Market Margin has been determined as provided herein or asotherwise agreed by the Borrower and the Administrative Agent. Upon (i)  receipt of the determination of the two banksnominated by the Borrower and the Administrative Agent, (ii) the AdministrativeAgent’s calculation of the applicable average of the rates of the three banksor (iii) the agreement of the Borrower and the Administrative Agent as to theNWA Market Margin, as applicable, the Administrative Agent shall provide to theBorrower, the Lenders and the Collateral Agent a written notice containing theNWA Market Margin, the Applicable Margin and the Applicable Rate, effective asof the Consummation Date or, if the NWA Market Margin has not been determinedby the Consummation Date, effective as of the first Interest Payment Date afterthe NWA Market Margin has been determined or agreed in accordance with thisSection 2.6(b). Such notice shall be conclusive and binding on the parties,absent manifest error by the Administrative Agent in its preparation.

###  

### (c)  DefaultInterest. Upon the occurrence and during the continuance of an Event ofDefault under Section 6.1(a), the Borrower shall pay interest on (i) theoverdue portion of the unpaid principal amount of the Loan, payable in arrearson the dates specified in paragraph (a) above at a rate per annum equal at alltimes to CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT% perannum above the rate per annum required to be paid on the Loan pursuant toparagraph (a) above and (ii) to the fullest extent permitted by law, the amountof any interest or other amount payable hereunder that is not paid when due,from the date such amount shall be due until such amount shall be paid in full,payable in arrears on the date such

 

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### amount shall be paid in full and on demand,at a rate per annum equal at all times to CONFIDENTIAL MATERIAL OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT% per annum above the then applicable rate ofinterest.

###  

SECTION2.7.   Interest Rate and Period Determination

 

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

 

(b)  In the event that, prior to the first day ofany Interest Period, the Administrative Agent shall have determined (whichdetermination shall be conclusive and binding upon the Borrower) that, byreason of circumstances affecting the market generally, adequate and reasonablemeans do not exist for ascertaining the Eurodollar Rate for such InterestPeriod, the Administrative Agent shall give telecopy or telephonic noticethereof to the Borrower and the Lenders as soon as practicable thereafter. Duringthe next thirty days, the Borrower and the Administrative Agent shall negotiatea mutually satisfactory interest rate to be substituted for the Eurodollar Rate.If a substituted interest rate is agreed upon, it shall be effective from thefirst day of the applicable Interest Period. If the Borrower and theAdministrative Agent fail to agree upon a substituted interest rate, then, solong as an Airbus Lender holds any of the Notes, the applicable interest ratefor the Loan shall be equal to the Applicable Rate specified in clause (y) of thedefinition thereof and, at any other time, the Base Rate will be substitutedfor the Eurodollar Rate in the definition of Applicable Rate. The replacementinterest rate determined pursuant to this paragraph (b) shall herein bereferred to as the “*Alternate Rate*”.

 

### (c)  TheLenders agree to an Interest Period of a specified number of days to be agreedwith and at the request of the Borrower in the event the Borrower requests suchan accommodation in connection with a refinancing and prepayment of the Loan.

###  

SECTION2.8.   Prepayments . (a)  So long as no Event ofDefault shall have occurred and be continuing, either on the date notice isgiven pursuant to this Section 2.8(a) or the date of prepayment,  Borrower may, upon at least ten (10) BusinessDays’ notice to the Administrative Agent stating the proposed date andaggregate principal amount of the prepayment (unless the giving of ten BusinessDays notice as aforesaid is not practicable, in which event the Borrower agreesto give such shorter notice as is practicable but in any event not to be lessthan three Business Days), and if such notice is given the Borrower shallprepay the outstanding principal amount of the Loan in whole but not in part,together with accrued interest to the date of such prepayment on the principalamount prepaid; *provided*, *however*,that, in the event of any such prepayment of the Loan while interest thereon isbased on the Eurodollar Rate, the Borrower shall be obligated to reimburse theLenders in respect thereof pursuant to Section 8.4(c). The Loan, if prepaidpursuant to this Section 2.8, may not be re-borrowed.

 

### (b)  Ifan Event of Loss occurs with respect to the Aircraft and the Borrower electsnot to substitute another aircraft for the Aircraft in accordance with the Mortgage,the Borrower shall prepay the outstanding principal amount of the Loan inwhole, together with accrued

 

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### interest to the date of such prepayment and all other Obligations thendue and payable; *provided* that(x) the date of prepayment shall not be later than the earlier of the thirdBusiness Day following receipt of insurance proceeds in respect of the Aircraft(but in no event earlier than 30 days after the occurrence of such Event ofLoss) or the first Business Day following the 120th day after the occurrence ofsuch Event of Loss, (y) the date of such prepayment shall be notified by theBorrower to the Administrative Agent at least two Business Days prior theretoand (z) if interest on the Loan is based upon the Eurodollar Rate at the timeof such prepayment, the Borrower shall be obligated to reimburse the Lenders inrespect thereof pursuant to Section 8.4(c).

 

SECTION 2.9.  Increased Costs . If, due toeither (i) the introduction after the date of this Agreement of or any changeafter the date of this Agreement in or in the interpretation of any law orregulation or (ii) the compliance with any guideline or request from anycentral bank or other governmental authority (whether or not having the forceof law) issued after the date of this Agreement, (1) there shall be anyincrease in the cost to any Lender of agreeing to make or making, funding ormaintaining the Loan (excluding for purposes of this Section 2.9 any suchincreased costs resulting from (x) Taxes or Other Taxes (as to which Section2.12 shall govern) and (y) changes in the rate of taxation of overall netincome of such Lender or (2) any Lender determines that compliance with any lawor regulation or any guideline or request from any central bank or othergovernmental authority (whether or not having the force of law) affects orwould affect the amount of capital required or expected to be maintained bysuch Lender or any corporation controlling such Lender and that the amount ofsuch capital is increased by or based upon the existence of such Lender’scommitment to lend hereunder and other commitments of this type, then theBorrower shall from time to time, upon demand by such Lender (with a copy ofsuch demand to the Administrative Agent), pay to the Administrative Agent forthe account of such Lender additional amounts sufficient to compensate, in thecase of clause (1) above, such Lender for such increased cost or, in the caseof clause (2) above, such Lender or such corporation in the light of suchcircumstances. A certificate as to the amount of such increased cost, submittedto the Borrower and the Administrative Agent by such Lender, shall be conclusiveand binding for all purposes, absent manifest error.

 

SECTION2.10.   Illegality. Notwithstanding any other provisionof this Agreement, if any Lender shall notify the Administrative Agent that theintroduction after the date of this Agreement of or any change after the dateof this Agreement in or in the interpretation of any law or regulation makes itunlawful, or any central bank or other governmental authority asserts that itis unlawful, for any Lender or its Lending Office to perform its obligationshereunder to make, fund or maintain its portion of the Loan bearing interestbased upon the Eurodollar Rate as contemplated herein, then:  (i) such Lender shall notify theAdministrative Agent and the Borrower of the same (ii) such portion of the Loanwill convert into a Loan bearing interest at the Alternate Rate (as determinedpursuant to Section 2.7(b) except that only the Affected Lender shall beinvolved), and (iii) the obligation of such Lender to make, fund andmaintain its portion of the Loan based upon the Eurodollar Rate shall besuspended until the Administrative Agent shall notify the Borrower and theLenders that the circumstances causing such suspension no longer exist.

 

SECTION2.11.   Payments and Computations. (a)  TheBorrower shall make each payment hereunder and under the Notes not later than11:00 A.M. (New York time) on the

 

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

 

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

 

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

 

(d)  Whenever any payment hereunder or under theNotes shall be stated to be due on a day other than a Business Day, suchpayment shall be made on the next succeeding Business Day, and such extensionof time shall in such case be included in the computation of payment ofinterest; *provided*, *however*, that, if such extension would causepayment of interest on or principal of the Loan to be made in the nextfollowing calendar month, such payment shall be made on the immediatelypreceding Business Day.

 

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

 

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

 

SECTION2.12.   Taxes. (a)  All payments made by theBorrower under this Agreement and the Notes shall be made free and clear of,and without deduction or withholding for or on account of, any present orfuture income, stamp or other taxes, levies, imposts, duties, charges, fees,deductions or withholdings, now or hereafter imposed, levied, collected,withheld or assessed by any Governmental Authority or any political subdivisionor taxing authority thereof or therein (all such taxes, levies, imposts,duties, charges, fees, deductions and withholdings being hereinafter called “*Taxes*”). If any Taxes are required to bewithheld from any amounts payable to the Agent or any Lender hereunder or underthe Notes, the amounts so payable to the Agent or such Lender shall beincreased to the extent necessary to yield to the Agent or such Lender (afterpayment of all Taxes) interest or any such other amounts payable hereunder atthe rates or in the amounts specified in this Agreement and the Notes. Inaddition, the Borrower shall pay any Other Taxes to the appropriate taxingauthority in accordance with applicable law. Whenever any Taxes or Other Taxesare payable by the Borrower, as promptly as possible thereafter the Borrowershall send to the Agent for its own account or for the account of such Lender,as the case may be, a certified copy of an original official receipt receivedby the Borrower showing payment thereof. If the Borrower fails to pay any Taxesor Other Taxes which are subject to indemnification hereunder when due to theappropriate taxing authority or fails to remit to the Agent the requiredreceipts or other required documentary evidence, the Borrower shall indemnifythe Agent and the Lenders for any incremental taxes, interest or penalties thatmay become payable by the Agent or any Lender as a result of any such failure.Each Lender agrees to use reasonable efforts to initially fund the Loan and tochange its applicable lending office, as the case may be, if to do so (i) wouldreduce amounts payable by the Borrower to such Lender pursuant to thissubsection, (ii) would not result in the incurrence by such Lender ofadditional costs or expenses (unless the Borrower agrees to pay such costs andexpenses) and (iii) would not, in the reasonable judgment of such Lender, bedisadvantageous to such Lender for material regulatory, competitive or internalmanagement reasons. The agreements of the Borrower in this subsection shallsurvive the termination of this Agreement and the payment of the Notes and allother amounts payable hereunder and under the other Loan Documents.

 

### (b)  Notwithstanding any provision to the contraryherein, the Borrower shall have no liability to pay or indemnify any Lender orthe Agent with respect to any of the following Taxes or Other Taxes:

###  

##### (1)  Any Taxes or Other Taxes imposed by theUnited States federal government or any state or local government or taxingauthority therein that is imposed on, based on, or measured by net or grossincome, or that is a franchise tax (imposed in lieu of a tax on net or grossincome) or a branch profits tax (including any such Taxes or Other Taxescollected by means of withholding) (herein referred to as “*United States Income Taxes*”), other than a United States Income Taxthat is payable by means of withholding solely as a result of (A) the enactmentafter the date of execution and delivery of this Agreement (the “*Applicable Date*”) of an amendment to the Code or theregulations thereunder or (B) ratification after the Applicable

 

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##### Date of any protocol or other amendment to any United States income taxconvention in effect on the Applicable Date or (C) the ratification after theApplicable Date of any new United States income tax convention (any of (A), (B)or (C), a “*Changein Law*”); *provided*, *however*, that the Borrower shall have no liabilityfor any United States Income Taxes on payments to or for the benefit of anyLender that is not AFS that is in excess of the United States Income Taxes thatwould be imposed on such payment if made to AFS;

#####  

##### (2)  Any Taxes or Other Taxes imposed as a resultof a transfer or disposition by a Lender or Agent including, withoutlimitation, of all or any portion of its interest in the Aircraft, or any otherCollateral or any Note or the Loan (including sale of participations in suchNote or the Loan) unless such transfer or disposition shall occur pursuant tothe exercise of remedies during the continuation of an Event of Default orpursuant to a change of lending office that is required under Section 2.15;

#####  

##### (3)  Any Taxes or Other Taxes, with respect to theLoan, imposed with respect to events occurring or matters arising after therepayment of the Loan;

#####  

##### (4)  Any Taxes or Other Taxes to the extent suchTaxes or Other Taxes are imposed as a result of a present, former, or futureconnection between any Lender or Agent or Affiliate and the jurisdictionimposing such Taxes or Other Taxes (other than a connection arising solely fromthe Agent or such Lender having executed, delivered, performed its obligations,received a payment under or enforced this Agreement or any related document orthe Notes) or any political subdivision or taxing authority thereof or therein;

#####  

##### (5)  Any Taxes or Other Taxes to the extentimposed as a result of a Lender’s failure (i) to comply with the requirementsof subsection (c) hereunder or (ii) to provide any other necessary exemptioncertificates or other required documentation that is required by law, treaty,or regulation as a condition to the allowance of any reduction in the rate ofsuch Taxes or Other Taxes; provided, however, that in the case of both (i) and(ii) the Lender is legally entitled to comply with such requirements;

#####  

##### (6)  Any Taxes or Other Taxes to the extentarising out of or caused by, or to the extent such Taxes or Other Taxes wouldnot have been incurred but for, the willful misconduct or gross negligence ofsuch Lender or Agent or the inaccuracy or breach of any representation,covenant or agreement by such Lender or Agent in this Agreement or any relateddocument; and

#####  

##### (7)  Any excise tax imposed on any Lender underSection 4975 of the Code as a result of the use by such Lender of the assets ofan “employee benefit plan” (as defined in Section 3(3) of ERISA) to make theLoan.

#####  

### (c)  Each Lender that is not incorporated underthe laws of the United States of America or a state thereof agrees that, on orbefore the first Interest Payment Date after the date on which such Lenderbecomes a Lender hereunder, it will deliver to the Borrower and theAgent two duly completed copies of United States Internal Revenue Service(“*IRS*”) Form W-8BEN, or W-8ECI orother applicable form, as the case may be, certifying that it is entitled toreceive payments under this Agreement without deduction or withholding of anyUnited States Federal income taxes or at a reduced rate. Each such Lender alsoagrees to deliver to the

 

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### Borrower and the Agent two further copies of the said IRS Form W-8BENor W-8ECI or other or successor applicable forms or other manner ofcertification, as the case may be, on or before the date that any such formexpires or becomes obsolete or after the occurrence of any event requiring achange in the most recent form previously delivered by it to the Borrower, andsuch extensions or renewals thereof as may reasonably be requested by theBorrower or the Agent. Notwithstanding any other provision of this paragraph, aLender shall not be required to deliver any form pursuant to this paragraphthat such Lender is not legally able to deliver.

###  

### (d)  The Borrower shall duly file IRS Forms 1042and 1042S or appropriate successor forms annually with respect to all interestpayments hereunder as required by the Code and applicable IRS regulations andprocedures and shall provide the Agent with copies of the forms so filed.

###  

### (e)  If the Administrative Agent or any Lenderreceives a refund in respect of Taxes or Other Taxes paid by the Borrower,which in the good faith judgment of such Lender is allocable to such payment,it shall promptly pay such refund, together with any other amounts paid by theBorrower in connection with such refunded Taxes or Other Taxes, to theBorrower, net of all out-of-pocket expenses of such Lender incurred inobtaining such refund, *provided*, *however*, that the Borrower agrees topromptly return such refund to the Administrative Agent or the applicableLender as the case may be, if it receives notice from the Administrative Agentor applicable Lender that such Administrative Agent or Lender is required torepay such refund unless such repayment is due to events described in Section2.12(b)(5) hereof.

###  

### (f)  If a written claim is made against any Lenderor the Administrative Agent for any Taxes or Other Taxes, such Lender orAdministrative Agent, as the case may be, shall promptly notify the Borrower inwriting of such claim, and upon written request of Borrower shall, at theBorrower’s sole cost and expense, contest the validity or amount of such claimor permit the Borrower, to contest the validity or amount of such claim, *provided*, *however*,that the Lender or Administrative Agent shall not be required and Borrowershall not be permitted to contest such claim unless (i) the Borrower shallprovide to the Lender an opinion of the Vice President Tax of the Borrowerreasonably satisfactory to such Lender stating that a reasonable basis existsto contest such claim and (ii) the Borrower agrees to indemnify the Lender forany additional taxes, interest, penalties or other expenses incurred as aresult of such contest.

###  

SECTION2.13.   Sharing of Payments, Etc. If any Lender shallobtain any payment (whether voluntary, involuntary, through the exercise of anyright of set-off, or otherwise) on account of the Loan (other than amounts dueto such Lender pursuant to Section 2.9, 2.12, 2.16, 2.18 or 8.4(c) or on accountof differing rates of interest on portions of the Loan) in excess of itsratable share of payments on account of the Loan obtained by all the Lenders(such Lender, the “*Overpaid Lender*”),such Overpaid Lender shall forthwith (x) notify the Administrative Agent ofsuch overpayment (and the Administrative Agent shall notify the Lendersthereof) and (y) pay to the other Lenders such amounts in cash as shall benecessary to cause such Overpaid Lender to share the excess payment ratablywith each of them, and the Overpaid Lender, upon such payment to each otherLender, shall be deemed to have purchased a participation in such otherLender’s Loan in an amount equal to such payment; provided, however, that ifall or any portion of such excess payment is thereafter recovered from suchOverpaid Lender, such payment to and purchase from each Lender shall berescinded and such

 

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

 

SECTION2.14.   Use of Proceeds. The proceeds of the Loan shallbe available (and the Borrower agrees that it shall use such proceeds) solelyin connection with the purchase of the Aircraft.

 

SECTION2.15.   Lender Cooperation. Each Lender agrees that, aspromptly as practicable after it becomes aware of the occurrence of any eventor the existence of a condition which would cause the provisions of Section 2.9or Section 2.10 to be applicable to such Lender, it will, to the extent notinconsistent with such Lender’s internal policies, use reasonable efforts to make,fund or maintain the Loan through another lending office of such Lender if as aresult thereof the additional monies which would otherwise be required to bepaid in respect of the Loan pursuant to Section 2.9 would be materially reducedor the illegality or other adverse circumstances which would otherwise existpursuant to Section 2.10 would cease to exist, and if, as reasonably determinedby such Lender, the making, funding or maintaining of the Loan through suchother lending office would not otherwise materially adversely affect the Loanor such Lender.

 

SECTION2.16.   Replacement of Lenders. The Borrower may, uponwritten notice to the Administrative Agent (which shall promptly notify theaffected Lender), arrange for another institution (which may be a Lender) topurchase, in accordance with Section 8.7, the portion of the Loan made by anaffected Lender. For purposes of this Section 2.16, “affected Lender” shallmean a Lender which has asserted claims against the Borrower under or soughtrights or remedies provided by Section 2.9, 2.10 or 2.12.

 

SECTION2.17.   Airbus Lenders. The Borrower acknowledges andagrees that AFS or another Airbus Lender may obtain the funds necessary for itto make the Loan (in whole or in part) from banks or other institutionallenders who, as a condition to providing such funds, may require an AirbusLender to enter into covenants of a nature not substantially different fromthose described in Section 2.9. The Borrower agrees to pay on demand to AFS orany other Airbus Lender an amount equal to any amount AFS or any other AirbusLender is required to pay under any such covenant as a result of costs soimposed on AFS or another Airbus Lender which are of general application. Anysuch Airbus Lender shall provide the Borrower with a statement in reasonabledetail of such costs.

 

SECTION2.18.   Funding Arrangements. If the Loan is not madeon the date requested in the applicable Notice of Loan by reason of the failureof the Borrower to accept delivery of the Aircraft upon valid tender by AVSAunder the Airbus A330 Purchase Agreement, the Borrower agrees to pay to theInitial Lender, promptly after demand by the Initial Lender, an

 

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

 

# ARTICLE IIICONDITIONS TO MAKING THE LOAN

 

SECTION3.1.   Conditions Precedent to the Loan. The obligationof the Initial Lender to make the Loan shall be subject to the followingconditions precedent.

 

#### (i)            The Administrative Agent shall have receivedthe following items, each dated the Funding Date, in form and substancesatisfactory to the Administrative Agent, and the statements contained in theOfficer’s Certificate described in clause (ii) shall be true:

####  

###### (i)            one Note to the order of the Initial Lenderin respect of the Loan;

######  

###### (ii)           an Officer’s Certificate of the Borrowerstating that:

######  

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

 

(y)  noDefault or Event of Default has occurred and is continuing.

 

###### (iii)          certified copies of the resolutions of theBoard of Directors of the Borrower approving the transactions contemplatedhereby, including the purchase and financing of the Aircraft, and of alldocuments evidencing other necessary corporate action and governmentalapprovals, if any, to authorize the execution of the Loan Documents and theperformance of the Borrower’s obligations thereunder;

######  

###### (iv)          a certificate of the Secretary or anAssistant Secretary of the Borrower certifying the names and true signatures ofthe officers of the Borrower authorized to sign the Loan Documents and theother documents to be delivered hereunder and thereunder;

######  

###### (v)           a favorable opinion of an Associate GeneralCounsel of the Borrower, substantially in the form of Exhibit D-1 hereto;

######  

###### (vi)          a favorable opinion of Cadwalader, Wickersham& Taft LLP, special counsel for the Borrower, substantially in the form ofExhibit D-2 hereto; and

######  

###### (vii)         a favorable opinion of Daugherty, Fowler,Peregrin, Haught & Jenson, a Professional Corporation, special aviationcounsel for the Administrative Agent,

 

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###### substantially in the form ofExhibit D-3 hereto and addressed to the Administrative Agent and the InitialLender.

######  

### (b)  The following documents shall have been dulyauthorized, executed and delivered by the respective parties thereto, shalleach be reasonably satisfactory in form and substance to the AdministrativeAgent and shall be in full force and effect and copies (or an excerpt in thecase of the purchase agreement described in clause (i) below) shall have beendelivered to the Administrative Agent and its counsel:

###  

###### (i)            a copy of Clauses 12 and 13 of the AirbusA330 Purchase Agreement in respect of the Aircraft, certified by an authorizedrepresentative of the Borrower to be true and correct and not to have beenterminated, amended or waived by the Borrower in respect of the Aircraft;

######  

###### (ii)           a bill of sale covering the Aircraft executedby AVSA in favor of the Borrower, dated the date of delivery of the Aircraft;

######  

###### (iii)          a bill of sale for the Aircraft on AC Form8050-2 or such other form as may be approved by the FAA on the date of deliveryof the Aircraft executed by AVSA in favor of the Borrower and dated such date;

######  

###### (iv)          a consent and agreement, relating to theCollateral Agent’s Lien on the Contract Rights pursuant to the Mortgage,executed by AVSA and Airbus in favor of the Borrower, dated the date of deliveryof the Aircraft;

######  

###### (v)           a written assumption by the Borrower of theAirbus A330 Purchase Agreement and a written confirmation by AVSA thatAmendment No. 9 thereto has been executed and delivered by the Borrower;

######  

###### (vi)          a written assumption by the Borrower of theAirbus A319 Purchase Agreement and a written confirmation by AVSA thatAmendment No. 19 thereto has been executed and delivered by the Borrower

######  

###### (vii)         amendments to the AI Subleases effecting themodifications set forth in the Term Sheet relating to the AI Subleases;

######  

###### (viii)        an amendment to the AFS Term Loan effectingthe modifications set forth in the Term Sheet relating to the AFS Term Loan;

######  

###### (ix)           amendments to the 2005 A330 Financings,effecting the modifications set forth in the Term Sheet relating to the 2005A330 Financings.

######  

### (c)  The Administrative Agent shall have receiveda copy of the Mortgage, together with:

###  

###### (i)            acknowledgment copies or stamped receiptcopies of proper financing statements, duly filed under the U.C.C. in alljurisdictions that the Administrative Agent

 

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###### may deem necessary ordesirable in order to perfect the security interests created by the Mortgage;

######  

###### (ii)           evidence of the completion of all recordingsand filings of or with respect to the Mortgage that the Administrative Agentmay deem necessary or desirable in order to perfect the security interestcreated by the Mortgage;

######  

###### (iii)          at the Borrower’s cost, an independentinsurance broker’s report (including confirmation of coverage) and evidence ofFAA insurance for war risk coverage, each in form and substance reasonablysatisfactory to the Administrative Agent, as to due compliance with the termsof such Mortgage relating to insurance with respect to the Aircraft; and

######  

###### (iv)          evidence that all other actions necessary or,in the reasonable opinion of the Administrative Agent, desirable to perfect andprotect the security interests created by the Mortgage have been taken(including all FAA filings).

######  

### (d)  The Borrower has (subject to the filing of anappropriate bill of sale with the FAA) good title to the Aircraft, free andclear of Liens other than Permitted Liens.

###  

### (e)  The Aircraft has been duly certified by theFAA as to type and airworthiness and the Administrative Agent has received acopy of such certification (it being agreed that if a copy of suchcertification is not available at the time of borrowing of the Loan, such copymay be delivered within five (5) Business Days thereafter without waivingcompliance by the Borrower with Section 3.2(b) of the Mortgage).

###  

### (f)  The Administrative Agent shall have receivedcopies of invoices substantiating to its reasonable satisfaction the BFE Cost.

###  

### (g)  The Aircraft shall be one of the LetterAgreement Aircraft specified in the Letter Agreement as being eligible forfinancing hereunder.

###  

### (h)  Pursuant to subsections 364(c)(2) and (3) ofthe Bankruptcy Code and the Final Order, all amounts owing by the Borrower tothe Lenders will be secured by a first priority perfected Lien on theCollateral, and no Lien on the Collateral or in any property securing theobligations of the Borrower under any Airbus Financing that is not a PooledAirbus Financing shall have been granted in favor of any lender or otherfinancing party or representative thereof under any other financing of theBorrower authorized in the Case by the Bankruptcy Court under Section 364 ofthe Bankruptcy Code.

###  

### (i)  The Final Order shall be in full force andeffect and shall not have been vacated, reversed, modified, amended or stayedin any manner that affects the rights or duties of the Agent or the Lenders, ineach case, without the prior written consent of the Agent.

###  

### (j)  The Borrower shall have paid or caused tohave been paid all amounts due and owing under certain product supportagreements that it and its Affiliates owe to AVSA and all Airbus Lenders,subject to any *bona fide* tradedispute.

 

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### (k)  The Administrative Agent shall have receivedevidence reasonably satisfactory to the effect that the Borrower has LiquidAssets in an amount greater than or equal to CONFIDENTIAL MATERIAL OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT dollars ($ CONFIDENTIAL MATERIAL OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT) as of the Funding Date.

###  

### (l)  The Case shall not have been converted to aliquidation under Chapter 7 or Chapter 11 of the Bankruptcy Code, no trusteeshall been appointed in the Case, and the exclusive right of the Borrower andthe other debtors in the Case to propose a Chapter 11 plan in the Case shallnot have been terminated.

###  

### (m)  The Bankruptcy Court shall not have grantedrelief to any Person that is inconsistent with the provisions of the Term Sheetor the Airbus Documentation, and the Administrative Agent shall be satisfiedthat any Chapter 11 plan which may have been proposed by the Borrower prior tothe date hereof shall have incorporated all of the provisions of the Term Sheetand, if applicable, any Airbus Documentation, and any Chapter 11 plan confirmedby the Bankruptcy Court (whether or not proposed by the Borrower) which mayhave been confirmed prior to the date hereof does not contain any provisioninconsistent with the Term Sheet or the Airbus Documentation.

###  

### (n)  There shall not be any default by theBorrower under (i) any Airbus Financing that is not a Pooled Airbus Financing;(ii) any Airbus Purchase Agreement; (iii) any debtor-in-possession or otherfinancing of the Borrower authorized in the Case by the Bankruptcy Court underSection 364 of the Bankruptcy Code; or (iv) any agreement between itself or anyof its Affiliates, on the one hand, and Airbus or any of its Affiliates, on theother hand (other than agreements described in sub-clauses (i) and (ii) of thisclause (n)), *provided*, *however*, that neither a (x) a *bona fide* dispute relating to mattersarising under any agreement described in subclause (iv) of this clause (n), nor(y) the commencement by the Borrower of the Case shall constitute a “default”for purposes of any sub-clause of this clause(n).

###  

### (o)  There shall not be any material default bythe Borrower under any Engine Manufacturer Financing.

###  

### (p)  The Borrower shall have supplied to theAdministrative Agent, not less than thirty (30) days prior to the Funding Dateeither an update of the Borrower’s Business Plan, which shall maintain theBorrower’s continuing compliance with its long-term commitment to the AirbusA330 Aircraft and shall cover a period extending at least through CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, or a certificateof the Chief Financial Officer of the Borrower that such Business Plan has notbeen substantially modified in relation to the Borrower’s operation of AirbusA330 aircraft, in each case since the Business Plan or any update meeting therequirements of this clause (p) was last delivered to the Administrative Agent,or, prior to the Consummation Date, in relation to the Borrower’s expectedtreatment of the transactions contemplated by the Term Sheet.

 

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### (q)  No applicable law or regulation orinterpretation thereof by appropriate regulatory authorities shall be in effectwhich, in the reasonable opinion of the Administrative Agent or its counsel,would materially restrict, prohibit or make it illegal for the Initial Lenderto make the Loan; and no action or proceeding shall have been instituted norshall government action be threatened before any court or governmental agency,nor shall any order, judgment or decree have been issued or proposed to beissued by any court or governmental agency at the time of the Loan to setaside, restrain, enjoin or prevent the completion and consummation of thisAgreement or the transactions contemplated hereby.

###  

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

 

# ARTICLE IVREPRESENTATIONS AND WARRANTIES

 

SECTION4.1.   Representations and Warranties of the Borrower.(a)  The Borrower represents and warrants, on the date of thisAgreement, as follows:

 

###### (i)            The Borrower is a corporation duly organized,validly existing and in good standing under the laws of the State of Minnesota;is duly qualified to do business as a foreign corporation in each jurisdictionin which its operations or the nature of its business requires, other thanfailures to qualify which would not have a material adverse effect on theConsolidated business, assets, properties or condition (financial or otherwise)of the Borrower and its Subsidiaries taken as a whole or on the ability of theBorrower to perform its obligations under this Agreement; is a Certificated AirCarrier; has its location (for purposes of Article 9 of the U.C.C.) in Eagan,Minnesota; holds all licenses, certificates, permits and franchises from theappropriate agencies of the United States and/or all other governmentalauthorities having jurisdiction necessary to authorize the Borrower to engagein air transport and to carry on scheduled passenger service as presentlyconducted (other than those licenses, certificates, permits and franchiseswhich, if not obtained, would not have a material adverse effect on theConsolidated business, assets, properties or condition (financial or otherwise)of the Borrower and its Subsidiaries taken as a whole or on the ability of theBorrower to perform its obligations under this Agreement); and has thecorporate power and authority to conduct its business as it is presently beingconducted.

######  

###### (ii)           Taking into account the Final Order, theexecution, delivery and performance by the Borrower of this Agreement and theconsummation of the transactions contemplated hereby, are within the Borrower’scorporate powers, have been duly authorized by all necessary corporate action,and do not contravene (1) the Borrower’s charter or by-laws or (2) any law or anycontractual restriction binding on or

 

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###### affecting the Borrower anddo not result in or require the creation of any lien, security interest orother charge or encumbrance (other than pursuant to the Mortgage) upon or withrespect to any of its properties.

######  

###### (iii)          No authorization or approval or other actionby, and no notice to or filing with, any Governmental Authority or any otherthird party is required for the due execution, delivery and performance by theBorrower of this Agreement, except for (1) the Final Order, (2) the orders,permits, waivers, exemptions, authorizations and approvals of the GovernmentalAuthorities having jurisdiction over the Borrower, which orders, permits,waivers, exemptions, authorizations and approvals have been duly obtained andare in full force and effect and (2) any such authorization or approval orother action, notice or filing to the extent required to be given or obtainedonly after the date of this Agreement.

######  

###### (iv)          This Agreement has been duly executed anddelivered by the Borrower. Taking into account the Final Order, this Agreementis the legal, valid binding obligation of the Borrower enforceable against theBorrower in accordance with its terms except as such enforceability may belimited after the Consummation Date by bankruptcy, insolvency, reorganization,moratorium or similar laws relating to or limiting creditors’ rights generallyor by equitable principles relating to enforceability.

######  

###### (v)           The Consolidated balance sheet of NAC and itsSubsidiaries as at the end of the most recent fiscal year of NAC for which suchbalance sheet is available, and the related Consolidated statements ofoperations and cash flows of NAC and its Subsidiaries for such fiscal year, accompaniedby an opinion of Ernst & Young, independent public accountants (or anyother firm of independent public accountants of recognized standing selected byNAC), and the Consolidated balance sheet of NAC and its Subsidiaries as at theend of the most recent fiscal quarter of NAC (excluding the final fiscalquarter of each fiscal year) for which such balance sheet is available, and therelated Consolidated statements of operations and cash flows of NAC and itsSubsidiaries for the fiscal period then ended, duly certified by the chieffinancial officer of NAC, copies of which have been furnished to theAdministrative Agent, fairly present, subject, in the case of said balancesheet as at the end of such fiscal quarter, and said statements of operationsand cash flows for such fiscal period then ended, to year-end auditadjustments, the Consolidated financial condition of NAC and its Subsidiariesas at such dates and the Consolidated results of the operations of NAC and itsSubsidiaries for the period ended on such dates, all in accordance withgenerally accepted accounting principles consistently applied.

######  

###### (vi)          Except for the Case, there is no pending orthreatened action, suit, investigation, litigation or proceeding affecting theBorrower or any of its Subsidiaries before any court, governmental agency orarbitrator that (1) is reasonably likely to have a material adverse effect on(A) the business, condition (financial or otherwise), operations or propertiesof the Borrower and its Subsidiaries taken as a whole, (B) the rights andremedies of the Administrative Agent or any Lender under this Agreement or (C)the ability of the Borrower to perform its obligations under this Agreement, or(2) purports to

 

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###### affect the legality,validity or enforceability of this Agreement or the consummation of thetransactions contemplated hereby.

######  

###### (vii)         The Borrower is not engaged in the businessof extending credit for the purpose of purchasing or carrying margin stock(within the meaning of Regulation U issued by the Board of Governors of theFederal Reserve System).

######  

###### (viii)        The Final Order is in full force and effectand has not been vacated, reversed, modified, amended or stayed in any mannerthat affects the rights or duties of Airbus or any of its Affiliates, in eachcase, without the prior written consent of the Agent, and the Bankruptcy Courthas not granted relief to any Person that is inconsistent with the Term Sheet.

######  

### (b)  On the Funding Date, the Borrower represents andwarrants as set forth in paragraphs (i), (v) and (vii) of Section 4.1(a) as ofsuch date and as follows:

###  

###### (i)            The Borrower has the corporate power andauthority to own the Aircraft securing the Loan.

######  

###### (ii)           Taking into account the Final Order, theexecution, delivery and performance by the Borrower of each Loan Document towhich it is or will be a party, and the consummation of the transactionscontemplated thereby, are within the Borrower’s corporate powers, have beenduly authorized by all necessary corporate action, and do not contravene (1)the Borrower’s charter or by-laws or (2) any law or any contractual restrictionbinding on or affecting the Borrower and do not result in or require thecreation of any Lien, security interest or other charge or encumbrance (otherthan pursuant to the Mortgage) upon or with respect to any of its properties.

######  

###### (iii)          No authorization or approval or other actionby, and no notice to or filing with, any Governmental Authority or any otherthird party is required for the due execution, delivery and performance by theBorrower of any Loan Document to which it is or will be a party, except for (1)the Final Order, (2) the orders, permits, waivers, exemptions, authorizationsand approvals of the Governmental Authorities having jurisdiction over theoperation of the Aircraft by the Borrower, which orders, permits, waivers,exemptions, authorizations and approvals have been duly obtained or will priorto the Funding Date be duly obtained, and will on the Funding Date be in full forceand effect and (2) any such authorization or approval or other action, noticeor filing to the extent required to be given or obtained only after the FundingDate.

######  

###### (iv)          Except for (1) the filing for recordingpursuant to the Transportation Code of the Mortgage and the Mortgage Supplementattached thereto and made a part thereof, (2) the filing of financingstatements (and continuation statements at periodic intervals) with respect tothe perfection of the security and other interests created by such documents inaccordance with the U.C.C. of the State of Minnesota (which financingstatements the Borrower has caused or is in the process of causing to bepresented in due form for filing to the appropriate filing office in Minnesota)and (3) the taking of possession by the Agent of the original counterparts ofthe Mortgage and the Mortgage

 

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###### Supplement covering theAircraft, no further action, including any filing or recording of any document(including any financing statement in respect thereof under Article 9 of theU.C.C.), is necessary or advisable in order to establish or perfect the Agent’ssecurity interest in the Aircraft (granted pursuant to the Mortgage and theMortgage Supplement covering the Aircraft) as against the Borrower and anythird parties in any applicable jurisdictions in the United States.

######  

###### (v)           There has not occurred any Default or anEvent of Default which is presently continuing and there has not occurred anyevent which constitutes or would, with the passage of time or the giving ofnotice, or both, constitute an Event of Loss.

######  

###### (vi)          This Agreement has been, and each of theother Loan Documents to which the Borrower will be a party when deliveredhereunder will have been, duly executed and delivered by the Borrower. ThisAgreement is, and each of the Loan Documents to which the Borrower will be aparty when delivered hereunder will be, the legal, valid and binding obligationof the Borrower enforceable against the Borrower in accordance with theirrespective terms except as such enforceability may be limited by bankruptcy,insolvency, reorganization, moratorium or similar laws relating to or limitingcreditors’ rights generally or by equitable principles relating toenforceability.

######  

###### (vii)         Except for the Case, there is no pending orthreatened action, suit, investigation, litigation or proceeding affecting theBorrower or any of its Subsidiaries before any court, governmental agency orarbitrator that (1) is reasonably likely to have a material adverse effect on(A) the business, condition (financial or otherwise), operations or propertiesof the Borrower and its Subsidiaries taken as a whole, (B) the rights andremedies of the Agents or any Lender under the Loan Documents or (C) the abilityof the Borrower to perform its obligations under the Loan Documents or (2)purports to affect the legality, validity or enforceability of this Agreementor any Loan Document or the consummation of the transactions contemplatedhereby or thereby.

######  

###### (viii)        No proceeds of the Loan will be used topurchase or carry any margin stock or to extend credit to others for thepurpose of purchasing or carrying any margin stock.

######  

###### (ix)           The Borrower has good title to the Aircraft,free and clear of Liens other than the Permitted Liens. The Aircraft has beenduly certified by the FAA as to type and airworthiness, has been insured by theBorrower in accordance with the terms of the Mortgage and is in the conditionand state of repair required under the terms of the Mortgage.

######  

###### (x)            The Agent, as secured party under theMortgage, is entitled to the protection of Section 1110 of the Bankruptcy Codein connection with its right to take possession of the Airframe and Enginessecuring the Loan in the event of a case under Chapter 11 of the BankruptcyCode (including the Case) in which the Borrower is a debtor. Pursuant tosubsections 364(c)(2) and (3) of the Bankruptcy Code and the Final Order, allamounts owing by the Borrower to the Lenders under any Loan Document aresecured by a first priority perfected Lien on the Collateral.

 

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###### (xi)           Except for any defaults arising out of or inconnection with the Case or related to the Borrower’s financial condition, theBorrower is not in material default under any material financing (including,without limitation, either of the A330 Financings, if Airbus Finance CompanyLimited or an Affiliate remains at risk thereunder, the financing under the AFSTerm Loan if AFS or an Affiliate remains at risk thereunder, any leasefinancing pursuant to an AL Sublease, if Airbus Leasing IV or an Affiliateremains at risk thereunder, or any EETC participation, if Airbus or anAffiliate remains at risk thereunder) or under the Airbus A319 PurchaseAgreement, the Airbus A330 Purchase Agreement or any Other Purchase Agreement.

 

# ARTICLE VCOVENANTS OF THE BORROWER

 

SECTION5.1.   Affirmative Covenants. So long as the Loan shallremain unpaid, the Borrower will:

 

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

 

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

 

(c)  Preservation of CorporateExistence, Etc. Except as otherwise required by the Bankruptcy Code,preserve and maintain and cause each of its Subsidiaries to preserve andmaintain, its corporate existence, rights (charter and statutory) and franchises;provided, however, that neither the Borrower nor any of its Subsidiaries shallbe required to preserve any right or franchise if the Board of Directors of theBorrower or such Subsidiary shall determine that the preservation thereof is nolonger desirable in the conduct of the business of the Borrower or suchSubsidiary. Notwithstanding the foregoing, the Borrower shall at all times be aCertificated Air Carrier.

 

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(d)  Visitation Rights. Atany reasonable time and from time to time, permit the Administrative Agent orany of the Lenders or any agents or representatives thereof, to examine andmake copies of and abstracts from the records and books of account of, andvisit the properties of, the Borrower and any of its Subsidiaries, and todiscuss the affairs, finances and accounts of the Borrower and any of itsSubsidiaries with any of their officers or directors and with their independentcertified public accountants, provided that (i) any Lender exercising itsrights under this Section 5.1(d) must act through the Administrative Agent,(ii) neither the Borrower nor any of its Subsidiaries shall be required toviolate any confidentiality provision of any agreement by which it is bound and(iii) nothing in this Section 5.1(d) shall entitle the Agent or Lender or anyof their agents or representatives, in connection with the inspection of theAircraft, to open any panels, bays or similar openings without the consent ofthe Borrower.

 

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

 

(f)  Reporting Requirements.Furnish to the Lenders:

 

(i)            as soon as available and in anyevent within 60 days after the end of each of the first three quarters of eachfiscal year of NAC, the Consolidated balance sheet of NAC and its Subsidiariesas of the end of such quarter and Consolidated statements of operations andcash flows of NAC and its Subsidiaries for the period commencing at the end ofthe previous fiscal year and ending with the end of such quarter, dulycertified (subject to year-end audit adjustments) by the chief financialofficer of NAC as having been prepared in accordance with generally acceptedaccounting principles;

 

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

 

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

 

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

 

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Borroweror any Subsidiary files with the Securities and Exchange Commission or anynational securities exchange;

 

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

 

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

 

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

 

SECTION5.2.   Compliance with Mortgage. So long as the Loanshall remain unpaid, the Borrower will comply with the terms and provisions ofthe Mortgage.

 

SECTION5.3.   Maintenance of Office. So long as the Loan shallremain unpaid, the Borrower will maintain an office in the State of Minnesotawhere notices, presentations and demands in respect of this Agreement and theother Loan Documents may be made upon it (which office shall be maintained at2700 Lone Oak Parkway, Eagan, Minnesota 55121 until such time as the Borrowershall have notified the Administrative Agent of a change of location).

 

SECTION5.4.   Negative Covenants. So long as the Loan shallremain unpaid, the Borrower will not make or permit, or permit any of itsSubsidiaries to make or permit, any change in accounting policies or reportingpractices, except as required or permitted by GAAP.

 

# ARTICLE VIEVENTS OF DEFAULT

 

SECTION6.1.   Events of Default. Each of the following eventsshall constitute an event of default with respect to the Loan (each an “*Event of Default*”), whether any such eventshall be voluntary or involuntary or come about or be effected by operation oflaw or pursuant to or in compliance with any judgment, decree or order of anycourt or any order, rule or regulation of any administrative or governmentbody, and each such Event of Default shall continue so long as, but only aslong as, it shall not have been remedied:

 

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

 

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Obligationswith respect to the Loan, and such failure shall continue unremedied forCONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT days after thereceipt by the Borrower of written notice thereof from the AdministrativeAgent; or

 

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

 

(c)  any representation orwarranty made by the Borrower herein or in the Mortgage or any document orcertificate furnished by the Borrower in connection herewith or therewith orpursuant hereto or thereto shall prove to have been incorrect in any materialrespect at the time made and the incorrectness of any such representation orwarranty shall not have been cured (to the extent of the adverse impact of suchincorrectness on the interests of the Lenders) within thirty (30) days afterthe receipt by the Borrower of written notice from the Administrative Agentadvising the Borrower of the existence of such incorrectness; or

 

(d)  the commencement of aninvoluntary case or other proceeding in respect of the Borrower in aninvoluntary case under the federal bankruptcy laws, as now or hereafterconstituted, or any other applicable federal or state bankruptcy, insolvency orother similar law in the United States or seeking the appointment of areceiver, liquidator, assignee, custodian, trustee, sequestrator (or similarofficial) of the Borrower or for all or substantially all of its property, orseeking the winding-up or liquidation of its affairs and the continuation ofany such case or other proceeding undismissed and unstayed for a period ofninety (90) consecutive days or an order, judgment or decree shall be enteredin any proceeding by any court of competent jurisdiction appointing, withoutthe consent of the Borrower, a receiver, trustee or liquidator of the Borrower,or of any substantial part of its property, or sequestering any substantialpart of the property of the Borrower and any such order, judgment or decree orappointment or sequestration shall be final or shall remain in forceundismissed, unstayed or unvacated for a period of ninety (90) days after thedate of entry thereof; or

 

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(e)  the commencement by theBorrower of a voluntary case (other than the Case) under the Federal bankruptcylaws, as now constituted or hereafter amended, or any other applicable federalor state bankruptcy, insolvency or other similar law in the United States, orthe consent by the Borrower to the appointment of or taking possession by areceiver, liquidator, assignee, trustee, custodian, sequestrator (or othersimilar official) of the Borrower or for all or substantially all of itsproperty, or the making by the Borrower of any assignment for the benefit ofcreditors or the Borrower shall take any corporate action to authorize any ofthe foregoing; or

 

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

 

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

 

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

 

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

 

(j)  a trustee under Chapter 7 orChapter 11 of the Bankruptcy Code, a responsible officer or an examiner withenlarged powers relating to the operation of the business (powers beyond thoseset forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section1106(b) of the Bankruptcy Code shall be appointed in the Case and the orderappointing such trustee, responsible officer or examiner shall not be reversedor vacated within 30 days after entry thereof;

 

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

 

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(l)  the Final Order shall havebeen vacated, reversed, modified, amended or stayed in any manner thatmaterially and adversely affects the rights or duties of the Agent or theLenders, in each case, without the prior written consent of the Agent;

 

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

 

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

 

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

 

Uponthe occurrence of any Event of Default, the Administrative Agent shall at therequest, or may with the consent, of the Required Lenders, by notice to theBorrower, declare all the Notes, all interest thereon and all other amountspayable under this Agreement in connection with the Loan to be forthwith dueand payable, whereupon the Loan and Notes, all such interest and all suchamounts shall become and be forthwith due and payable, without presentment,demand, protest or further notice of any kind, all of which are herebyexpressly waived by the Borrower; *provided*,*however*, that in the event of anactual or deemed entry of an order for relief with respect to the Borrowerunder the Bankruptcy Code, the Loan, the Notes, all such interest and all suchamounts shall automatically become and be due and payable, without presentment,demand, protest or any notice of any kind, all of which are hereby expresslywaived by the Borrower. To the extent that any rights and remedies under thisSection 6.1 would otherwise be in violation of the automatic stay of section362 of the Bankruptcy Code, such stay shall be deemed modified, as set forth inthe Final Order, as applicable, to the extent necessary to permit theAdministrative Agent to exercise such rights and remedies.

 

# ARTICLE VIITHE AGENTS

 

SECTION7.1.   Authorization and Action. Each Lender herebyappoints and authorizes each Agent to take such action as agent on its behalfand to exercise such powers and discretion under the Loan Documents as are expresslydelegated to such Agent by the terms

 

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

 

SECTION7.2.   Each Agent’s Reliance, Etc. Neither Agent norsuch Agent’s directors, officers, agents or employees shall be liable for anyaction taken or omitted to be taken by it or them under or in connection withthe Loan Documents, except for its or their own gross negligence or willfulmisconduct. Without limitation of the generality of the foregoing, eachAgent:  (i) may treat the payee of anyNote as the holder thereof until the Administrative Agent receives and acceptsan Assignment and Acceptance entered into by the Lender that is the payee ofsuch Note, as assignor, and an Eligible Assignee, as assignee, as provided inSection 8.7; (ii) may consult with legal counsel (including counsel for theBorrower), independent public accountants and other experts selected by it andshall not be liable for any action taken or omitted to be taken in good faithby it in accordance with the advice of such counsel, accountants or experts;(iii) makes no warranty or representation to any Lender and shall not beresponsible to any Lender for any statements, warranties representations(whether written or oral) made in or in connection with the Loan Documents;(iv) shall not have any duty to ascertain or to inquire as to the performanceor observance of any of the terms, covenants or conditions of the LoanDocuments on the part of the Borrower or to inspect the property (including thebooks and records and the Airbus Aircraft) of the Borrower; (v) shall not beresponsible to any Lender for the due execution, legality, validity,enforceability, genuineness, sufficiency or value of, or the perfection orpriority of any Lien or security interest created or purported to be createdunder or in connection with, the Loan Documents or any other instrument ordocument furnished pursuant thereto; and (vi) shall incur no liability under orin respect of the Loan Documents by acting upon any notice, consent,certificate or other instrument or writing (which may be by telecopier,telegram or telex) believed by it to be genuine and signed or sent by theproper party or parties.

 

SECTION7.3.   The Agents and Their Affiliates. Each Agent (oran Affiliate of such Agent) shall have the same rights and powers under theLoan Documents as any other Lender and may exercise the same as though it werenot an Agent, and the term “Lender” or “Lenders” shall, unless otherwiseexpressly indicated, include each Agent in its individual capacity. Each Agentand its Affiliates may accept deposits from, lend money to, act as trusteeunder indentures of, accept investment banking engagements from and generallyengage in any kind of business with, the Borrower, any of its Subsidiaries andany Person who may do business with or own securities of the Borrower or anysuch Subsidiary, all as if such Agent were not an Agent and without any duty toaccount therefor to the Lenders.

 

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SECTION7.4.   Lender Credit Decision. Each Lender acknowledgesthat it has, independently and without reliance upon the Agent or any otherLender and based on the financial statements referred to in Section 4.1(a)(v)and such other documents and information as it has deemed appropriate, made itsown credit analysis and decision to enter into this Agreement. Each Lender alsoacknowledges that it will, independently and without reliance upon any Agent orany other Lender and based on such documents and information as it shall deemappropriate at the time, continue to make its own credit decisions in taking ornot taking action under this Agreement.

 

SECTION7.5.   Indemnification. The Lenders agree to indemnifyeach Agent and such Agent’s directors, officers, agents or employees (to theextent not reimbursed by the Borrower), ratably according to the respectiveprincipal amounts of the Notes then held by each such Lender, from and againstany and all liabilities, obligations, losses, damages, penalties, actions,judgments, suits, costs, expenses or disbursements of any kind or naturewhatsoever that may be imposed on, incurred by, or asserted against such Agentin any way relating to or arising out of the Loan Documents or any action takenor omitted by such Agent under the Loan Documents, provided that no Lendershall be liable for any portion of such liabilities, obligations, losses,damages, penalties, actions, judgments, suits, costs, expenses or disbursementsresulting from an Agent’s gross negligence or willful misconduct. Withoutlimitation of the foregoing, each Lender agrees to reimburse each Agentpromptly upon demand for its ratable share of any out-of-pocket expenses(including counsel fees) incurred by such Agent in connection with thepreparation, execution, delivery, administration, modification, amendment orenforcement (whether through negotiations, legal proceedings or otherwise) of,or legal advice in respect of rights or responsibilities under, the LoanDocuments, to the extent that such Agent is not reimbursed for such expenses bythe Borrower.

 

SECTION7.6.   Successor Agent. Subject to the appointment andacceptance of a successor agent as provided below, either Agent may resign atany time by giving written notice thereof to the Lenders and the Borrower andmay be removed at any time with or without cause by the Required Lenders. Uponany such resignation or removal, or the earlier written request of such Agentto resign addressed as aforesaid, the Required Lenders shall have the right toappoint a successor Agent. If no successor Agent shall have been so appointedby the Required Lenders, and shall have accepted such appointment, within 30days after the retiring Agent’s giving of notice of resignation or the RequiredLenders’ removal of the retiring Agent, then the retiring Agent may, on behalfof the Lenders, appoint a successor Agent. In each case, the successor Agent(if not an Airbus Lender) shall be an entity having a consolidated tangible networth of at least $ CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT. Upon the acceptance of any appointment as an Agent by a successorAgent, such successor Agent shall thereupon succeed to and become vested withall the rights, powers, discretion, privileges and duties of the retiringAgent, and the retiring Agent shall be discharged from its duties andobligations under the Loan Documents. After any retiring Agent’s resignation orremoval hereunder as an Agent, the provisions of this Article VII (including,without limitation, Section 7.5) shall inure to the retiring Agent’s benefit asto any actions taken or omitted to be taken by it while it was an Agent underthe Loan Documents. Notwithstanding anything to the contrary herein, theAdministrative Agent and the Collateral Agent under (and as defined in) theMortgage shall be the same institution.

 

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# ARTICLEVIIIMISCELLANEOUS

 

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

 

SECTION8.2.   Notices, Etc. All notices and othercommunications provided for hereunder shall be in writing (including telecopieror telegraphic communication) and mailed, telecopied, telegraphed or delivered,if to the Borrower, at its address at Department A4010, 2700 Lone Oak Parkway,Eagan, MN 55121, Attention: Senior Vice President and Treasurer (Telecopier No.+1-612-726-2221); if to the Initial Lender, at its Lending Office specifiedopposite its name on Schedule I hereto; if to any other Lender, at its LendingOffice specified in the Assignment and Acceptance pursuant to which it became aLender; if to the Administrative Agent, at its address at 5th Floor, 6 George’sDock, International Financial Services Centre, Dublin 1, Ireland,Attention:  Managing Director (TelecopierNo. +353-1-670-2020); or, as to the Borrower or the Agent, at such otheraddress as shall be designated by such party in a written notice to the otherparties and, as to each other party, at such other address as shall bedesignated by such party in a written notice to the Borrower and the Agent. Allsuch notices and communications shall, when mailed, telecopied or telegraphed,be effective when deposited in the mails, telecopied or delivered to thetelegraph company, respectively, except that notices and communications to theAgent or any Lender pursuant to Article II, III or VII shall not be effectiveuntil received. Delivery by telecopier of an executed counterpart of anyamendment or waiver of any provision of this Agreement or the Notes or of anyExhibit hereto to be executed and delivered hereunder shall be effective asdelivery of a manually executed counterpart thereof.

 

SECTION8.3.   No Waiver; Remedies. No failure on the part ofany Lender or the Agent to exercise, and no delay in exercising, any rightunder any Loan Document shall operate as a waiver thereof; nor shall any singleor partial exercise of any such right preclude any other or further exercisethereof or the exercise of any other right. The remedies herein provided arecumulative and not exclusive of any remedies provided by law.

 

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SECTION8.4.   Costs and Expenses. (a)  The Borroweragrees to pay on demand the reasonable and adequately documented fees andexpenses, including without limitation reasonable legal fees and expenses ofcounsel for the Agent and any Airbus Lender in connection with the transactionscontemplated hereby; *provided*thatthe Borrower will be obligated to pay the legal fees and expenses of only onelaw firm. The Borrower further agrees to pay on demand all reasonable andadequately documented costs and expenses of the Agent and the Lenders, if any(including, without limitation, reasonable counsel fees and expenses), inconnection with the enforcement (whether through negotiations, legalproceedings or otherwise) of the Loan Documents and the other documents to bedelivered under the Loan Documents, including, without limitation, reasonablefees and expenses of counsel for the Agent and each Lender in connection withthe enforcement of rights under this Section 8.4(a).

 

### (b)  The Borrower agrees to indemnify and holdharmless (x) each Lender, the Agents, Airbus and AVSA, (y) their respectiveAffiliates, and (z) their respective officers, directors, employees, agents andadvisors (each, an “*Indemnified Party*”)from and against any and all claims, damages, losses, liabilities and expenses(including, without limitation, reasonable fees and expenses of counsel) thatmay be incurred by or asserted or awarded against any Indemnified Party, in eachcase arising out of or in connection with or by reason of, or in connectionwith the preparation for a defense of, any investigation, litigation orproceeding arising out of, related to or in connection with the Loan Documents,any of the transactions contemplated herein or therein or the actual orproposed use of the proceeds of the Loan, whether or not such investigation,litigation or proceeding is brought by the Borrower, its directors,shareholders or creditors or an Indemnified Party or any other Person or anyIndemnified Party is otherwise a party thereto and whether or not thetransactions contemplated hereby are consummated, except to the extent suchclaim, damage, loss, liability or expense (i) results from such IndemnifiedParty’s gross negligence or willful misconduct, (ii) arises by reason of lawsor governmental regulations, orders or other legal requirements pertaining tosecured lending by such Indemnified Party, (iii) consists of Taxes or OtherTaxes (whether or not otherwise indemnified by the Borrower), (iv) isattributable, in the case of a particular Indemnified Party, to theincorrectness of any representation or warranty or the breach of any covenantof such Indemnified Party in the Loan Documents, (v) is attributable toamendments to the Loan Documents not made in accordance with the terms thereof,(vi) constitutes an administrative expense, (vii) arises because of the grossnegligence or willful misconduct of the Agent in distributing funds inaccordance with the Loan Documents, (viii) arises due to a transfer ordisposition of an Indemnified Party’s interest in the Aircraft or in the LoanDocuments other than as required therein or following the occurrence of anEvent of Default or (ix) results from actions of Airbus or AVSA in theirrespective capacities as manufacturer and seller of the Aircraft.

###  

### (c)  If (i) any payment or prepayment of principalof the Loan is made by the Borrower (or any replacement lender pursuant toSection 2.16) to or for the account of a Lender other than on the last day ofthe Interest Period for the Loan, as a result of a prepayment pursuant toSection 2.8, acceleration pursuant to Section 6.1 or for any other reason or(ii) the Loan is converted from being based on the Eurodollar Rate to beingbased on a substitute rate pursuant to Section 2.10 other than on the last dayof the Interest Period for the Loan, the Borrower shall, upon demand by suchLender (with a copy of such demand to the Agent), pay to the Agent for theaccount of such Lender any amounts required to compensate such Lender for anyadditional losses, costs or expenses that it may reasonably incur and as areset forth in reasonable detail in a

 

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### certificate furnished to the Borrower within 90 days after theincurrence of such loss, cost or expense as a result of such payment orconversion (as the case may be), including, without limitation, any loss(including loss of anticipated profits), cost or expense incurred by reason ofthe liquidation or reemployment of deposits or other funds acquired by suchLender to fund or maintain the Loan.

###  

### (d)  Without prejudice to the survival of anyother agreement of the Borrower hereunder, the agreements and obligations ofthe Borrower contained in Sections 2.9, 2.10, 2.12, 2.13 and 8.4 shall survivethe payment in full of principal, interest and all other amounts payablehereunder and under the Notes.

###  

SECTION8.5.   Right of Setoff. Upon (i) the occurrence andduring the continuance of any Event of Default and (ii) the making of therequest or the granting of the consent specified by Section 6.1 to authorizethe Administrative Agent to declare the Notes relating to the Loan to be dueand payable pursuant to the provisions of Section 6.1, each Lender is hereby authorizedat any time and from time to time, to the fullest extent permitted by law, toset off and apply any and all deposits (general or special, time or demand,provisional or final) at any time held and other indebtedness at any time owingby such Lender to or for the credit or the account of the Borrower against anyand all of the obligations of the Borrower now or hereafter existing under anyLoan Document, whether or not such Lender shall have made any demand under suchLoan Document and although such obligations may be unmatured; provided that anAirbus Lender shall not be entitled to set off and apply as aforesaid depositsheld by or indebtedness owing by the Manufacturer or AVSA to the Borrower. Eachsuch Lender agrees promptly to notify the Borrower after any such setoff andapplication, provided that the failure to give such notice shall not affect thevalidity of such setoff and application. The rights of each such Lender underthis Section 8.5 are in addition to other rights and remedies (including,without limitation, other rights of setoff) that such Lender may have.

 

SECTION8.6.   Binding Effect; Integration. This Agreementshall become effective when it shall have been executed by the Borrower, theAdministrative Agent and the Initial Lender and thereafter shall be bindingupon and inure to the benefit of the Borrower, the Administrative Agent andeach Lender and their respective successors and assigns, except that theBorrower shall not have the right to assign its rights hereunder or any interestherein without the prior written consent of the Lenders. This Agreement and theother Loan Documents constitute the entire agreement and understanding amongthe parties hereto relating to the subject matter hereof and supersede any andall prior agreements and understandings, oral or written, relating to thesubject matter hereof.

 

SECTION8.7.   Assignments and Participations.(a)  Each Lender (x) may, at any time, and (y) shall, so long as noDefault has occurred and is continuing and if demanded by the Borrower pursuantto the provisions of Section 2.16, assign to one or more Persons all or aportion of its rights and obligations under the Loan Documents (including,without limitation, the portion of the Loan owing to it and the Note or Notesheld by it); provided, however, that (i) each such assignment may be of aconstant or of a varying, percentage of all rights and obligations under thisAgreement and the other Loan Documents, (ii) except in the case of anassignment to a Person that, immediately prior to such assignment, was a Lenderor an assignment of all of a Lender’s rights and obligations under thisAgreement, the principal

 

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amount of the Loan of the assigning Lenderbeing assigned pursuant to each such assignment (determined as of the date ofthe Assignment and Acceptance with respect to such assignment) shall in noevent be less than $5,000,000, (iii) each such assignment shall be (x) (A) toany Airbus Lender or any Affiliate thereof, or (B) to any special purposeentity formed pursuant to Section 8.7(j), or (y) (A) to a bank or otherfinancial institution with a combined capital, surplus and undivided profits ofat least $75,000,000, or a corporation whose consolidated tangible net worth isat least $75,000,000, exclusive of goodwill, in either case as of the proposeddate of such sale, as determined in accordance with GAAP or (B) to anyAffiliate of any such bank, financial institution or corporation if such bank,financial institution or corporation furnishes to the Borrower an agreement oragreements of such bank, financial institution or corporation (in form andsubstance reasonably satisfactory to the Borrower) unconditionally guaranteeingto the Borrower such Affiliate’s obligations to the Borrower hereunder, or (z)Avion or any Person in which AFS or its successor holds at least twenty-fivepercent (25%) of the equity interests, so long as such entity referred to inclause (x) or (y) or (z) is (A) not an airline, a commercial air carrier, anair freight forwarder, an entity engaged in the business of parcel transport orother similar business (collectively, a “*PotentialCompetitor*”) and (B) is not a Person (other than a bank or otherfinancial institution) controlling, controlled by or under common control withany such Potential Competitor (the entities referred to in clauses (x) and (y)above, subject to the limitations aforesaid in clauses (A) and (B),collectively, the “*Eligible Assignees*”),(iv) each such assignment made as a result of a demand by the Borrower pursuantto Section 2.16 shall be arranged by the Borrower, shall be to an EligibleAssignee acceptable to the Administrative Agent (which acceptance shall not beunreasonably withheld) and shall be either an assignment of all of the rightsand obligations of the assigning Lender under the Loan Documents or anassignment of a portion of such rights and obligations made concurrently withanother such assignment or other such assignments that together cover all ofthe rights and obligations of the assigning Lender under the Loan Documents and(v) no Lender shall be obligated to make any such assignment as a result of ademand by the Borrower pursuant to Section 2.16 unless and until such Lendershall have received one or more payments from either the Borrower or one ormore Eligible Assignees in an aggregate amount at least equal to the aggregateoutstanding principal amount of the Loan owing to such Lender, together withaccrued interest thereon to the date of payment of such principal amount andall other amounts payable to such Lender under the Loan Documents. The partiesto each such assignment shall execute and deliver to the Administrative Agent,for its acceptance and recording in the Register, an Assignment and Acceptancetogether with any Note subject to such assignment. Upon such execution,delivery, acceptance and recording from and after the effective date specifiedin each Assignment and Acceptance, (x) the assignee thereunder shall be a partyhereto and, to the extent that rights and obligations hereunder have beenassigned to it pursuant to such Assignment and Acceptance, have the rights andobligations of a Lender hereunder and (y) the Lender assignor thereunder shall,to the extent that rights and obligations hereunder have been assigned by itpursuant to such Assignment and Acceptance, relinquish its rights and bereleased from its obligations under the Loan Documents (and, in the case of anAssignment and Acceptance covering all or the remaining portion of an assigningLender’s rights and obligations under this Agreement, such Lender shall ceaseto be a party hereto).

 

### (b)  By executing and delivering an Assignment andAcceptance, the Lender assignor thereunder and the assignee thereunder confirmto and agree with each other and the other parties hereto as follows: (i) otherthan as provided in such Assignment and Acceptance,

 

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### such assigning Lender makes no representation or warranty and assumesno responsibility with respect to any statements, warranties or representationsmade in or in connection with this Agreement or the other Loan Documents or theexecution, legality, validity, enforceability, genuineness, sufficiency orvalue of, or the perfection or priority of any lien or security interestcreated or purported to be created under or in connection with, this Agreementor the other Loan Documents or any other instrument or document furnishedpursuant hereto; (ii) such assigning Lender makes no representation or warrantyand assumes no responsibility with respect to the financial condition of theBorrower or the performance or observance by the Borrower of any of its obligationsunder this Agreement or the other Loan Documents or any other instrument ordocument furnished pursuant hereto; (iii) such assignee confirms that it hasreceived a copy of this Agreement, together with copies of the financialstatements referred to in Section 4.1(a)(v) and such other documents andinformation as it has deemed appropriate to make its own credit analysis anddecision to enter into such Assignment and Acceptance; (iv) such assignee will,independently and without reliance upon the Agent, such assigning Lender or anyother Lender and based on such documents and information as it shall deemappropriate at the time, continue to make its own credit decisions in taking ornot taking action under this Agreement; (v) such assignee confirms that it isan Eligible Assignee; (vi) such assignee represents and warrants that either(x) no part of the funds to be used by it for the purchase of a portion of theLoan (or any part thereof) constitutes assets of any “employee benefit plan” asdefined in Section 3(3) of ERISA or (y) the proposed assignment will not resultin a nonexempt prohibited transaction (as defined in Section 4975 of theInternal Revenue Code and ERISA); (vii) such assignee appoints and authorizeseach Agent to take such action as agent on its behalf and to exercise suchpowers and discretion under the Loan Documents as are delegated to such Agentby the terms thereof, together with such powers and discretion as arereasonably incidental thereto; and (ix) such assignee agrees that it willperform in accordance with their terms all of the obligations that by the termsof this Agreement are required to be performed by it as a Lender.

###  

### (c)  The Administrative Agent shall maintain atits address referred to in Section 8.2 a copy of each Assignment and Acceptancedelivered to and accepted by it and a register for the recordation of the namesand addresses of the Lenders, and the principal amount of the Loan owing to,each Lender from time to time (the “*Register*”).If more than 50% of the then outstanding principal amount of the Notes are heldby a Person or Persons other than an Airbus Lender, the Administrative Agentshall maintain, and make available to the Borrower on request, a list of PooledAirbus Financings in which such Person or Persons holds more than 50% of thethen outstanding principal balance (other than Pooled Airbus Financings thatare AL Subleases) and/or all of the leasehold interest in one or more PooledAirbus Financings that are AL Subleases. The entries in the Register shall beconclusive and binding for all purposes, absent manifest error, and theBorrower, the Agent and the Lenders may treat each Person whose name isrecorded in the Register as a Lender hereunder for all purposes of thisAgreement. The Register shall be available for inspection by the Borrower orany Lender at any reasonable time and from time to time upon reasonable priornotice.

###  

### (d)  Upon its receipt of an Assignment andAcceptance executed by an assigning Lender and an assignee representing that itis an Eligible Assignee, together with any Note or Notes subject to suchassignment, the Administrative Agent shall, if such Assignment and Acceptancehas been completed and is in substantially the form of Exhibit C hereto, (i)accept such Assignment and Acceptance, (ii) record the information containedtherein in the Register

 

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### and (iii) give prompt notice thereof to the Borrower. Within fiveBusiness Days after its receipt of such notice, the Borrower, at its ownexpense, shall execute and deliver to the Administrative Agent in exchange forany surrendered Notes new Notes to the order of such Eligible Assignee each inan amount equal to the portion of such surrendered Note assumed by suchEligible Assignee pursuant to such Assignment and Acceptance and, if theassigning Lender has retained a portion of such surrendered Note, a new Note tothe order of the assigning Lender in an amount equal to such retained portionand such old Note shall be returned to the Borrower marked “cancelled”. Suchnew Note or Notes shall be dated the effective date of such Assignment andAcceptance and shall otherwise be in substantially the form of Exhibit Ahereto.

###  

### (e)  Each Lender may sell participations to one ormore Eligible Assignees in or to all or a portion of the Loan owing to it andthe Note or Notes held by it; *provided*,*however*, that (i) such Lender’sobligations under this Agreement shall remain unchanged, (ii) such Lender shallremain solely responsible to the other parties hereto for the performance ofsuch obligations, (iii) such Lender shall remain the holder of any such Notefor all purposes of this Agreement and the other Loan Documents, (iv) theBorrower, each Agent and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement and the other Loan Documents, and (v) eachsuch participation shall be in a minimum amount of $ CONFIDENTIAL MATERIALOMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONPURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT (unless otherwise agreed to bythe Borrower).

###  

### (f)  Any Lender may, in connection with anyassignment or participation or proposed assignment or participation pursuant tothis Section 8.7, disclose to the assignee or participant or proposed assigneeor participant, any information relating to the Borrower furnished to suchLender by or on behalf of the Borrower; *provided*that, prior to any such disclosure, the assignee or participant or proposedassignee or participant shall agree to preserve the confidentiality of anyConfidential Information relating to the Borrower received by it from suchLender pursuant to a confidentiality agreement substantially in the form ofExhibit E.

###  

### (g)  Notwithstanding any other provision set forthin this Agreement, any Lender may at any time create a security interest in allor any portion of its rights under this Agreement (including, withoutlimitation, the Loan owing to it and the Notes held by it) in favor of anyFederal Reserve Bank in accordance with Regulation A of the Board of Governorsof the Federal Reserve System or any other Person.

###  

### (h)  The Borrower agrees to cooperate with eachLender to accommodate the efforts of such Lender to transfer, sell or assignall or any part of its rights and obligations under this Agreement pursuant tothis Section 8.7. Each Lender severally agrees to reimburse the Borrower’sreasonable and adequately documented external legal and investment bank feesand expenses in respect of any such transfer, sale or assignment.

###  

### (i)  If as a result of one or more assignments,transfers or other transactions, the Airbus Lenders cease to control theability to accelerate the Loan, the Administrative Agent agrees to give promptwritten notice thereof to the Borrower.

 

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### (j)  In connection with a transfer, sale,assignment of, or participation with respect to, all or any part of its rightsand/or obligations under the Loan Documents by the Initial Lender or anyAffiliate thereof (it being understood that the Initial Lender or Affiliate mayallocate particular rights and obligations as between the relevant parties),including by means of a capital markets, private placement or securitizationtransaction in one or more steps (an “*InitialLender Sell-Down*”), the parties agree as follows, notwithstandingany other provision of this Section 8.7:

###  

###### (i)            that the Borrower shall have theright to review and approve (acting reasonably) any widely circulated (as, forexample, in a Rule 144A offering) placement or offering materials in connectionwith any Initial Lender Sell-Down, limited to those portions of such placementor offering materials that: (i) describe the Borrower or its business, (ii)describe the Loan Documents to which the Borrower is a party or (iii) describeany risk factors concerning the Borrower or the airline industry, and for thispurpose, the Borrower shall have a period of not less than 30 days for any suchreview and approval in connection with an Initial Lender Sell-Down;

######  

###### (ii)           that not more than two Initial LenderSell-Down transactions (as defined herein and in the credit agreements inrespect of other Airbus Loans) per calendar year shall be subject to theprovisions of this Section 8.7(j) (or the comparable provisions of the creditagreements in respect of other Airbus Financings) (it being understood that anyone Initial Lender Sell-Down transaction may involve more than one creditagreement for purposes of this subclause) in which review and approval of theplacement or offering materials by the Borrower is required as provided in thepreceding subclause (1);

######  

###### (iii)          that a special purpose entity (an “*SPV*”) organized in a manner acceptable tothe placement agents, rating agencies and other participants in an InitialLender Sell-Down transaction shall be an acceptable “Eligible Assignee” underthe Loan Documents (it being understood that such SPV may have only nominalcapitalization);

######  

###### (iv)          that the Loan Documents and closingdocuments may be disclosed to the rating agencies, underwriters, investors,placement agents and trustees and other parties reasonably deemed necessary bythe Initial Lender in connection with an Initial Lender Sell-Down transaction,and their respective counsel, auditors, agents and advisors, each of whom agreeto hold such information confidential in accordance with the terms of Exhibit Eor otherwise in a manner customary for such persons in similar transactions;

######  

###### (v)           that, if requested by the InitialLender, the Borrower will provide reliance letters with respect to the legalopinions delivered at the closing of the Loan at the closing of an InitialLender Sell-Down transaction, *provided*that such reliance letters need only relate to the date of the closing of theLoan; and

######  

###### (vi)          that, the Borrower will cooperate withthe Initial Lender, to the extent consistent with the Borrower’s access to thecapital markets (subject to the Borrower informing the Initial Lender, uponreasonable request by the Initial Lender, of the transactions the Borrower isthen undertaking, or planning to undertake, to raise funds in relation to whichthe Borrower is the obligor on the capital markets (whether or not such

 

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###### transactions arecollateralized by aircraft)), in connection with any Initial Lender Sell-Downtransaction involving a private placement or Rule 144A offering of securities,in agreeing to amend the terms of this Agreement and the Mortgage to includesuch market terms as shall be available to the Borrower at such time (x) to theextent not included in the Loan Documents and (y) to the extent such amendmentsdoe not adversely deteriorate the economic value to the Borrower of the LoanDocuments; and

######  

###### (vii)         from and after the closing of anInitial Lender Sell-Down transaction, that Section 2.11 of this Agreement shallbe deemed amended by adding a new paragraph (f) to read as follows:

######  

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

 

### ; it being agreed that the reasonable costs and expenses of Borrower(including reasonable legal fees and disbursements) incurred by the Borrower incomplying with clauses (iv) and (v) above and in connection with its review andapproval of any widely circulated (as, for example, in a Rule 144A offering)placement or offering materials to be utilized in connection with an InitialLender Sell-Down shall be reimbursed by the Initial Lender.

###  

SECTION 8.8.  Confidentiality. Neither Agent nor any Lender nor the Borrowershall disclose any Confidential Information to any other Person without theconsent of each other, except (a) to such Agent’s or such Lender’s Affiliatesand their officers, directors, employees, agents and advisors and, ascontemplated by Section 8.7(f), to actual or prospective assignees andparticipants, and then only on a confidential basis or as otherwise permittedunder Section 8.7(j), (b) as required by any law, rule or regulation orjudicial process and (c) as requested or required by any state, federal orforeign authority or examiner regulating banks or banking. Notwithstandinganything herein to the contrary, any party subject to confidentialityobligations hereunder or under any other related document (and any employee,representative or other agent of such party) may disclose to any and allpersons, without limitation of any kind, such party’s U.S. federal income taxtreatment and the U.S. federal income tax structure of the transactionscontemplated by this Agreement relating to such party and all materials of anykind (including opinions or other tax analyses) that are provided to itrelating to such tax treatment and tax structure. However, no such party shalldisclose any information relating to such tax treatment or tax structure to theextent nondisclosure is reasonably necessary in order to comply with applicablesecurities laws.

 

SECTION8.9.   Certain Agreements and Representations of Lenders.Each Lender represents and warrants that: (i) such Lender qualifies as anEligible Assignee; (ii) such Lender will not make the Loan or acquire anyinterest in the Loan with the assets of any

 

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“employee benefit plan” as defined in Section3(3) of ERISA or of any “plan” within the meaning of Section 4975(e)(1) of theCode, unless the acquisition will not result in a non-exempt prohibitedtransaction (as defined in Section 4975 of the Code and ERISA; and (iii) suchLender will acquire the Loan and each Note for investment and not with a viewto resale or distribution (it being understood that such Lender may pledge orassign as security its interest in the Loan and each Note issued to it),provided that the disposition of its property shall at all times be and remainwithin its control, except that such Lender may sell, transfer or otherwisedispose of any Note or any portion thereof or grant participations therein, ina manner which in itself will not require registration under the Securities Actof 1933, as amended.

 

SECTION8.10.   GOVERNING LAW. THIS AGREEMENT AND THE NOTESSHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY ANDPERFORMANCE, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THESTATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE OF LAW PRINCIPLE THAT WOULDDICTATE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.

 

SECTION8.11.   Execution in Counterparts. This Agreement maybe executed in any number of counterparts and by different parties hereto inseparate counterparts, each of which when so executed shall be deemed to be anoriginal and all of which taken together shall constitute one and the sameagreement. Delivery of an executed counterpart of a signature page to thisAgreement by telecopier shall be effective as delivery of a manually executedcounterpart of this Agreement.

 

SECTION8.12.   Jurisdiction, Etc. (a)  Each of theparties hereto hereby irrevocably and unconditionally submits, for itself andits property, to the nonexclusive jurisdiction of any New York State court orfederal court of the United States of America, in each case sitting in New YorkCity, except that during the pendency of the Case, the Bankruptcy Court shallhave exclusive jurisdiction, in any action or proceeding arising out of orrelating to the Loan Documents, or for recognition or enforcement of anyjudgment, and each of the parties hereto hereby irrevocably and unconditionallyagrees that all claims in respect of any such action or proceeding shall be conclusiveand may be enforced in other jurisdictions by suit on the judgment may be heardand determined in such state court or, to the extent permitted by law, in suchfederal court. Each of the parties hereto agrees that a final judgment in suchaction or proceeding or in any other manner provided by law. Nothing in thisAgreement shall affect any right that any party may otherwise have to bring anyaction or proceeding relating to this Agreement or the Notes in the courts ofany jurisdiction.

 

### (b)  The Borrower hereby irrevocably designates,appoints and empowers CT Corporation System, with offices on the date hereof at111 Eighth Avenue, New York, New York 10011 as its designee, appointee andagent to receive, accept and acknowledge for and on its behalf, and in respectof its property, service of any and all legal process, summons, notices anddocuments which may be served in any such action or proceeding. If for anyreason such designee, appointee and agent shall cease to be available to act assuch, the Borrower agrees to designate a new designee, appointee and agent inNew York City on the terms and for the purposes of this provision satisfactoryto the Administrative Agent under this Agreement. The Borrower furtherirrevocably consents to the service of process out of any of the aforementioned

 

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### courts specified in paragraph (a) above in any such action orproceeding by the mailing of copies there by registered or certified mail,postage prepaid, to the Borrower, such service to become effective 30 daysafter such mailing. Nothing herein shall affect the right of the Agent underthis Agreement, any Lender or the holder of any Note to serve process in anyother manner permitted by law or to commence legal proceedings or otherwiseproceed against the Borrower in any other jurisdiction.

###  

### (c)  Each of the parties hereto irrevocably andunconditionally waives, to the fullest extent it may legally and effectively doso, any objection that it may now or hereafter have to the laying of venue ofany suit, action or proceeding arising out of or relating to the Loan Documentsin any New York State or federal court referred to in Section 8.12(a). Each ofthe parties hereto hereby irrevocably waives, to the fullest extent permittedby law, the defense of an inconvenient forum to the maintenance of such actionor proceeding in any such court.

###  

SECTION8.13.   WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THEAGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY INANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OROTHERWISE) ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE ACTIONS OFTHE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE ORENFORCEMENT THEREOF.

 

SECTION8.14.   Severability. Any provision of this Agreementwhich is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction.

 

SECTION8.15.   Headings. All headings in this Agreement arefor convenience of reference only and do not constitute a part of thisAgreement.

 

SECTION8.16.   Interpretation of Term Sheet. Nothing in thisAgreement or the other Loan Documents shall be deemed to interpret theprovisions of the Term Sheet for purposes of, and no reliance shall be made onthe terms of this Agreement or the other Loan Documents in the negotiation of,any other financing required to be provided by AVSA under the Term Sheet.

 

SECTION8.17.   Quiet Enjoyment. Each Lender and theAdministrative Agent covenant to the Borrower as follows:

 

### (a)  the Lenders and the Administrative Agentacknowledge and consent to the provisions contained in the proviso in Section2.1 of the Mortgage; and

###  

### (b)  each Lender and the Administrative Agentshall not, through its own actions or inactions, interfere with, or suffer toexist with respect to the Aircraft, any Lien attributable to itself which mightinterfere with the Borrower’s (or any Lessee’s thereof) continued possession,use and operation of, and quiet enjoyment (including, without limitation,administrative quiet enjoyment) of, the Aircraft during the term of theMortgage and in accordance with the terms of the Loan Documents so long as noEvent of Default shall have occurred and be continuing.

 

48

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SECTION8.18.   Concerning Clause (i)(y) of Section 3.6(a)(I) of theMortgage. The Borrower agrees that the dollar amount referred to inClause (i)(y) of Section 3.6(a)(I) of the Mortgage shall be: $ Confidentialmaterial omitted and filed separately with the Securities and ExchangeCommission pursuant to a request for confidential treatment per occurrence.

 

INWITNESS WHEREOF, the parties hereto have caused this Agreement to be dulyexecuted and to be delivered in New York, New York by their proper and dulyauthorized officers as of the day and year first above written.

 
|   | NORTHWEST  AIRLINES, INC.                          |
|--------|----------------------------------------------------|
|   |                                               |
|   |                                               |
|   | By:                                                |   |   |
|   |                                               | Name: |
|   |                                               | Title: |
|   |                                               |
|   |                                               |
|   | AIRBUS  FINANCIAL SERVICES,                        |
|   | as  Administrative Agent and as the Initial Lender |
|   |                                               |
|   |                                               |
|   | By:                                                |   |   |
|   |                                               | Name: |
|   |                                               | Title: |
|        |                                                    |  |  |  |  |

 

49

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Schedule ItoCredit Agreement

 

**Lending Office of Airbus Financial Services**

 
|   | 5th  Floor                               |
|--------|------------------------------------------|
|   | 6  George’s Dock                    |
|   | International  Financial Services Centre |
|   | Dublin  1, Ireland                       |
|   | Attn:  Managing Director                 |

 

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Schedule IItoCredit Agreement

 

**Approved Commercial Banks**

 

CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

theirsuccessors or assigns.

 

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Schedule IIItoCredit Agreement

 

**Principal Payment Schedule**

 

 

CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

 

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Schedule IVtoCredit Agreement

 

**Approved Countries for Reregistration**

 

 

CONFIDENTIALMATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

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Schedule VtoCredit Agreement

 

**AL Subleases**

 

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

 

Sublease [1992 Trust NW-B],dated as of January 5, 1992, between Airbus Leasing IV and the Borrower, asamended and supplemented from time to time, with respect to one Airbus A320aircraft bearing airframe serial number 263 and FAA registration number N322US.

 

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

 

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

 

Sublease [1992 Trust NW-E], dated as of March2, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 281 and FAA registration number N325US.

 

Sublease [1992 Trust NW-F], dated as of March4, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 282 and FAA registration number N326US.

 

Sublease [1992 Trust NW-G], dated as of April1, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 297 and FAA registration number N327NW.

 

Sublease [1992 Trust NW-H], dated as of April6, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 298 and FAA registration number N328NW.

 

Sublease [1992 Trust NW-I], dated as of May5, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 306 and FAA registration number N329NW.

 

Sublease [1992 Trust NW-J], dated as of May7, 1992, between Airbus Leasing IV and the Borrower, as amended andsupplemented from time to time, with respect to one Airbus A320 aircraftbearing airframe serial number 307 and FAA registration number N330NW.

 

1

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Exhibit AtoCredit Agreement

 

**Form of Promissory Note**

 
| U.S.$ [ |                     | ] |   | Dated:                   ,             |
|--------------|--------------------------------------------------------------------------------------------------------------------|---|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

FORVALUE RECEIVED, the undersigned, NORTHWEST AIRLINES, INC., a Minnesota corporation(the “*Borrower*”), HEREBY PROMISESTO PAY to                    (the “*Lender*”) for the account ofits Lending Office as defined in the Credit Agreement referred to below) theprincipal sum of U.S.$ [                 ](the “*Original Amount*”) representinga Loan made by the Lender to the Borrower pursuant to the Credit Agreementdated as of January 24, 2006 between the Borrower and Airbus FinancialServices, as the Initial Lender and as Administrative Agent (as amended ormodified from time to time, the “*CreditAgreement*”; the terms defined therein being used herein as thereindefined). The Original Amount shall be payable in installments in the amountsand on the dates specified in Section 2.5 of the Credit Agreement.Notwithstanding the foregoing, the final payment made on this Promissory Noteshall be in an amount sufficient to discharge in full the unpaid OriginalAmount and all accrued and unpaid interest on any amounts due under thisPromissory Note.

 

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

 

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

 

ThisPromissory Note is one of the Notes referred to in, and is entitled to thebenefits of, the Credit Agreement. The Credit Agreement, among other things,contains provisions for acceleration of the maturity hereof upon the happeningof certain stated events and also for prepayments on account of principalhereof prior to the maturity hereof upon the terms and conditions thereinspecified. The obligations of the Borrower under this Promissory Note and theCredit Agreement are secured by collateral as provided in the Credit Agreementand in the Mortgage and Security Agreement, dated as of January 24, 2006,executed by the Borrower and pertaining to the Aircraft bearing FAARegistration No. N[    ]NW.

 
|   | NORTHWEST  AIRLINES, INC. |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       |   |   |
|   |                      | Title: |   |   |
|        |                           |  |  |  |

 

1

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Exhibit BtoCredit Agreement

 

**Form of Notice of Loan**

 
| Airbus  Financial Services, as Administrative Agent |
|-----------------------------------------------------|
| for the Lenders under to the Credit                 |
| Agreement referred to below                         |
|                                                |
| [Date]                                              |
|                                                |
| Attention:                                          |                                            |   |

 

Ladies and Gentlemen:

 

Theundersigned, Northwest Airlines, Inc., refers to the Credit Agreement, dated asof January 24, 2006 (as amended or modified from time to time, the “*Credit Agreement*”, the terms definedtherein being used herein as therein defined), between the undersigned andAirbus Financial Services, as the Initial Lender and as Administrative Agentfor the Lenders, and hereby gives you notice, irrevocably, pursuant to Section2.2 of the Credit Agreement that the undersigned hereby requests the Loan underthe Credit Agreement, and in that connection sets forth below the informationrelating to the Loan (the “*Proposed Loan*”)as required by Section 2.2(a) of the Credit Agreement:

 

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

 

Theaggregate amount of the Proposed Loan is $[            ].

 

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

 

Theundersigned hereby certifies that the following statements are true on the datehereof, and will be true on the date of the Proposed Loan:

 

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

 

B-1

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(y)  noDefault or Event of Default has occurred and is continuing.

 
|   | Very  truly yours,        |
|--------|---------------------------|
|   |                      |
|   | NORTHWEST  AIRLINES, INC. |
|   |                      |
|   |                      |
|   | By:                       |   |   |
|   |                      | Title: |   |   |
|        |                           |  |  |  |

 

B-2

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Exhibit CtoCredit Agreement

 

**Form of Assignment and Acceptance**

 

Referenceis made to the Credit Agreement dated as of January 24, 2006 (as amended ormodified from time to time, the “*CreditAgreement*”) between Northwest Airlines, Inc., a Minnesotacorporation (the “*Borrower*”) andAirbus Financial Services, as Initial Lender and as Administrative Agent forthe Lenders (the “*Administrative Agent*”).Terms defined in the Credit Agreement are used herein with the same meaning.

 

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

 

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

 

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

 

3.     The Assignee (i) confirms that it has received a copy of theCredit Agreement, together with copies of the financial statements referred toin Section 4.1(a)(v) thereof and such other documents and information as it hasdeemed appropriate to make its own credit analysis and decision to enter intothis Assignment and Acceptance; (ii) agrees that it will, independently andwithout reliance upon the Agents, the Assignor or any other

 

C-1

----

 

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

 

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

 

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

 

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

 

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

 

C-2

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

 

INWITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to thisAssignment and Acceptance to be executed by their officers thereunto dulyauthorized as of the date specified thereon.

 

C-3

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Schedule 1toAssignment and Acceptance

 

Percentageinterest assigned:

 

Outstandingprincipal amount of the Loan assigned:

 

EffectiveDate:

 
| **Note** | ** ** | **Principal Amount of  Note payable to Assignee** | ** ** | **Principal Amount of  Note payable to Assignor** |
|----------|------------|----------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|
|     |       |                                                                       |       |                                                                       |

 
|   | [NAME  OF ASSIGNOR], as Assignor                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                            |
|   |                                                                                                                                            |
|   | By:                                                                                                                                             |   |   |
|   |                                                                                                                                            | Title: |
|   |                                                                                                                                            |
|   | Dated:               ,            |
|   |                                                                                                                                            |
|   |                                                                                                                                            |
|   | [NAME  OF ASSIGNEE], as Assignee                                                                                                                |
|   |                                                                                                                                            |
|   |                                                                                                                                            |
|   | By:                                                                                                                                             |   |   |
|   |                                                                                                                                            | Title: |   |   |
|   |                                                                                                                                            |
|   | Lending  Office:                                                                                                                                |
|   |                                                                                                                                            | [Address] |
|        |                                                                                                                                                 |  |  |  |  |  |

 
| Accepted  this                                                                                                                                                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            day of                  ,           |
|                                                                                                                                                                                                                     |
| Airbus  Financial Services, as                                                                                                                                                                                           |
| Administrative  Agent                                                                                                                                                                                                    |
|                                                                                                                                                                                                                     |
| By:                                                                                                                                                                                                                      |   |   |
|                                                                                                                                                                                                                     | Title: |

 

C-4

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Exhibit D-1toCredit Agreement

 

 

**Form of Opinion of Associate General Counsel of TheBorrower**

 

 

[In the form delivered at closing]

 

D-1-1

----

 

Exhibit D-2toCredit Agreement

 

 

**Form of Opinion of Cadwalader, Wickersham & TaftLLP,Special Counsel for the Borrower**

 

 

[In the form delivered at closing]

 

D-2-1

----

 

Exhibit D-3toCredit Agreement

 

 

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

 

 

[In the form delivered at closing]

 

D-3-1

----

 

Exhibit EtoCredit Agreement

 

**Form of Confidentiality Agreement**

 

 

[InsertName and Address ofthe Prospective Assignee or Holderof a Participation]

 

Ladiesand Gentlemen:

 

Youhave expressed interest in establishing a credit relationship with NorthwestAirlines, Inc., a Minnesota corporation (together with its subsidiaries andaffiliates, the “*Borrower*”). Inconnection therewith, you have asked for certain information about theBorrower. In consideration for and as a condition of your receiving theMaterials (as hereinafter defined), you acknowledge the confidential andproprietary nature of the Materials and agree to hold and keep the sameconfidential as provided in this letter agreement and to take or refrain fromtaking certain other actions as set forth in this letter agreement.

 

Theterm “Materials” means any information concerning the Borrower which wasfurnished to us by or on behalf of the Borrower and which we furnish to you.The term “Materials” does not include information which (i) is or becomesgenerally available to the public or (ii) is or becomes available to you from asource other than the Borrower, unless you have the actual knowledge (withoutbeing obligated to conduct any investigation) that such information has beenmade available by such source in breach of a confidentiality agreement by whichsuch source is bound with respect to such information.

 

Weare prepared to provide you with a copy of the Materials, as necessary, whichhave been or may be provided pursuant to the information provisions under theCredit Agreement (the “*Credit Agreement*”)dated as of January 24, 2006 between Northwest Airlines, Inc. and Airbus FinancialServices, as the Initial Lender and as Administrative Agent. Pursuant toSection 8.7(f) of the Credit Agreement, we are required to have you, as aprospective assignee or holder of a participation in the Loan (as defined inthe Credit Agreement) enter into this Confidentiality Agreement (the“Agreement”) before receiving the Materials. Such Materials will be madeavailable to you upon your execution of this Agreement. In considerationthereof, you agree that Materials will be kept confidential, in accordance withyour customary procedure for handling confidential information and inaccordance with safe and sound banking practices, and not be used by you exceptin connection with the proposed credit relationship referred to above.Notwithstanding anything herein to the contrary, any party subject toconfidentiality obligations hereunder or under any other related document (andany employee, representative or other agent of such party) may disclose to anyand all persons, without limitation of any kind, such party’s U.S. federalincome tax treatment and the U.S. federal income tax structure of thetransactions contemplated by the Credit Agreement relating to such party andall materials of any kind (including opinions or other tax analyses) that areprovided to it relating to such tax treatment and tax structure. However, nosuch party shall disclose any information relating to 

 

----

 

suchtax treatment or tax structure to the extent nondisclosure is reasonablynecessary in order to comply with applicable securities laws.

 

Youacknowledge that the Materials are internal information that may includeallocations, projections data, analyses and calculations that may notcompletely and accurately reflect the results of the Borrower’s operations. Inaddition, you acknowledge that the Materials regarding operations have not beenprepared for financial statement disclosure purposes.

 

Youhereby acknowledge that you are aware, and that you will advise such of yourrepresentatives who are informed as to the matters which are the subject ofthis letter agreement, that the United States securities law imposerestrictions on any person who has received from an issuer material, non-publicinformation concerning the matters which are the subject of this letteragreement from purchasing or selling securities of such issuer or fromcommunicating such information to any other person under circumstances in whichit is reasonably foreseeable that such person is likely to purchase or sellsuch securities.

 

Youand your affiliates, directors, officers, employees and representatives agreeto be bound by the terms of this Agreement. This Agreement shall inure to thebenefit of the Borrower.

 

Inthis connection, we acknowledge that you may make disclosure as required by anygovernmental agency or representative thereof or pursuant to legal process andthat you are subject to oversight by bank or other financial regulatoryagencies and may be required to provide to, or otherwise make available forreview by, the representatives of such agencies the Materials. You also agreeto request confidential treatment of the Materials to the extent permitted bylaw.

 

Pleaseindicate your agreement to the foregoing at the place provided below.

 
|                              | Very  truly yours,       |
|-----------------------------------|--------------------------|
|                              |                     |
|                              | [Insert  Name of Lender] |
|                              |                     |
|                              |                     |
|                              | By:                      |   |   |
|                              |                     | Title: |   |
|                              |                     |
|                              |                     |
| The  foregoing is agreed to as of |                     |
| the  date of this letter.         |                     |
|                              |                     |
|                              |                     |
| By:                               |                     |   |   |
|                                   |                          |  |  |  |  |

 

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