**Exhibit 10.2**

 

Execution Copy

 

 

$975,000,000SECOND AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT

 

Among

 

NORTHWEST AIRLINES CORPORATION

 

NORTHWEST AIRLINES HOLDINGS CORPORATION

 

NWA INC.,as Guarantors,

 

NORTHWEST AIRLINES, INC.,as Borrower,

 

The Several Lendersfrom Time to Time Parties Hereto,

 

CITICORP USA, INC.,as Documentation Agent,

 

U.S. BANK NATIONAL ASSOCIATION,as Co-Documentation Agent,

 

DEUTSCHE BANK SECURITIES INC.,as Syndication Agent,

 

CALYON NEW YORK BRANCH,as Co-Syndication Agent

 

ABN AMRO BANK N.V., as Agent

 

and

 

JPMORGAN CHASE BANK, N.A.,as Administrative Agent

 

Dated as of April 15, 2005

 

 

**J.P. MORGANSECURITIES INC.DEUTSCHE BANK SECURITIES INC.,as Tranche A Joint Lead Arrangers and Joint Bookrunners**

 

**J.P. MORGANSECURITIES INC.CITIGROUP GLOBAL MARKETS INC.,as Tranche B Joint Lead Arrangers and Joint Bookrunnersandas Tranche C Joint Lead Arrangers and Joint Bookrunners**

 

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TABLE OF CONTENTS

 

 
| Section 1 | DEFINITIONS                             |                                                     |
|----------------|-----------------------------------------|----------------------------------------------------------|
|           |                                    |                                                     |   |
|           | 1.1                                     | Defined Terms                                            |   |
|           | 1.2                                     | Other Definitional Provisions                            |   |
|           |                                    |                                                     |   |
| Section 2 | AMOUNT AND TERMS  OF COMMITMENTS        |                                                     |
|           |                                    |                                                     |   |
|           | 2.1                                     | Term Commitments                                         |   |
|           | 2.2                                     | Procedure for Term Loan Borrowing                        |   |
|           | 2.3                                     | Repayment of Term Loans                                  |   |
|           |                                    |                                                     |   |
| Section 3 | GENERAL  PROVISIONS APPLICABLE TO LOANS |                                                     |
|           |                                    |                                                     |   |
|           | 3.1                                     | Optional Prepayments                                     |   |
|           | 3.2                                     | Mandatory Prepayments                                    |   |
|           | 3.3                                     | Conversion and Continuation Options                      |   |
|           | 3.4                                     | Limitations on Eurodollar Tranches                       |   |
|           | 3.5                                     | Interest Rates and Payment Dates                         |   |
|           | 3.6                                     | Computation of Interest and Fees                         |   |
|           | 3.7                                     | Inability to Determine Interest Rate                     |   |
|           | 3.8                                     | Pro Rata Treatment and Payments                          |   |
|           | 3.9                                     | Requirements of Law                                      |   |
|           | 3.10                                    | Taxes                                                    |   |
|           | 3.11                                    | Indemnity                                                |   |
|           | 3.12                                    | Change of Lending Office                                 |   |
|           | 3.13                                    | Replacement of Lenders                                   |   |
|           |                                    |                                                     |   |
| Section 4 | REPRESENTATIONS  AND WARRANTIES         |                                                     |
|           |                                    |                                                     |   |
|           | 4.1                                     | Financial Condition; Financial Outlook                   |   |
|           | 4.2                                     | No Change                                                |   |
|           | 4.3                                     | Corporate Existence; Compliance with Law                 |   |
|           | 4.4                                     | Corporate Power; Authorization; Enforceable  Obligations |   |
|           | 4.5                                     | No Legal Bar                                             |   |
|           | 4.6                                     | Litigation                                               |   |
|           | 4.7                                     | Ownership of the Pool Assets                             |   |
|           | 4.8                                     | Federal Regulations                                      |   |
|           | 4.9                                     | ERISA                                                    |   |
|           | 4.10                                    | Investment Company Act                                   |   |
|           | 4.11                                    | Subsidiaries                                             |   |
|           | 4.12                                    | Use of Proceeds                                          |   |
|           | 4.13                                    | True and Complete Disclosure                             |   |
|           | 4.14                                    | Air Carrier                                              |   |
|           | 4.15                                    | Aircraft Collateral                                      |   |
|           | 4.16                                    | Pacific Routes                                           |   |
|           | 4.17                                    | Slot Utilization                                         |   |
|           | 4.18                                    | Foreign Slot Utilization                                 |   |
|           | 4.19                                    | Route Utilization                                        |   |

 

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|           | 4.20                   | Security Documents                                      |   |
|----------------|------------------------|---------------------------------------------------------|--------|
|           |                   |                                                    |   |
| Section 5 | CONDITIONS  PRECEDENT  |                                                    |
|           |                   |                                                    |   |
| Section 6 | AFFIRMATIVE  COVENANTS |                                                    |
|           |                   |                                                    |   |
|           | 6.1                    | Financial Statements                                    |   |
|           | 6.2                    | Certificates; Other  Information                        |   |
|           | 6.3                    | Payment of Taxes                                        |   |
|           | 6.4                    | Maintenance of Existence;  Compliance                   |   |
|           | 6.5                    | Maintenance of Property;  Insurance                     |   |
|           | 6.6                    | Inspection of Property; Books  and Records; Discussions |   |
|           | 6.7                    | Notices                                                 |   |
|           | 6.8                    | Performance of Obligations                              |   |
|           | 6.9                    | End of Fiscal Years; Fiscal  Quarters                   |   |
|           | 6.10                   | Air Carrier                                             |   |
|           | 6.11                   | ERISA                                                   |   |
|           | 6.12                   | Security Interests;  Additional Collateral              |   |
|           | 6.13                   | Gate Utilization                                        |   |
|           | 6.14                   | Slot Utilization                                        |   |
|           | 6.15                   | Foreign Slot Utilization.                               |   |
|           | 6.16                   | Route Utilization; Route  Reporting                     |   |
|           |                   |                                                    |   |
| Section 7 | NEGATIVE  COVENANTS    |                                                    |
|           |                   |                                                    |   |
|           | 7.1                    | Financial Condition Covenants                           |   |
|           | 7.2                    | Indebtedness                                            |   |
|           | 7.3                    | Liens                                                   |   |
|           | 7.4                    | Fundamental Changes                                     |   |
|           | 7.5                    | Disposition of Pool Assets                              |   |
|           | 7.6                    | Restricted Payments                                     |   |
|           | 7.7                    | Transactions with Affiliates                            |   |
|           | 7.8                    | Lines of Business                                       |   |
|           | 7.9                    | ERISA                                                   |   |
|           | 7.10                   | Investments                                             |   |
|           | 7.11                   | Acquisitions                                            |   |
|           |                   |                                                    |   |
| Section 8 | EVENTS OF  DEFAULT     |                                                    |
|           |                   |                                                    |   |
| Section 9 | GUARANTY               |                                                    |
|           |                   |                                                    |   |
|           | 9.1                    | The Guaranty                                            |   |
|           | 9.2                    | Bankruptcy                                              |   |
|           | 9.3                    | Nature of Liability                                     |   |
|           | 9.4                    | Independent Obligation                                  |   |
|           | 9.5                    | Authorization                                           |   |
|           | 9.6                    | Reliance                                                |   |
|           | 9.7                    | Subordination                                           |   |
|           | 9.8                    | Waiver                                                  |   |
|           | 9.9                    | Limitation on Enforcement                               |   |

 

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| Section 10 | THE AGENTS    |                                                                  |
|-----------------|---------------|-----------------------------------------------------------------------|
|            |          |                                                                  |   |
|            | 10.1          | Appointment                                                           |   |
|            | 10.2          | Delegation of Duties                                                  |   |
|            | 10.3          | Exculpatory Provisions                                                |   |
|            | 10.4          | Reliance by Agents                                                    |   |
|            | 10.5          | Notice of Default                                                     |   |
|            | 10.6          | Non-Reliance on Agents and  Other Lenders                             |   |
|            | 10.7          | Indemnification                                                       |   |
|            | 10.8          | Agent in Its Individual  Capacity                                     |   |
|            | 10.9          | Successor Administrative  Agent                                       |   |
|            | 10.10         | Other Agents                                                          |   |
|            |          |                                                                  |   |
| Section 11 | MISCELLANEOUS |                                                                  |
|            |          |                                                                  |   |
|            | 11.1          | Amendments and Waivers                                                |   |
|            | 11.2          | Notices                                                               |   |
|            | 11.3          | No Waiver; Cumulative  Remedies                                       |   |
|            | 11.4          | Survival of Representations  and Warranties                           |   |
|            | 11.5          | Payment of Expenses and  Taxes                                        |   |
|            | 11.6          | Successors and Assigns;  Participations and Assignments               |   |
|            | 11.7          | Adjustments; Set-off                                                  |   |
|            | 11.8          | Counterparts                                                          |   |
|            | 11.9          | Severability                                                          |   |
|            | 11.10         | Integration                                                           |   |
|            | 11.11         | **GOVERNING  LAW**                                                    |   |
|            | 11.12         | Submission To Jurisdiction;  Waivers                                  |   |
|            | 11.13         | Acknowledgements                                                      |   |
|            | 11.14         | Intercreditor Agreement                                               |   |
|            | 11.15         | Confidentiality                                                       |   |
|            | 11.16         | **WAIVERS OF  JURY TRIAL**                                            |   |
|            | 11.17         | Termination; Releases of Guarantees  and Liens                        |   |
|            | 11.18         | Effect of Amendment and  Restatement of the Existing Credit Agreement |   |

 

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| SCHEDULES: |                                                |
|------------|-----------------------------------------------------|
|       |                                                |
| 1.1(a)     | Commitments                                         |   |
| 1.1(b)     | Tranche C Commitments                               |   |
| 4.4        | Consents, Authorizations, Filings and Notices       |   |
| 4.12       | Subsidiaries                                        |   |
| 7.2(c)     | Existing Indebtedness                               |   |
| 7.5        | Pool Assets                                         |   |
|       |                                                |
| EXHIBITS:  |                                                |
|       |                                                |
| A          | Form of Closing Certificate                    |   |
| B          | Form of Assignment and Acceptance              |   |
| C          | Form of Exemption Certificate                  |   |
| D          | Form of Compliance Certificate                 |   |
| E          | Form of Prepayment Option Notice               |   |
| F          | Form of Certificate of Chief Financial Officer |   |

 

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SECOND AMENDED AND RESTATED CREDIT AND GUARANTEEAGREEMENT, dated as of April 15, 2005, among NORTHWEST AIRLINESCORPORATION, a Delaware corporation (“Holdings”), NORTHWEST AIRLINESHOLDINGS CORPORATION, a Delaware corporation (“NWAC”), NWA INC., aDelaware corporation (“NWA”), NORTHWEST AIRLINES, INC., a Minnesotacorporation (the “Borrower”), the several banks and other financialinstitutions or entities from time to time parties to this Agreement (the “Lenders”),DEUTSCHE BANK SECURITIES INC., as Syndication Agent (in such capacity, the “SyndicationAgent”), CITICORP USA, INC., as Documentation Agent (in such capacity, the“Documentation Agent”), CALYON NEW YORK BRANCH, as Co-Syndication Agent(in such capacity, the “Co-Syndication Agent”), U.S. BANK NATIONALASSOCIATION, as Co-Documentation Agent (in such capacity, the “Co-DocumentationAgent”), ABN AMRO BANK N.V., as Agent (in such capacity, the “Agent”),JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), asAdministrative Agent (in such capacity, the “Administrative Agent”),J.P. MORGAN SECURITIES INC. and DEUTSCHE BANK SECURITIES INC., as Joint LeadArrangers and Joint Bookrunners for the Tranche A Term Facility (as definedherein) (collectively, in such capacities, the “Tranche A Joint LeadArrangers”), and J.P. MORGAN SECURITIES INC. and CITIGROUP GLOBAL MARKETSINC., as Joint Lead Arrangers and Joint Bookrunners for the Tranche B TermFacility and the Tranche C Term Facility (in each case, as defined herein)(collectively, in such capacities, the “Tranche B Joint Lead Arrangers”and the “Tranche C Joint Lead Arrangers”, as the case may be, andcollectively with the Tranche A Joint Lead Arrangers, the “Joint LeadArrangers”).

 

WITNESSETH:

 

WHEREAS, the Borrower, certain of the Lenders andthe Administrative Agent are parties to the Amended and Restated Credit andGuarantee Agreement, dated as of November 23, 2004 (as amended, the “ExistingCredit Agreement”);

 

WHEREAS, pursuant to the Existing Credit Agreement,certain of the Lenders have made loans to the Borrower (collectively, the “ExistingLoans”) which are secured pursuant to the Security Documents (ashereinafter defined);

 

WHEREAS, the Borrower has requested that theExisting Credit Agreement be amended and restated in the manner provided for herein;and

 

WHEREAS, the security interests granted andguarantees issued pursuant to the Existing Credit Agreement and the SecurityDocuments will continue to provide collateral security for the obligations ofthe Borrower under this Agreement:

 

NOW, THEREFORE, the parties hereto hereby agreethat, subject to the satisfaction or waiver of the conditions set forth inSection 5, the Existing Credit Agreement is hereby amended and restated inits entirety to read as follows:

 

SECTION 1  DEFINITIONS

#  

1.1           Defined Terms.  As used in this Agreement, the terms listedin this Section 1.1 shall have the respective meanings set forth in thisSection 1.1.

 

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to thenext 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect onsuch day and (b) the Federal Funds

 

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Effective Rate in effect on such day plus 1⁄2of 1%.  For the purposes hereof:  “Prime Rate” shall mean the rate ofinterest per annum publicly announced from time to time by the Reference Lenderas its prime rate in effect at its principal office in New York City (the PrimeRate not being intended to be the lowest rate of interest charged by theReference Lender in connection with extensions of credit to debtors).  Any change in the ABR due to a change in thePrime Rate or the Federal Funds Effective Rate shall be effective as of theopening of business on the effective day of such change in the Prime Rate orthe Federal Funds Effective Rate, respectively.

 

“ABR Loans”: Loans the rate of interest applicable to which is based upon the ABR.

 

“Acquisition”:  an acquisition, the consideration for whichis paid (in whole or in part) in cash (it being understood that any deferredpurchase price or assumed Indebtedness due within one year after any suchacquisition shall be treated as paid in cash as of the date of suchacquisition), by any Person of (a) the Capital Stock of any other Personwhich, upon consummation of such acquisition, becomes a Subsidiary of suchPerson, (b) assets constituting all or substantially all of the assets ofany other Person, (c) assets constituting an operating unit or division ofany other Person, (d) one or more Routes in a single transaction or seriesof related transactions to the extent that the cash consideration for theacquisition of such Routes exceeds $50,000,000, (e) Intellectual Propertyused in connection with the operation of an air passenger or cargo business byany other Person purchased outside the ordinary course of business from anysuch Person in a single transaction or series of related transactions to theextent that the cash consideration for the acquisition of such IntellectualProperty exceeds $25,000,000 and (f) Flight Equipment from any otherPerson (other than a manufacturer) in a single transaction or series of relatedtransactions to the extent the cash consideration for the acquisition of suchFlight Equipment exceeds $100,000,000, including any such acquisition inconnection with the establishment of a low cost air passenger business.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is incontrol of, is controlled by, or is under common control with, suchPerson.  For purposes of this definition,“control” of a Person means the power, directly or indirectly, either to(a) vote 10% or more of the securities having ordinary voting power forthe election of directors (or persons performing similar functions) of suchPerson or (b) direct or cause the direction of the management and policiesof such Person, whether by contract or otherwise.

 

“Agent”: as defined in the preamble to this Agreement.

 

“Agents”: the collective reference to the Syndication Agent, the DocumentationAgent, the Co-Syndication Agent, the Co-Documentation Agent, the Agent, theJoint Lead Arrangers and the Administrative Agent.

 

“Aggregate Exposure”:  with respect to any Lender at any time, anamount equal to the aggregate then unpaid principal amount of such Lender’s Loans.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, theratio (expressed as a percentage) of such Lender’s Aggregate Exposure at suchtime to the Aggregate Exposure of all Lenders at such time.

 

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“Agreement”: this Second Amended and Restated Credit and Guarantee Agreement, asamended, supplemented or otherwise modified from time to time.

 

“Aircraft Collateral”:  all “Collateral” as defined in the AircraftMortgage Agreement.

 

“Aircraft Mortgage Agreement”:  the Aircraft Mortgage and Security Agreementdated as of October 23, 2001, executed and delivered by the Borrower infavor of the Collateral Agent, as amended, supplemented or otherwise modifiedfrom time to time.

 

“Applicable Rate”:  (a) with respect to Tranche A TermLoans, (i) 4.25%, in the case of ABR Loans, and (ii) 5.25%, in thecase of Eurodollar Loans, (b) with respect to Tranche B Term Loans,(i) 5.75%, in the case of ABR Loans, and (ii) 6.75%, in the case ofEurodollar Loans, and (c) with respect to the Tranche C Term Loans,(i) 5.25%, in the case of ABR Loans and (ii) 6.25%, in the case ofEurodollar Loans.

 

“Allocable Prepayment Percentage”:  at any time, the ratio (expressed as apercentage) of (a) the aggregate outstanding principal amount of the Loansto (b) the sum of the aggregate outstanding principal amount of the Loans plusthe aggregate outstanding principal amount of any Pari Passu Obligations atsuch time.

 

“Applicable Appraisal Discount Rate”:  on the date of any valuation done inconnection with an Appraisal, 11.5% for purposes of determining compliance withthe Coverage Test; provided that, to the extent the Treasury Rate asdetermined immediately prior to such Appraisal is greater than 8%, the ApplicableAppraisal Discount Rate will be increased by an amount equal to the differencebetween such Treasury Rate and 8%; and providedfurther that, tothe extent the Treasury Rate as determined immediately prior to such Appraisalis less than 3%, the Applicable Appraisal Discount Rate will be decreased by anamount equal to the difference between 3% and such Treasury Rate.

 

“Appraisal”: an appraisal, dated the date of delivery thereof to the Lenders pursuantto the terms of this Agreement, by BK Associates Inc. (as to any aircraftincluded in the Pool Assets), Simat, Helliesen & Eichner, Inc.(as to the Pacific Routes or any aircraft included in the Pool Assets), oranother independent appraisal firm satisfactory at the time of such Appraisalto the Borrower and the Administrative Agent, setting forth (i) in thecase of the aircraft included in the Pool Assets, the fair market valuethereof, as determined in accordance with the definition of “fair market value”promulgated by the International Society of Transport Aircraft Trading on abasis consistent with the Appraisal delivered in accordance withSection 5(h), and (ii) in the case of the Pacific Routes (asdescribed in the Appraisal), the current fair market value thereof utilizingthe Applicable Appraisal Discount Rate, in each case as of the date of suchappraisal of each Pool Asset or proposed Pool Asset, as the case may be.

 

“Appraised Value”:  as of any date of determination, the value asof such date of each Pool Asset or proposed Pool Asset, as the case may be, asset forth in the most recently delivered Appraisal.

 

“Assignee”: as defined in Section 11.6(c).

 

“Assignment and Acceptance”:  an Assignment and Acceptance, substantiallyin the form of Exhibit B.

 

3

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“Assignor”: as defined in Section 11.6(c).

 

“Authorized Officer”:  as to any Loan Party, the Chief ExecutiveOfficer, the Chief Financial Officer or any Vice President and above whoreports directly or indirectly to the Chief Financial Officer of such LoanParty.

 

“Base Number of Japanese Foreign Slots”: atany time, the sum of (a) the total number of Japanese Foreign Slots ownedby the Borrower as of the Original Closing Date, plus (b) anyJapanese Foreign Slots acquired by the Borrower after the Original ClosingDate.

 

“Benefited Lender”:  as defined in Section 11.7(a).

 

“Board”: the Board of Governors of the Federal Reserve System of the UnitedStates (or any successor).

 

“Borrower”: as defined in the preamble to this Agreement.

 

“Borrowing Date”: (a) with respect tothe Tranche A Term Loans and the Tranche B Term Loans, the Original ClosingDate, and (b) with respect to the Tranche C Term Loans, the SecondAmendment and Restatement Closing Date.

 

“Business Day”:  a day other than a Saturday, Sunday or otherday on which commercial banks in New York City or Minneapolis, Minnesota areauthorized or required by law to close, provided, that with respect tonotices and determinations in connection with, and payments of principal andinterest on, Eurodollar Loans, such day is also a day for trading by andbetween banks in Dollar deposits in the interbank eurodollar market.

 

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

 

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

 

“Cash Liquidity”:  at any time, the sum of (a) unrestrictedcash and cash equivalents of Holdings and its Subsidiaries at such time and(b) unrestricted short term investments of Holdings and its Subsidiariesat such time.

 

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

 

“Citizen of the United States”:  shall have the meaning provided inSection 40102(a)(15) of Title 49.

 

4

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

 

“Co-Documentation Agent”:  as defined in the preamble to this Agreement.

 

“Co-Syndication Agent”:  as defined in the preamble to this Agreement.

 

“Collateral”: any of the Pool Assets upon which a Lien is purported to be created byany Security Document including, without limitation, all Aircraft Collateraland all Route Collateral.

 

“Collateral Agent”:  JPMorgan Chase, in its capacity as CollateralAgent.

 

“Commitment”: as to any Lender, the sum of the Tranche A Term Commitment, the TrancheB Term Commitment and the Tranche C Term Commitment of such Lender.

 

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

 

“Compliance Certificate”:  a certificate substantially in the form ofExhibit D (with such changes as may be approved by the AdministrativeAgent).

 

“Consolidated EBITDAR”:  for any period, without duplication, theconsolidated operating income of Holdings and its Subsidiaries for such period(calculated on a consolidated basis in accordance with GAAP and in a mannerconsistent with the consolidated financial statements of Holdings and itsSubsidiaries for the period ended September 30, 2004) plus(i) consolidated aircraft operating rental expenses of Holdings and itsSubsidiaries that were deducted in arriving at the amount of such consolidatedoperating income for such period plus (ii) amortization anddepreciation that were deducted in arriving at the amount of such consolidatedoperating income for such period plus (iii) interest income ofHoldings and its Subsidiaries during such period plus (iv) allgovernment reimbursements in cash for losses incurred as a result ofdevelopments affecting the aviation industry (including, without limitation,terrorist acts and epidemic diseases) plus (v) any non-recurringnon-cash charges of Holdings and its Subsidiaries recorded during such period(excluding any such charge incurred in the ordinary course of business thatconstitutes an accrual of or a reserve for cash charges for any future period),all as determined on a consolidated basis in accordance with GAAP, provided,however, that cash payments made in such period or in any future periodin respect of such noncash charges (excluding any such charge incurred in theordinary course of business that constitutes an accrual of or a reserve forcash charges for any future period) shall be subtracted in calculatingConsolidated EBITDAR in the period when such payments are made, and providedfurther that Consolidated EBITDAR shall be calculated without givingeffect to any acceleration of flight equipment rental expense after theOriginal Closing Date required as a result of the Borrower’s decision to removean aircraft or aircraft class from the operating fleet of the Borrower.

 

“Consolidated Fixed Charges”:  for any period, the total consolidatedinterest expense of Holdings and its Subsidiaries for such period (calculatedwithout regard to any limitations on the payment thereof) plus, withoutduplication, that portion of Capital Lease Obligations of Holdings and itsSubsidiaries representing the interest factor for such period, plus thetotal consolidated aircraft operating rental expenses of Holdings and itsSubsidiaries for such period, all as determined on a consolidated basis inaccordance with GAAP, provided that Consolidated Fixed

 

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Charges shall be calculated without givingeffect to any acceleration of flight equipment rental expense after theOriginal Closing Date required as a result of the Borrower’s decision to removean aircraft or aircraft class from the operating fleet of the Borrower.

 

“Contingent Obligation”:  as to any Person, any obligation of suchPerson guaranteeing or intended to guarantee any Indebtedness, leases,dividends or other obligations (“primary obligations”) of any otherPerson (other than Holdings or any of its Subsidiaries) (the “primaryobligor”), in any manner, whether directly or indirectly, including anyobligation of such Person, whether or not contingent, (i) to purchase anysuch primary obligation or any property constituting direct or indirectsecurity therefor, (ii) to advance or supply funds (x) for thepurchase or payment of any such primary obligation or (y) to maintainworking capital or equity capital of the primary obligor or otherwise tomaintain the net worth or solvency of the primary obligor, (iii) topurchase property, securities or services primarily for the purpose of assuringthe owner of any such primary obligation of the ability of the primary obligorto make payment of such primary obligation or (iv) otherwise to assure orhold harmless the holder of such primary obligation against loss in respectthereof; provided, however, that the term Contingent Obligationshall not include endorsements of instruments for deposit or collection in theordinary course of business.  The amountof any Contingent Obligation shall be deemed to be an amount equal to the statedor determinable amount of the primary obligation in respect of which suchContingent Obligation is made (or, if less, the maximum amount of such primaryobligation for which such Person may be liable pursuant to the terms of theinstrument evidencing such Contingent Obligation) or, if not stated ordeterminable, the maximum reasonably anticipated liability in respect thereof(assuming such Person is required to perform thereunder) as determined by suchperson in good faith.

 

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

 

“Coverage Test”:  at any time, the Total Appraised Value Ratioshall not be less than 175% at such time, or, if Cash Liquidity is less than$1,000,000,000 at such time, the Total Appraised Value Ratio shall not be lessthan 200% at such time.

 

“Default”: any of the events specified in Section 8, whether or not anyrequirement for the giving of notice, the lapse of time, or both, has beensatisfied.

 

“Disposed Japanese Foreign Slots”: at anytime, the Japanese Foreign Slots sold, transferred, leased (so long as suchlease remains in effect and conveys to another Person the right to utilize therelevant Japanese Foreign Slot) or otherwise disposed of by the Borrower afterthe Original Closing Date.

 

“Disposition”:  with respect to any property, any sale,lease, sale and leaseback, assignment, conveyance, transfer or otherdisposition thereof (excluding, however, the creation or imposition of anyLien).  The terms “Dispose” and “Disposedof” shall have correlative meanings.

 

“Documentation Agent”:  as defined in the preamble to this Agreement.

 

“Dollars” and “$”:  dollars in lawful currency of the UnitedStates.

 

“DOT”: the United States Department of Transportation.

 

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“Eligible Transferee”:  a commercial bank, financial institution,other “accredited investor” (as defined in Regulation D of the Securities Actof 1933, as amended), any Person that is engaged in making, purchasing, holdingor otherwise investing in commercial loans and similar extensions of credit inthe ordinary course of its business, or any Lender Affiliate, other than anairline, a commercial air carrier, an air freight forwarder, an entity engagedin the business of parcel transport by air or other similar Person or acorporation or other entity controlling, controlled by or under common controlwith such an airline, commercial air carrier, air freight forwarder, entityengaged in the business of parcel transport by air or other similar Person.

 

“Environmental Laws”: any and all foreign,Federal, state, local or municipal laws, rules, orders, regulations, statutes,ordinances, codes, decrees, requirements of any Governmental Authority or otherRequirements of Law (including common law) regulating, relating to or imposingliability or standards of conduct concerning protection of human health or theenvironment, as now or may at any time hereafter be in effect.

 

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

 

“ERISA Affiliate”:  each person (as defined inSection 3(9) of ERISA) which together with Holdings or any of itsSubsidiaries would be deemed to be a “single employer” within the meaning ofSection 414(b), (c) or (o) of the Code.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,the aggregate (without duplication) of the maximum rates (expressed as a decimalfraction) of reserve requirements in effect on such day (including basic,supplemental, marginal and emergency reserves under any regulations of theBoard) dealing with reserve requirements prescribed for eurocurrency funding(currently referred to as “Eurocurrency Liabilities” in Regulation D of theBoard) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each InterestPeriod pertaining to a Eurodollar Loan, the rate per annum determined on thebasis of the rate for deposits in Dollars for a period equal to such InterestPeriod commencing on the first day of such Interest Period appearing onPage 3750 of the Telerate Service screen as of 11:00 a.m., Londontime, two Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appearon Page 3750 of the Telerate Service screen (or otherwise on such screen),the “Eurodollar Base Rate” shall be determined by reference to suchother comparable publicly available service for displaying eurodollar rates asmay be selected by the Administrative Agent with the consent of the Borrower,or in the absence of such availability or consent, by reference to the rate atwhich the Administrative Agent is offered Dollar deposits at or about11:00 a.m., New York City time, two Business Days prior to the beginningof such Interest Period in the interbank eurodollar market where its eurodollarand foreign currency and exchange operations are then being conducted for deliveryon the first day of such Interest Period for the number of days comprisedtherein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable towhich is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each InterestPeriod pertaining to a Eurodollar Loan, a rate per annum determined for suchday in accordance with the following formula (rounded upward to the nearest1/100th of 1%):

 

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|   | Eurodollar Base Rate                           |   |
|--------|------------------------------------------------|--------|
|   | 1.00 – Eurocurrency  Reserve Requirements |   |

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loansunder a particular Facility the then current Interest Periods with respect toall of which begin on the same date and end on the same later date (whether ornot such Loans shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified inSection 8, provided that any requirement for the giving of notice,the lapse of time, or both, has been satisfied.

 

“Existing Credit Agreement”:  as defined in the recitals to this Agreement.

 

“Existing Route Security Agreement”:  the Route Security Agreement dated as ofOctober 23, 2001, executed and delivered by the Borrower in favor of theCollateral Agent, as the same may be amended, supplemented or otherwisemodified from time to time.

 

“Existing Loans”:  as defined in the recitals to this Agreement.

 

“Facility”: each of (a) the Tranche A Term Facility, (b) the Tranche BTerm Facility and (c) the Tranche C Term Facility.

 

“FAA”: the Federal Aviation Administration.

 

“Federal Funds Effective Rate”:  for any day, the weighted average of therates on overnight federal funds transactions with members of the FederalReserve System arranged by federal funds brokers, as published on the nextsucceeding Business Day by the Federal Reserve Bank of New York, or, ifsuch rate is not so published for any day that is a Business Day, the averageof the quotations for the day of such transactions received by the ReferenceLender from three federal funds brokers of recognized standing selected by it.

 

“Fifth Freedom Rights”:  the operational right pursuant to a bilateraltreaty between the United States and a foreign country to enplane passengertraffic and cargo in such foreign country and deplane it in another foreigncountry.

 

“Financial Outlook”:  the multi-year financial outlook for Holdingsand its consolidated Subsidiaries dated November 3, 2004, as modified bythe 2005 financial outlook for Holdings and it consolidated Subsidiaries datedMarch 2005.

 

“First Amendment”:  the First Amendment dated as ofApril 12, 2005 to the Existing Credit Agreement.

 

“Flight”: (a) the completion of anon-stop passenger and/or cargo flight utilizing the Pacific Routes from apoint of origin in the United States of America to a destination in Japan orChina and from a point of origin in Japan or China to a destination in theUnited States of America and (b) the completion of a non-stop passengerand/or cargo flight utilizing the Pacific Routes (other than a flight describedin clause (a) of this definition).

 

“Flight Equipment”:  any aircraft, airframes or engines and allparts incorporated or installed in or attached or made a part of the aircraft,airframes or engines.

 

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“Foreign Aviation Authorities”: foreign or governmental, regulatory orother agency or agencies which exercise jurisdiction over the issuance orauthorization to serve any foreign point on each of the Pacific Routes and/oroperations related to the Pacific Routes and Supporting Route Facilities.

 

“Foreign Slot”: all of the rights andoperational authority, now held or hereafter acquired, of the Borrower toconduct one landing or takeoff operation during a specific hour or other periodat each non-U.S. airport necessary to operate a Pacific Route, whether or notutilized by the Borrower.

 

“Funding Office”:  the office of the Administrative Agentspecified in Section 11.2 or such other office as may be specified fromtime to time by the Administrative Agent as its funding office by writtennotice to the Borrower and the Lenders.

 

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

 

“Gate Leaseholds”:  at any time, all of the right, title,privilege, interest, and authority now or hereafter acquired or held by theBorrower in connection with the right to use, operate or occupy space in anairport terminal at which the Borrower conducts scheduled operations for directnon-stop flights (or flights originating at a Northwest Hub) to and within Asiausing the Pacific Routes to the extent such Gate Leasehold is utilized inconnection with the Pacific Routes at such time.  To the extent that the Borrower ceases to useany Gate Leasehold in connection with the Pacific Routes, such Gate Leaseholdshall automatically cease to be a Gate Leasehold hereunder, including, withoutlimitation, for purposes of Section 7.5.

 

“Governmental Authority”:  any nation or government, any state or otherpolitical subdivision thereof, any agency, authority, instrumentality,regulatory body, court, central bank or other entity exercising executive,legislative, judicial, taxing, regulatory or administrative functions of orpertaining to government, any securities exchange and any self-regulatoryorganization (including the National Association of Insurance Commissioners).

 

“Guarantors”: the collective reference to Holdings, NWAC and NWA.

 

“Hedging Obligations”:  as to any Person, all obligations andliabilities of such Person under any Interest Rate Protection Agreement, whichare payable upon the termination of such agreement.

 

“Holdings”: as defined in the preamble to this Agreement.

 

“Indebtedness”:  as to any Person, without duplication,(i) all indebtedness (including principal, interest, fees and charges) ofsuch Person for borrowed money or for the deferred purchase price of propertyor services but excluding trade accounts payable and accrued expenses incurredin the ordinary course of business, (ii) the maximum amount available tobe drawn under all letters of credit issued for the account of such Person andall unpaid drawings in respect of such letters of credit, (iii) allIndebtedness of the types described in clause (i), (ii), (iv), (v),(vi) or (vii) of this definition secured by any Lien on any propertyowned by such Person, whether or not such Indebtedness has been assumed by suchPerson (to the extent of the value of the respective property),(iv) Capital Lease Obligations, (v) all obligations of such person topay a specified purchase price for goods or services, whether or not deliveredor accepted, i.e., take-or-pay and similar obligations,

 

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(vi) all Contingent Obligations of suchPerson and (vii) all Hedging Obligations under any Interest RateProtection Agreement.

 

“Intellectual Property”:  the collective reference to all rights,priorities and privileges relating to intellectual property, whether arisingunder United States, multinational or foreign laws or otherwise, includingcopyrights, copyright licenses, patents, patent licenses, trademarks, trademarklicenses, technology, know-how and processes, and all rights to sue at law orin equity for infringement or other impairment thereof, including the right toreceive all proceeds and damages therefrom.

 

“Intercreditor Agreement”:  the Second Amended and Restated IntercreditorAgreement dated as of July 31, 2003 among the Administrative Agent, U.S.Bank National Association, the PBGC, the Borrower and the Guarantors, as thesame may be amended, supplemented or otherwise modified from time to time.

 

“Interest Payment Date”:  (a) as to any ABR Loan, the fifteenthday of each March, June, September and December to occur while suchLoan is outstanding and the final maturity date of such Loan, (b) as toany Eurodollar Loan having an Interest Period of three months or less, the lastday of such Interest Period, (c) as to any Eurodollar Loan having anInterest Period longer than three months, each day that is three months, or awhole multiple thereof, after the first day of such Interest Period and thelast day of such Interest Period and (d) as to any Loan, the date of anyrepayment or prepayment made in respect thereof.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially,the period commencing on the borrowing or conversion date, as the case may be,with respect to such Eurodollar Loan and ending one, two, three, six or (ifavailable to all Lenders under the relevant Facility) nine or twelve monthsthereafter, as selected by the Borrower in its notice of borrowing or notice ofconversion, as the case may be, given with respect thereto and(b) thereafter, each period commencing on the last day of the nextpreceding Interest Period applicable to such Eurodollar Loan and ending one,two, three, six or (if available to all Lenders under the relevant Facility)nine or twelve months thereafter, as selected by the Borrower by irrevocablenotice to the Administrative Agent not less than three Business Days prior tothe last day of the then current Interest Period with respect thereto; providedthat, all of the foregoing provisions relating to Interest Periods are subjectto the following:

 

(A)          if any Interest Period would otherwise end on a day that isnot a Business Day, such Interest Period shall be extended to the nextsucceeding Business Day unless the result of such extension would be to carrysuch Interest Period into another calendar month in which event such InterestPeriod shall end on the immediately preceding Business Day;

 

(B)           the Borrower may not select an Interest Period for aparticular Facility that would extend beyond the anticipated final maturitydate of the relevant Loan;

 

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

 

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(D)          the Borrower shall select Interest Periods so as not torequire a payment or prepayment of any Eurodollar Loan during an InterestPeriod for such Loan.

 

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

 

“Investments” as defined inSection 7.10.

 

“Japanese Foreign Slots”: any Foreign Slot inJapan.

 

“JFK”: New York’s John F. Kennedy (JFK) International Airport.

 

“Joint Lead Arrangers”:  as defined in the preamble to this Agreement.

 

“JPMorgan Chase”:  JPMorgan Chase Bank, N.A., a New York bankingcorporation.

 

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

 

“Lease”: any operating lease entered into by any Loan Party or any of itsSubsidiaries as lessee thereunder.

 

“Lenders”: as defined in the preamble to this Agreement.

 

“Lender Affiliate”:  (a) any Affiliate of any Lender,(b) any Person that is administered or managed by any Lender and that isengaged in making, purchasing, holding or otherwise investing in commercialloans and similar extensions of credit in the ordinary course of its businessand (c) with respect to any Lender which is a fund that invests incommercial loans and similar extensions of credit, any other fund that investsin commercial loans and similar extensions of credit and is managed or advisedby the same investment advisor as such Lender or by an Affiliate of such Lenderor investment advisor.

 

“Lien”: any mortgage, pledge, hypothecation, assignment, security depositarrangement, encumbrance, lien (statutory or other), charge or other securityinterest or security agreement of any kind or nature whatsoever (including,without limitation, any conditional sale or other title retention agreement andany capital lease having substantially the same economic effect as any of theforegoing).

 

“Loan”: any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents”:  this Agreement, each Security Document andany Notes.

 

“Loan Parties”:  the Borrower and the Guarantors.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders ofmore than 50% of the aggregate unpaid principal amount of the Loans thenoutstanding under such Facility.

 

“Material Adverse Effect”:  a material adverse effect on the financialcondition or results of operations of the Borrower and its Subsidiaries takenas a whole.

 

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

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan asdefined in Section 4001(a)(3) of ERISA with respect to which theBorrower or any of its ERISA Affiliates is an “employer” as defined inSection 3(5) of ERISA.

 

“Non-Excluded Taxes”:  as defined in Section 3.10(a).

 

“Non-U.S. Lender”:  as defined in Section 3.10(d).

 

“Northwest Hub”:  as of the Original Closing Date, the airportsin Detroit, Michigan, Minneapolis, Minnesota, Memphis, Tennessee and NaritaAirport in Japan, and any other airport which becomes a central connectionpoint through which the Borrower coordinates flights utilizing the PacificRoutes.

 

“Notes”: the collective reference to any promissory note evidencing Loans.

 

“NWA”: as defined in the preamble to this Agreement.

 

“NWAC”: as defined in the preamble to this Agreement.

 

“Obligations”:  the unpaid principal of and interest on(including interest, fees and costs accruing after the maturity of the Loansand interest, fees and costs accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or likeproceeding, relating to the Borrower, whether or not a claim for post-filing orpost-petition interest, fees or cost is allowed in such proceeding) the Loansand all other obligations and liabilities of the Borrower to any Agent orLender (or, in the case of Specified Interest Rate Protection Agreements, anyaffiliate of any Lender), whether direct or indirect, absolute or contingent,due or to become due, or now existing or hereafter incurred, which arise under,out of, or in connection with, this Agreement, any other Loan Document, anySpecified Interest Rate Protection Agreement entered into with any Lender orany affiliate of any Lender or any other document made, delivered or given inconnection herewith or therewith, whether on account of principal, interest,reimbursement obligations, fees, indemnities, costs, expenses (including allfees, charges and disbursements of counsel to any Agent or Lender that arerequired to be paid by the Borrower pursuant hereto) or otherwise.

 

“Original Closing Date”:  November 23, 2004.

 

“Other Taxes”:  any and all present or future stamp ordocumentary taxes or any other property taxes, charges or similar leviesarising from any payment made hereunder or from the execution, delivery orenforcement of, this Agreement or any other Loan Document.

 

“Pacific Countries”: (i) countriesbordering the Pacific Ocean in Asia, North America, Australia and New Zealand,(ii) islands surrounded by the Pacific Ocean and (iii) Thailand, Myanmar(Burma), Laos and Cambodia.

 

“Pacific Routes”: the Routes described onSchedule 7.5 and any other Routes to the Pacific Countries that areacquired by or granted to the Borrower.

 

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“Pari Passu Commitments”:  at any time, the amount of unfunded lendingcommitments under the Pari Passu Obligations at such time.

 

“Pari Passu Obligations”:  as defined in the Intercreditor Agreement.

 

“Participant”:  as defined in Section 11.6(b).

 

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

 

“Pension Plan”: any plan (other than aMultiemployer Plan) described in Section 4021(a) of ERISA, and notexcluded pursuant to Section 4021(b) of ERISA, with respect to whichany Loan Party or any of its ERISA Affiliates is a “contributing sponsor” asdefined in Section 4001(a)(13) of ERISA and each such plan for the fiveyear period immediately following the last date on which the Borrower or any ofits ERISA Affiliates contributed or had an obligation to contribute to suchplan.

 

“Permitted Liens”:  as defined in Section 7.3.

 

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

 

“Pool Assets”:  the assets of the Borrower listed onSchedule 7.5 (as modified pursuant to Section 7.5) and together withall the engines necessary to comply with Section 7.5(c) and anyPacific Routes and related Slots and Gate Leaseholds acquired by the Borrower.

 

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

 

“Reference Lender”:  JPMorgan Chase.

 

“Register”: as defined in Section 11.6(d).

 

“Regulation U”:  Regulation U of the Board as in effect fromtime to time.

 

“Removed Pool Assets”: assets which are nolonger Pool Assets as a result of such assets either (a) having beenremoved from the Pool Assets in accordance withSection 7.5(a)(ii) hereof or (b) having been involuntarilydisposed of (whether by loss of property due to theft, destruction,confiscation, prohibition or use, any similar event or otherwise).

 

“Reorganization”:  with respect to any Multiemployer Plan, thecondition that such plan is in reorganization within the meaning ofSection 4241 of ERISA.

 

“Replaced Lender”:  as defined in Section 3.13.

 

“Replacement Airframe”: an aircraft (exceptEngines (as defined in the Aircraft Mortgage Agreement) or engines from time totime installed thereon) which shall have been made subject to the Lien of theAircraft Mortgage Agreement pursuant to Section 3.4 or 3.5 thereof.

 

“Replacement Engine”: an aircraft enginesuitable for installation and use on the relevant Airframe (as defined in theAircraft Mortgage Agreement) and which has a value, utility and

 

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remaining useful life (except for maintenancecycle condition) at least equal to the Engine (as defined in the AircraftMortgage Agreement) which it is replacing, assuming such Engine was of thevalue, utility and remaining useful life (except for maintenance cyclecondition) required by the terms of the Aircraft Mortgage Agreement, and whichshall have been made subject to the Lien of the Aircraft Mortgage Agreementpursuant to Section 3.4 or 3.5 thereof.

 

“Replacement Facility”:  a term loan facility or facilities in anaggregate amount at any time outstanding not in excess of the aggregateprincipal amount of the Loans theretofore or concurrently paid or prepaid.

 

“Replacement Lender”:  as defined in Section 3.13.

 

“Replacement Route”: a Route which has avalue at least equal to the Route which it is replacing and which shall havebeen made subject to the pledge of the Route Security Agreement pursuant toSection 1 thereof, subject to the satisfactory review and approval of theAdministrative Agent.

 

“Required Lenders”:  at any time, the holders of more than 50% ofthe aggregate unpaid principal amount of the Loans then outstanding.

 

“Requirement of Law”:  as to any Person, the Certificate ofIncorporation and By-Laws or other organizational or governing documents ofsuch Person, and any law, treaty, rule or regulation or determination ofan arbitrator or a court or other Governmental Authority, in each caseapplicable to or binding upon such Person or any of its property or to whichsuch Person or any of its property is subject.

 

“Responsible Officer”:  as to any Loan Party, the chief executiveofficer, president, chief financial officer, treasurer or chief accountingofficer of such Loan Party, but in any event, with respect to financialmatters, the chief financial officer, treasurer or chief accounting officer ofsuch Loan Party.

 

“Restricted Payments”:  as defined in Section 7.6.

 

“Route Collateral”: all of the “Collateral”as defined in the Route Security Agreements.

 

“Route Security Agreement”:  the Route Security Agreement dated as of theOriginal Closing Date, executed and delivered by the Borrower in favor of theCollateral Agent, as the same may be amended, supplemented or otherwisemodified from time to time, and collectively with the Existing Route SecurityAgreement, the “Route Security Agreements”.

 

“Routes”: the route authorities which the Borrower holds or hereafter acquires therequisite authority to operate pursuant to Title 49 including withoutlimitation, applicable frequencies, exemption and certificate authorities,Fifth-Freedom Rights and “behind/beyond rights”, whether or not utilized by theBorrower.

 

“S&P”: Standard & Poor’s Ratings Services, a division of theMcGraw-Hill Companies, Inc.

 

“SEC”: the Securities and Exchange Commission.

 

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“Second Amendment and Restatement Closing Date”:  the date on which the conditions precedentset forth in Section 5 shall have been satisfied, which date isApril 15, 2005.

 

“Secured Creditors”: the Lenders, theAdministrative Agent and the Collateral Agent.

 

“Security Documents”:  the collective reference to the AircraftMortgage Agreement, the Route Security Agreements, the Intercreditor Agreementand all other security documents hereafter delivered to the AdministrativeAgent granting a Lien on any property of any Person to secure the obligationsand liabilities of any Loan Party under any Loan Document.

 

“Significant Subsidiary”:  any Subsidiary that would be a “significantsubsidiary” of any of the Loan Parties within the meaning of the SEC’sRegulation S-X.

 

“Slot”: at any time, all of the rights and operational authority of the Borrowernow held or hereafter acquired, to conduct one Instrument Flight Rule (asdefined under the FAA regulations) landing or takeoff operation during aspecific hour or half-hour period at JFK (or at any other slot-constrainedairport in the U.S.) pursuant to FAA regulations, including Title 14, to theextent that any such slot is used to operate direct non-stop flights to Asiausing a Pacific Route and all take-off and landing rights and operationalauthority of the Borrower at a Northwest Hub in the U.S. or other airport inthe U.S. which is an origination or destination point for flights utilizing thePacific Routes, in each case, at such time. To the extent that the Borrower ceases to use any Slot in connectionwith the Pacific Routes, such Slot shall automatically cease to be a Slothereunder, including, without limitation, for purposes of Section 7.5.

 

“Specified Interest Rate Protection Agreement”:  any Interest Rate Protection Agreemententered into by the Borrower and any Lender or Lender Affiliate designated bythe relevant Lender and the Borrower, by written notice to the AdministrativeAgent, as a Specified Interest Rate Protection Agreement.

 

“Stage III Aircraft”: aircraft owned by theBorrower certified as Stage III aircraft, as set forth in Federal AviationRegulation 36.1(f)(6), 14 C.F.R. § 36.1(f)(6) or any successorregulation, as amended.

 

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

 

“Supporting Route Facilities”: the Borrower’sgates, ticket counters, office space and baggage claim areas at each airportnecessary to operate a Pacific Route.

 

“Syndication Agent”:  as defined in the preamble to this Agreement.

 

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“Title 14”: Title 14 of the U.S. Code of Federal Regulations, Part 93, SubpartsK and S, as amended from time to time or any successor or recodifiedregulation.

 

“Title 49”: Title 49 of the United States Code, which, among other things,recodified and replaced the U.S. Federal Aviation Act of 1958, and theregulations promulgated pursuant thereto or any subsequent legislation thatamends, supplements or supercedes such provisions.

 

“Termination Event”:  means a “reportable event” described inSection 4043 of ERISA or in the regulations thereunder (excluding eventsfor which the requirement for notice of such reportable event has been waivedunder subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043and any event described in subsection .33 of PBGC RegulationSection 4043).

 

“Total Appraised Value”: as of any date ofdetermination, the Appraised Value as of such date of all Pool Assets otherthan the Removed Pool Assets.

 

“Total Appraised Value Ratio”: at any time,the ratio of (a) Total Appraised Value (determined as of the then mostrecent Appraisal of the Pool Assets) to (b) the sum of the aggregateunpaid principal amount of the Loans then outstanding and any Pari PassuObligations (for purposes of this definition, Pari Passu Obligations shallinclude any Pari Passu Commitments).

 

“Tranche A Term Commitment”: as to anyLender, the obligation of such Lender, if any, to make a Tranche A Term Loan inan aggregate principal amount not to exceed the amount set forth under theheading “Tranche A Term Commitment” opposite such Lender’s name onSchedule 1.1(a) to the Existing Credit Agreement or in the Assignmentand Acceptance pursuant to which such Lender become a party hereto, as the samemay be changed from time to time pursuant to the terms hereof.  The original aggregate amount of the TrancheA Term Commitments is $575,000,000.

 

“Tranche A Term Facility”:  the Tranche A Term Commitments and theTranche A Term Loans made thereunder.

 

“Tranche A Term Lender”:  each Lender that has a Tranche A TermCommitment or that holds a Tranche A Term Loan.

 

“Tranche A Term Loan”:  as defined in Section 2.1.

 

“Tranche A Term Percentage”:  as to any Tranche A Term Lender at any time,the percentage which such Lender’s Tranche A Term Commitment then constitutesof the total Tranche A Term Commitments (or, at any time after the OriginalClosing Date, the percentage which the aggregate principal amount of suchLender’s Tranche A Term Loans then outstanding constitutes of the aggregateprincipal amount of the Tranche A Term Loans then outstanding).

 

“Tranche A Termination Date”:  November 23, 2009.

 

“Tranche B Term Commitment”:  as to any Lender, the obligation of suchLender, if any, to make a Tranche B Term Loan in an aggregate principal amountnot to exceed the amount set forth under the heading “Tranche B TermCommitment” opposite such Lender’s name on Schedule 1.1(a) to theExisting Credit Agreement or in the Assignment and Acceptance pursuant to whichsuch Lender became a party hereto, as the same may be changed from time to timepursuant to the terms hereof.  Theoriginal aggregate amount of the Tranche B Term Commitments is $400,000,000.

 

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“Tranche B Term Facility”:  the Tranche B Term Commitments and theTranche B Term Loans made thereunder.

 

“Tranche B Term Lender”:  each Lender that has a Tranche B TermCommitment or that holds Tranche B Term Loans.

 

“Tranche B Term Loans”:  as defined in Section 2.1.

 

“Tranche B Term Percentage”:  as to any Tranche B Term Lender at any time,the percentage which such Lender’s Tranche B Term Commitment then constitutesof the total Tranche B Term Commitments (or, at any time after the OriginalClosing Date, the percentage which the aggregate principal amount of suchLender’s Tranche B Term Loans then outstanding constitutes of the aggregateprincipal amount of the Tranche B Term Loans then outstanding).

 

“Tranche B Termination Date”:  November 23, 2010.

 

“Tranche C Term Commitment”: as to anyLender, the obligation of such Lender, if any, to make a Tranche C Term Loan inan aggregate principal amount not to exceed the amount set forth under theheading “Tranche C Term Commitment” opposite such Lender’s name onSchedule 1.1(b) to this Agreement or in the Assignment and Acceptancepursuant to which such Lender become a party hereto, as the same may be changedfrom time to time pursuant to the terms hereof. The original aggregate amount of the Tranche C Term Commitments is$147,750,000.

 

“Tranche C Term Facility”:  the Tranche C Term Commitments and theTranche C Term Loans made thereunder.

 

“Tranche C Term Lender”:  each Lender that has a Tranche C TermCommitment or that holds a Tranche C Term Loan.

 

“Tranche C Term Loan”:  as defined in Section 2.1.

 

“Tranche C Term Percentage”:  as to any Tranche C Term Lender at any time,the percentage which such Lender’s Tranche C Term Commitment then constitutesof the total Tranche C Term Commitments (or, at any time after the SecondAmendment and Restatement Closing Date, the percentage which the aggregateprincipal amount of such Lender’s Tranche C Term Loans then outstandingconstitutes of the aggregate principal amount of the Tranche C Term Loans thenoutstanding).

 

“Tranche C Termination Date”:  November 23, 2010.

 

“Treasury Rate”: as of the date which is 10Business Days prior to the date on which an Appraisal is to be delivered inaccordance with Section 6.2(f), the effective yield of (x) directobligations of the United States maturing on the tenth anniversary of such dateor (y) if there are no such obligations, the effective yield determined bylinear interpolation between the effective yield borne by the two directobligations of the United States maturing closest to, but straddling, the tenthanniversary of such date, in each case as appearing on the relevant Telerateservice screen on such date.  In theevent that such screen is not available, the “Treasury Rate” shall bedetermined by reference to such other comparable publicly available serviceselected by the Administrative Agent for displaying such effective yield.

 

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“Transferee”: any Assignee or Participant.

 

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“Unavailable Japanese Foreign Slots”: at anytime, any Japanese Foreign Slot with respect to which the Borrower has lost itsrights (including as a result of any action of an applicable GovernmentalAuthority revoking or suspending (whether temporarily or permanently) suchrights but excluding any failure to utilize the relevant Japanese Foreign Slotwhich has been approved by all applicable Governmental Authorities and as towhich no revocation or suspension has occurred).

 

“United States”:  the United States of America.

 

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

 

1.2           Other Definitional Provisions.  (a)  Unless otherwise specified therein,all terms defined in this Agreement shall have the defined meanings when usedin the other Loan Documents or any certificate or other document made ordelivered pursuant hereto or thereto.

 

(b)  As used herein and in the other LoanDocuments, and any certificate or other document made or delivered pursuanthereto or thereto, (i) accounting terms relating to Holdings and itsSubsidiaries not defined in Section 1.1 shall have the respective meaningsgiven to them under GAAP, (ii) the words “include,” “includes” and“including” shall be deemed to be followed by the phrase “without limitation,”and (iii) the words “asset” and “property” shall be construed to have thesame meaning and effect and to refer to any and all tangible and intangibleassets and properties, including cash, Capital Stock, securities, revenues,accounts, leasehold interests and contract rights.

 

(c)  The words “hereof,” “herein” and “hereunder”and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of this Agreement, andSection, Schedule and Exhibit references are to this Agreement unlessotherwise specified.

 

(d)  The meanings given to terms defined hereinshall be equally applicable to both the singular and plural forms of suchterms.

 

(e)  Except as otherwise expressly providedherein, all terms of an accounting or financial nature shall be construed inaccordance with GAAP; provided that, if the Borrower notifies theAdministrative Agent that the Borrower requests an amendment to any provisionhereof to eliminate the effect of any change occurring after the OriginalClosing Date in GAAP or in the application thereof on the operation of suchprovision (or if the Administrative Agent notifies the Borrower that theRequired Lenders request an amendment to any provision hereof for such purpose),regardless of whether any such notice is given before or after such change inGAAP or in the application thereof, then such provision shall be interpreted onthe basis of GAAP as in effect and applied immediately before such change shallhave become effective until such notice shall have been withdrawn or suchprovision amended in accordance herewith.

 

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# SECTION 2  AMOUNT AND TERMS OFCOMMITMENTS

#  

2.1           TermCommitments.  On the Original ClosingDate (a) each TrancheA Term Lender made a term loan (a “Tranche A Term Loan”) to the Borrowerin an amount equal to the amount of the Tranche A Term Commitment of suchLender and (b) each Tranche B Term Lender made a term loan (a “TrancheB Term Loan”) to the Borrower in an amount equal to the amount of theTranche B Term Commitment of such Lender. Subject to the terms and conditions hereof, each Tranche C Term Lenderseverally agrees to make a term loan (a “Tranche C Term Loan”) to theBorrower on the Second Amendment and Restatement Closing Date in an amountequal to the amount of the Tranche C Term Commitment of such Lender.  The Loans may from time to time be EurodollarLoans or ABR Loans, as determined by the Borrower and notified to theAdministrative Agent in accordance with Sections 2.2 and 3.3.  The Tranche A Term Loans and the Tranche BTerm Loans outstanding on the Second Amendment and Restatement Closing Dateunder the Existing Credit Agreement shall continue outstanding hereunder on theterms set forth herein.

 

2.2           Procedurefor Term Loan Borrowing.  The Borrower shall give the AdministrativeAgent irrevocable notice (which notice must be received by the AdministrativeAgent prior to 10:00 A.M., New York City time, (a) three BusinessDays prior to the anticipated Second Amendment and Restatement Closing Date inthe case of Eurodollar Loans and (b) one Business Day prior to theanticipated Second Amendment and Restatement Closing Date in the case of ABRLoans) requesting that the Tranche C Term Lenders make the Tranche C Term Loanson the Borrowing Date and specifying the amount to be borrowed.  Upon receipt of such notice theAdministrative Agent shall promptly notify each Tranche C Term Lender thereof.  Not later than 12:00 Noon, New York Citytime, on the Borrowing Date each Tranche C Term Lender shall make available tothe Administrative Agent at the Funding Office an amount in immediatelyavailable funds equal to the Tranche C Term Loan or Loans to be made by suchTranche C Term Lender; provided, however, that, at the option ofany Lender that is a lender under the Existing Credit Agreement immediatelyprior to the satisfaction of the conditions in Section 5, all or a portionof the aggregate amount of the Existing Loans of such Lender may be deemed tosatisfy the foregoing funding requirement by written notice to theAdministrative Agent to such effect given prior to the Closing Date.  Subject to the immediately precedingsentence, the Administrative Agent shall use the amounts made available to theAdministrative Agent by the Tranche C Term Lenders on the Second Amendment andRestatement Closing Date to repay the first installment of the Tranche A TermLoans and the Tranche B Term Loans as set forth in Section 2.3 hereof.

 

2.3           Repaymentof Term Loans.  (a)  The Borrower hereby agrees to repaythe Tranche A Term Loan of each Tranche A Term Lender in five consecutiveannual installments with the first installment due on the Second Amendment andRestatement Closing Date and the succeeding installments due on the second,third, fourth and fifth anniversary of the Original Closing Date.  Each payment shall be in an amount equal tosuch Lender’s Tranche A Term Percentage multiplied by the amount set forthbelow opposite such installment:

 
| **Installment** | ** ** | **Principal Amount** | ** **  |
|-----------------|------------|----------------------|-------------|
| 1               |       | $                    | 143,750,000 |   |
| 2               |       | $                    | 71,875,000  |   |
| 3               |       | $                    | 71,875,000  |   |
| 4               |       | $                    | 0           |   |
| 5               |       | $                    | 287,500,000 |   |

 

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(b)  The Borrower hereby agrees to repay theTranche B Term Loan of each Tranche B Term Lender in six consecutive annualinstallments with the first installment due on the Second Amendment andRestatement Closing Date and the succeeding installments due on the second,third, fourth, fifth and sixth anniversary of the Original Closing Date.  Each payment shall be in an amount equal tosuch Lender’s Tranche B Term Percentage multiplied by the amount set forthbelow opposite such installment:

 
| **Installment** | ** ** | **Principal Amount** | ** **  |
|-----------------|------------|----------------------|-------------|
| 1               |       | $                    | 4,000,000   |   |
| 2               |       | $                    | 4,000,000   |   |
| 3               |       | $                    | 4,000,000   |   |
| 4               |       | $                    | 4,000,000   |   |
| 5               |       | $                    | 4,000,000   |   |
| 6               |       | $                    | 380,000,000 |   |

 

(c)  TheBorrower hereby agrees to repay the Tranche C Term Loan of each Tranche C TermLender in five consecutive annual installments on each anniversary of theOriginal Closing Date commencing November 23, 2006.  Each payment shall be in an amount equal tosuch Lender’s Tranche C Term Percentage multiplied by the amount set forthbelow opposite such installment:

 
| **Installment** | ** ** | **Principal Amount** | ** **  |
|-----------------|------------|----------------------|-------------|
| 1               |       | $                    | 1,477,500   |   |
| 2               |       | $                    | 1,477,500   |   |
| 3               |       | $                    | 1,477,500   |   |
| 4               |       | $                    | 1,477,500   |   |
| 5               |       | $                    | 141,840,000 |   |
|                 |            |                      |             |  |  |

 

Oncerepaid, the Loans may not be reborrowed.

 

# SECTION 3  GENERAL PROVISIONSAPPLICABLE TO LOANS

#  

3.1           OptionalPrepayments.  (a)  The Borrower may at any time andfrom time to time prepay the Loans, in whole or in part, without premium orpenalty (except as provided for in Section 3.8(e)), upon irrevocablenotice (which may be given by telephone if confirmed promptly in writing)delivered to the Administrative Agent at least one Business Day prior thereto,which notice shall specify the date and amount of prepayment and whether theprepayment is of Eurodollar Loans or ABR Loans; provided, that if aEurodollar Loan is prepaid on any day other than the last day of the InterestPeriod applicable thereto, the Borrower shall also pay any amounts owingpursuant to Section 3.11.  Uponreceipt of any such notice the Administrative Agent shall promptly notify eachrelevant Lender thereof.  If any suchnotice is given, the amount specified in such notice shall be due and payableon the date specified therein, together with accrued interest to such date onthe amount prepaid.  Partial prepaymentsof Loans shall be in an aggregate principal amount of $1,000,000 or a wholemultiple thereof.  Once prepaid, Loansmay not be reborrowed.

 

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(b)           Notwithstandinganything to the contrary in Section 3.1(a) or 3.8, with respect tothe amount of any optional prepayment described inSection 3.1(a) that is allocated to Tranche B Term Loans (suchamount, the “Tranche B Prepayment Amount”) or to the Tranche C TermLoans (such amount, the “Tranche C Prepayment Amount”), at any time whenTranche A Term Loans remain outstanding, the Borrower will, in lieu of applyingsuch amount to the prepayment of Tranche B Term Loans or Tranche C Term Loans asprovided in paragraph (a) above, on the date specified inSection 3.1(a) for such prepayment, give the Administrative Agenttelephonic notice (promptly confirmed in writing) requesting that theAdministrative Agent prepare and provide to each Tranche B Term Lender and eachTranche C Term Lender a notice (each, a “Prepayment Option Notice”) asdescribed below.  As promptly aspracticable after receiving such notice from the Borrower, the AdministrativeAgent will send to each Tranche B Term Lender and each Tranche C Term Lender aPrepayment Option Notice, which shall be in the form of Exhibit E, andshall include an offer by the Borrower to prepay on the date (each a “PrepaymentDate”) that is 10 Business Days after the date of the Prepayment OptionNotice, the relevant Loans of such Lender by an amount equal to the portion ofthe Prepayment Amount indicated in such Lender’s Prepayment Option Notice asbeing applicable to such Lender’s Tranche B Term Loans and/or Tranche C TermLoans, as the case may be.  On thePrepayment Date, (i) the Borrower shall pay to the relevant Tranche B TermLenders and Tranche C Term Lenders the aggregate amount necessary to prepaythat portion of the outstanding relevant Loans in respect of which such Lendershave accepted prepayment as described above in accordance with the terms of thePrepayment Option Notice, and (ii) the Borrower shall be entitled toretain the portion of the Tranche B Prepayment Amount and Tranche C PrepaymentAmount not accepted by the relevant Lenders.

 

3.2           MandatoryPrepayments.  The Borrower shall prepay the Loans as setforth in this Section 3.2 to the extent necessary to maintain compliancewith Section 7.5(a).  Amounts to beapplied in connection with prepayments made pursuant to this Section shallbe applied to prepay any outstanding Tranche A Term Loans, Tranche B Term Loansand Tranche C Term Loans, ratably to the remaining scheduled installmentsthereof.

 

3.3           Conversionand Continuation Options.  (a)  The Borrower may elect from time totime to convert Eurodollar Loans to ABR Loans by giving the AdministrativeAgent at least two Business Days’ prior irrevocable notice (which may be givenby telephone if promptly confirmed by writing) of such election, providedthat any such conversion of Eurodollar Loans may only be made on the last dayof an Interest Period with respect thereto. The Borrower may elect from time to time to convert ABR Loans toEurodollar Loans by giving the Administrative Agent at least three BusinessDays’ prior irrevocable notice (which may be by telephone if promptly confirmedby writing) of such election (which notice shall specify the length of theinitial Interest Period therefor), provided that no ABR Loan under aparticular Facility may be converted into a Eurodollar Loan when any Event ofDefault has occurred and is continuing and the Administrative Agent has or theMajority Facility Lenders in respect of such Facility have determined in its ortheir sole discretion not to permit such conversions.  Upon receipt of any such notice theAdministrative Agent shall promptly notify each relevant Lender thereof.

 

(b)  Any Eurodollar Loan may be continued as suchupon the expiration of the then current Interest Period with respect thereto bythe Borrower giving irrevocable notice (which may be given by telephone ifpromptly confirmed in writing) to the Administrative Agent, in accordance withthe applicable provisions of the term “Interest Period” set forth inSection 1.1, of the length of the next Interest Period to be applicable tosuch Loans, provided that no Eurodollar Loan under a particular Facilitymay be continued as such when any Event of Default has occurred and is

 

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continuing and the Administrative Agent has or the Majority FacilityLenders in respect of such Facility have determined in its or their solediscretion not to permit such continuations, and provided, further,that if the Borrower shall fail to give any required notice as described abovein this paragraph or if such continuation is not permitted pursuant to thepreceding proviso such Loans shall be automatically converted to ABR Loans onthe last day of such then expiring Interest Period.  Upon receipt of any such notice the AdministrativeAgent shall promptly notify each relevant Lender thereof.

 

3.4           Limitationson Eurodollar Tranches.  Notwithstanding anything to the contrary inthis Agreement, all borrowings, conversions and continuations of EurodollarLoans hereunder and all selections of Interest Periods hereunder shall be insuch amounts and be made pursuant to such elections so that, (a) aftergiving effect thereto, the aggregate principal amount of the Eurodollar Loanscomprising each Eurodollar Tranche shall be equal to at least $10,000,000 and(b) no more than fifteen Eurodollar Tranches under all Facilities shall beoutstanding at any one time.

 

3.5           InterestRates and Payment Dates.  (a)  Each Eurodollar Loan shall bearinterest for each day during each Interest Period with respect thereto at arate per annum equal to the Eurodollar Rate determined for such day plus theApplicable Rate.

 

(b)  Each ABR Loan shall bear interest at a rateper annum equal to the ABR plus the Applicable Rate.

 

(c)  (i) If all or a portion of theprincipal amount of any Loan shall not be paid when due (whether at the statedmaturity, by acceleration or otherwise), such overdue amount shall bearinterest at a rate per annum equal to the rate that would otherwise beapplicable thereto pursuant to the foregoing provisions of this Section plus2%, and (ii) if all or a portion of any interest payable on any Loan orother amount payable hereunder shall not be paid when due (whether at thestated maturity, by acceleration or otherwise), such overdue amount shall bearinterest at a rate per annum equal to the rate then applicable to ABR Loans plus2%, in each case, with respect to clauses (i) and (ii) above, fromthe date of such non-payment until such amount is paid in full (as well afteras before judgment).

 

(d)  Interest shall be payable in arrears on eachInterest Payment Date, provided that interest accruing pursuant toparagraph (c) of this Section shall be payable from time to time ondemand.

 

3.6           Computationof Interest and Fees.  (a)  Interest and fees payable pursuanthereto shall be calculated on the basis of a 360-day year for the actual dayselapsed, except that, with respect to ABR Loans the rate of interest on whichis calculated on the basis of the Prime Rate, the interest thereon shall becalculated on the basis of a 365- (or 366-, as the case may be) day year forthe actual days elapsed.  TheAdministrative Agent shall as soon as practicable notify the Borrower and therelevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loanresulting from a change in the ABR or the Eurocurrency Reserve Requirementsshall become effective as of the opening of business on the day on which suchchange becomes effective.  TheAdministrative Agent shall as soon as practicable notify the Borrower and therelevant Lenders of the effective date and the amount of each such change ininterest rate.

 

(b)  Each determination of an interest rate bythe Administrative Agent pursuant to any provision of this Agreement shall beconclusive and binding on the Borrower and the Lenders in

 

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the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliverto the Borrower a statement showing the quotations used by the Administrative Agentin determining any interest rate pursuant to Section 3.5(a).

 

3.7           Inabilityto Determine Interest Rate.  If prior to the first day ofany Interest Period:

 

(a)  theAdministrative Agent shall have determined that, by reason of circumstancesaffecting the relevant market, adequate and reasonable means do not exist forascertaining the Eurodollar Rate for such Interest Period, or

 

(b)  theAdministrative Agent shall have determined that the making or continuation ofany Eurodollar Loan has become (x) unlawful by any law or governmental rule,regulation or order, (y) impossible by compliance by any Lender in good faithwith any governmental request (whether or not having force of law) or (z)impracticable as a result of a contingency occurring after the date of thisAgreement which materially and adversely affects the interbank eurodollarmarket,

 

theAdministrative Agent shall give telecopy or telephonic notice thereof to theBorrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any EurodollarLoans under the relevant Facility requested to be made on the first day of suchInterest Period shall be made as ABR Loans, (y) any Loans under the relevantFacility that were to have been converted on the first day of such InterestPeriod to Eurodollar Loans shall be continued as ABR Loans and (z) anyoutstanding Eurodollar Loans under the relevant Facility shall be converted, onthe last day of the then-current Interest Period, to ABR Loans.  Until such notice has been withdrawn by theAdministrative Agent, no further Eurodollar Loans under the relevant Facilityshall be made or continued as such, nor shall the Borrower have the right toconvert Loans under the relevant Facility to Eurodollar Loans.  Upon the cessation of the circumstancesgiving rise to the delivery of such notice, the Administrative Agent or theMajority Facility Lenders, as the case may be, shall promptly withdraw suchnotice.

 

3.8           ProRata Treatment and Payments.  (a)  Except as providedin Section 11.1, each borrowing by the Borrower from the Lenders hereunderand each payment, including each prepayment, by the Borrower on account ofprincipal of and interest on the Loans shall be made pro rata according to therespective outstanding principal amounts of the Tranche A Term Loans, theTranche B Term Loans or the Tranche C Term Loans, as the case may be, held bythe Lenders.  Except as otherwiseprovided in Section 3.1(b) and Section 3.2, the amount of eachprincipal prepayment of the Loans shall be applied to reduce the then remaininginstallments of the Tranche A Term Loans, the Tranche B Term Loans and theTranche C Term Loans, as the case may be, (i) in the chronological orderof maturity with respect to scheduled repayments which mature within twelve monthsfollowing the date of such prepayment and (ii) prorata withrespect to scheduled repayments which mature thereafter.

 

(b)  All payments (including prepayments) to bemade by the Borrower hereunder, whether on account of principal, interest, feesor otherwise, shall be made without setoff or counterclaim and shall be madeprior to 2:00 p.m., New York City time, on the due date thereof to theAdministrative Agent, for the account of the Lenders, at the Funding Office, inDollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenderspromptly upon receipt in like funds as received.  If any payment hereunder (other than paymentson the Eurodollar Loans) becomes due and payable on a day other than a BusinessDay,

 

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such payment shall be extended to the next succeeding BusinessDay.  If any payment on a Eurodollar Loanbecomes due and payable on a day other than a Business Day, the maturitythereof shall be extended to the next succeeding Business Day unless the resultof such extension would be to extend such payment into another calendar month,in which event such payment shall be made on the immediately preceding BusinessDay.  In the case of any extension of anypayment of principal pursuant to the preceding two sentences, interest thereonshall be payable at the then applicable rate during such extension.

 

(c)  Unless the Administrative Agent shall havebeen notified in writing by any Lender prior to the applicable Borrowing Datethat such Lender will not make the amount that would constitute its Commitment(or any portion thereof) available to the Administrative Agent, theAdministrative Agent may assume that such Lender is making such amountavailable to the Administrative Agent, and the Administrative Agent may, inreliance upon such assumption, make available to the Borrower a correspondingamount.  If such amount is not madeavailable to the Administrative Agent by the required time on the applicable BorrowingDate, such Lender shall pay to the Administrative Agent, on demand, such amountwith interest thereon at a rate equal to the daily average Federal FundsEffective Rate for the period until such Lender makes such amount immediatelyavailable to the Administrative Agent.  Acertificate of the Administrative Agent submitted to any Lender with respect toany amounts owing under this paragraph shall be conclusive in the absence ofmanifest error.  If such Lender’sCommitment (or any portion thereof) is not made available to the AdministrativeAgent by such Lender within three Business Days of the applicable BorrowingDate, the Administrative Agent shall also be entitled to recover such amountwith interest thereon at the rate per annum applicable to ABR Loans under therelevant Facility, on demand, from the Borrower.

 

(d)  Unless the Administrative Agent shall havebeen notified in writing by the Borrower prior to the date of any paymentrequired to be made hereunder that the Borrower will not make such payment tothe Administrative Agent, the Administrative Agent may assume that the Borroweris making such payment, and the Administrative Agent may, but shall not berequired to, in reliance upon such assumption, make available to the Lenderstheir respective prorata shares of a corresponding amount.  If such payment is not made to theAdministrative Agent by the Borrower within three Business Days of suchrequired date, the Administrative Agent shall be entitled to recover, on demand,from each Lender to which any amount which was made available pursuant to thepreceding sentence, such amount with interest thereon at the rate per annumequal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit therights of the Administrative Agent or any Lender against the Borrower.

 

(e)  All voluntary prepayments of the Loans madepursuant to Section 3.1 shall be accompanied by a prepayment fee equal to:(i) if such prepayment is effected on any date that is on or prior to thefirst anniversary of the Original Closing Date, 3.00% of the aggregate amountof such prepayment, (ii) if such prepayment is effected on any date afterthe first anniversary of the Original Closing Date through and including thesecond anniversary thereof, 2.00% of the aggregate amount of such prepayment,and (iii) if such prepayment is effected on any date after the secondanniversary of the Original Closing Date through and including the thirdanniversary thereof, 1% of the aggregate amount of such prepayment.

 

3.9           Requirementsof Law.  (a)  If the adoption of or any change inany Requirement of Law or in the interpretation or application thereof afterthe date hereof or

 

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compliance by any Lender with any request ordirective (whether or not having the force of law) from any central bank orother Governmental Authority made subsequent to the date hereof:

 

#### (i)            shall subject any Lender to any taxof any kind whatsoever with respect to any Eurodollar Loan made by it, orchange the basis of taxation of payments to such Lender in respect thereof(except for Non-Excluded Taxes covered by Section 3.10 and changes in therate of tax on the overall net income or profits of such Lender);

####  

#### (ii)           shall impose, modify or hold applicableany reserve, special deposit, compulsory loan or similar requirement againstassets held by, deposits or other liabilities in or for the account of,advances, loans or other extensions of credit by, or any other acquisition offunds by, any office of such Lender that is not otherwise included in thedetermination of the Eurodollar Rate hereunder; or

####  

#### (iii)          shall impose any other conditionaffecting the interbank eurodollar market;

####  

andthe result of any of the foregoing is to increase the cost to such Lender, byan amount that such Lender deems to be material, of making, converting into,continuing or maintaining Eurodollar Loans, or to reduce any amount receivablehereunder in respect thereof, then, in any such case, the Borrower shallpromptly pay such Lender, upon its demand, any additional amounts necessary tocompensate such Lender for such increased cost or reduced amountreceivable.  If any Lender becomesentitled to claim any additional amounts pursuant to this paragraph, it shallpromptly notify the Borrower (with a copy to the Administrative Agent) of theevent by reason of which it has become so entitled.

 

(b)  If any Lender shall have determined that theadoption of or any change in any Requirement of Law regarding capital adequacyor in the interpretation or application thereof after the date hereof orcompliance by such Lender or any corporation controlling such Lender with anyrequest or directive regarding capital adequacy (whether or not having theforce of law) from any Governmental Authority made subsequent to the datehereof shall have the effect of reducing the rate of return on such Lender’s orsuch corporation’s capital as a consequence of its obligations hereunder to alevel below that which such Lender or such corporation could have achieved butfor such adoption, change or compliance (taking into consideration suchLender’s or such corporation’s policies with respect to capital adequacy) by anamount deemed by such Lender to be material, then from time to time, aftersubmission by such Lender to the Borrower (with a copy to the AdministrativeAgent) of a written request therefor, the Borrower shall pay to such Lendersuch additional amount or amounts as will compensate such Lender for suchreduction.  In determining such additionalamounts, such Lender will act reasonably and in good faith and will useaveraging and attribution methods which are reasonable.

 

(c)  A certificate as to any additional amountspayable pursuant to this Section submitted by any Lender to the Borrower (witha copy to the Administrative Agent) shall be conclusive in the absence ofmanifest error.  The obligations of theBorrower pursuant to this Section shall survive the termination of thisAgreement and the payment of the Loans and all other amounts payable hereunder,provided that the Borrower shall not be required to compensate a Lenderpursuant to this Section for any amounts incurred more than six monthsprior to the date that such Lender notifies the Borrower of such Lender’sintention to claim compensation therefor; and providedfurtherthat, if the circumstances giving rise to such claim have a retroactive effect,then such 180 days period shall be extended to include the period of suchretroactive effect.

 

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3.10         Taxes. (a)  Except as otherwise provided herein all payments made by theBorrower under this Agreement shall be made free and clear of, and withoutdeduction or withholding for or on account of, any taxes, levies, imposts,duties, charges, fees, deductions or withholdings, now or hereafter imposed,levied, collected, withheld or assessed by any Governmental Authority,excluding net income or profits taxes and franchise taxes (based on the netincome or profits of an Agent or Lender or imposed in lieu of net income taxes)imposed on any Agent or any Lender as a result of a present or formerconnection between such Agent or such Lender and the jurisdiction of theGovernmental Authority imposing such tax or any political subdivision or taxingauthority thereof or therein (other than any such connection arising solelyfrom such Agent or such Lender having executed, delivered or performed itsobligations or received a payment under, or enforced, this Agreement or anyother Loan Document).  If any suchnon-excluded taxes, levies, imposts, duties, charges, fees, deductions orwithholdings (“Non-Excluded Taxes”) or Other Taxes are required to bewithheld from any amounts payable to any Agent or any Lender hereunder, theamounts so payable to such Agent or such Lender shall be increased to theextent necessary to yield to such Agent or such Lender (after payment of allNon-Excluded Taxes and Other Taxes) interest or any such other amounts payablehereunder at the rates or in the amounts specified in this Agreement, provided,however, that the Borrower shall not be required to increase any suchamounts payable to any Lender with respect to any Non-Excluded Taxes(i) that are attributable to such Lender’s failure to comply with therequirements of paragraph (d) or (e) of this Section or(ii) that are United States withholding taxes unless such withholdingresults from a change in applicable law or treaty after such Lender becomes aparty to this Agreement.

 

(b)  In addition, the Borrower shall pay anyproperly imposed Other Taxes to the relevant Governmental Authority inaccordance with applicable law.

 

(c)  Whenever any Non-Excluded Taxes or OtherTaxes are payable by the Borrower, the Borrower shall promptly send to theAdministrative Agent for its own account or for the account of the relevantAgent or Lender, as the case may be, a certified copy of an original officialreceipt received by the Borrower showing payment thereof or, if not available,other documentation evidencing such payment. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes whendue to the appropriate taxing authority or fails to remit to the AdministrativeAgent the required receipts or other required documentary evidence, theBorrower shall indemnify the Agents and the Lenders for any incremental taxes,interest or penalties that may become payable by any Agent or any Lender as aresult of any such failure.

 

(d)  Each Lender (or Transferee) that is not a“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.Lender”) shall deliver to the Borrower and the Administrative Agent (or, inthe case of a Participant, to the Lender from which the related participationshall have been purchased who shall in turn deliver to the Borrower and theAdministrative Agent ) two copies of either U.S. Internal Revenue ServiceForm W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lenderclaiming exemption from U.S. federal withholding tax underSection 871(h) or 881(c) of the Code with respect to payments of“portfolio interest,” a statement substantially in the form of Exhibit Cand a Form W-8BEN, or any subsequent versions thereof or successorsthereto, properly completed and duly executed by such Non-U.S. Lender claimingcomplete exemption from, or a reduced rate of, U.S. federal withholding tax onall payments by the Borrower under this Agreement and the other LoanDocuments.  Such forms shall be deliveredby each Non-U.S. Lender on or before the date it becomes a party to this Agreement(or, in the case of any Participant, on or before the date such Participantpurchases the related participation).  Inaddition, each Non-U.S. Lender shall deliver such forms promptly upon theobsolescence or invalidity of any form previously

 

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delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time itdetermines that it is no longer in a position to provide any previouslydelivered certificate to the Borrower (or any other form of certificationadopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of thisparagraph, a Non-U.S. Lender shall not be required to deliver any form pursuantto this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(e)  A Lender that is entitled to an exemptionfrom or reduction of non-U.S. withholding tax under the law of the jurisdictionin which the Borrower is located, or any treaty to which such jurisdiction is aparty, with respect to payments under this Agreement shall deliver to theBorrower (with a copy to the Administrative Agent), at the time or timesprescribed by applicable law or reasonably requested by the Borrower, suchproperly completed and executed documentation prescribed by applicable law aswill permit such payments to be made without withholding or at a reduced rate, providedthat such Lender is legally entitled to complete, execute and deliver suchdocumentation and in such Lender’s reasonable judgment such completion,execution or submission would not materially prejudice the legal position ofsuch Lender.

 

(f)  The agreements in this Section shallsurvive the termination of this Agreement and the payment of the Loans and allother amounts payable hereunder.

 

(g)  The Borrower shall be entitled to contest,or, upon written request of the Borrower, to require a Lender to takereasonable measures to contest, at the Borrower’s cost and expense, theimposition of any Non-Excluded Tax or Other Tax.  Notwithstanding this paragraph (g), theBorrower still must satisfy its obligations to pay additional amounts orindemnify the Lender if such tax has already been withheld, paid, or deducted.

 

3.11         Indemnity.  TheBorrower agrees to indemnify each Lender and to hold each Lender harmless fromany loss or expense that such Lender may sustain or incur as a consequence of(a) default by the Borrower in making a borrowing of, conversion into orcontinuation of Eurodollar Loans after the Borrower has given a noticerequesting the same in accordance with the provisions of this Agreement,(b) default by the Borrower in making any prepayment of or conversion fromEurodollar Loans after the Borrower has given a notice thereof in accordancewith the provisions of this Agreement or (c) the making of a payment or prepaymentof Eurodollar Loans on a day that is not the last day of an Interest Periodwith respect thereto.  Suchindemnification may include (but shall in no event exceed) an amount equal tothe excess, if any, of (i) the amount of interest that would have accruedon the amount so prepaid, or not so borrowed, converted or continued, for theperiod from the date of such prepayment or of such failure to borrow, convertor continue to the last day of such Interest Period (or, in the case of afailure to borrow, convert or continue, the Interest Period that would havecommenced on the date of such failure) in each case at the applicable rate ofinterest for such Loans provided for herein (excluding, however, the ApplicableRate included therein, if any) over (ii) the amount of interest (asreasonably determined by such Lender) that would have accrued to such Lender onsuch amount by placing such amount on deposit for a comparable period withleading banks in the interbank eurodollar market.  A certificate as to any amounts payablepursuant to this Section submitted to the Borrower by any Lender shall beconclusive in the absence of manifest error. No Lender shall be deemed to have any loss, expense or liability incurredby the reason of the liquidation or reemployment of deposits as a result of therepayment of Eurodollar Loans prior to the end of an Interest Period unless theEurodollar Rate which would be applicable to the Eurodollar Loan being repaidif such Eurodollar Rate were being determined on the date of repayment(assuming for purposes of this determination that the Interest Period or the

 

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maturity utilized in making suchdetermination is the Interest Period originally applicable to such EurodollarLoan) is less than the Eurodollar Rate actually applicable to the EurodollarLoan being repaid.  This covenant shallsurvive the termination of this Agreement and the payment of the Loans and allother amounts payable hereunder.

 

3.12         Changeof Lending Office.  Each Lender agrees that, upon the occurrenceof any event giving rise to the operation of Section 3.9 or3.10(a) with respect to such Lender, it will, if requested by theBorrower, use reasonable efforts (subject to overall policy considerations ofsuch Lender) to designate another lending office for any Loans affected by suchevent with the object of avoiding the consequences of such event, providedthat such designation is made on terms that, in the reasonable judgment of suchLender, cause such Lender and its lending office(s) to suffer no materialeconomic, legal or regulatory disadvantage.

 

3.13         Replacementof Lenders.  If (x) any Lender defaults in its obligationsto make Loans, (y) any Lender refuses to give timely consents to proposedchanges, waivers, discharges or terminations with respect to this Agreementwhich have been approved by the Required Lenders as provided inSection 11.1 but which requires the approval of one or more additionalLenders to become effective in accordance with such Section or (z) anyLender is owed increased costs under Sections 3.9 or 3.10 which in the judgmentof the Borrower are material in amount and which are not otherwise requested byLenders constituting at least the Required Lenders (assuming for this purposethat the percentage in such definition was 80%), the Borrower shall have theright, if no Event of Default then exists and, in the case of a Lenderdescribed in clause (z) above, such Lender has not withdrawn its request forsuch compensation or changed its applicable lending office with the effect ofeliminating or substantially decreasing (to a level which in the judgment ofthe Borrower is not material) such increased cost, to replace such Lender (the“Replaced Lender”) with one or more other Eligible Transferee orTransferees (collectively, the “Replacement Lender”) with the consent ofthe Administrative Agent, which consent shall not be unreasonably withheld ordelayed, provided that (i) at the time of any replacement pursuantto this Section, the Replacement Lender shall enter into an Assignment andAcceptance pursuant to which the Replacement Lender shall acquire all of theCommitments and outstanding Loans of, the Replaced Lender and, in connectiontherewith, shall pay to the Replaced Lender in respect thereof an amount equalto the principal of, and all accrued interest on, all outstanding Loans of theReplaced Lender and the Borrower or Replacement Lender shall pay any feespayable in connection with such assignment pursuant to Section 11.6, (ii) allobligations of the Borrower owing to the Replaced Lender (other than thosespecifically described in clause (i) above in respect of which theassignment purchase price has been, or is concurrently being, paid) shall bepaid in full to such Replaced Lender concurrently with such replacement and(iii) and in the case of any replacement pursuant to clause (y) above, theReplacement Lender shall approve the proposed changes, waivers, discharges orterminations at the time of such replacement. Upon the execution of therespective assignment documentation, the payment of amounts referred to inclauses (i) and (ii) above and, if so requested by the ReplacementLender, delivery to the Replacement Lender of the appropriate Notes executed bythe Borrower, the Replacement Lender shall become a Lender hereunder and theReplaced Lender shall cease to constitute a Lender hereunder, except withrespect to indemnification provisions under this Agreement, which shall surviveas to such Replaced Lender.

 

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# SECTION 4  REPRESENTATIONS ANDWARRANTIES

#  

To induce the Agents and the Lenders to enter intothis Agreement and to make the Loans, each of Holdings, NWAC, NWA and theBorrower hereby jointly and severally represent and warrant to each Agent andLender that:

 

4.1           FinancialCondition; Financial Outlook.  (a)  The auditedconsolidated balance sheets of Holdings and its Subsidiaries and the Borrowerand its Subsidiaries as at December 31, 2004, and the related consolidatedstatements of operations, of common stockholders’ equity (deficit, in the caseof Holdings and its Subsidiaries) and of cash flows for the fiscal year endedon such date, reported on by and accompanied by an unqualified report fromErnst & Young LLP, present fairly in all material respects theconsolidated financial condition of such entities as at such date, and theconsolidated results of their operations and their consolidated cash flows forthe respective fiscal years then ended. The unaudited condensed consolidated balance sheets of Holdings and itsSubsidiaries and the Borrower and its Subsidiaries as at September 30,2004, and the related unaudited condensed consolidated statements of income andcash flows for the nine-month period ended on such date, present fairly in allmaterial respects the consolidated financial condition of such entities as atsuch date and the consolidated results of their operations and theirconsolidated cash flows for the nine-month period then ended (subject to normalyear-end audit adjustments).  All suchfinancial statements, including the related schedules and notes thereto (in thecase of such annual statements), have been prepared in accordance with GAAPapplied consistently throughout the periods involved (except as disclosed therein).

 

(b)  On and as of the Second Amendment andRestatement Closing Date, the Financial Outlook, previously delivered to theAgents and the Lenders, was prepared on a basis consistent in all materialrespects with the financial statements referred to in Section 4.1(a) (otherthan as set forth or presented in such Financial Outlook), and there are nostatements or conclusions in the Financial Outlook which are based upon orinclude information known to any Loan Party to be misleading in any materialrespect or which fail to take into account material information regarding thematters reported therein.  The FinancialOutlook is based on good faith estimates and assumptions believed by the LoanParties to be reasonable at the time made, it being recognized by the Lendersthat the Financial Outlook as to future events is not to be viewed as facts andthat actual results during the period or periods covered by the FinancialOutlook may differ from the results set forth in the Financial Outlook.

 

4.2           NoChange.  Since December 31, 2004, there has beenno material adverse change in the financial condition or results of operationsof any Loan Party.

 

4.3           CorporateExistence; Compliance with Law.  Holdings and each of itsSubsidiaries (a) is duly organized, validly existing and in good standingunder the laws of the jurisdiction of its organization, (b) has the powerand authority, and the legal right, to own and operate its property, to leasethe property it operates as lessee and to conduct the business in which it iscurrently engaged and presently proposes to engage in, (c) is dulyqualified as a foreign corporation and in good standing under the laws of eachjurisdiction where it is required to be so qualified and where the failure tobe so qualified would have a Material Adverse Effect, and (d) is incompliance with all Requirements of Law (including, without limitation,Environmental Laws) except to the extent that the failure to comply therewithwould not, in the aggregate, have a Material Adverse Effect.

 

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4.4           CorporatePower; Authorization; Enforceable Obligations.  EachLoan Party has the corporate power and authority, and the legal right, to make,deliver and perform the Loan Documents to which it is a party and, in the caseof the Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessarycorporate action to authorize the execution, delivery and performance of theLoan Documents to which it is a party and, in the case of the Borrower, toauthorize the extensions of credit on the terms and conditions of thisAgreement.  No material consent orauthorization of, filing with, notice to or other act by or in respect of, anyGovernmental Authority or any other Person, including, without limitation, U.S.Bank and the PBGC under the Intercreditor Agreement, is required in connectionwith the extensions of credit hereunder or with the execution, delivery,performance, validity or enforceability of this Agreement or any of the LoanDocuments, except consents, authorizations, filings and notices describedin Schedule 4.4, which consents, authorizations, filings and notices havebeen obtained or made and are in full force and effect and any such otherconsent, authorization, filing, notice or other act required to be made orobtained after the Original Closing Date in the ordinary course ofbusiness.  Each Loan Document has beenduly executed and delivered on behalf of each Loan Party party thereto.  This Agreement constitutes, and each otherLoan Document upon execution will constitute, a legal, valid and bindingobligation of each Loan Party party thereto, enforceable against each such LoanParty in accordance with its terms, except as enforceability may be limited byapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting the enforcement of creditors’ rights generally and by generalequitable principles (whether enforcement is sought by proceedings in equity orat law).

 

4.5           NoLegal Bar.  The execution, delivery and performance ofthis Agreement and the other Loan Documents, the borrowings hereunder and theuse of the proceeds thereof will not violate in any material respect anymaterial Requirement of Law or any material Contractual Obligation of Holdings andits Subsidiaries and will not result in, or require, the creation or impositionof any Lien on any of their respective properties or revenues pursuant to anysuch Requirement of Law or Contractual Obligation.

 

4.6           Litigation. There are no actions, suits or proceedings pending or threatened withrespect to any Loan Party or any of its Subsidiaries (i) that have had amaterial adverse affect on the financial condition or results of operations ofany Loan Party or (ii) that affect the legality, validity, binding effector enforceability of any Loan Document.

 

4.7           Ownershipof the Pool Assets.  The Pool Assets are owned by the Borrower andare not subject to any Lien except as permitted by Section 7.3.

 

4.8           FederalRegulations.  Not more than 25% of the value of the assetsof the Borrower, or of Holdings and its Subsidiaries on a consolidated basis,constitutes “margin stock” within the meaning of such term under RegulationU.  Neither the making of any Loan northe use of the proceeds of any thereof will violate or be inconsistent with theprovisions of Regulation T, U or X of the Board.

 

4.9           ERISA.  Each Pension Plan has been operated and administered in compliance withall applicable requirements of ERISA and, if intended to qualify underSection 401(a) or 403(a) of the Code, in compliance with allapplicable requirements of such provision except where the failure to so complywould not result in, taking all instances in the aggregate, liability in excessof $2,000,000.  Full payment has beenmade by each Loan Party or any of its ERISA Affiliates of all amounts whichsuch Persons are required under the terms of each Pension

 

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Plan and Multiemployer Plan to have paid ascontributions to such Pension Plan and Multiemployer Plan except where thefailure to so comply, taking all instances in the aggregate, would not resultin liability in excess of $2,000,000. None of the Pension Plans had an accumulated funding deficiency as(defined in Section 302 of ERISA and Section 412 of the Code),whether or not waived, as of the last day of the most recent plan year of suchPension Plan.  No Termination Event hasoccurred or, to the best knowledge of any Loan Party, is expected by such LoanParty to occur with respect to any Pension Plan or Multiemployer Plan such thatany Loan Party or any of its ERISA Affiliates would incur, taking all instancesin the aggregate, liabilities in excess of $10,000,000 (such liability toinclude, without limitation, any liability to the PBGC or to any other partyunder Section 4062, 4063 and 4064 of ERISA or to any Multiemployer Plandetermined under Section 4201 etseq. of ERISA) resultingfrom or associated with all such Termination Events.  No Loan Party nor any of its ERISA Affiliateshas engaged in any transaction in connection with which any such entity hasbeen or could be subjected to either a tax imposed by Section 4975 of theCode or the corresponding civil penalty assessed pursuant to Sections502(i) and 502(l) of ERISA, which penalties and taxes for all suchtransactions are in an aggregate amount in excess of $2,500,000.  Using actuarial assumptions and computationmethods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregateliabilities of Holdings and its Subsidiaries, the Borrower and its Subsidiariesand their ERISA Affiliates to all Multiemployer Plans in the event of acomplete withdrawal therefrom, as of the close of the most recent fiscal yearof each such Multiemployer Plan ended prior to the Second Amendment andRestatement Closing Date, would not have a material adverse effect upon theresults of operation or financial condition of any Loan Party.  No Loan Party nor any of its Subsidiariesmaintains or contributes to any employee welfare benefit plan (as defined inSection 3(1) of ERISA) which provides benefits to retired employeesor other former employees (other than as required by Section 601 of ERISAor any employee pension benefit plan (as defined in Section 3(2) ofERISA) the obligations with respect to which would have a material adverseeffect on the ability of any Loan Party to perform its respective obligationsunder this Agreement.

 

4.10         Investment Company Act.  NoLoan Party is an “investment company,” or a company “controlled” by an“investment company,” within the meaning of the Investment Company Act of 1940,as amended.

 

4.11         Subsidiaries.  As of the Second Amendment andRestatement Closing Date, Schedule 4.12 correctly sets forth thepercentage ownership (direct and indirect) of Holdings, NWAC, NWA and theBorrower in each of their respective Subsidiaries.

 

4.12         Use of Proceeds.  The proceeds of the Loansshall be used to refinance the Indebtedness of the Borrower under the ExistingCredit Agreement.

 

4.13         Trueand Complete Disclosure.  All factual information (taken as a whole)furnished by or on behalf of any Loan Party in writing to any Agent or anyLender for purposes of or in connection with this Agreement, the other LoanDocuments or any transaction contemplated herein or therein is, and all othersuch factual information (taken as a whole) hereafter furnished by or on behalfof any such Persons in writing to any Agent or any Lender will be, true andaccurate in all material respects on the date as of which such information isdated or certified and not incomplete by omitting to state any fact necessaryto make such information (taken as a whole) not misleading in any materialrespect at such time in light of the circumstances under which such informationwas provided.

 

4.14         AirCarrier.  The Borrower is a Certificated Air Carrier.

 

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4.15         AircraftCollateral.  All aircraft included in the Collateral areStage III Aircraft.

 

4.16         Pacific Routes.  As of the Second Amendment and Restatement ClosingDate, Schedule 7.5 identifies all of the Routes held by the Borrower inconnection with its route system in the Pacific Countries.

 

4.17         SlotUtilization. TheBorrower is utilizing the Slots in a manner consistent in all material respectswith applicable regulations and contracts in order to preserve both its rightto hold and operate the Slots, taking into account any waivers or other reliefgranted to the Borrower by the FAA. The Borrower has not received any noticefrom the FAA, and is not aware of any other event or circumstance, that wouldbe reasonably likely to impair its right to hold and operate the Slots in anymaterial respect.

 

4.18         ForeignSlot Utilization. TheBorrower is utilizing the Foreign Slots in a manner consistent in all material respectswith applicable regulations, foreign laws, and contracts in order to preserveboth its right to hold and operate the Foreign Slots. The Borrower has notreceived any notice from any applicable Foreign Aviation Authorities, nor isthe Borrower aware of any other event or circumstance, that would be reasonablylikely to impair its right to hold and operate the Foreign Slots in anymaterial respect.

 

4.19         RouteUtilization. TheBorrower holds the requisite authority to operate over each of the PacificRoutes pursuant to Title 49, all rules and regulations promulgatedthereunder, applicable foreign law, and the applicable rules andregulations of the FAA, the DOT and any applicable Foreign AviationAuthorities, and has, at all times after being awarded each such Pacific Route,complied in all material respects with all of the terms, conditions andlimitations of each such certificate or order issued by the DOT and theapplicable Foreign Aviation Authorities regarding such Pacific Route and withall applicable provisions of Title 49 or applicable foreign law. There existsno violation of such terms, conditions or limitations that gives the FAA, DOTor any applicable Foreign Aviation Authorities the right to terminate, cancel,withdraw or modify in any material adverse respect the rights of the Borrowerin any such Pacific Route.

 

4.20         Security Documents.  (a)  The Security Documents remain in full force and effect, are effectiveto secure the Obligations under this Agreement, and are enforceable in accordancewith their terms except as enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingthe enforcement of creditors’ rights generally and by general equitableprinciples (whether enforcement is sought by proceedings in equity or at law).

 

(b)  Except as expressly stated therein, eachsecurity interest that is purported to be granted under the Security Documentsconstitutes a perfected first priority security interest in favor of theCollateral Agent for the benefit of the Lenders in the Collateral subjectthereto (to the extent such perfection and priority can be obtained by, in thecase of Collateral subject to the Route Security Agreements, filing a UniformCommercial Code financing statement and any requisite filings with the FAA and,in the case of Collateral subject to the Aircraft Mortgage Agreement, recordingthe Aircraft Mortgage Agreement with the FAA), and such security interests(i) are continuing, valid and enforceable, (ii) are not subject toany defense, counterclaim or setoff and (iii) are entitled to thebenefits, rights and protections afforded under the Intercreditor Agreement tothe security interests granted in connection with the Existing CreditAgreement.

 

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# SECTION 5  CONDITIONS PRECEDENT

#  

The effectiveness of this Agreement and theagreement of each Lender to make the Loan requested to be made by it hereunderis subject to the satisfaction on the Second Amendment and Restatement ClosingDate of the following conditions precedent:

 

(a)  CreditAgreement.  The Administrative Agentshall have received this Agreement, executed and delivered by theAdministrative Agent, Holdings, NWAC, NWA, the Borrower, the Required Lenders(as defined in the Existing Credit Agreement) and each Tranche C Term Lender.

 

(b)  Approvals.  All governmental and third party approvalsdeemed reasonably necessary by the Joint Lead Arrangers shall have beenobtained and be in full force and effect.

 

(c)  Fees;Expenses; Accrued Interest.  TheLenders and the Agents shall have received:

 

(i)            all fees due and payable inconnection with this Agreement including, to the extent not paid as provided in Section 6(f) ofthe First Amendment, anamendment fee to each Lender under the Existing Credit Agreement which hasexecuted and delivered both the First Amendment and this Agreement in an amountequal to 0.125% of such Lender’s Commitment on the Second Amendment andRestatement Closing Date;

 

(ii)           all expenses payable by the Borroweras set forth herein for which invoices have been presented (including thereasonable fees and expenses of legal counsel) on or before the SecondAmendment and Restatement Closing Date; and

 

(iii)          all accrued interest due in connectionwith the payment of the first installment of the Tranche A Term Loans and theTranche B Term Loans and fees and other obligations owing which are due andpayable under Section 3.11 of the Existing Credit Agreement, in each case,through the Second Amendment and Restatement Closing Date.

 

(d)  Useof Proceeds.  The proceeds of theTranche C Term Loans made on the Second Amendment and Restatement Closing Dateshall be used to repay the first installment of the Tranche A Term Loans andthe first installment of the Tranche B Term Loans.

 

(e)  ClosingCertificates.  The AdministrativeAgent shall have received, with a counterpart for each Lender, a certificate ofeach Loan Party, dated the Second Amendment and Restatement Closing Date,substantially in the form of Exhibit A, with appropriate insertions andattachments.

 

(f)  LegalOpinions.  The Administrative Agentshall have received the following legal opinions:

 

#### (i)            the legal opinion of Thaddeus J.Marciniak, Esq., counsel to the Borrower and the Guarantors, satisfactoryin form and substance to the Administrative Agent;

####  

#### (ii)           the legal opinion of Simpson Thacher &Bartlett LLP, counsel to the Administrative Agent, satisfactory in form andsubstance to the Administrative Agent;

 

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#### (iii)          the legal opinion of Dorsey &Whitney, special counsel to the Borrower and the Guarantors, satisfactory inform and substance to the Administrative Agent; and

####  

#### (iv)          the legal opinion of Daugherty,Fowler, Peregrin & Haught, special aviation counsel for the Administrative Agent, satisfactory inform and substance to the Administrative Agent.

####  

(g)  FinancialOutlook.  The Lenders shall havereceived the Financial Outlook which shall be in form and substance reasonablysatisfactory to the Joint Lead Arrangers and the Required Lenders.

 

(h)  ComplianceCertificate.  The AdministrativeAgent shall have received a compliance certificate of the Borrower certifyingthat, as of the Second Amendment and Restatement Closing Date, after givingeffect to the extensions of credit on the Second Amendment and RestatementClosing Date, the Borrower is in compliance with the financial covenants setforth in Section 7.1 and the Total Appraised Value Ratio is not less than200%.

 

(i)  Representationsand Warranties.  Each of the representationsand warranties made by any Loan Party in or pursuant to the Loan Documentsshall be true and correct in all material respects with the same effect asthough such representations and warranties had been made on such date (it beingunderstood and agreed that any representation or warranty which by its terms ismade as of a specified date shall be required to be true and correct in allmaterial respects only as of such specified date).

 

(j)  No Default.  No Default or Event of Default shall have occurredand be continuing on such date.

 

Upon the satisfaction (in the good faith judgment ofthe Administrative Agent) of the foregoing conditions, the Administrative Agentshall notify the Borrower and the Lenders of the satisfaction thereof, suchnotice shall be conclusive and binding and the Second Amendment and RestatementClosing Date shall be deemed to have occurred.

 

# SECTION 6  AFFIRMATIVE COVENANTS

#  

Each of Holdings, NWAC, NWA and the Borrower herebyagrees that, so long as the Commitments remain in effect or any Loan or otheramount is owing to any Lender or Agent hereunder, each of Holdings, NWAC, NWAand the Borrower shall and shall cause each of its Subsidiaries to:

 

6.1           Financial Statements. Furnish to the Administrative Agent (and the Administrative Agent shallpromptly following receipt thereof furnish to the Lenders):

 

(a)  as soon as available, but in any event within 90 daysafter the end of each fiscal year of Holdings, a copy of the SEC Form 10-Kfiled by Holdings with the SEC for such fiscal year, or, if no such Form 10-Kwas so filed by Holdings for such fiscal year, the audited consolidated balancesheet of Holdings and its Subsidiaries and whether or not such Form 10-Kwas filed, of the Borrower and its Subsidiaries, as at the end of such fiscalyear and the related audited consolidated statements of operations, of commonstockholders’

 

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equity and ofcash flows for such year, setting forth in each case in comparative form thefigures for the previous year, reported on without a “going concern” or likequalification or exception, or qualification arising out of the scope of theaudit, by Ernst & Young or other independent certified publicaccountants of nationally recognized standing; and

 

(b)  as soon as available, but in any event not later than 45 daysafter the end of each of the first three quarterly periods of each fiscal yearof Holdings, a copy of the SEC Form 10-Q filed by Holdings with the SECfor such quarterly period, or, if no such Form 10-Q was so filed byHoldings with respect to any such quarterly period, the unaudited consolidatedbalance sheet of Holdings and its Subsidiaries, and whether or not such Form 10-Qwas filed, of the Borrower and its Subsidiaries as at the end of such quarterand the related unaudited consolidated statements of operations for suchquarter and the portion of the fiscal year through the end of such quarter,setting forth in each case in comparative form the figures for the previousyear, certified by a Responsible Officer of Holdings, as the case may be, asbeing fairly stated in all material respects (subject to normal year-end auditadjustments).

 

All such financial statements shall be prepared inaccordance with GAAP applied consistently throughout the periods reflectedtherein and with prior periods (except as approved by such accountants orofficer, as the case may be, and disclosed therein).  Subject to the next succeeding sentence,information delivered pursuant to this Section 6.1 to the AdministrativeAgent may be made available by the Administrative Agent to the Lenders byposting such information on the Intralinks website on the Internet athttp://www.intralinks.com.  Informationdelivered pursuant to this Section 6.1 may also be delivered by electroniccommunication pursuant to procedures approved by the Administrative Agentpursuant to Section 11.2(b) hereto. Information required to be delivered pursuant to this Section 6.1(to the extent not made available as set forth above) shall be deemed to havebeen delivered to the Administrative Agent on the date on which the Borrowerprovides written notice to the Administrative Agent that such information hasbeen posted on the Borrower’s website on the Internet at http://www.nwa.com (tothe extent such information has been posted or is available as described insuch notice).  Information required to bedelivered pursuant to this Section 6.1 shall be in a format which issuitable for transmission.

 

6.2           Certificates; Other Information. Furnish to the Administrative Agent (and the Administrative Agent shallpromptly following receipt thereof furnish to the Lenders):

 

(a)  concurrently with the delivery of the financial statementsreferred to in Section 6.1(a), a certificate of the independent certifiedpublic accountants reporting on such financial statements stating that inmaking the examination necessary therefor no knowledge was obtained of anyDefault or Event of Default, except as specified in such certificate;

 

(b)  concurrently with the delivery of any financial statementspursuant to Section 6.1, (i) a certificate of a Responsible Officerof Holdings and the Borrower stating that such Responsible Officer has obtainedno knowledge of any Default or Event of Default except as specified in suchcertificate and (ii) a Compliance Certificate of the last day of thefiscal quarter or fiscal year of the Borrower, as the case may be;

 

(c)  not more than 75 days following the commencement of eachfiscal year of the Borrower, a budget of the Borrower and its Subsidiaries inreasonable detail for each fiscal month of such fiscal year as is customarilyprepared by management for its internal use setting forth, with appropriatediscussion, the principal assumptions upon which such budget is based;

 

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(d)  promptly after any senior financial or legal officer of anyLoan Party obtains knowledge thereof, notice of any change in the ratingassigned by either Rating Agency to the Facilities;

 

(e)  within five days after the same are sent, copies of allfinancial statements and reports that Holdings sends to the holders of anyclass of its debt securities or public equity securities and, within five daysafter the same are filed, copies of all financial statements and reports thatHoldings may make to, or file with, the SEC (including, without limitation, anyForm 10-K or Form 10-Q);

 

(f)  on the twelve month anniversary of the Original Closing Dateand on each one year anniversary thereafter, an Appraisal of the Pool Assets;

 

(g)  within 45 days after the close of each calendar quarter,notice of (i) any acquisition of any Route, Slot, or Foreign Slot and (ii) anysale or transfer of any Route, Slot or Foreign Slot, in each case during suchcalendar quarter and confirming the Routes, Slots and Foreign Slots then inexistence;

 

(h)  within ten days after the end of each fiscal quarter, acertificate of the Chief Financial Officer of the Borrower (i) statingthat the Borrower is utilizing the Pacific Routes, the Slots and the ForeignSlots, in each case, in a manner consistent in all material respects withapplicable regulations and contracts and whether the Borrower has satisfied allapplicable utilization requirements set forth in any such regulations andcontracts, (ii) showing the number of Flights by the Borrower during suchquarterly period using the Pacific Routes, setting forth in each case incomparative form the number of Flights by the Borrower using such Routes duringthe corresponding quarterly period in fiscal year 2004, and (iii) showingthe aggregate number of Disposed Japanese Foreign Slots plus UnavailableJapanese Foreign Slots, which certificate shall be substantially in the form ofExhibit F;

 

(i)  promptly, such information as to the Slots, Foreign Slots,the Pacific Routes and Gate Leaseholds as the Administrative Agent may fromtime to time reasonably request; and

 

(j)  promptly, such additionalfinancial and other information as the Required Lenders may (through theAdministrative Agent) from time to time reasonably request.

 

Subject to the next succeeding sentence, informationdelivered pursuant to this Section 6.2 to the Administrative Agent may bemade available by the Administrative Agent to the Lenders by posting suchinformation on the Intralinks website on the Internet athttp://www.intralinks.com.  Informationdelivered pursuant to this Section 6.2 may also be delivered by electroniccommunication pursuant to procedures approved by the Administrative Agentpursuant to Section 11.2(b) hereto.  Informationrequired to be delivered pursuant to this Section 6.2 (to the extent notmade available as set forth above) shall be deemed to have been delivered tothe Administrative Agent on the date on which the Borrower provides writtennotice to the Administrative Agent that such information has been posted on theBorrower’s website on the Internet at http://www.nwa.com (to the extent suchinformation has been posted or is available as described in such notice).  Information required to be delivered pursuantto this Section 6.2 shall be in a format which is suitable fortransmission.

 

If any notice or other communication deliveredpursuant to this Section 6.2, or otherwise pursuant to this Agreement,contains any material non-public information, the Borrower,

 

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or other Loan Party if applicable, shall, atthe time of such delivery, notify the Administrative Agent that suchcommunication or notice contains material non-public information.  If a Lender has notified the AdministrativeAgent that it does not want to receive material non-public information, theAdministrative Agent will not forward to such Lender any notice orcommunication which is identified by the Borrower as including such informationuntil such Lender notifies the Administrative Agent otherwise.

 

6.3           Payment of Taxes.  Pay,discharge or otherwise satisfy, all material taxes, assessments andgovernmental charges or levies imposed upon it or upon its income or profits,or upon any properties belonging to it, prior to the date on which materialpenalties attach thereto, and all material lawful claims which, if unpaid,might become a Lien or charge upon any properties of any Loan Party or any ofits Subsidiaries, provided that no Loan Party nor any of itsSubsidiaries shall required to pay any such tax, assessment, charge, levy orclaim (i) which is being contested in good faith and by proper proceedingsif it has maintained adequate reserves (in the good faith judgment ofmanagement) with respect thereto in accordance with GAAP or (ii) thenonpayment of which would not have a Material Adverse Effect.

 

6.4           Maintenance of Existence;Compliance.  (a)  Except as permitted by Section 7.4,do all things necessary to preserve and keep in full force and effect itsexistence and material rights, authority and franchises, unless the failure tokeep in full force and effect any such right, authority or franchise would nothave a Material Adverse Effect; and (b) comply in all material respectswith all applicable statutes, regulations and orders of, and all applicablerestrictions impose by, all governmental bodies, domestic or foreign, inrespect of the conduct of its business and the ownership of its property(including Environmental Laws) other than those the non-compliance with whichwould not have a Material Adverse Effect.

 

6.5           Maintenance of Property; Insurance.  (a) Keep all property useful and necessary in its business in good working orderand condition, ordinary wear and tear excepted and from time to time make insuch properties and equipment all needed and proper repairs, renewals,replacements, extensions, additions, betterments and improvements thereto, tothe extent and in the manner customary for companies in similar businesses,except where the failure to keep such properties and equipment in good repair,working order and condition or to make such repairs, renewals, replacements,extensions, additions, betterments or improvements would not have a MaterialAdverse Effect and (b) maintain in full force and effect insurance in suchamounts, covering such risks and liabilities and with such deductibles orself-insured retentions as are in accordance with normal industry practice andas is required by law.

 

6.6           Inspection of Property; Books andRecords; Discussions.  (a)  Keep proper books ofrecords and account in which full, true and correct entries in conformity withGAAP and all Requirements of Law shall be made of all dealings and transactionsin relation to its business and activities and (b) permit, upon reasonablenotice given by the Administrative Agent to the Borrower on behalf of anyLender, officers and designated representatives of any Lender (includingwithout limitation, appraisers) to visit and inspect the properties or assetsof Holdings and any of its Subsidiaries and to examine the books of account ofHoldings and any of its Subsidiaries and discuss the affairs, finances andaccounts of Holdings and of any of its Subsidiaries with its and their officersand independent accountants, all at such reasonable times and intervals and tosuch reasonable extent as such Lender may desire.

 

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6.7           Notices. Promptly give notice to the Administrative Agent and each Lender of:

 

(a)  (i) the occurrence of any Default or Event of Defaultand (ii) any litigation or governmental proceeding pending against oraffecting Holdings or any of its Subsidiaries which is likely to have aMaterial Adverse Effect;

 

(b)  the following events, as soon as possible and in any eventwithin 30 days after the Borrower knows or has reason to know thereof, if suchevents, individually or in the aggregate have had or would have a MaterialAdverse Effect:  (i) the occurrenceof any Termination Event with respect to any Plan, a failure to make anyrequired contribution to a Plan, the creation of any Lien in favor of the PBGCor a Plan or any withdrawal from, or the termination, Reorganization orInsolvency of, any Multiemployer Plan or (ii) the institution ofproceedings or the taking of any other action by the PBGC or the Borrower orany Commonly Controlled Entity or any Multiemployer Plan with respect to thewithdrawal from, or the termination, Reorganization or Insolvency of, any Plan;and (c) copies of (i) any proposal for a waiver of any “reportableevent” sent to the PBGC contemporaneous therewith and (ii) any waivergranted by PBGC promptly after the Borrower receives notice that such waiverhas been granted by PBGC.

 

Eachnotice pursuant to this Section shall be accompanied by a statement of aResponsible Officer setting forth details of the occurrence referred to thereinand stating what action Holdings or the relevant Subsidiary proposes to takewith respect thereto.

 

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

 

6.9           End of Fiscal Years; FiscalQuarters.  For financial reportingpurposes, end Holdings’ and each of its Subsidiaries’ (i) fiscal years on December 31of each year and (ii) fiscal quarters on March 31, June 30, September 30and December 31 of each year.

 

6.10         Air Carrier.  TheBorrower will at all times be a Certificated Air Carrier.

 

6.11         ERISA.  (a) As soon as practicable and in any event within fifteen days after any LoanParty or any of its ERISA Affiliates knows or has reason to know of theoccurrence of any (i) Termination Event in connection with any PensionPlan or Multiemployer Plan, (ii) non-exempt “prohibited transaction” asdescribed in Section 406 of ERISA or Section 4975 of the Code, (iii) accumulatedfunding deficiency or application to the Secretary of the Treasury for a waiveror modification of the minimum funding standard (including any requiredinstallment payments) or an extension of any amortization period under Section 412of the Code, (iv) institution pursuant to Section 515 of ERISA tocollect a delinquent contribution, or (v) material liability by any LoanParty or any Subsidiary of any Loan Party pursuant to any employee welfarebenefit plan (as defined in Section 3(1) of ERISA) that providesbenefits to retired employees or other former employees (other than as requiredby Section 601 of ERISA) or any employee pension benefit plan (as definedin Section 3(2) of ERISA) in addition to the liability existing onthe Original Closing Date pursuant to any such welfare or pension plan or plansin connection with any Pension Plan or Multiemployer Plan or any trust createdthereunder, if as a result of such event or transaction, considered togetherwith other such events and

 

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transactions occurring within the prior twoyears, the Loan Parties and their ERISA Affiliates incur or could reasonablyexpect to incur liabilities from all such events and transactions in excess of$5,000,000, such Loan Party shall deliver to each of the Lenders a certificate,signed by an Authorized Officer of such Loan Party, specifying the naturethereof, what action such Loan Party or such ERISA Affiliate has taken, istaking or proposes to take with respect thereto, and any action taken orthreatened by the Internal Revenue Service, Department of Labor, PBGC, Pension Planor Multiemployer Plan, as applicable, to be taken with respect thereto(together with copies of all relevant notices or other communications receivedfrom such entity).  For the purposes ofthis Section 6.11, a Loan Party shall be deemed to have knowledge of allfacts known by the plan “administrator”(as defined in Section 3(16)(A) ofERISA) of any Pension Plan of which such Loan Party or any of its ERISAAffiliates is the “plan sponsor” (as defined in Section 3(16)(B) ofERISA).

 

(b)  Tothe extent reasonably requested by any Lender, as soon as practicable and inany event within 30 days after the filing of a Form 5500 series annualreport by a Loan Party or any of its ERISA Affiliates with the Internal RevenueService with respect to each Pension Plan, such Loan Party shall furnish tosuch Lender a copy of such Form 5500 series annual report and the Schedule B(Actuarial Information) thereto (and shall make available for inspection bysuch Lender at reasonable times copies of the full annual report with respectto each Pension Plan).

 

6.12         Security Interests; AdditionalCollateral.  (a)  Perform any and all acts and execute any andall documents (including, without limitation, the execution, amendment orsupplementation of any financing statement or continuation statement) forfiling under the provisions of the UCC or the Federal Aviation Act and the rules andregulations thereunder, which are necessary in order to maintain in favor ofthe Collateral Agent for the benefit of the Secured Creditors a valid andperfected Lien on the Collateral, subject to no other Liens except forPermitted Liens.

 

(b)  With respect to any Route to the Pacific orany related Slot or Foreign Slot acquired after the Original Closing Date bythe Borrower as to which the Administrative Agent, for the benefit of theLenders, does not have a perfected Lien, promptly (i) execute and deliverto the Administrative Agent such security agreements (which shall containsubstantially the same terms and conditions as the Route Security Agreements)and other documents as the Administrative Agent deems necessary or advisable togrant to the Administrative Agent, for the benefit of the Lenders, a securityinterest in such property and (ii) take all actions reasonably requestedby the Administrative Agent to grant to the Administrative Agent, for thebenefit of the Lenders, a perfected first priority security interest in suchproperty, including the filing of Uniform Commercial Code financing statementsin such jurisdictions as may be required by the security agreement or by law oras may be requested by the Administrative Agent.

 

6.13         Gate Utilization. Utilize all of its Gate Leaseholds in amanner sufficient to comply in all material respects with applicable leaseprovisions governing such Gate Leaseholds.

 

6.14         Slot Utilization. (a)  Utilize the Slots in a mannerconsistent in all material respects with applicable regulations and contracts,taking into account any waivers or other relief granted to the Borrower by theFAA.

 

(b) Cause to be done all things reasonably necessary to preserve and keep in fullforce and effect its rights in and use of its Slots, including, withoutlimitation, satisfying the Use or Lose Rule. Without in any way limiting theforegoing, the Borrower shall promptly take all such steps as may be reasonablynecessary now or in the future to maintain, renew and obtain the rights,

 

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licenses, authorizations orcertifications as are necessary to the continued and future holding and use bythe Borrower of its Slots. It is understood and agreed that the Borrower maycease using any Slot in connection with the Pacific Routes in the event thatthe Borrower determines in good faith that the preservation of its rights inand/or use of such Slot is no longer advantageous to the Borrower in connectionwith the conduct of its operations utilizing the Pacific Routes.

 

6.15         Foreign Slot Utilization. (a) Utilize the Foreign Slots in amanner consistent in all material respects with applicable regulations andcontracts, taking into account any waivers or other relief granted to theBorrower by any applicable Foreign Aviation Authorities.

 

(b)           Causeto be done all things reasonably necessary to preserve and keep in full forceand effect its rights in and use of its Foreign Slots. Without in any waylimiting the foregoing, the Borrower shall promptly take all such steps as maybe reasonably necessary now or in the future to maintain, renew and obtain therights, licenses, authorizations or certifications as are necessary to thecontinued and future holding and operation by the Borrower of its ForeignSlots. Notwithstanding the foregoing, the Borrower may cease using any ForeignSlot in the event the Borrower determines in good faith that the preservationof its rights in and/or use of such Foreign Slot is no longer advantageous tothe Borrower in connection with the conduct of its operations utilizing thePacific Routes.  If, at any time, theaggregate number of Disposed Japanese Foreign Slots plus UnavailableJapanese Foreign Slots exceeds 10% of the Base Number of Japanese Foreign Slotsat such time, the Borrower shall immediately notify the Administrative Agent,and, following receipt of such notice, the Administrative Agent may, or at therequest of the Required Lenders, the Administrative Agent shall, require thatthe Borrower deliver to the Administrative Agent an Appraisal of the PoolAssets within 30 days of such request (except that an additional Appraisalshall not be requested, if, within 30 days of the delivery of such certificate,the Borrower is required to deliver an Appraisal pursuant to Section 6.2(f)).

 

6.16         Route Utilization; Route Reporting.a) Utilizethe Pacific Routes in a manner consistent in all material respects with Title49, rules and regulations promulgated thereunder, and applicable foreignlaw, and the applicable rules and regulations of the FAA, DOT and anyapplicable Foreign Aviation Authorities, including, without limitation, anyoperating authorizations, certificates, bilateral authorizations and bilateralagreements with any applicable Foreign Aviation Authorities and contracts withrespect to such Pacific Routes.

 

(b)  Cause to be done all things reasonablynecessary to preserve and keep in full force and effect its material rights inand to use its Pacific Routes. Without in any way limiting the foregoing, theBorrower shall promptly take (i) all such steps as may be reasonablynecessary to obtain renewal of each such Pacific Route authority from the DOTand any applicable Foreign Aviation Authorities, within a reasonable time priorto the expiration of such authority (as prescribed by law or regulation, ifany), and notify the Administrative Agent of the status of such renewal and (ii) allsuch other steps as may be necessary to maintain, renew and obtain SupportingRoute Facilities as needed for the continued and future operations of theBorrower over the Pacific Routes which are now allocated or possessed, or asmay hereafter be allocated or acquired. The Borrower shall further take allactions reasonably necessary or, in the reasonable judgment of AdministrativeAgent, advisable in order to maintain its material rights to use its PacificRoutes (including, without limitation, protecting the Pacific Routes from dormancyor withdrawal by the DOT) and Supporting Route Facilities for the PacificRoutes. The Borrower and any applicable Loan Party shall pay any applicablefiling fees and other expenses related to the submission of applications,renewal requests, and other filings as may be reasonably necessary to maintainor obtain such entity’s rights in the

 

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Pacific Routes and Supporting RouteFacilities for the Pacific Routes.  It isunderstood and agreed that the Borrower may cease using its rights in and/oruse of any Supporting Route Facilities in connection with the Pacific Routes inthe event that the Borrower determines in good faith that the preservation ofits rights in and/or use of such Supporting Route Facilities is no longeradvantageous to the Borrower in connection with the conduct of its operationsutilizing the Pacific Routes.

 

(c)  Subject to any governmental requirement ofconfidentiality, promptly upon receipt thereof, deliver to the AdministrativeAgent copies of (i) each certificate or order issued by the DOT and theapplicable Foreign Aviation Authorities with respect to Pacific Routes, (ii) allmaterial filings made by the Borrower with any Governmental Authority or anyForeign Aviation Authorities related to preserving and maintaining the PacificRoutes and (iii) any notices received from any Person notifying theBorrower or any applicable Loan Party of an event which would have a materialadverse effect upon the Pacific Routes, or the failure to preserve such PacificRoutes as required pursuant to this Section 6.16.

 

(d)  If the number of Flights by the Borrowerduring any fiscal quarter using the Pacific Routes has declined by more than15% from the number of Flights by the Borrower using the Pacific Routes duringthe corresponding quarterly period in the fiscal year ending December 31,2004 (and calculated in the same manner), the Borrower shall immediately notifythe Administrative Agent and, following receipt of such notice, theAdministrative Agent may, or, at the request of the Required Lenders, theAdministrative Agent shall, require that the Borrower deliver to theAdministrative Agent an Appraisal of the Pool Assets within 30 days of suchrequest (except that an additional Appraisal shall not be requested, if, within30 days of the delivery of such certificate, the Borrower is required todeliver an Appraisal pursuant to Section 6.2(f)).

 

# SECTION 7  NEGATIVE COVENANTS

#  

Each of Holdings, NWAC, NWA and the Borrower herebyjointly and severally agree that, so long as the Commitments remain in effect,or any Loan or other amount is owing to any Lender or Agent hereunder, each ofHoldings, NWAC, NWA and the Borrower shall not, and (other than for purposes ofSection 7.4) shall not permit any of its Subsidiaries to, directly orindirectly:

 

7.1           Financial Condition Covenants.  (a)    Cash Liquidity.  Permit Cash Liquidity to be less than$900,000,000 at any time.

 

(b)  ConsolidatedEBITDAR to Consolidated Fixed Charges. (i)  Permit the ratio of Consolidated EBITDAR to ConsolidatedFixed Charges for (A) the nine-month period ended December 31, 2004or (B) the twelve-month period ended March 31, 2005, in each case tobe less than 0.50 to 1.0.

 

#### (ii)           Permitthe ratio of Consolidated EBITDAR to Consolidated Fixed Charges for any periodof four consecutive fiscal quarters (or, if less, the number of full fiscalquarters subsequent to March 31, 2006) ending with any fiscal quarter setforth below to be less than the ratio set forth below opposite such fiscal quarter:

 

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| **Fiscal Quarter(s) Ended** | ** ** | **Consolidated EBITDAR to  Consolidated Fixed Charges** | ** ** |
|-----------------------------|------------|---------------------------------------------------------|------------|
| 6/30/06                     |       | 1.00 to 1.00                                            |       |
| 9/30/06                     |       | 1.05 to 1.00                                            |       |
| 12/31/06                    |       | 1.15 to 1.00                                            |       |
| 3/31/07                     |       | 1.30 to 1.00                                            |       |
| 6/30/07                     |       | 1.45 to 1.00                                            |       |
| 9/30/07 and thereafter      |       | 1.50 to 1.00                                            |       |

 

7.2           Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer toexist any Indebtedness secured by a Lien in excess in the aggregate forHoldings and its Subsidiaries of $1,500,000,000 at any time outstanding except:

 

(a)  Indebtedness of any Loan Party pursuant to any Loan Document;

 

(b)  intercompany Indebtedness among Holdings and itsSubsidiaries;

 

(c)  Indebtedness outstanding on the Original Closing Date andlisted on Schedule 7.2(c) and any refinancings, refundings, renewalsor extensions thereof but only to the extent that such refinancing, refunding,renewal or extension does not increase the principal amount of suchIndebtedness outstanding immediately prior to such refinancing, refinancings,renewal or extensions (except to the extent that such increase is permittedunder the $1,500,000,000 limitation set forth above in this Section) and thatthe Lien securing such Indebtedness is not spread to cover any additionalproperties;

 

(d)  Indebtedness (including industrial revenue bonds) in respectof tax-exempt government sponsored financings relating to the acquisition,leasing or improvement of property in connection with its business and anyrefinancing, refunding, renewal or extension thereof but only to the extentthat such refinancing, refunding, renewal or extension does not increase theprincipal amount of such Indebtedness outstanding immediately prior to suchrefinancing, refunding, renewal or extension (except to the extent suchincrease is permitted under the $1,500,000,000 limitation set forth above inthis Section) and that the Lien securing any such Indebtedness shall only coverthe property financed thereby;

 

(e)  Indebtedness of Holdings or any of its Subsidiaries incurredin connection with (i) the acquisition of aircraft (including Indebtednesssecured by aircraft purchase agreements) so long as such Indebtedness isincurred not later than 18 months after the acquisition thereof and (ii) theacquisition of other assets so long as such Indebtedness is incurred not laterthan 120 days after the acquisition thereof and any refinancing, refunding,renewal or extension thereof but only to the extent that such refinancing,refunding, renewal or extension does not increase the principal amount of suchIndebtedness outstanding immediately prior to such refinancing, refunding,renewal or extension (except to the extent such increase is permitted under the$1,500,000,000 limitation set forth above in this Section), and that the Lien securingany such Indebtedness shall only cover the property financed thereby;

 

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

 

(g)  the Pari Passu Obligations; and

 

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(h)  Indebtedness outstanding under any Replacement Facility, providedthat the maturity of such Replacement Facility (the “Replacement FacilityMaturity Date”) shall be on a date that is after the Tranche B TerminationDate and such Replacement Facility Maturity Date shall not be amended to anydate other than a date that is after the Tranche B Termination Date.

 

7.3           Liens. Create, incur, assume or suffer to exist any Lien upon or in respect ofany Pool Assets or any Supporting Route Facilities or any proceeds or income inrespect thereof, whether now owned or hereafter acquired, except for (Liensdescribed below are herein referred to as “Permitted Liens”):

 

(a)  inchoate Liens for taxes not yet due or Liens for taxes beingcontested in good faith and by appropriate proceedings for which adequatereserves (in the good faith judgment of the management of the Borrower) havebeen established in accordance with GAAP;

 

(b)  Liens (other than any Lien imposed by ERISA) in respect ofthe Pool Assets or any Supporting Route Facilities imposed by law which wereincurred in the ordinary course of business and which have not arisen to secureIndebtedness for borrowed money, such as carriers’, warehousemen’s andmechanics’ Liens, statutory landlord’s Liens, and other similar Liens andgovernmental charges arising in the ordinary course of business, and whicheither (x) do not in the aggregate materially detract from the value of any ofthe Pool Assets or any material portion of the Supporting Route Facilities, asthe case may be, or materially impair the use thereof in the operation of thebusiness of the Borrower or any of its Subsidiaries or (y) are being contestedin good faith by appropriate proceedings, which proceedings have the effect ofpreventing the forfeiture or sale of the property or asset subject to suchLien;

 

(c)  Liens (where there has been no execution or levy and nopledge or delivery of Pool Assets or any material portion of the SupportingRoute Facilities as security therefor) arising out of judgments or awardsagainst the Borrower or any of its Subsidiaries with respect to which an appealor proceeding for review is being prosecuted in good faith and which judgmentor award shall be vacated, discharged, satisfied or stayed or bonded pendingappeal within 60 days from the entry thereof;

 

(d)  Liens created pursuant to the Security Documents;

 

(e)  Liens securing the Pari Passu Obligations;

 

(f)  other Liens on the Collateral, including Liens securing anyReplacement Facility permitted pursuant to Section 7.2(h); providedthat prior to the creation of any such Liens, the Intercreditor Agreement shallbe amended in a manner reasonably satisfactory to the Administrative Agent andshall provide that such Liens shall be junior and subordinate to the Liens infavor of the Administrative Agent created pursuant to the Security Documentsand shall be subject to the terms and conditions in the Intercreditor Agreementapplicable to the Junior Lien and the PBGC Lien (as such terms are defined inthe Intercreditor Agreement); and

 

(g)  (i) any Liens or other interests of any airport orairport authority on any Supporting Route Facilities arising out of theBorrower’s use of such Supporting Route Facilities and (ii) any Liens onany Supporting Route Facilities outside the United States

 

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imposed by anyGovernmental Authority outside the United States so long as the Borrower iscontesting the imposition of such Lien in good faith by appropriate proceedingsto the extent that such a contest is permitted and the Borrower is disputingthe imposition of such Lien.

 

7.4           Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), or Dispose ofall or substantially all of its property or business, except that, so long as(x) no Default or Event of Default exists, or would result therefrom, and (y)after giving pro forma effect to any such transaction, the Loan Parties wouldbe in compliance with Section 7.1 of this Agreement as of the mostrecently ended fiscal quarter and the Borrower shall have delivered acertificate of a Responsible Officer to the Administrative Agent setting forthin reasonable detail the calculations required to determine such compliance,any Loan Party may merge or consolidate with, or sell or Dispose of all orsubstantially all of its assets to, any Person, provided that (i) inthe case of any merger or consolidation, the surviving corporation shall besuch Loan Party or (ii) the surviving corporation, if not such Loan Party(or the successor corporation, in the case of a Disposition of all orsubstantially all of a Loan Party’s assets), (A) is a corporationorganized and existing under the laws of the United States of America or anyState thereof, (B) executes and delivers agreements assuming theobligations of such Loan Party under this Agreement and the other LoanDocuments, which assumption agreements and all related actions anddocumentation shall be in form and substance reasonably satisfactory to theAdministrative Agent, and (C) delivers to the Administrative Agent acertificate signed by a Responsible Officer of such Loan Party and an opinionof counsel to such Person satisfactory to the Administrative Agent, eachstating that such transaction and such assumption agreement comply with this Section andthat all conditions precedent herein provided for relating to such transactionhave been complied with.

 

7.5           Disposition of Pool Assets.  (a) Convey, sell, lease, transfer or otherwise dispose of (whether voluntarily orinvoluntarily (it being understood that loss of property due to theft,destruction, confiscation, prohibition on use or similar event shall constitutea disposal for purposes of this covenant)), or remove or substitute, any PoolAssets or take any action that could materially diminish the fair market valueof the Pool Assets taken as a whole, or agree to do any of the foregoing at anyfuture time, except that:

 

#### (i)            so long as no Default or Event ofDefault exists, the Borrower may replace an aircraft included in the Collateralwith another aircraft of the Borrower (and Schedule 7.5 shall be modifiedto reflect such replacement), provided that (A) such replacementshall be made on a dollar-for-dollar basis based upon (x) in the case of theaircraft being removed, the Appraised Value of such aircraft (as determined bythe most recently delivered Appraisal with respect to such aircraft), and (y)in the case of the aircraft being added to the Collateral, the Appraised Valueof such aircraft (as determined by an Appraisal performed at the time of suchreplacement) and (B) prior to effecting the replacement, the Borrowershall have delivered a certificate of a Responsible Officer of the Borrowercertifying compliance with this Section and attaching to such certificateall Appraisals not previously delivered to the Lenders;

####  

#### (ii)           so long as no Default or Event ofDefault exists, or would result therefrom, the Borrower may remove any Airframeor Engine (as such terms are defined in the Aircraft Mortgage Agreement) fromthe Collateral (and Schedule 7.5 shall be modified to reflect suchremoval), provided that (A) either (I) after giving effect to suchremoval, the Appraised Value of the remaining Pool Assets (as determined by themost recently delivered

 

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#### Appraisal of all Pool Assets) shallsatisfy the Coverage Test or (II) the Borrower shall prepay Loans in accordancewith Section 3.2 and the Pari Passu Obligations to the extent necessary tocomply with the Coverage Test (with any such prepayment of Loans being in anaggregate amount at least equal to the Allocable Prepayment Percentage of theaggregate amount of such prepayments so required) and (B) prior toeffecting the removal, the Borrower shall have delivered a certificate of anAuthorized Officer of the Borrower certifying that, and providing calculations demonstratingthat, after giving effect to such removal, the Appraised Value of the PoolAssets shall satisfy the Coverage Test, and otherwise certifying compliancewith this Section 7.5;

####  

#### (iii)          in the event of an involuntarydisposal of any Pool Assets (including, without limitation, in the case of anAirframe or Engine (as such terms are defined in the Aircraft MortgageAgreement), an Event of Loss (as defined in the Aircraft Mortgage Agreement)for such Airframe or Engine) (whether by loss of property due to theft,destruction, confiscation, prohibition or use, any similar event or otherwise),the Borrower shall, unless the Borrower is entitled to exercise and exercisesits right to remove any Airframe or Engine which is the subject of suchinvoluntary disposal pursuant to Section 7.5(a)(ii), within 30 days afterthe date of such involuntary disposal (A) either (I) in the event thatsuch Pool Assets subject to such involuntary disposal is an Airframe or Engine,cause to be subjected to the Lien of the Aircraft Mortgage Agreement aReplacement Airframe (together with the same number of Replacement Engines asthe number of Engines, if any, installed on such Airframe at the time suchinvoluntary disposal occurred) or Replacement Engine, all in accordance with therequirements of the Aircraft Mortgage Agreement, or (II) in the event that suchPool Asset subject to such involuntary disposal is Route Collateral, then causeto be subjected to the Lien of the Route Security Agreement a ReplacementRoute, such Replacement Route to be free and clear of all Liens exceptPermitted Liens and to have a value, utility and remaining useful life at leastequal to such Route Collateral so replaced as of the date of such involuntarydisposal or (B) reduce the aggregate outstanding principal amount of theLoans to an amount which shall equal or exceed the Allocable PrepaymentPercentage of the Appraised Value of the Pool Asset subject to such involuntarydisposal, in accordance with Section 3.2; and

####  

#### (iv)          in the event that an Appraisalfurnished pursuant to Section 6.2(f), Section 6.15(b) or Section 6.16(d) disclosesthat the Coverage Test is not satisfied, the Borrower shall within 30 daysafter the date of such Appraisal (A) designate additional assets as PoolAssets to the extent that, after giving effect to such designation, the TotalAppraised Value based on the most recently delivered Appraisals with respect toassets already constituting Pool Assets and based on an Appraisal performed atthe time of such addition with respect to assets being added to Pool Assets(and Schedule 7.5 shall be modified to reflect such addition), shallsatisfy the Coverage Test, provided that (1) at the time of suchaddition, the Lenders shall have received a certificate of a ResponsibleOfficer of the Borrower certifying that the conditions set forth in this Section shallhave been satisfied after giving effect to such addition and attaching theretoany Appraisals not previously delivered to the Lenders and (2) the assetbeing added shall constitute a Pacific Route or a Stage III Aircraft or (B) reducethe aggregate outstanding principal amount of the Loans in accordance with Section 3.2and reduce Pari Passu Commitments and/or prepay Pari Passu Obligations to theextent necessary to satisfy the Coverage Test.

 

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(b) Directly or indirectly create or otherwise cause or suffer to exist or becomeeffective any encumbrance or restriction on the ability of the Borrower tocreate, incur, assume or suffer to exist any Lien on any Pool Assets or anySupporting Route Facilities (other than (i) any encumbrances orrestrictions imposed by any airport or airport authority on any SupportingRoute Facilities arising out of the Borrower’s use of such Supporting RouteFacilities and (ii) any encumbrances or restrictions on any SupportingRoute Facilities outside the United States imposed by a Governmental Authorityoutside the United States so long as the Borrower is contesting the impositionof such encumbrances and restrictions in good faith by appropriate proceedingsto the extent that such a contest is permitted and the Borrower is disputingthe imposition of such encumbrances and restrictions).

 

(c)  Fail tocause the Collateral to include, with respect to each airframe includedtherein, a sufficient number of appropriate aircraft engines to operate suchairframe as an aircraft.

 

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

 

(a)  any Subsidiary of Holdings may make Restricted Payments toHoldings or any Subsidiary of Holdings;

 

(b)  Holdings or any of its Subsidiaries may repurchase or redeemits Capital Stock solely through the issuance of additional shares of itsCapital Stock which is of the same or a junior class of such Capital Stockbeing repurchased or redeemed; and

 

(c)  so long as no Default or Event of Default shall have occurredand be continuing or would result therefrom, Holdings may make requireddividend and redemption payments in respect of its outstanding Series CPreferred Stock pursuant to the Certificate of Designations for the Series CPreferred Stock as in effect on the Original Closing Date.

 

7.7           Transactions with Affiliates. Enter into any transaction or series of related transactions with anyAffiliate of any Loan Party or any of their respective Subsidiaries, other thanon terms and conditions substantially as favorable to such Loan Party or suchSubsidiary as would reasonably be obtained by such Loan Party or suchsubsidiary at that time in a comparable arm’s-length transaction with a Personother than an Affiliate, provided that the foregoing restrictions shallnot apply to (a) customary fees paid to members of the Board of Directors(in their capacity as such) of Holdings and its Subsidiaries and (b) RestrictedPayments permitted by Section 7.6.

 

7.8           Lines of Business.  Makeany material change in the lines of business in which it is engaged as of theOriginal Closing Date.

 

7.9           ERISA.  Noneof the Loan Parties will, or will permit any of their respective Subsidiariesor its ERISA Affiliates to:

 

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

 

(b) permit to exist any accumulated funding deficiency, for which a waiver has notbeen obtained from the Internal Revenue Service, with respect to any PensionPlan in an aggregate amount greater than $5,000,000; or

 

(c) permit to exist any failure to make contributions or any unfunded benefitsliability which creates, or with the passage of time would create, a statutorylien or requirement to provide security under ERISA or the Code in favor of thePBGC or any Pension Plan, Multiemployer Plan or other entity in an aggregateamount in excess of $5,000,000.

 

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

 

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

 

(b)  investments in cash, cash equivalents and short terminvestments; and

 

(c)  other Investments in an aggregate principal amount notexceeding $250,000,000 at any time, provided that after giving effect toany such Investment, no Default or Event of Default shall have occurred and becontinuing.

 

7.11         Acquisitions.  Makeany Acquisition (excluding any Acquisition permitted as an Investment under Section 7.10)unless, after giving effect to any such Acquisition, Cash Liquidity is at least$1,500,000,000 and no Default or Event of Default shall have occurred and becontinuing.

 

# SECTION 8  EVENTS OF DEFAULT

#  

If any of the following events shall occur and becontinuing:

 

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

 

(b)  anyrepresentation or warranty made or deemed made by any Loan Party herein or inany other Loan Document or that is contained in any certificate furnished by itat any time under or in connection with this Agreement or any such other LoanDocument shall prove to have been inaccurate in any material respect on or asof the date made or deemed made, and such default shall continue unremedied fora period of 30 days after written notice to the Borrower by the AdministrativeAgent or the Required Lenders; or

 

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(c)  anyLoan Party shall default in the observance or performance of any agreementcontained in Sections 6.15(b), 6.16(d), 7.3 (other than any Default resultingfrom a nonconsensual Lien), 7.4, 7.5 or 7.6; or

 

(d)  anyLoan Party shall default in the observance or performance of any otheragreement contained in this Agreement or any other Loan Document (other than asprovided in paragraphs (a) through (c) of this Section), and suchdefault shall continue unremedied for a period of 30 days (or 15 days in thecase of Section 7.1) after notice to the Borrower from the AdministrativeAgent or the Required Lenders; or

 

(e)  (i) Holdings or any of its Subsidiaries shall (x)default in making any payment of any Indebtedness (excluding the Obligations)which default is in excess of $10,000,000 beyond the period of grace, if any,provided in the instrument or agreement under which such Indebtedness wascreated; or (y) default in the observance or performance of any other agreementor condition relating to any Indebtedness (excluding the Obligations) if suchIndebtedness is in excess of $25,000,000 in the case of any one issue ofIndebtedness or in excess of $50,000,000 in the case of all such Indebtednesswhen aggregated with all Lease claims described in clause (iii)(y) or containedin any instrument or agreement evidencing, securing or relating thereto, or anyother event shall occur or condition exist, the effect of which default orother event or condition is to cause, or to permit the holder or holders ofsuch Indebtedness (or a trustee or agent on behalf of such holder or holders) tocause, any such Indebtedness to become due prior to its stated maturity; or (ii) anyIndebtedness (other than the Obligations), individually in excess of$25,000,000, or in the aggregate in excess of $50,000,000 (when aggregated withall Lease claims described in clause (iii)(y)), of any Loan Party or any of itsSubsidiaries shall be declared to be due and payable, or required to be prepaidother than by a regularly scheduled required prepayment, prior to the statedmaturity thereof; or (iii) any Loan Party or any of its Subsidiaries shalldefault in the observance or performance of any agreement or condition relatingto any Lease if (x) the default is with respect to any payment in excess of$10,000,000 beyond the period of grace (not to exceed 10 days), if any,provided in the Lease or (y) the effect of such default is to give the lessorpursuant to such Lease a claim against any Loan Party (after deducting fromsuch claim the value of the property subject to such Lease) in excess of$25,000,000 in the case of any one Lease or in excess of $50,000,000 in thecase of all Leases and all Indebtedness described in clause (i)(y) or (ii) ofthis Section, or

 

(f)  (i) any Loan Party or any of its Significant Subsidiaries shall commence any case,proceeding or other action (A) under any existing or future law of anyjurisdiction, domestic or foreign, relating to bankruptcy, insolvency,reorganization or relief of debtors, seeking to have an order for reliefentered with respect to it, or seeking to adjudicate it a bankrupt orinsolvent, or seeking reorganization, arrangement, adjustment, winding-up,liquidation, dissolution, composition or other relief with respect to it or itsdebts, or (B) seeking appointment of a receiver, trustee, conservator,custodian or other similar official for all or substantially all of its assets,or any Loan Party or any of its Significant Subsidiaries shall make a generalassignment for the benefit of its creditors; or (ii) there shall becommenced against any Loan Party or any of its Significant Subsidiaries anycase, proceeding or other action of a nature referred to in clause (i) abovethat (A) results in the entry of an order for relief or any suchadjudication or appointment or (B) remains undismissed, undischarged andunbonded for a period of 60 days; or (iii) there shall be commencedagainst any Loan Party or any of its Significant Subsidiaries any case,proceeding or other action seeking issuance of a warrant of attachment,execution, distraint or similar process against all or substantially all of itsassets that results in the entry of an order for any such relief that shall nothave been vacated, discharged, stayed or bonded pending appeal within 60 daysfrom the entry thereof; or

 

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(iv) any Loan Party or anyof its Significant Subsidiaries shall take any action in furtherance of, orindicating its consent to, approval of, or acquiescence in, any of the acts setforth in clause (i), (ii), or (iii) above; or (v) any Loan Party or anyof its Significant Subsidiaries shall generally not, or shall be unable to, orshall admit in writing its inability to, pay its debts as they become due; or

 

(g)  ERISA.  (i)  any “reportable event” as describedin Section 4043 of ERISA or the regulations thereunder (excluding thoseevents for which the requirement for notice has been waived by the PBGC), orany other event or condition, which the Required Lenders determine constitutesreasonable grounds under Section 4042 of ERISA for the termination of anyPension Plan by the PBGC or for the appointment by the appropriate UnitedStates District Court of a trustee to administer or liquidate any Pension Planshall have occurred; or

 

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

 

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

 

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

 

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

 

(vi) any Pension Plan shall fail to satisfy theminimum funding standard required for any plan year or part thereof unless awaiver of such standard or extension of any amortization period is grantedunder Section 412 of the Code; or

 

(vii) a contribution required to be made to aPension Plan or a Multiemployer Plan has not been timely made; or

 

(vii) any Loan Party or any Subsidiary ofHoldings or any ERISA Affiliate has incurred or is likely to incur a liabilityto or on account of a Plan under Section 502(i), or 502(l) of ERISA or Section 4975of the Code; or

 

(ix) any Loan Party or any Subsidiary of anyLoan Party has incurred or is likely to incur liabilities pursuant to one ormore employee welfare benefit plans (as defined in Section 3(1) ofERISA) that provide benefits to retired employees or other former employees(other than as required by Section 601 of ERISA) or employee pensionbenefit plans (as defined in Section 3(2) of ERISA) other thanPension Plans;

 

ifas of the date thereof or any subsequent date, the sum of each Loan Party’s andits ERISA Affiliates’ various liabilities (such liabilities to include, withoutlimitation, any liability to the PBGC or to any other party under Section 4062,4063 or 4064 of ERISA with respect to any Pension Plan, or to any MultiemployerPlan under Section 4201 etseq. of ERISA, and to becalculated after giving effect to the tax consequences thereof) as a result ofsuch events listed in subclauses (i) through (ix) above exceeds$100,000,000; or

 

(h)  oneor more judgments or decrees shall be entered against any Loan Party or any ofits Subsidiaries involving a liability of $25,000,000 or more in the case ofany one such judgment

 

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or decree or $50,000,000 ormore in the aggregate for all such judgments and decrees (in each case to theextent not paid or fully covered by insurance provided by a carrier that hasacknowledged coverage) and any such judgments or decrees shall not have beenvacated, discharged, satisfied or stayed or bonded pending appeal within 60days from the entry thereof; or

 

(i)  theguarantee contained in Section 9 shall cease, for any reason, to be infull force and effect or any Loan Party or any Affiliate of any Loan Partyshall so assert; or

 

(j)  any of the Security Documents shall cease,for any reason, to be in full force and effect, or any Loan Party, anyAffiliate of any Loan Party or any party to the Intercreditor Agreement shallso assert, or any Lien created by any of the Security Documents shall cease tobe enforceable and of the same effect and priority purported to be createdthereby or any Loan Party shall assert in writing the invalidity,unenforceability or lack of priority of such Liens; or

 

(k)  the number of Flights by the Borrowerduring any fiscal quarter using the Pacific Routes declines by more than 25%from the number of Flights by the Borrower using the Pacific Routes during thecorresponding quarterly period in the fiscal year ending December 31, 2004(and calculated in the same manner); or

 

(l)  the aggregate number of DisposedJapanese Foreign Slots plus Unavailable Japanese Foreign Slots shallexceed 15% of the Base Number of Japanese Foreign Slots;

 

then,and in any such event, (A) if such event is an Event of Default specifiedin clause (i) or (ii) of paragraph (f) above with respect to theBorrower, automatically the Commitments shall immediately terminate and theLoans hereunder (with accrued interest thereon) and all other amounts owingunder this Agreement and the other Loan Documents shall immediately become dueand payable, as the case may be, and (B) if such event is any other Eventof Default, with the consent of the Required Lenders, the Administrative Agentmay, or upon the request of the Required Lenders, the Administrative Agentshall, by notice to the Borrower declare the Commitments to be terminatedforthwith, and the Loans hereunder (with accrued interest thereon) and allother amounts owing under this Agreement or any other Loan Document to be dueand payable forthwith, whereupon the same shall immediately terminate andbecome due and payable, as the case may be. Except as expressly provided above in this Section, presentment, demand,protest and all other notices of any kind are hereby expressly waived by theBorrower.

 

# SECTION 9  GUARANTY

#  

9.1           The Guaranty.  Inorder to induce the Lenders to enter into this Agreement and to extend credithereunder and in recognition of the direct benefits to be received by theGuarantors from the proceeds of the Loans, each Guarantor hereby jointly andseverally agrees with the Agents and the Lenders as follows:  each Guarantor hereby jointly and severally,unconditionally and irrevocably guarantees as primary obligor and not merely assurety the full and prompt payment and performance when due, whether upon maturity,by acceleration or otherwise, of the Obligations to each of the Lenders andeach of the Agents.  If any or all of theObligations of the Borrower to the Lenders or the Agents becomes due andpayable hereunder, each Guarantor unconditionally promises on a joint andseveral basis to pay such Obligations to the Lenders or the Agents, as the casemay be, or order, on demand, together with any and all expenses which may beincurred by the Agents or the Lenders in collecting any of the Obligations.

 

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9.2           Bankruptcy. Additionally, each Guarantor jointly and severally, unconditionally andirrevocably guarantees the payment of any and all Obligations of the Borrowerto each of the Lenders and each of the Agents whether or not due or payable bythe Borrower upon the occurrence in respect to the Borrower of any of theevents specified in Section 8(f), and unconditionally promises to pay suchObligations to each of the Lenders and each of the Agents, or order, on demand,in lawful money of the United States.

 

9.3           Nature of Liability.  Theliability of each Guarantor hereunder is exclusive and independent of anysecurity for or other guaranty of the Obligations of the Borrower whetherexecuted by each Guarantor, any other guarantor or by any other party, and theliability of each Guarantor hereunder shall not be affected or impaired by (a) anydirection as to application of payment by the Borrower or by any other party,or (b) any other continuing or other guaranty, undertaking or maximumliability of a guarantor or of any other party as to the Obligations of theBorrower, or (c) any payment on or in reduction of any such other guarantyor undertaking, or (d) any dissolution, termination or increase, decreaseor change in personnel by the Borrower, or (e) any payment made to theAgents or the Lenders on the Obligations which such Agents or such Lendersrepay the Borrower or Guarantor (including by depositing the Proceeds with areceiver, intervenor or conservator of, or trustee or similar officer for, theBorrower or Guarantor) pursuant to court order in any bankruptcy,reorganization, arrangement, moratorium or other debtor relief proceeding, andeach Guarantor waives any right to the deferral or modification of its obligationshereunder by reason of any such proceeding.

 

9.4           Independent Obligation.  Theobligations of each Guarantor hereunder are independent of the obligations ofany other Guarantor or the Borrower, and a separate action or actions may bebrought and prosecuted against each Guarantor whether or not action is broughtagainst any other Guarantor or the Borrower and whether or not any otherguarantor or the Borrower be joined in any such action or actions.  Each Guarantor waives, to the fullest extentpermitted by law, the benefit of any statute of limitations affecting itsliability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstances which operate to tollany statute of limitations as to the Borrower shall operate to toll the statuteof limitations as to each Guarantor.

 

9.5           Authorization.  EachGuarantor authorizes the Agents and the Lenders without notice or demand(except as shall be required by applicable statute and which cannot be waived),and without affecting or impairing its liability hereunder, from time to timeto (a) renew, compromise, extend, increase, accelerate or otherwise changethe time for payment of, or otherwise change the terms of, the Obligations orany part thereof in accordance with this Agreement, including any increase ordecrease of the rate of interest thereon, (b) take and hold security fromany Guarantor or any other party for the payment of this guaranty or theObligations and exchange, enforce, waive and release any such security, (c) applysuch security and direct the order or manner of sale thereof as the Agents andthe Lenders in their discretion may determine and (d) release orsubstitute any one or more endorsers, Guarantors, the Borrower or otherobligors.

 

9.6           Reliance.  Itis not necessary for the Agents or the Lenders to inquire into the capacity orpowers of the Borrower or its Subsidiaries or the officers, directors, partnersor agents acting or purporting to act on its behalf, and any Obligations madeor created in reliance upon the professed exercise of such powers shall beguaranteed hereunder.

 

9.7           Subordination.  Anyindebtedness of the Borrower now or hereafter held by any Guarantor is herebysubordinated to the Obligations of the Borrower to the Agents and the

 

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Lenders; and such indebtedness of theBorrower to such Guarantor, if any Agent, after an Event of Default hasoccurred and is continuing, so requests, shall be collected, enforced andreceived by such Guarantor as trustee for the Lenders and be paid over to theLenders and the Agents on account of the Obligations of the Borrower to theLenders and the Agents, but without affecting or impairing in any manner theliability of such Guarantor under the other provisions of this Guaranty.  Prior to the transfer by any Guarantor of anynote or negotiable instrument evidencing any indebtedness of the Borrower tosuch Guarantor, such Guarantor shall mark such note or negotiable instrument witha legend that the same is subject to this subordination.

 

9.8           Waiver.  (a) Each Guarantor waives any right (except as shall required by applicable statuteand which cannot be waived) to require the Agents or the Lenders to (a) proceedagainst the Borrower, any other Guarantor or any other party, (b) proceedagainst or exhaust any security held from the Borrower, any other Guarantor orany other party or (c) pursue any other remedy in the Agents’ or theLenders’ power whatsoever. Each Guarantor waives any defense based on orarising out of any defense of the Borrower, any other Guarantor or any otherparty other than payment in full of the Obligations, including, withoutlimitation, any defense based on or arising out of the disability of theBorrower, any other Guarantor or any other party, or the unenforceability ofthe Obligations or any part thereof from any cause, or the cessation from anycause of the liability of the Borrower other than payment in full of theObligations. The Agents and the Lenders may, at their election, foreclose on anysecurity held by the Agents or the Lenders by one or more judicial ornonjudicial sales (to the extent such sale is permitted by applicable law), orexercise any other right or remedy the Agents and the Lenders may have againstthe Borrower or any other party, or any security, without affecting orimpairing in any way the liability of each Guarantor hereunder except to theextent the Obligations have been paid. Each Guarantor waives any defensearising out of any such election by the Agents and the Lenders, even thoughsuch election operates to impair or extinguish any right of reimbursement orsubrogation or other right or remedy of such Guarantor against the Borrower orany other party or any security. Until all Obligations of the Borrower to theLenders and to the Agents shall have been paid in full, each Guarantor agreesthat it will not exercise any right of subrogation, and waives any right toenforce any remedy which the Agents and the Lenders now have or may hereafterhave against the Borrower, and waives any benefit of, and any right toparticipate in, any security now or hereafter held by the Agents and theLenders.

 

(b)  EachGuarantor waives all presentments, demands for performance, protests andnotices, including, without limitation, notices of nonperformance, notices ofprotest, notices of dishonor, notices of acceptance of this guaranty, andnotices of the existence, creation or incurring of new or additionalObligations.  Each Guarantor assumes allresponsibility for being and keeping itself informed of the Borrower’sfinancial condition and assets, and of all other circumstances bearing upon therisk of nonpayment of the Obligations and the nature, scope and extent of therisks which each Guarantor assumes and incurs hereunder, and agrees that theAgents and the Lenders shall have no duty to advise either Guarantor ofinformation known to them regarding such circumstances or risks.

 

9.9           Limitation on Enforcement.  TheLenders agree that no Lender shall have any right individually to seek to enforceor to enforce this guaranty, it being understood and agreed that such rightsand remedies may be exercised only by the Administrative Agent for the benefitof the Lenders upon the terms of this Agreement.

 

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# SECTION 10  THE AGENTS

#  

10.1         Appointment.  EachLender hereby irrevocably designates and appoints each Agent as the agent ofsuch Lender under this Agreement and the other Loan Documents, and each suchLender irrevocably authorizes each Agent, in such capacity, to take such actionon its behalf under the provisions of this Agreement and the other LoanDocuments and to exercise such powers and perform such duties as are expresslydelegated to such Agent by the terms of this Agreement and the other LoanDocuments, together with such other powers as are reasonably incidentalthereto.  Notwithstanding any provisionto the contrary elsewhere in this Agreement, no Agent shall have any duties orresponsibilities, except those expressly set forth herein, or any fiduciaryrelationship with any Lender, and no implied covenants, functions,responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Loan Document or otherwise exist against any Agent.

 

10.2         Delegation of Duties.  EachAgent may execute any of its duties under this Agreement and the other LoanDocuments by or through agents or attorneys-in-fact and shall be entitled toadvice of counsel concerning all matters pertaining to such duties.  No Agent shall be responsible for thenegligence or misconduct of any agents or attorneys-in-fact selected by it withreasonable care.

 

10.3         Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors,employees, agents, attorneys-in-fact or affiliates shall be (i) liable forany action lawfully taken or omitted to be taken by it or such Person under orin connection with this Agreement or any other Loan Document (except to theextent that any of the foregoing are found by a final and nonappealabledecision of a court of competent jurisdiction to have resulted from its or suchPerson’s own gross negligence or willful misconduct) or (ii) responsiblein any manner to any of the Lenders for any recitals, statements,representations or warranties made by any Loan Party or any officer thereofcontained in this Agreement or any other Loan Document or in any certificate,report, statement or other document referred to or provided for in, or receivedby any Agent under or in connection with, this Agreement or any other LoanDocument or for the value, validity, effectiveness, genuineness, enforceabilityor sufficiency of this Agreement or any other Loan Document or for any failureof any Loan Party a party thereto to perform its obligations hereunder or thereunder.  No Agent shall be under any obligation to anyLender to ascertain or to inquire as to the observance or performance of any ofthe agreements contained in, or conditions of, this Agreement or any other LoanDocument, or to inspect the properties, books or records of any Loan Party.

 

10.4         Reliance by Agents.  EachAgent shall be entitled to rely, and shall be fully protected in relying, uponany instrument, writing, resolution, notice, consent, certificate, affidavit,letter, telecopy, telex or teletype message, statement, order or other documentor conversation believed by it to be genuine and correct and to have beensigned, sent or made by the proper Person or Persons and upon advice andstatements of legal counsel (including counsel to the Loan Parties),independent accountants and other experts selected by the AdministrativeAgent.  Each Agent may deem and treat thepayee of any Note as the owner thereof for all purposes unless a written noticeof assignment, negotiation or transfer thereof shall have been filed with theAdministrative Agent.  Each Agent shallbe fully justified in failing or refusing to take any action under thisAgreement or any other Loan Document unless it shall first receive such adviceor concurrence as it deems appropriate of the requisite Lenders or it shallfirst be indemnified to its satisfaction by the Lenders against any and allliability and expense that may be incurred by it by reason of taking orcontinuing to take any such action.  EachAgent shall in all cases be fully protected in acting, or in refraining fromacting, under this Agreement and the other Loan Documents in accordance with arequest of

 

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the requisite Lenders, and such request andany action taken or failure to act pursuant thereto shall be binding upon allthe Lenders and all future holders of the Loans.

 

10.5         Notice of Default.  NoAgent shall be deemed to have knowledge or notice of the occurrence of anyDefault or Event of Default hereunder unless such Agent has received noticefrom a Lender or a Loan Party referring to this Agreement, describing suchDefault or Event of Default and stating that such notice is a “notice ofdefault”.  In the event that theAdministrative Agent receives such a notice, the Administrative Agent shallgive notice thereof to the Lenders.  TheAdministrative Agent shall take such action with respect to such Default orEvent of Default as shall be reasonably directed by the requisite Lenders, providedthat unless and until the Administrative Agent shall have received suchdirections, the Administrative Agent may (but shall not be obligated to) takesuch action, or refrain from taking such action, with respect to such Defaultor Event of Default as it shall deem advisable in the best interests of theLenders.

 

10.6         Non-Reliance on Agents and OtherLenders.  Each Lender expressly acknowledges thatneither the Agents nor any of their respective officers, directors, employees,agents, attorneys-in-fact or affiliates have made any representations orwarranties to it and that no act by any Agent hereafter taken, including anyreview of the affairs of a Loan Party or any affiliate of a Loan Party, shallbe deemed to constitute any representation or warranty by any Agent to anyLender.  Each Lender represents to theAgents that it has, independently and without reliance upon any Agent or anyother Lender, and based on such documents and information as it has deemedappropriate, made its own appraisal of and investigation into the business, operations,property, financial and other condition and creditworthiness of the LoanParties and their affiliates and made its own decision to make its Loanshereunder and enter into this Agreement. Each Lender also represents that it will, independently and withoutreliance upon any Agent or any other Lender, and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigation asit deems necessary to inform itself as to the business, operations, property,financial and other condition and creditworthiness of the Loan Parties andtheir Affiliates.  Except for notices,reports and other documents expressly required to be furnished to the Lendersby an Agent hereunder, no Agent shall have any duty or responsibility toprovide any Lender with any credit or other information concerning thebusiness, operations, property, condition (financial or otherwise), prospectsor creditworthiness of any Loan Party or any Affiliate of a Loan Party that maycome into the possession of such Agent or any of its officers, directors,employees, agents, attorneys-in-fact or affiliates.

 

10.7         Indemnification.  TheLenders agree to indemnify each Agent in its capacity as such (to the extentnot reimbursed by the Loan Parties and without limiting the obligation of theLoan Parties to do so), ratably according to their respective Aggregate ExposurePercentages in effect on the date on which indemnification is sought under thisSection (or, if indemnification is sought after the date upon which theCommitments shall have terminated and the Loans shall have been paid in full,ratably in accordance with such Aggregate Exposure Percentages immediatelyprior to such date), from and against any and all liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses ordisbursements of any kind whatsoever that may at any time (whether before orafter the payment of the Loans) be imposed on, incurred by or asserted againstsuch Agent in any way relating to or arising out of, the Commitments, thisAgreement, any of the other Loan Documents or any documents contemplated by orreferred to herein or therein or the transactions contemplated hereby orthereby or any action taken or omitted by such Agent under or in connectionwith any of the foregoing; provided that no Lender shall be liable forthe payment of

 

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any portion of such liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses ordisbursements that are found by a final and nonappealable decision of a courtof competent jurisdiction to have resulted from such Agent’s gross negligenceor willful misconduct.  The agreements inthis Section shall survive the payment of the Loans and all other amountspayable hereunder.

 

10.8         Agent in Its Individual Capacity.  EachAgent and its affiliates may make loans to, accept deposits from and generallyengage in any kind of business with any Loan Party as though such Agent werenot an Agent.  With respect to its Loansmade or renewed by it, each Agent shall have the same rights and powers underthis Agreement and the other Loan Documents as any Lender and may exercise thesame as though it were not an Agent, and the terms “Lender” and “Lenders” shallinclude each Agent in its individual capacity.

 

10.9         Successor Administrative Agent.  TheAdministrative Agent may resign as Administrative Agent upon 15 Business Days’notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent, thenthe Required Lenders shall appoint from among the Lenders a successor agent forthe Lenders, which successor agent shall (unless an Event of Default under Section 8(a) or8(f) with respect to the Borrower shall have occurred and be continuing)be subject to approval by the Borrower (which approval shall not beunreasonably withheld or delayed), whereupon such successor agent shall succeedto the rights, powers and duties of the Administrative Agent, and the term “AdministrativeAgent” shall mean such successor agent effective upon such appointment andapproval, and the former Administrative Agent’s rights, powers and duties asAdministrative Agent shall be terminated, without any other or further act ordeed on the part of such former Administrative Agent or any of the parties tothis Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agentby the date that is 10 days following a retiring Administrative Agent’s noticeof resignation, the retiring Administrative Agent’s resignation shallnevertheless thereupon become effective and the Lenders shall assume andperform all of the duties of the Administrative Agent hereunder until suchtime, if any, as the Required Lenders appoint a successor agent as provided forabove.  After any retiring AdministrativeAgent’s resignation as Administrative Agent, the provisions of this Section shallinure to its benefit as to any actions taken or omitted to be taken by it whileit was Administrative Agent under this Agreement and the other Loan Documents.

 

10.10       Other Agents.  NoAgent other than the Administrative Agent and Syndication Agent shall have anyduties or responsibilities hereunder in its capacity as such.

 

# SECTION 11  MISCELLANEOUS

#  

11.1         Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof orthereof may be amended, supplemented or modified except in accordance with theprovisions of this Section.  The RequiredLenders and each Loan Party party to the relevant Loan Document may, or, withthe written consent of the Required Lenders, the Administrative Agent and eachLoan Party party to the relevant Loan Document may, from time to time, (a) enterinto written amendments, supplements or modifications hereto and to the otherLoan Documents or (b) waive, on such terms and conditions as the Required Lendersor the Administrative Agent, as the case may be, may specify in suchinstrument, any of the requirements of this Agreement or the other LoanDocuments or any Default or Event of Default and its consequences; provided,however, that no such waiver and no such amendment, supplement ormodification shall (i) forgive or reduce the principal amount or extendthe final scheduled date of

 

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maturity of any Loan, extend the scheduleddate or reduce the amount of any required amortization payment in respect ofany Loan, reduce the stated rate of any interest or fee payable hereunder(except (x) in connection with the waiver of applicability of any post-defaultincrease in interest rates, which waiver shall be effective with the consent ofthe Majority Facility Lenders of each adversely affected Facility and (y) thatany amendment or modification of defined terms used in the financial covenantsin this Agreement shall not constitute a reduction in the rate of interest orfees for purposes of this clause (i)) or extend the scheduled date of anypayment thereof, or increase the amount or extend the expiration date of anyLender’s Commitment, in each case without the written consent of each Lenderdirectly affected thereby;  (ii) eliminateor reduce the voting rights of any Lender under this Section without thewritten consent of such Lender; (iii) reduce any percentage specified inthe definition of Required Lenders, consent to the assignment or transfer bythe Borrower of any of its rights and obligations under this Agreement and theother Loan Documents, release all or substantially all of the Guarantors fromtheir obligations under Section 9, or release (A) either of the US toJapan or the US to China Routes listed on Schedule 7.5, (B) anysubstantial portion of the Route Collateral, or (C) all or substantiallyall of the Collateral, in each case without the written consent of all Lenders;(iv) amend, modify or waive any provision of Section 3.8 without thewritten consent of the Majority Facility Lenders in respect of each Facilityadversely affected thereby; (v) reduce the percentage specified in thedefinition of Majority Facility Lenders with respect to any Facility withoutthe written consent of all Lenders under such Facility; or (vi) amend,modify or waive any provision of Section 10 without the written consent ofthe Administrative Agent.  Any suchwaiver and any such amendment, supplement or modification shall apply equallyto each of the Lenders and shall be binding upon the Loan Parties, the Lenders,the Agents and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agentsshall be restored to their former position and rights hereunder and under theother Loan Documents, and any Default or Event of Default waived shall bedeemed to be cured and not continuing; but no such waiver shall extend to anysubsequent or other Default or Event of Default, or impair any right consequentthereon.

 

For the avoidance of doubt, this Agreement may beamended (or amended and restated) with the written consent of the RequiredLenders, the Administrative Agent and the Borrower (a) to add one or moreadditional credit facilities to this Agreement and to permit the extensions ofcredit from time to time outstanding thereunder and the accrued interest andfees in respect thereof (collectively, the “Additional Extensions of Credit”)to share ratably in the benefits of this Agreement and the other Loan Documentswith the Loans and the accrued interest and fees in respect thereof and (b) toinclude appropriately the Lenders holding such credit facilities in anydetermination of the Required Lenders and Majority Facility Lenders.  If, in connection with any proposed waiver,amendment, supplement or modification to any of the provisions of thisAgreement as contemplated by this Section, the consent of the Required Lendersis obtained but the consent of one or more of such other Lenders whose consentis required is not obtained, then the Borrower shall have the right, so long aseach non-consenting Lender whose individual consent is required is treated asdescribed in either clause (A) or (B) below, to either (A) replacesuch non-consenting Lender with one or more Replacement Lenders pursuant to Section 3.13so long as at the time of such replacement, each such Replacement Lenderconsents to the proposed waiver, amendment, supplement or modification or (B) repayin full all of such non-consenting Lender’s outstanding Loans and all otherObligations owing to such Lender, and at such time such Lender shall no longerconstitute a “Lender” for purposes of this Agreement.

 

11.2         Notices.  (a) Exceptas otherwise provided herein, all notices, requests and demands to or upon therespective parties hereto to be effective shall be in writing (including by

 

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telecopy), and all such notices, requests anddemands shall be effective when received, addressed as follows in the case ofthe Loan Parties and the Administrative Agent, and as set forth in anadministrative questionnaire delivered to the Administrative Agent in the caseof the Lenders, or to such other address as may be hereafter notified by therespective parties hereto:

 

 
| Loan Parties:             |   | 2700 Lone Oak Parkway      |
|---------------------------|--------|----------------------------|
|                      |   | Eagan, MN 55121            |
|                      |   | Tel: (612) 726-2274        |
|                      |   | Fax: (612) 726-0665        |
|                      |   | Attn:                      | Daniel B. Matthews |
|                      |   |                       | Senior Vice President |
|                      |   |                       | and Treasurer |
|                      |   |                       |
|                      |   |                       |
| The Administrative Agent: |   | JPMorgan Chase Bank, N.A.  |
|                      |   | 1111 Fannin 10th Floor     |
|                      |   | Houston, TX 77002          |
|                      |   | Attention: Khuyen Ta       |
|                      |   | Telecopy: 713-750-2938     |
|                      |   | Telephone: 713-750-3780    |
|                      |   |                       |
|                      |   |                       |
| with a copy to:           |   | JPMorgan Chase Bank, N.A.  |
|                      |   | 277 Park Avenue            |
|                      |   | New York, NY 10017         |
|                      |   | Attention: Donald Shokrian |
|                      |   | Telecopy: 646-534-0574     |
|                      |   | Telephone: 212-622-2166    |

 

(b) Notices and other communications to theLenders hereunder may be delivered or furnished by electronic communicationspursuant to procedures approved by the Administrative Agent.  The Administrative Agent or the Borrower may,in its discretion, agree to accept notices and other communications to ithereunder by electronic communications pursuant to procedures approved by it; providedthat approval of such procedures may be limited to particular notices orcommunications.

 

11.3         No Waiver; Cumulative Remedies.  Nofailure to exercise and no delay in exercising, on the part of any Agent or anyLender, any right, remedy, power or privilege hereunder or under the other LoanDocuments shall operate as a waiver thereof; nor shall any single or partialexercise of any right, remedy, power or privilege hereunder preclude any otheror further exercise thereof or the exercise of any other right, remedy, poweror privilege.  The rights, remedies,powers and privileges herein provided are cumulative and not exclusive of anyrights, remedies, powers and privileges provided by law.

 

11.4         Survival of Representations andWarranties.  All representations and warranties madehereunder, in the other Loan Documents and in any document, certificate orstatement delivered pursuant hereto or in connection herewith shall survive theexecution and delivery of this Agreement and the making of the Loans and otherextensions of credit hereunder.

 

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11.5         Payment of Expenses and Taxes.  The Borroweragrees (a) to pay or reimburse each of the Administrative Agent, and theJoint Lead Arrangers for all their reasonable and adequately documented out-of-pocketcosts and expenses incurred in connection with the development, preparation andexecution of, and of any amendment, supplement or modification to, thisAgreement and the other Loan Documents and any other documents prepared inconnection herewith or therewith, including the reasonable and adequatelydocumented fees and disbursements of Simpson Thacher & Bartlett LLP,outside counsel to the Administrative Agent and filing and recording fees andexpenses, with statements with respect to the foregoing to be submitted to theBorrower prior to the Second Amendment and Restatement Closing Date (in thecase of amounts to be paid on the Second Amendment and Restatement ClosingDate) and from time to time thereafter on a quarterly basis (b) to pay orreimburse each Lender and Agent for all its reasonable and adequatelydocumented costs and expenses incurred in connection with the enforcement orpreservation of any rights under this Agreement, the other Loan Documents andany such other documents, including the reasonable and adequately documentedfees and disbursements of counsel (including the reasonable allocated fees andexpenses of in-house counsel) to each Lender and of counsel to theAdministrative Agent, (c) to pay, indemnify, and hold each Lender andAgent harmless from, any and all recording and filing fees and any and allliabilities with respect to, or resulting from any delay in paying, stamp,excise and other taxes, if any, that may be payable or determined to be payablein connection with the execution and delivery of, or any amendment, supplementor modification of, or any waiver or consent under or in respect of, thisAgreement, the other Loan Documents and any such other documents, and (d) toindemnify each Agent, each Lender and each of their respective affiliates, andeach of their respective officers, directors, employees, representatives,trustees, advisors and agents from and hold each of them harmless against anyand all liabilities, obligations, losses, damages, penalties, claims, actions,judgments, suits, costs, expenses and disbursements (including reasonable andadequately documented attorney’s and consultant’s fees and disbursements)incurred by, imposed on or assessed against any of them as a result of, orarising out of, or in any way related to, or by reason of, any investigation,litigation or other proceeding (whether or not any Agent or any Lender is aparty thereto) related to the entering into and/or performance of thisAgreement or any other Loan Document or the actual or proposed use of theproceeds of any Loans hereunder or the consummation of any transactionscontemplated therein or in any other Loan document or the exercise of any oftheir rights or remedies provided herein or in any other Loan Document,including the reasonable and adequately documented fees and disbursements ofcounsel and other consultants incurred in connection with any suchinvestigation, litigation, or other proceeding (but excluding any liabilities,obligations, losses, damages, penalties, claims, actions, judgments, suits,costs, expenses and disbursements to the extent arising or incurred by reasonof (x) a violation of laws or governmental regulations pertaining to lending bythe Person to be indemnified (or the Agent or Bank of which such Person is anofficer, director, employee, representative or agent); provided that thePerson to be indemnified shall, in all events, be entitled to theindemnification set forth in Sections 3.9, 3.10 and 3.11) or (y) the grossnegligence or willful misconduct of the Person to be indemnified).  To the extent that the undertaking toindemnify, pay or hold harmless any Person set forth in the preceding sentencemay be unenforceable because it is violative of any law or public policy, theBorrower shall make the maximum contribution to the payment and satisfaction ofeach of the indemnified liabilities which is permissible under applicablelaw.  The agreements in this Section 11.5shall survive repayment of the Loans and all other amounts payable hereunder.

 

11.6         Successors and Assigns;Participations and Assignments.  (a)  This Agreement shallbe binding upon and inure to the benefit of the Loan Parties, the Lenders, theAdministrative Agent, all future holders of the Loans and their respectivesuccessors and assigns,

 

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except that the Borrower may not assign ortransfer any of its rights or obligations under this Agreement without theprior written consent of each Lender.

 

(b)  AnyLender may, in accordance with applicable law, at any time sell to one or morebanks, financial institutions or other entities (each, a “Participant”)participating interests in any Loan owing to such Lender, any Commitment ofsuch Lender or any other interest of such Lender hereunder and under the otherLoan Documents.  In the event of any suchsale by a Lender of a participating interest to a Participant, such Lender’sobligations under this Agreement to the other parties to this Agreement shallremain unchanged, such Lender shall remain solely responsible for theperformance thereof, such Lender shall remain the holder of any such Loan forall purposes under this Agreement and the other Loan Documents, and theBorrower and the Administrative Agent 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.  In no event shall any Participant under anysuch participation have any right to approve any amendment or waiver of anyprovision of any Loan Document, or any consent to any departure by any LoanParty therefrom, except to the extent that such amendment, waiver or consentwould reduce the principal of, or interest on, the Loans or any fees payablehereunder, or postpone the date of the final maturity of the Loans, in eachcase to the extent subject to such participation.  The Borrower agrees that if amountsoutstanding under this Agreement and the Loans are due or unpaid, or shall havebeen declared or shall have become due and payable upon the occurrence of anEvent of Default, each Participant shall, to the maximum extent permitted byapplicable law, be deemed to have the right of setoff in respect of itsparticipating interest in amounts owing under this Agreement to the same extentas if the amount of its participating interest were owing directly to it as aLender under this Agreement, provided that, in purchasing suchparticipating interest, such Participant shall be deemed to have agreed toshare with the Lenders the proceeds thereof as provided in Section 11.7(a) asfully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to thebenefits of Sections 3.9, 3.10 and 3.11 with respect to its participation inthe Commitments and the Loans outstanding from time to time as if it was aLender; provided that, in the case of Section 3.10, suchParticipant shall have complied with the requirements of said Section and provided,further, that no Participant shall be entitled to receive any greateramount pursuant to any such Section than the transferor Lender would havebeen entitled to receive in respect of the amount of the participationtransferred by such transferor Lender to such Participant had no such transferoccurred.

 

(c)  AnyLender (an “Assignor”) may, in accordance with applicable law, at anytime and from time to time upon notice to the Borrower and the AdministrativeAgent assign to any Lender, any affiliate of any Lender or to an EligibleTransferee (an “Assignee”) all or any part of its rights and obligationsunder this Agreement and the other Loan Documents pursuant to an Assignment andAcceptance, executed by such Assignee, such Assignor and any other Person whoseconsent is required pursuant to this paragraph, and delivered to theAdministrative Agent for its acceptance and recording in the Register; providedthat no such assignment to an Assignee (other than any Lender or any affiliateof a Lender) shall be in an aggregate principal amount of less than $2,000,000(or an integral multiple of $1,000,000 in excess thereof) (other than in thecase of an assignment of all of a Lender’s interests under this Agreement),unless otherwise agreed by the Borrower and the Administrative Agent.  For purposes of the proviso contained in thepreceding sentence, the amount described therein shall be aggregated in respectof each Lender and each Lender’s Affiliates, if any.  Any such assignment need not be ratable asamong the Facilities.  Upon suchexecution, delivery, acceptance and recording, from and after the effective datedetermined pursuant to such Assignment and Acceptance, (x) the Assigneethereunder shall be a party hereto and, to the extent provided in suchAssignment and Acceptance, have the rights and obligations of a

 

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Lender hereunder with Loans asset forth therein, and (y) the Assignor thereunder shall, to the extentprovided in such Assignment and Acceptance, be released from its obligationsunder this Agreement (and, in the case of an Assignment and Acceptance coveringall of an Assignor’s rights and obligations under this Agreement, such Assignorshall cease to be a party hereto).

 

(d)  TheAdministrative Agent shall, on behalf of the Borrower, maintain at its addressreferred to in Section 11.2 a copy of each Assignment and Acceptancedelivered to it and a register (the “Register”) for the recordation ofthe names and addresses of the Lenders and the Commitment of, and the principalamount of the Loans owing to, each Lender from time to time.  The entries in the Register shall beconclusive, in the absence of manifest error, and the Borrower, each other LoanParty, the Administrative Agent and the Lenders shall treat each Person whosename is recorded in the Register as the owner of the Loans and any Notesevidencing the Loans recorded therein for all purposes of this Agreement.  Any assignment of any Loan, whether or notevidenced by a Note, shall be effective only upon appropriate entries withrespect thereto being made in the Register (and each Note shall expressly soprovide).  Any assignment or transfer ofall or part of a Loan evidenced by a Note shall be registered on the Registeronly upon surrender for registration of assignment or transfer of the Noteevidencing such Loan, accompanied by a duly executed Assignment and Acceptance,and thereupon one or more new Notes shall be issued to the designated Assignee.

 

(e)  Uponits receipt of an Assignment and Acceptance executed by an Assignor, anAssignee and any other Person whose consent is required by Section 11.6(c),together with payment to the Administrative Agent of a registration andprocessing fee of $4,000, the Administrative Agent shall (i) promptlyaccept such Assignment and Acceptance and (ii) record the informationcontained therein in the Register on the effective date determined pursuantthereto.

 

(f)  Foravoidance of doubt, the parties to this Agreement acknowledge that theprovisions of this Section 11.6 concerning assignments of Loans and Notesrelate only to the absolute assignments and that such provisions do notprohibit assignments creating security interests, including any pledge orassignment by a Lender of any Loan or Note to any Federal Reserve Bank (itbeing understood that any foreclosure of any such security interest and anyassignment of rights (including voting rights) in connection therewith shall besubject to the requirements of this Section).

 

(g)  TheBorrower, upon receipt of written notice from the relevant Lender, agrees toissue Notes (in a form to be reasonably agreed with the Borrower) to any Lenderrequiring Notes to facilitate transactions of the type described in paragraph (f) above.

 

11.7         Adjustments; Set-off.  (a) Except to the extent that this Agreement expressly provides for payments to beallocated to a particular Lender or to the Lenders under a particular Facility,if any Lender (a “Benefitted Lender”) shall, receive any payment of allor part of the Obligations owing to it, or receive any collateral in respectthereof (whether voluntarily or involuntarily, by set-off, pursuant to eventsor proceedings of the nature referred to in Section 8(f), or otherwise),in a greater proportion than any such payment to or collateral received by anyother Lender, if any, in respect of the Obligations owing to such other Lender,such Benefitted Lender shall purchase for cash from the other Lenders aparticipating interest in such portion of the Obligations owing to each suchother Lender, or shall provide such other Lenders with the benefits of any suchcollateral, as shall be necessary to cause such Benefitted Lender to share theexcess payment or benefits of such collateral ratably with each of the Lenders;provided, however, that if all or any portion of such excesspayment or benefits is thereafter recovered from such Benefitted

 

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Lender, such purchase shall be rescinded, andthe purchase price and benefits returned, to the extent of such recovery, butwithout interest.

 

(b)  Inaddition to any rights and remedies of the Lenders provided by law, each Lendershall have the right, without prior notice to any Loan Party, any such noticebeing expressly waived by the Loan Parties to the extent permitted byapplicable law, upon the commencement and during the continuance of an Event ofDefault, to set off and appropriate and apply against any amount then due andpayable by any Loan Party hereunder any and all deposits (general or special,time or demand, provisional or final), in any currency, and any other credits,indebtedness or claims, in any currency, in each case whether direct orindirect, absolute or contingent, matured or unmatured, at any time held orowing by such Lender or any branch or agency thereof to or for the credit orthe account of the relevant Loan Party, as the case may be.  Each Lender agrees promptly to notify theBorrower and the Administrative Agent after any such setoff and applicationmade by such Lender, provided that the failure to give such notice shallnot affect the validity of such setoff and application.

 

11.8         Counterparts.  ThisAgreement may be executed by one or more of the parties to this Agreement onany number of separate counterparts, and all of said counterparts takentogether shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page ofthis Agreement by facsimile transmission shall be effective as delivery of amanually executed counterpart hereof.  Aset of the copies of this Agreement signed by all the parties shall be lodgedwith the Borrower and the Administrative Agent.

 

11.9         Severability.  Anyprovision of this Agreement that is prohibited or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or unenforceability without invalidating the remainingprovisions hereof, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction.

 

11.10       Integration.  ThisAgreement and the other Loan Documents represent the entire agreement of theLoan Parties, the Agents and the Lenders with respect to the subject matterhereof and thereof, and there are no promises, undertakings, representations orwarranties by any Agent or any Lender relative to subject matter hereof notexpressly set forth or referred to herein or in the other Loan Documents.

 

11.11       **GOVERNING LAW**.  THISAGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENTSHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWOF THE STATE OF NEW YORK.

 

11.12       Submission To Jurisdiction; Waivers.  EachLoan Party hereby irrevocably and unconditionally:

 

(a) submits for itself and its property in any legal action or proceeding relatingto this Agreement and the other Loan Documents to which it is a party, or forrecognition and enforcement of any judgment in respect thereof, to the non-exclusivegeneral jurisdiction of the courts of the State of New York, the courts of theUnited States for the Southern District of New York, and appellate courtsfrom any thereof;

 

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(b) consents that any such action or proceeding may be brought in such courts andwaives any objection that it may now or hereafter have to the venue of any suchaction or proceeding in any such court or that such action or proceeding wasbrought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be effectedby mailing a copy thereof by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to the relevant Loan Party at itsaddress set forth in Section 11.2 or at such other address of which theAdministrative Agent shall have been notified pursuant thereto;

 

(d) agrees that nothing herein shall affect the right to effect service of processin any other manner permitted by law or shall limit the right to sue in anyother jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have toclaim or recover in any legal action or proceeding referred to in this Section anyindirect or consequential damages.

 

11.13       Acknowledgements.  EachLoan Party hereby acknowledges that:

 

(a)  ithas been advised by counsel in the negotiation, execution and delivery of thisAgreement and the other Loan Documents;

 

(b) neither the Administrative Agent nor any Lender has any fiduciary relationshipwith or duty to any Loan Party arising out of or in connection with thisAgreement or any of the other Loan Documents, and the relationship between the Agent,and the Lenders, on one hand, and the Loan Parties, on the other hand, inconnection herewith or therewith is solely that of debtor and creditor; and

 

(c)  nojoint venture is created hereby or by the other Loan Documents or otherwiseexists by virtue of the transactions contemplated hereby among the Lenders oramong the Loan Parties and the Lenders.

 

11.14       Intercreditor Agreement.  Each Lender acknowledges that it has receivedand reviewed a copy of the Intercreditor Agreement and has agreed to the termsthereof.

 

Each Lender further agrees that JPMorganChase Bank, N.A. (in its capacity as Administrative Agent, Collateral Agent andSecurity Paying Agent under the Intercreditor Agreement) is hereby permitted toconsent to an amendment to the Intercreditor Agreement, on behalf of theLenders, expanding the definition of “US Bank Obligations” to include theBorrower’s obligations to US Bank in connection with the sale of WorldPerksmileage to US Bank.

 

11.15       Confidentiality.  (a) Subject to the provisions of clause (b) of this Section, each Lender shallhold all non-public information obtained pursuant to the requirements of thisAgreement which has been identified as such by any Loan Party in accordancewith its customary procedure for handling confidential information of thisnature and in accordance with safe and sound banking practices and in any eventmay make disclosure reasonably to any bona fide prospective transferee orparticipant in connection with the contemplated transfer of any Loan or Commitmentor participation therein or as required or requested by any governmental agencyor representative thereof or pursuant to legal process or to such Lender’sattorney’s, affiliates or independent auditors,

 

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provided that, unless specifically prohibited byapplicable law or court order, each Lender shall notify Holdings of any requestby any governmental agency or representative thereof (other than any suchrequests in connection with an examination of the financial condition of suchLender by such governmental agency) for disclosure of any such non-publicinformation prior to disclosure of such information; and providedfurther,that in no event shall any Lender be obligated or required to return any materialsfurnished by Holdings or any of its Subsidiaries, provided that, in thecase of disclosure to any prospective transferee or participant, such Personexecutes an agreement with such Lender containing provisions substantially thesame as to those contained in this Section 11.15.

 

(b)  EachLoan Party hereby acknowledges and agrees that each Lender may share with anyof its affiliates any information related to Holdings or any of itsSubsidiaries (including, without limitation, any nonpublic customer informationregarding the creditworthiness of Holdings or any of its Subsidiaries), providedsuch Persons shall be subject to the provisions of this Section to thesame extent as such Lender.

 

11.16       **WAIVERS OF JURY TRIAL**.  EACHLOAN PARTY, EACH AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLYWAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.17       Termination; Releases of Guaranteesand Liens.  (a) After the date upon which theprincipal of and all accrued interest on the Loans, and the other Obligationsunder the Loan Documents, shall have been indefeasibly paid in full (other thancontingent Obligations which are not then due and payable) and the Commitmentshave been terminated, this Agreement shall terminate (provided that allindemnities set forth herein shall survive) and the Collateral Agent is herebyirrevocably authorized by each Lender (without requirement of notice to orconsent of any Lender except as expressly required by Section 11.1) totake any action requested by the Borrower having the effect of releasing anyCollateral or guarantee obligations (including, at the request and expense ofthe Borrower, the execution and delivery of a proper instrument or instrumentsacknowledging the satisfaction and termination of this Agreement), and theCollateral Agent will duly assign, transfer and deliver to the Borrower(without recourse and without any representation or warranty) such of itsCollateral as may be in the possession of the Collateral Agent that has nottheretofore been sold or otherwise applied or released pursuant to thisAgreement or any other Loan Document.

 

(b)  In the event that any part of theCollateral is sold in connection with a sale permitted under this Agreement orany other Loan Document or is otherwise released at the direction of theRequired Lenders (or all the Lenders if required by Section 11.1 of thisAgreement) and the proceeds of such sale or sales or from such release areapplied in accordance with the terms of this Agreement, such Collateral will besold free and clear of the Liens created by this Agreement and the CollateralAgent, at the request and expense of the Borrower, will duly assign, transferand deliver to the Borrower (without recourse and without any representation orwarranty) such of the Collateral of the Borrower as is then being (or has been)so sold or released and as may be in the possession of the Collateral Agent andhas not theretofore been released pursuant to this Agreement.

 

(c)  At any time that the Borrower desires thatCollateral be released as provided in the foregoing Section 11.17(a) or(b) it shall deliver to the Collateral Agent a certificate signed by itschief financial officer or another authorized senior officer stating that therelease of the respective Collateral is permitted pursuant to Section 11.17(a) or(b).  If requested by the CollateralAgent

 

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(although the Collateral Agent shall have noobligation to make any such request), the Borrower shall furnish appropriatelegal opinions (from counsel, which may be in-house counsel, acceptable to theCollateral Agent) to the effect set forth in the immediately precedingsentence. The Collateral Agent shall have no liability whatsoever to any Lenderas the result of any release of Collateral by it as permitted by this Section 11.17.

 

(d) Notwithstanding anything to the contrarycontained herein or in any other Loan Document, no such Collateral shall bereleased in connection with clause (b) of this Section 11.17 unlessthe corresponding liens (if any) of U.S. Bank and the PBGC (as defined in theIntercreditor Agreement) and any other lien on such Collateral permitted under Section 7.3(f) ofthis Agreement are released prior to or concurrently with any such releasehereunder.

 

11.18       Effect of Amendment and Restatement ofthe Existing Credit Agreement.

 

On the Second Amendment and Restatement ClosingDate, the Existing Credit Agreement shall be amended, restated and supersededin its entirety.  The parties heretoacknowledge and agree that (a) this Agreement and the other LoanDocuments, whether executed and delivered in connection herewith or otherwise,do not constitute a novation, payment and reborrowing, or termination of the “Obligations”(as defined in the Existing Credit Agreement) under the Existing CreditAgreement as in effect prior to the Second Amendment and Restatement ClosingDate and (b) such “Obligations” are in all respects continuing (as amendedand restated hereby) with only the terms thereof being modified as provided inthis Agreement.

 

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INWITNESS WHEREOF, the parties hereto have caused this Agreement to be dulyexecuted and delivered by their proper and duly authorized officers as of theday and year first above written.

 

 
|   | NORTHWEST AIRLINES CORPORATION           |                                              |
|--------|------------------------------------------|---------------------------------------------------|
|   |                                     |                                              |   |
|   |                                     |                                              |   |
|   | By:                                      |   /s/ Daniel B. Matthews                |   |
|   |                                     | Name: Daniel B. Matthews                          |   |
|   |                                     | Title: Senior Vice President & Treasurer |   |
|   |                                     |                                              |   |
|   |                                     |                                              |   |
|   | NORTHWEST AIRLINES HOLDINGS  CORPORATION |                                              |
|   |                                     |                                              |   |
|   |                                     |                                              |   |
|   | By:                                      |   /s/ Daniel B. Matthews                |   |
|   |                                     | Name: Daniel B. Matthews                          |   |
|   |                                     | Title: Senior Vice President & Treasurer |   |
|   |                                     |                                              |   |
|   |                                     |                                              |   |
|   | NWA INC.                                 |                                              |
|   |                                     |                                              |
|   |                                     |                                              |   |
|   | By:                                      |   /s/ Daniel B. Matthews                |   |
|   |                                     | Name: Daniel B. Matthews                          |   |
|   |                                     | Title: Senior Vice President & Treasurer |   |
|   |                                     |                                              |   |
|   |                                     |                                              |   |
|   | NORTHWEST AIRLINES, INC.                 |                                              |
|   |                                     |                                              |
|   |                                     |                                              |   |
|   | By:                                      |   /s/ Daniel B. Matthews                |   |
|   |                                     | Name: Daniel B. Matthews                          |   |
|   |                                     | Title: Senior Vice President & Treasurer |   |

 

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|   | JPMORGAN CHASE BANK., N.A. as        |
|--------|--------------------------------------|
|   | Administrative Agent and as a Lender |
|   |                                 |
|   |                                 |
|   | By:                                  | /s/ Donald S. Shokrian |   |
|   |                                 | Name: Donald S. Shokrian |
|   |                                 | Title: Managing Director |

 

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|   | ACCESS INSTITUTIONAL LOAN FUND              |
|--------|---------------------------------------------|
|   | By: Deerfield Capital Management LLC as its |
|   | Portfolio Manager                           |
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/ Peter Sakon |   |
|   |                                        | Name: Peter Sakon |
|   |                                        | Title: Vice President |

 

3

----

 
|   | Akanthos Arbitrage Master Fund, LP by    |
|--------|------------------------------------------|
|   | Akanthos Capital Management LLC, its GP, |
|   | as Tranche C Term Lender                 |
|   |                                     |   |
|   |                                     |   |
|   | By:                                      | /s/  Michael  Kao |   |
|   |                                     | Name:  Michael Kao |
|   |                                     | Title:  Managing Member |

 

4

----

 
|   | ALLSTATE LIFE INSURANCE COMPANY |
|--------|---------------------------------|
|   |                            |
|   |                            |
|   | By:                             |  /s/ Chris Goergen |   |
|   |                            | Name: Chris Goergen |
|   |                            | Title: Authorized Signatory |
|   |                            |
|   |                            |
|   | By:                             |  /s/ Jerry D. Zinkula |   |
|   |                            | Name: Jerry D. Zinkula |
|   |                            | Title: Authorized Signatory |

 

5

----

 
|   | AMMC CDO II, LIMITED |
|--------|----------------------|
|   | By:                  | American Money Management Corp., |
|   |                 | as Collateral Manager |
|   |                 |   |
|   |                 |   |
|   | By:                  |  /s/ Chester M. Eng |   |
|   |                 | Name: Chester M. Eng |
|   |                 | Title: Senior Vice President |

 

6

----

 
|   | AMMC CLO III, LIMITED |
|--------|-----------------------|
|   | By:                   | American Money Management Corp., |
|   |                  | as Collateral Manager |
|   |                  |   |
|   |                  |   |
|   | By:                   |  /s/ Chester M. Eng |   |
|   |                  | Name: Chester M. Eng |
|   |                  | Title: Senior Vice President |

 

7

----

 
|   | AMMC CLO IV, LIMITED |
|--------|----------------------|
|   | By:                  | American Money Management Corp., |
|   |                 | as Collateral Manager |
|   |                 |   |
|   |                 |   |
|   | By:                  |  /s/  Chester M. Eng |   |
|   |                 | Name:  Chester M. Eng |
|   |                 | Title:  Senior Vice President |

 

8

----

 
|   | ARCHIMEDES FUNDING III, LTD. |
|--------|------------------------------|
|   |                         |
|   | By:                          | ING Capital Advisors LLC, |
|   |                         | as Collateral Manager |
|   |                         |   |
|   |                         |   |
|   | By:                          |  /s/  Steven Gorski |   |
|   |                         | Name:  Steven Gorski |
|   |                         | Title:  Director |

 

9

----

 
|   | ARCHIMEDES FUNDING IV (CAYMAN), LTD. |
|--------|--------------------------------------|
|   |                                 |
|   | By:                                  | ING Capital Advisors LLC, |
|   |                                 | as Collateral Manager |
|   |                                 |   |
|   |                                 |   |
|   | By:                                  |  /s/  Steven Gorski |   |
|   |                                 | Name:  Steven Gorski |
|   |                                 | Title:  Director |

 

10

----

 
|   | ARES III CLO Ltd. |
|--------|-------------------|
|   |              |
|   | By:               | ARES CLO Management, LLC |
|   | Its:              | Investment Manager |
|   |              |   |
|   |              |   |
|   | By:               |  /s/  David A. Sachs |   |
|   |              | Name:  David A. Sachs |
|   |              | Title:  Vice President |

 

11

----

 
|   | ARES IV CLO LTD. |
|--------|------------------|
|   |             |
|   | By:              | Ares CLO Management IV, L.P. |
|   | Its:             | Investment Manager |
|   |             |   |
|   | By:              | Ares CLO GP IV, LLC |
|   | Its:             | Managing Member |
|   |             |   |
|   |             |   |
|   | By:              |  /s/  David A. Sachs |   |
|   |             | Name:  David A. Sachs |
|   |             | Title:  Vice President |

 

12

----

 
|   | Ares V CLO Ltd. |
|--------|-----------------|
|   |            |
|   | By:             | Ares CLO Management IV, L.P. |
|   | Its:            | Investment Manager |
|   |            |   |
|   | By:             | Ares CLO GP V, LLC |
|   | Its:            | Managing Member |
|   |            |   |
|   |            |   |
|   | By:             |  /s/  David A. Sachs |   |
|   |            | Name:  David A. Sachs |
|   |            | Title:  Vice President |

 

13

----

 
|   | Ares VII CLO Ltd. |
|--------|-------------------|
|   |              |
|   | By:               | Ares CLO Management VII, L.P. |
|   | Its:              | Investment Manager |
|   |              |   |
|   | By:               | Ares CLO GP VII, LLC |
|   | Its:              | General Partner |
|   |              |   |
|   |              |   |
|   | By:               |  /s/  David A. Sachs |   |
|   |              | Name:  David A. Sachs |
|   |              | Title:  Vice President |

 

14

----

 
|   | Ares VIII CLO Ltd. |
|--------|--------------------|
|   |               |
|   | By:                | Ares CLO Management VIII, L.P. |
|   | Its:               | Investment Manager |
|   |               |   |
|   | By:                | Ares CLO GP VIII, LLC |
|   | Its:               | General Partner |
|   |               |   |
|   |               |   |
|   | By:                |  /s/  David A. Sachs |   |
|   |               | Name:  David A. Sachs |
|   |               | Title:  Vice President |

 

15

----

 
|   | Ares IX CLO Ltd. |
|--------|------------------|
|   |             |
|   | By:              | Ares CLO Management IX, L.P. |
|   | Its:             | Investment Manager |
|   |             |   |
|   | By:              | Ares CLO GP IX, LLC |
|   | Its:             | General Partner |
|   |             |   |
|   |             |   |
|   | By:              |  /s/  David A. Sachs |   |
|   |             | Name:  David A. Sachs |
|   |             | Title:  Vice President |

 

16

----

 
|   | By:    | Ares Enhanced Loan Management, L.P., |
|--------|--------|--------------------------------------|
|   | Its:   | Investment Manager                   |
|   |   |                                 |
|   | By:    | Ares Enhanced Loan GP, LLC           |
|   | Its:   | General Partner                      |
|   |   |                                 |
|   |   |                                 |
|   | By:    |  /s/  David A. Sachs       |   |
|   |   | Name:  David A. Sachs           |
|   |   | Title:  Vice President          |

 

17

----

 
|   | ARES Leveraged Investment Fund II, L.P. |
|--------|-----------------------------------------|
|   |                                    |
|   | By:                                     | ARES Management II, L.P. |
|   | Its:                                    | General Partner |
|   |                                    |   |
|   |                                    |   |
|   | By:                                     |  /s/  David A. Sachs |   |
|   |                                    | Name:  David A. Sachs |
|   |                                    | Title:  Vice President |

 

18

----

 
|   | Ares Total Value Fund, L.P. |
|--------|-----------------------------|
|   |                        |
|   | By:                         | Ares Total Value Management LLC |
|   | Its:                        | General Partner |
|   |                        |   |
|   |                        |   |
|   | By:                         |  /s/  David A. Sachs |   |
|   |                        | Name:  David A. Sachs |
|   |                        | Title:  Vice President |

 

19

----

 
|   | Aurum CLO 2002-1, Ltd. |
|--------|------------------------|
|   | By:                    | Columbia Management Advisors, Inc. |
|   | as Investment Manager  |
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Mark S. Pelletier |   |
|   |                   | Name:  Mark S. Pelletier |
|   |                   | Title:  Director |

 

20

----

 
|   | AVENUE CLO FUND, LIMITED, |
|--------|---------------------------|
|   | as Tranche C Term Lender  |
|   |                      |   |
|   |                      |   |
|   | By:                       |  /s/  Richard D’Addario |   |
|   |                      | Name:  Richard D’Addario |
|   |                      | Title:  Senior Portfolio  Manager |

 

21

----

 
|   | Sankaty Advisors, LLC as Collateral |
|--------|-------------------------------------|
|   | Manager for AVERY POINT CLO, LTD.,  |
|   | as Term Lender                      |
|   |                                |
|   | [NAME OF TRANCHE C LENDER],         |
|   | as Tranche C Term Lender            |
|   |                                |   |
|   |                                |   |
|   | By:                                 |  /s/  Diane J. Exter |   |
|   |                                | Name:  Diane J. Exter |
|   |                                | Title:  Managing Director |
|   |                                | Portfolio  Manager |

 

22

----

 
|   | BANK OF AMERICA, N.A. |
|--------|-----------------------|
|   |                  |   |
|   |                  |   |
|   | By:                   |  /s/  Jonathan M. Barnes |   |
|   |                  | Name:  Jonathan M. Barnes |
|   |                  | Title:  Associate |

 

23

----

 
|   | BOLDWATER CREDIT             |
|--------|------------------------------|
|   | OPPORTUNITIES MASTER FUND LP |
|   |                         |   |
|   |                         |   |
|   | By:                          |  /s/  Martin E. Kalisker |   |
|   |                         | Name:  Martin E. Kalisker |
|   |                         | Title:  Chief Financial Officer |

 

24

----

 
|   | BRYN MAWR CLO, Ltd. |
|--------|---------------------|
|   | By:                 | Deerfield Capital Management LLC as its |
|   | Collateral Manager  |
|   |                |   |
|   |                |   |
|   | By:                 |  /s/  Peter Sakon |   |
|   |                | Name:  Peter Sakon |
|   |                | Title:  Vice President |

 

25

----

 
|   | CALYON New York Branch |
|--------|------------------------|
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Olivier Audemard |   |
|   |                   | Name:  Olivier Audemard |
|   |                   | Title:  Managing Director |
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Brian Bolotin |   |
|   |                   | Name:  Brian Bolotin |
|   |                   | Title:  Managing Director |

 

26

----

 
|   | Canadian Imperial Bank of Commerce |
|--------|------------------------------------|
|   | as Tranche C Term Lender           |
|   |                               |   |
|   |                               |   |
|   | By:                                |  /s/  John O’Dowd |   |
|   |                               | Name:  John O’Dowd |
|   |                               | Title:  Authorized Signatory |
|   |                               |   |
|   |                               |   |
|   | By:                                |  /s/  Milena Grgic |   |
|   |                               | Name:  Milena Grgic |
|   |                               | Title:  Authorized Signatory |

 

27

----

 
|   | Canpartners Investments IV, LLC |                                     |
|--------|---------------------------------|------------------------------------------|
|   |                            |                                     |
|   |                            |                                     |
|   | By:                             |  /s/  R. Christian B.  Evensen |   |
|   |                            | Name:  R. Christian B. Evensen      |
|   |                            | Title:  Managing Director           |
|   |                            |                                     |
|   | By:                             | Canpartners Investments IV, LLC,         |
|   |                            | a California limited liability company   |
|        |                                 |                                          |  |  |

 

28

----

 
|   | CANYON CAPITAL CDO 2001-1 LTD. |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            |  /s/  R. Christian B.  Evensen |   |
|   |                           | Name:  R. Christian B. Evensen |
|   |                           | Title:  Managing Director |
|   |                           |   |
|   | By:                            | Canyon Capital Advisors LLC, |
|   |                           | a Delaware limited liability company, |
|   |                           | its Collateral Manager |

 

29

----

 
|   | CANYON CAPITAL CDO 2002-1 LTD. |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            |  /s/  R. Christian B.  Evensen |   |
|   |                           | Name:  R. Christian B. Evensen |
|   |                           | Title:  Managing Director |
|   |                           |   |
|   | By:                            | Canyon Capital Advisors LLC, |
|   |                           | a Delaware limited liability company, |
|   |                           | its Collateral Manager |

 

30

----

 
|   | CANYON CAPITAL CLO 2004-1 LTD. |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            |  /s/  R. Christian B.  Evensen |   |
|   |                           | Name:  R. Christian B. Evensen |
|   |                           | Title:  Managing Director |
|   |                           |   |
|   | By:                            | Canyon Capital Advisors LLC, |
|   |                           | a Delaware limited liability company, |
|   |                           | its Collateral Manager |

 

31

----

 
|   | Carlyle High Yield Partners IV, Ltd. |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  |  /s/  Linda Pace |   |
|   |                                 | Name:  Linda Pace |
|   |                                 | Title:  Managing Director |

 

32

----

 
|   | Carlyle Loan Opportunity Fund |
|--------|-------------------------------|
|   |                          |   |
|   |                          |   |
|   | By:                           |  /s/  Linda Pace |   |
|   |                          | Name:  Linda Pace |
|   |                          | Title:  Managing Director |

 

33

----

 
|   | Sankaty Advisors, LLC as Collateral        |
|--------|--------------------------------------------|
|   | Manager for Castle Hill II - INGOTS, Ltd., |
|   | as Term Lender                             |
|   |                                       |
|   | [NAME OF TRANCHE C LENDER],                |
|   | as Tranche C Term Lender                   |
|   |                                       |   |
|   |                                       |   |
|   | By:                                        |  /s/  Diane J. Exter |   |
|   |                                       | Name:  Diane J. Exter |
|   |                                       | Title:  Managing Director |
|   |                                       | Portfolio Manager |

 

34

----

 
|   | Sankaty Advisors, LLC as Collateral |
|--------|-------------------------------------|
|   | Manager for Castle Hill III CLO,    |
|   | Limited, as Term Lender             |
|   |                                |
|   | [NAME OF TRANCHE C LENDER],         |
|   | as Tranche C Term Lender            |
|   |                                |   |
|   |                                |   |
|   | By:                                 |  /s/  Diane J. Exter |   |
|   |                                | Name:  Diane J. Exter |
|   |                                | Title:  Managing Director |
|   |                                | Portfolio Manager |

 

35

----

 
|   | Cidatel Hill 2000 Ltd. |
|--------|------------------------|
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Harry Amyotte |   |
|   |                   | Name:  Harry Amyotte |
|   |                   | Title:  Authorized Signatory |

 

36

----

 
|   | Cidatel Hill 2004 Ltd. |
|--------|------------------------|
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Harry Amyotte |   |
|   |                   | Name:  Harry Amyotte |
|   |                   | Title:  Authorized Signatory |
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/  Brian Cerreta |   |
|   |                   | Name:  Brian Cerreta |
|   |                   | Title:  Authorized Signatory |

 

37

----

 
|   | CITIBANK N.A. |
|--------|---------------|
|   |          |   |
|   |          |   |
|   | By:           |  /s/  Janet  Wallace-Himmler |   |
|   |          | Name:  Janet Wallace-Himmler |
|   |          | Title:  Attorney-In-Fact |

 

38

----

 
|   | CITICORP USA, INC.,      |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |   |
|   |                     |   |
|   | By:                      |  /s/  Gaylord C. Holmes |   |
|   |                     | Name:  Gaylord C. Holmes |
|   |                     | Title:  Director |

 

39

----

 
|   | CITICORP FINANCIAL PRODUCTS INC. |
|--------|----------------------------------|
|   |                             |   |
|   |                             |   |
|   | By:                              |  /s/  Jeffrey S. Jacob |   |
|   |                             | Name:  Jeffrey S. Jacob |
|   |                             | Title:  Managing Director |

 

40

----

 
|   | Comac Acquisition Co. L.P. |
|--------|----------------------------|
|   |                       |   |
|   |                       |   |
|   | By:                        |  /s/  Christopher M.  Mackey |   |
|   |                       | Name:  Christopher M. Mackey |
|   |                       | Title:  Managing Principal |

 

41

----

 
|   | CREDIT SUISSE FIRST BOSTON |
|--------|----------------------------|
|   | INTERNATIONAL              |
|   |                       |   |
|   |                       |   |
|   | By:                        |  /s/ Irina Borisova |   |
|   |                       | Name: Irina Borisova |
|   |                       | Title: Assistant Vice President |
|   |                       |   |
|   |                       |   |
|   | By:                        |  /s/ Maria de Lellis |   |
|   |                       | Name: Maria de Lellis |
|   |                       | Title: Assistant Vice President |

 

42

----

 
|   | as  Tranche C Term Lender |
|--------|---------------------------|
|   |                      |
|   | CUMBERLAND II CLO LTD.    |
|   | By:                       | Deerfield Capital Management LLC as its |
|   |                      | Collateral Manager |
|   |                      |   |
|   |                      |   |
|   | By:                       |  /s/  Peter Sakon |   |
|   |                      | Name:  Peter Sakon |
|   |                      | Title:  Vice President |

 

43

----

 
|   | CYPRESSTREE CLAIF FUNDING  LLC, |
|--------|---------------------------------|
|   | as Tranche C Term Lender        |
|   |                            |
|   |                            |
|   | By:                             |  /s/  Meredith J. Koslick |   |
|   |                            | Name:  Meredith J. Koslick |
|   |                            | Title:  Assistant Vice  President |

 

44

----

 
|   | DB DISTRESSED           |
|--------|-------------------------|
|   | OPPORTUNITIES FUND, LTD |
|   | By:                     | Post Advisory Group, LLC |
|   | As Authorized Agent     |
|   |                    |   |
|   |                    |   |
|   | By:                     |  /s/  Carl Goldsmith |   |
|   |                    | Name:  Carl Goldsmith |
|   |                    | Title:  Chief Investment  Officer |

 

45

----

 
|   | Desjardins Financial  Security Life Assurance |
|--------|-----------------------------------------------|
|   | Company                                       |
|   |                                          |
|   | By:                                           | Marathon Asset Management, LLC |
|   | Its:                                          | Investment Manager and Authorized Signatory |
|   |                                          |   |
|   |                                          |   |
|   | By:                                           |  /s/  Louis Hanover |   |
|   |                                          | Name: Louis Hanover |
|   |                                          | Title: Chief Investment Officer |

 

46

----

 
|   | Deutsche Bank AG New York  Branch      |
|--------|----------------------------------------|
|   | By: DB Services New  Jersey, Inc. |
|   |                                   |
|   |                                   |
|   | By:                                    |  /s/ Edward Schaffer |   |
|   |                                   | Name: Edward Schaffer |
|   |                                   | Title: Vice President |
|   |                                   |   |
|   |                                   |   |
|   | By:                                    |  /s/ Jay Hopkins |   |
|   |                                   | Name: Jay Hopkins |
|   |                                   | Title: Assistant Vice President |

 

47

----

 
|   | DEUTSCHE BANK TRUST  COMPANY |
|--------|------------------------------|
|   | AMERICAS                     |
|   |                         |
|   |                         |
|   | By:                          |  /s/ Marguerite Sutton |   |
|   |                         | Name: Marguerite Sutton |
|   |                         | Title: Director |
|   |                         |   |
|   |                         |   |
|   | By:                          |  /s/ Carin M. Keegan |   |
|   |                         | Name: Carin M. Keegan |
|   |                         | Title: Vice President |

 

48

----

 
|   | DMA, LTD                     |
|--------|------------------------------|
|   | By: Post Advisory Group, LLC |
|   |  As Authorized Agent    |
|   |                         |   |
|   |                         |   |
|   | By:                          |  /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: Chief Investment Officer |

 

49

----

 
|   | DUNES FUNDING LLC |
|--------|-------------------|
|   |              |   |
|   |              |   |
|   | By:               |  /s/  Meredith J. Koslick |   |
|   |              | Name: Meredith J. Koslick |
|   |              | Title: Assistant Vice President |

 

50

----

 
|   | ENDURANCE CLO I, LTD. |
|--------|-----------------------|
|   |                  |   |
|   | c/o:                  | ING Capital Advisors LLC, |
|   |                  | as Collateral Manager |
|   |                  |   |
|   |                  |   |
|   | By:                   |  /s/  Steven Gorksi |   |
|   |                  | Name:  Steven Gorski |
|   |                  | Title:  Director |

 

51

----

 
|   | Fidelity Advisor Series II: Fidelity Advisor |
|--------|---------------------------------------------------|
|   | Floating Rate High Income Fund,                   |
|   |                                              |   |
|   |                                              |   |
|   | By:                                               |  /s/ John H. Costello |   |
|   |                                              | Name: John H. Costello |
|   |                                              | Title: Assistant Treasurer |

 

52

----

 
|   | Flagship Capital CLO II                    |
|--------|--------------------------------------------|
|   | By: Flagship Capital Management, Inc. |
|   |                                       |   |
|   |                                       |   |
|   | By:                                        |  /s/ Mark S. Pelletier |   |
|   |                                       | Name: Mark S. Pelletier |
|   |                                       | Title: Director |

 

53

----

 
|   | Flagship Capital CLO III                   |
|--------|--------------------------------------------|
|   | By: Flagship Capital Management, Inc. |
|   |                                       |   |
|   |                                       |   |
|   | By:                                        |  /s/ Mark S. Pelletier |   |
|   |                                       | Name: Mark S. Pelletier |
|   |                                       | Title: Director |

 

54

----

 
|   | FOREST CREEK CLO, Ltd.                      |
|--------|---------------------------------------------|
|   | By: Deerfield Capital Management LLC as its |
|   | Collateral Manager                          |
|   |                                        |   |
|   |                                        |   |
|   | By:                                         |  /s/ Peter Sakon |   |
|   |                                        | Name: Peter Sakon |
|   |                                        | Title: Vice President |

 

55

----

 
|   | FRANKLIN FLOATING RATE |
|--------|------------------------|
|   | DAILY ACCESS FUND      |
|   |                   |   |
|   |                   |   |
|   | By:                    |  /s/ Richard Hsu |   |
|   |                   | Name: Richard Hsu |
|   |                   | Title: Vice President |

 

56

----

 
|   | Franklin Floating Rate Master Series |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  |  /s/ Richard Hsu |   |
|   |                                 | Name: Richard Hsu |
|   |                                 | Title: Vice President |

 

57

----

 
|   | Franklin Floating Rate Trust |
|--------|------------------------------|
|   |                         |   |
|   |                         |   |
|   | By:                          |  /s/ Richard Hsu |   |
|   |                         | Name: Richard Hsu |
|   |                         | Title: Vice President |

 

58

----

 
|   | FRANKLIN TEMPLETON         |
|--------|----------------------------|
|   | LIM. DURATION INCOME TRUST |
|   |                       |   |
|   |                       |   |
|   | By:                        |  /s/ Richard Hsu |   |
|   |                       | Name: Richard Hsu |
|   |                       | Title: Vice President |

 

59

----

 
|   | Galaxy CLO 1999-1, Ltd.         |
|--------|---------------------------------|
|   | by: AIG Global Investment Corp. |
|   | as Collateral Advisor           |
|   |                            |
|   |                            |
|   | By:                             | /s/ W. Jeffrey Baxter |   |
|   |                            | Name: W. Jeffrey Baxter |
|   |                            | Title: Vice President |

 

60

----

 
|   | Galaxy CLO 2003-1, Ltd.         |
|--------|---------------------------------|
|   | by: AIG Global Investment Corp. |
|   | Its Investment Advisor          |
|   |                            |
|   |                            |
|   | By:                             | /s/ W. Jeffrey Baxter |   |
|   |                            | Name: W. Jeffrey Baxter |
|   |                            | Title: Vice President |

 

61

----

 
|   | Galaxy III CLO, Ltd.            |
|--------|---------------------------------|
|   | by: AIG Global Investment Corp. |
|   | Its Investment Advisor          |
|   |                            |
|   |                            |
|   | By:                             | /s/ W. Jeffrey Baxter |   |
|   |                            | Name: W. Jeffrey Baxter |
|   |                            | Title: Vice President |

 

62

----

 
|   | Galaxy IV CLO, Ltd.             |
|--------|---------------------------------|
|   | by: AIG Global Investment Corp. |
|   | as Investment Manager           |
|   |                            |
|   |                            |
|   | By:                             | /s/ W. Jeffrey Baxter |   |
|   |                            | Name: W. Jeffrey Baxter |
|   |                            | Title: Vice President |

 

63

----

 
|   | GREAT AMERICAN INSURANCE COMPANY |
|--------|----------------------------------|
|   | By:                              | American Money Management Corp., |
|   |                             | as Portfolio Manager |
|   |                             |
|   |                             |
|   | By:                              | /s/ Chester M. Eng |   |
|   |                             | Name: Chester M. Eng |
|   |                             | Title: Senior Vice President |
|        |                                  |  |  |  |

 

64

----

 
|   | GREAT AMERICAN LIFE INSURANCE COMPANY |
|--------|---------------------------------------|
|   | By:                                   | American Money Management Corp., |
|   |                                  | as Portfolio Manager |
|   |                                  |
|   |                                  |
|   | By:                                   | /s/ David P. Meyer |   |
|   |                                  | Name: David P. Meyer |
|   |                                  | Title: Senior Vice President |
|        |                                       |  |  |  |

 

65

----

 
|   | GUGGENHEIM PORTFOLIO COMPANY |
|--------|------------------------------|
|   | By:                          | Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: Chief Investment Officer |
|        |                              |  |  |  |

 

66

----

 
|   | Hamilton CDO, Ltd.                 |
|--------|------------------------------------|
|   | By: Stanfield Capital Partners LLC |
|   | As its Collateral Manager          |
|   |                               |
|   |                               |
|   | By:                                |  /s/ |   |
|   |                               | Name: |
|   |                               | Title: |

 

67

----

 
|   | HARBOUR TOWN FUNDING LLC, |
|--------|---------------------------|
|   | as Tranche C Term Lender  |
|   |                      |
|   |                      |
|   | By:                       |  /s/ Meredith J. Koslick |   |
|   |                      | Name: Meredith J. Koslick |
|   |                      | Title: Assistant Vice President |

 

68

----

 
|   | HarbourView CLO IV, Ltd., |
|--------|---------------------------|
|   | as Tranche C Term Lender  |
|   |                      |
|   |                      |
|   | By:                       |  /s/ Lisa Chaffee |   |
|   |                      | Name: Lisa Chaffee |
|   |                      | Title: AVP |

 

69

----

 
|   | HarbourView CLO V, Ltd., |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      |  /s/ Lisa Chaffee |   |
|   |                     | Name: Lisa Chaffee |
|   |                     | Title: AVP |

 

70

----

 
|   | Hewett’s Island CDO, Ltd.                 |
|--------|------------------------------------------------|
|   | By: CypressTree Investment Management Company, |
|   | Inc.,                                          |
|   | as Portfolio Manager,                          |
|   | as Tranche C Term Lender                       |
|   |                                           |
|   |                                           |
|   | By:                                            |  /s/ Preston I.  Carnes, Jr. |   |
|   |                                           | Name: Preston I. Carnes, Jr. |
|   |                                           | Title: Managing Director |

 

71

----

 
|   | Hewett’s Island CLO II, Ltd.              |
|--------|------------------------------------------------|
|   | By: CypressTree Investment Management Company, |
|   | Inc.,                                          |
|   | as Portfolio Manager,                          |
|   | as Tranche C Term Lender                       |
|   |                                           |
|   |                                           |
|   | By:                                            |  /s/ Preston I.  Carnes, Jr. |   |
|   |                                           | Name: Preston I. Carnes, Jr. |
|   |                                           | Title: Managing Director |

 

72

----

 
|   | HFR DS OPPORTUNITY           |
|--------|------------------------------|
|   | MASTER TRUST                 |
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          |  /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: Chief Investment Officer |

 

73

----

 
|   | HIGHLAND LEGACY LIMITED               |
|--------|---------------------------------------|
|   | By: Highland Capital Management, L.P. |
|   | as Collateral Manager                 |
|   |                                  |
|   | as Tranche C Term Lender              |
|   |                                  |
|   |                                  |
|   | By:                                   |  /s/ David Lancelot |   |
|   |                                  | Name: David Lancelot |
|   |                                  | Title: | Treasurer |
|   |                                  |   | Highland Capital Management, L.P. |
|        |                                       |  |  |  |

 

74

----

 
|   | ING-ORYX CLO, LTD.            |
|--------|-------------------------------|
|   |                          |
|   | By: ING Capital Advisors LLC, |
|   |                          | as Collateral Manager |
|   |                          |
|   |                          |
|   | By:                           | /s/  Steven  Gorski |   |
|   |                          | Name: Steven Gorski |
|   |                          | Title: | Director |
|        |                               |  |  |  |  |

 

 

75

----

 
|   | ING SENIOR INCOME FUND                        |
|--------|-----------------------------------------------|
|   | By:   ING Investment Management Co. |
|   |                                          |   as its investment manager |
|   |                                          |
|   |                                          |
|   | By:                                           | /s/  Ralph  E. Bucher |   |
|   |                                          | Name: Ralph E. Bucher |
|   |                                          | Title: | Vice President |
|        |                                               |  |  |  |  |

 
|   | ING PRIME RATE TRUST                          |
|--------|-----------------------------------------------|
|   | By:   ING Investment Management Co. |
|   |                                          |   as its investment manager |
|   |                                          |
|   |                                          |
|   | By:                                           | /s/  Ralph  E. Bucher |   |
|   |                                          | Name: Ralph E. Bucher |
|   |                                          | Title: | Vice President |
|        |                                               |  |  |  |  |

 

76

----

 
|   | INVESTORS BANK & TRUST COMPANY AS  SUB-CUSTODIAN AGENT OF CYPRESSTREE  INTERNATIONAL LOAN HOLDING COMPANY  LIMITED, |
|--------|------------------------------------------------------------------------------------------------------------------------------|
|   | as Tranche C Term Lender                                                                                                     |
|   |                                                                                                                         |
|   |                                                                                                                         |
|   | By:                                                                                                                          | /s/  Preston  I. Carnes, Jr. |   |
|   |                                                                                                                         | Name: Preston I. Carnes, |
|   |                                                                                                                         | Title: | Managing Director |
|   |                                                                                                                         |
|   |                                                                                                                         |
|   | By:                                                                                                                          | /s/  |   |
|   |                                                                                                                         | Name: |
|   |                                                                                                                         | Title: |   |
|        |                                                                                                                              |  |  |  |

 

77

----

 
|   | KIL LOAN FUNDING LLC,    |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   | By:                      | /s/  N. John  Beal |   |
|   |                     | Name: N. John Beal |
|   |                     | Title: | Authorized Signatory |
|        |                          |  |  |  |

 

78

----

 
|   | KZH Soleil LLC |
|--------|----------------|
|   |           |
|   |           |
|   | By:            | /s/  Dorian  Herrera |   |
|   |           | Name: Dorian Herrera |
|   |           | Title: | Authorized Agent |
|        |                |  |  |  |

 

79

----

 
|   | KZH SOLEIL-2 LLC |
|--------|------------------|
|   |             |
|   |             |
|   | By:              | /s/  Dorian  Herrera |   |
|   |             | Name: Dorian Herrera |
|   |             | Title: | Authorized Agent |
|        |                  |  |  |  |

 

80

----

 
|   | L.A. FUNDING LLC         |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      | /s/   Meredith J. Koslick |   |
|   |                     | Name: Meredith J. Koslick |
|   |                     | Title: | Assistant Vice President |
|        |                          |  |  |  |

 

81

----

 
|   | LANDMARK V CDO LIMITED                         |
|--------|------------------------------------------------|
|   |                                           |
|   | By: Aladdin Capital Management LLC, as Manager |
|   |                                           |
|   |                                           |
|   | By:                                            | /s/  Angela  Bozorgmir |   |
|   |                                           | Name: Angela Bozorgmir |
|   |                                           | Title: | Director |
|        |                                                |  |  |  |

 

82

----

 
|   | LIGHTHOUSE MULTISTRATEGY     |
|--------|------------------------------|
|   | MASTER FUND                  |
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/  Carl  Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: | Chief Investment Officer |
|        |                              |  |  |  |

 

83

----

 
|   | LightPoint CLO 2004-1 & Premium Loan |
|--------|-----------------------------------------------|
|   | Trust 1, Ltd.                                 |
|   |                                          |
|   |                                          |
|   | By:                                           | /s/  Thomas  A. Kramer |   |
|   |                                          | Name: Thomas A. Kramer |
|   |                                          | Title: | Senior Managing Director &  Chief Executive Officer |
|        |                                               |  |  |  |

 

84

----

 
|   | LINCOLN NATIONAL LIFE INSURANCE CO. |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By:                                 | /s/  Thomas  Chow |   |
|   |                                | Name: Thomas Chow |
|   |                                | Title: | Vice President |
|        |                                     |  |  |  |

 

85

----

 
|   | Lispenard Street Credit (Master), Ltd. by        |
|--------|--------------------------------------------------|
|   | DiMaio Ahmad Capital LLC, its investment advisor |
|   |                                             |
|   |                                             |
|   | By:                                              | /s/   Lawrence Wolfson |   |
|   |                                             | Name: Lawrence Wolfson |
|   |                                             | Title: | Managing Director |
|        |                                                  |  |  |  |

 

86

----

 
|   | Sankaty Advisors, LLC as Collateral Manager |
|--------|---------------------------------------------|
|   | for Loan Funding XI LLC,                    |
|   | as Term Lender                              |
|   |                                        |
|   | [NAME OF TRANCHE C LENDER],                 |
|   | as Tranche C Term Lender                    |
|   |                                        |
|   |                                        |
|   | By:                                         | /s/  Diane  J. Exter |   |
|   |                                        | Name: Diane J. Exter |
|   |                                        | Title: | Managing Director  Portfolio Manager |
|        |                                             |  |  |  |

 

87

----

 
|   | LOAN STAR STATE TRUST                              |
|--------|----------------------------------------------------|
|   | By Its Investment Manager,                         |
|   | Highland Capital Management, L.P.                  |
|   | By Its General Partner, Strand Advisors, Inc. |
|   | as Tranche C Term Lender                           |
|   |                                               |
|   |                                               |
|   | By:                                                | /s/  Todd A.  Travers |   |
|   |                                               | Name: Todd A. Travers |
|   |                                               | Title: | Assistant Secretary  Highland Capital Management L.P. |
|        |                                                    |  |  |  |

 

88

----

 
|   | LONG GROVE CLO, LIMITED                                         |
|--------|-----------------------------------------------------------------|
|   | By: Deerfield Capital Management LLC as its  Collateral Manager |
|   |                                                            |
|   |                                                            |
|   | By:                                                             | /s/  Peter  Sakon |   |
|   |                                                            | Name: Peter Sakon |
|   |                                                            | Title: | Vice President |
|        |                                                                 |  |  |  |

 

89

----

 
|   | Marathon Special Opportunity Master Fund Ltd. |
|--------|-----------------------------------------------|
|   |                                          |
|   |                                          |
|   | By:                                           | /s/  Louis  Hanover |   |
|   |                                          | Name: Louis Hanover |
|   |                                          | Title: | Chief Investment Officer |
|        |                                               |  |  |  |

 

90

----

 
|   | MARKET SQUARE CLO, Ltd.                                         |
|--------|-----------------------------------------------------------------|
|   | By. Deerfield Capital Management LLC as its  Collateral Manager |
|   |                                                            |
|   |                                                            |
|   | By:                                                             | /s/  Peter  Sakon |   |
|   |                                                            | Name: Peter Sakon |
|   |                                                            | Title: | Vice President |
|        |                                                                 |  |  |  |

 

91

----

 
|   | Merrill Lynch PCG, Inc. |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          | /s/ |   |
|   |                         | Name: |
|   |                         | Title: | President |
|        |                              |  |  |  |

 

92

----

 
|   | [NAME OF LENDER]         |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | By:                      | /s/ Wayne Schulman |   |
|   |                     | Name: Wayne Schulman |
|   |                     | Title: | Manager - Settlements |
|   |                     |   |   |
|   | Wayne Schulman           |
|   | MetWest Asset Management |
|   | 310.996.8930 tel         |
|   | 310.444.1601 fax         |
|        |                          |  |  |  |

 
| Loan A                                                      |   |      |   |
|-------------------------------------------------------------|--------|-----------|--------|
|                                                        |   |      |   |
| SEI Institutional Managed Trust — High Yield Bond Fund |   | 3,000,000 |   |
|                                                        |   |      |   |
| Loan B                                                      |   |      |   |
| Banner Health System                                        |   | 1,000,000 |   |
| Adventist Health System                                     |   | 1,000,000 |   |
| Metropolitan West High Yield Bond Fund                      |   | 1,000,000 |   |
| Metropolitan West Strategic Income Fund                     |   | 1,000,000 |   |
| SEI Institutional Managed Trust — High Yield Bond      |   | 1,000,000 |   |

 

93

----

 
|   | MUIRFIELD TRADING LLC |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   | /s/ Meredith J. Koslick |   |
|   |                  | Name: Meredith J. Koslick |
|   |                  | Title: | Assistant Vice President |
|        |                       |  |  |  |

 

94

----

 
|   | MW POST LONG/SHORT           |
|--------|------------------------------|
|   | OPPORTUNITY FUND, LTD        |
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: | Chief Investment Officer |
|        |                              |  |  |  |

 

95

----

 
|   | MW POST PORTFOLIO FUND, LTD  |
|--------|------------------------------|
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: | Chief Investment Officer |
|        |                              |  |  |  |

 

96

----

 
|   | NEMEAN CLO, LTD.                    |
|--------|-------------------------------------|
|   | BY:  ING Capital Advisors LLC, |
|   | as Investment Manager               |
|   |                                |
|   |                                |
|   | By:                                 | /s/ Steven Gorski |   |
|   |                                | Name: Steven Gorski |
|   |                                | Title: | Director |
|        |                                     |  |  |  |

 

97

----

 
|   | NORTHWOODS CAPITAL III, LIMITED          |
|--------|------------------------------------------|
|   | BY: ANGELO, GORDON & CO., L.P., |
|   | AS COLLATERAL MANAGER                    |
|   |                                     |
|   | [NAME OF LENDER]                         |
|   |                                     |
|   |                                     |
|   | By:                                      | /s/  John W.  Fraser |   |
|   |                                     | Name: John W. Fraser |
|   |                                     | Title: | Managing Director |
|        |                                          |  |  |  |

 

98

----

 
|   | NORTHWOODS CAPITAL IV, LIMITED           |
|--------|------------------------------------------|
|   | BY: ANGELO, GORDON & CO., L.P., |
|   | AS COLLATERAL MANAGER                    |
|   |                                     |
|   | [NAME OF LENDER]                         |
|   |                                     |
|   |                                     |
|   | By:                                      | /s/  John W.  Fraser |   |
|   |                                     | Name: John W. Fraser |
|   |                                     | Title: | Managing Director |
|        |                                          |  |  |  |

 

99

----

 
| OAK HILL SECURITIES FUND, L.P.          | OAK HILL SECURITIES FUND II, L.P           |
|-----------------------------------------|--------------------------------------------|
|                                    |                                       |
| By: Oak Hill Securities GenPar, L.P.    | By: Oak Hill Securities GenPar II, L.P.    |
| its General Partner                     | its General Partner                        |
|                                    |                                       |
| By: Oak Hill Securities MGP , Inc. | By: Oak Hill Securities MGP II , Inc. |
| its General Partner                     | its General Partner                        |
|                                    |                                       |
| By:                                     | /s/  Scott D. Krase                   |   | By: | /s/  Scott D. Krase |   |
|                                    | Name:  Scott D. Krase                 |   | Name:  Scott D. Krase |
|                                    | Title:  Vice President                |   | Title:  Vice President |
|                                    |                                       |
|                                    |                                       |
| OAK HILL CREDIT PARTNERS, I, LIMITED    | OAK HILL CREDIT PARTNERS II, LIMITED       |
|                                    |                                       |
| By: Oak Hill CLO Management I, LLC      | By: Oak Hill CLO Management II, LLC        |
| As Investment Manager                   | As Investment Manager                      |
|                                    |                                       |
| By:                                     | /s/  Scott D. Krase                   |   | By: | /s/  Scott D. Krase |   |
|                                    | Name:  Scott D. Krase                 |   | Name:  Scott D. Krase |
|                                    | Title:  Authorized Person             |   | Title:  Authorized Person |
|                                    |                                       |
|                                    |                                       |
| OAK HILL CREDIT PARTNERS III, LIMITED   | OAK HILL CREDIT PARTNERS IV, LIMITED       |
|                                    |                                       |
| By: Oak Hill CLO Management III, LLC    | By: Oak Hill Management IV, LLC            |
| As Investment Manager                   | As Investment Manager                      |
|                                    |                                       |
| By:                                     | /s/  Scott D. Krase                   |   | By: | /s/  Scott D. Krase |   |
|                                    | Name:  Scott D. Krase                 |   | Name:  Scott D. Krase |
|                                    | Title:  Authorized Person             |   | Title:  Authorized Person |
|                                    |                                       |
|                                    |                                       |
| OAK HILL CREDIT ALPHA FUND, L.P.        | OAK HILL CREDIT ALPHA FUND                 |
|                                    | (OFFSHORE), LTD.                           |
| By: Oak Hill Credit Alpha GenPar, L.P.  |                                       |
| its General Partner                     |                                       |
|                                    |                                       |
| By: Oak Hill Credit Alpha MGP, LLC,     |                                       |
| its General Partner                     | By:                                        | /s/  Scott D. Krase |   |
|                                    |                                       | Name:  Scott D. Krase |
| By:                                     | /s/  Scott D. Krase                   |   |   | Title:  Vice President |
|                                    | Name:  Scott D. Krase                 |   |
|                                    | Title:  Vice President                |   |
|                                         |                                            |  |  |  |  |  |

 

100

----

 
|   | [NAME OF LENDER]               |
|--------|--------------------------------|
|   | OCM High Yield Plus Fund, L.P. |
|   |                           | By: OCM High Yield Plus  Fund GP, LLC |
|   |                           | Its: General Partner |
|   |                           | By: Oaktree Capital  Management, LLC |
|   |                           | Its: Managing Member |
|   |                           |
|   |                           |
|   | By:                            | /s/  Tim  Andrews |   |
|   |                           | Name:  Tim Andrews |
|   |                           | Title: | Managing Director |
|   |                           |
|   |                           |
|   | By:                            | /s/  Richard  Ting |   |
|   |                           | Name: Richard Ting |
|   |                           | Title: | Vice President, Legal |
|        |                                |  |  |  |  |  |

 

101

----

 
|   | Oppenheimer Senior Floating Rate Fund, |
|--------|----------------------------------------|
|   | as Tranche C Term Lender               |
|   |                                   |
|   |                                   |
|   | By:                                    | /s/ Lisa Chaffee |   |
|   |                                   | Name: Lisa Chaffee |
|   |                                   | Title: | AVP |
|        |                                        |  |  |  |

 

102

----

 
|   | THE OPPORTUNITY FUND, LLC    |
|--------|------------------------------|
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/ Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: | Chief Investment Officer |
|        |                              |  |  |  |

 

103

----

 
|   | PACIFICA CDO II, LTD. |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   | /s/  Phillip  Otero |   |
|   |                  | Name: Phillip Otero |
|   |                  | Title: | SVP |
|        |                       |  |  |  |

 

104

----

 
|   | PACIFICA CDO III, LTD. |
|--------|------------------------|
|   |                   |
|   |                   |
|   | By:                    | /s/  Phillip  Otero |   |
|   |                   | Name: Phillip Otero |
|   |                   | Title: | SVP |
|        |                        |  |  |  |

 

105

----

 
|   | PACIFICA CDO IV, LTD. |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   | /s/  Phillip  Otero |   |
|   |                  | Name: Phillip Otero |
|   |                  | Title: | SVP |
|        |                       |  |  |  |

 

106

----

 
|   | PIONEER FLOATING RATE TRUST                 |
|--------|---------------------------------------------|
|   | BY:  HIGHLAND CAPITAL  MANGEMENT, L.P. |
|   | ITS SUB-ADVISOR,                            |
|   |                                        |
|   | as Tranche C Term Lender                    |
|   |                                        |
|   | By:                                         | /s/  R.  Joseph Dougherty |   |
|   |                                        | Name: R. Joseph Dougherty |
|   |                                        | Title: | Senior Vice President, Secretary |
|        |                                             |  |  |  |

 

107

----

 
|   | POST TOTAL RETURN            |
|--------|------------------------------|
|   | OFFSHORE FUND, LP            |
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          | /s/  Carl  Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: | Chief Investment Officer |
|        |                              |  |  |  |

 

108

----

 
|   | PRINCIPAL LIFE INSURANCE COMPANY |
|--------|----------------------------------|
|   |                             |   |
|   | By:                              | Principal Global Investors, LLC |
|   |                             | a Delaware limited liability company, |
|   |                             | its authorized signatory |
|   |                             |   |
|   |                             |   |
|   | By:                              | /s/  Jon C.  Heiny |   |
|   |                             | Name: Jon C. Heiny |
|   |                             | Title: | Counsel |
|   |                             |
|   |                             |
|   | By:                              | /s/  R. James  C. Fifield |   |
|   |                             | Name: James C. Fifield |
|   |                             | Title: | Counsel |
|        |                                  |  |  |  |

 

109

----

 
|   | Sankaty Advisors, LLC as Collateral Manager |
|--------|---------------------------------------------|
|   | for Race Point CLO, Limited,                |
|   | as Term Lender                              |
|   |                                        |
|   |                                        |
|   | By:                                         |  /s/ Diane J. Exter |   |
|   |                                        | Name: | Diane J. Exter |
|   |                                        | Title: | Managing Director |
|   |                                        |   | Portfolio Manager |
|        |                                             |  |  |  |  |

 

110

----

 
|   | Sankaty Advisors, LLC as Collateral Manager |
|--------|---------------------------------------------|
|   | for Race Point II CLO, Limited,             |
|   | as Term Lender                              |
|   |                                        |
|   |                                        |
|   | By:                                         |  /s/ Diane J. Exter |   |
|   |                                        | Name: | Diane J. Exter |
|   |                                        | Title: | Managing Director |
|   |                                        |   | Portfolio Manager |
|        |                                             |  |  |  |  |

 

111

----

 
|   | REDWOOD MASTER FUND, LTD. |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       |  /s/  Jonathan Kolatch |   |
|   |                      | Name: Jonathan Kolatch |
|   |                      | Title: Director |

 

112

----

 
|   | ROSEMONT CLO, Ltd.                                              |
|--------|-----------------------------------------------------------------|
|   | By: Deerfield Capital Management LLC as its  Collateral Manager |
|   |                                                            |
|   |                                                            |
|   | By:                                                             |  /s/  Peter Sakon |   |
|   |                                                            | Name: Peter Sakon |
|   |                                                            | Title: Vice President |

 

113

----

 
|   | Salomon Brothers Asset Management Inc. |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    |  /s/  Christopher Lipscombe |   |
|   |                                   | Name: Christopher Lipscombe |
|   |                                   | Title: Director |

 

114

----

 
|   | SATELLITE SENIOR INCOME FUND II, LLC |
|--------|--------------------------------------|
|   |                                 |
|   | BY SATELLITE ASSET MANAGEMENT, L.P.  |
|   | ITS INVESTMENT MANAGER               |
|   |                                 |
|   |                                 |
|   | By:                                  |  /s/  Simon Raykher |   |
|   |                                 | Name: Simon Raykher |
|   |                                 | Title: General Counsel |

 

115

----

 
|   | SENECA CAPITAL LP |
|--------|-------------------|
|   |              |
|   |              |
|   | By:               |  /s/  Doug Hirsch |   |
|   |              | Name: Doug Hirsch |
|   |              | Title: GP |

 

116

----

 
|   | SKY CBNA LOAN FUNDING    |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      |  /s/  Karen Kwan |   |
|   |                     | Name: Karen Kwan |
|   |                     | Title: Assistant Vice President |

 

117

----

 
|   | SOL LOAN FUNDING LLC, for itself or as agent for |
|--------|--------------------------------------------------|
|   | SOL2 Loan Funding LLC                            |
|   |                                             |
|   |                                             |
|   | By:                                              |  /s/  Suzanne Smith |   |
|   |                                             | Name: Suzanne Smith |
|   |                                             | Title: As Attorney-In-Fact |

 

118

----

 
|   | Southfork CLO, Ltd.                   |
|--------|---------------------------------------|
|   | By: Highland Capital Management, L.P. |
|   | As Collateral Manager                 |
|   |                                  |
|   | as Tranche C Term Lender              |
|   |                                  |
|   |                                  |
|   | By:                                   |  /s/  Todd A. Travers |   |
|   |                                  | Name: | Todd A. Travers |
|   |                                  | Title: | Assistant Secretary |
|   |                                  |   | Highland Capital Management, L.P. |
|        |                                       |  |  |  |  |

 

119

----

 
|   | Sowood Alpha Fund Ltd.           |
|--------|----------------------------------|
|   | By: Sowood Capital Management LP |
|   |                             |
|   |                             |
|   | By:                              |  /s/  Megan Kelleher |   |
|   |                             | Name: Megan Kelleher |
|   |                             | Title: Principal and General Counsel |

 

120

----

 
|   | Sowood Alpha Fund LP             |
|--------|----------------------------------|
|   | By: Sowood Capital Management LP |
|   |                             |
|   |                             |
|   | By:                              |  /s/  Megan Kelleher |   |
|   |                             | Name: Megan Kelleher |
|   |                             | Title: Principal and General Counsel |

 

121

----

 
|   | SPHINX DISTRESSED (MW POST        |
|--------|-----------------------------------|
|   | OPPORTUNITY) SEGREGATED PORTFOLIO |
|   | By: Post Advisory Group, LLC      |
|   | As Authorized Agent               |
|   |                              |
|   |                              |
|   | By:                               |  /s/  Carl Goldsmith |   |
|   |                              | Name: Carl Goldsmith |
|   |                              | Title: Chief Investment Officer |

 

122

----

 
|   | Stanfield Arbitrage CDO, Ltd.      |
|--------|------------------------------------|
|   | By: Stanfield Capital Partners LLC |
|   | as its Collateral Manager          |
|   |                               |
|   |                               |
|   | By:                                |  /s/ |   |
|   |                               | Name: |
|   |                               | Title: |

 

123

----

 
|   | Stanfield Carrera CLO, Ltd.        |
|--------|------------------------------------|
|   | By: Stanfield Capital Partners LLC |
|   | as its Asset Manager               |
|   |                               |
|   |                               |
|   | By:                                |  /s/ |   |
|   |                               | Name: |   |
|   |                               | Title: |   |

 

124

----

 
|   | Stanfield Quattro CLO, Ltd.        |
|--------|------------------------------------|
|   | By: Stanfield Capital Partners LLC |
|   | As its Collateral Manager          |
|   |                               |
|   |                               |
|   | By:                                |  /s/ |   |
|   |                               | Name: |
|   |                               | Title: |

 

125

----

 
|   | Stanfield/RMF Transatlantic CDO Ltd. |
|--------|--------------------------------------|
|   | By: Stanfield Capital Partners LLC   |
|   | as its Collateral Manager            |
|   |                                 |
|   |                                 |
|   | By:                                  |  /s/ |   |
|   |                                 | Name: |
|   |                                 | Title: |

 

126

----

 
|   | Stanfield Vantage CLO, Ltd          |
|--------|-------------------------------------|
|   | By: Stanfield Capital Partners, LLC |
|   | as its Asset Manager                |
|   |                                |
|   |                                |
|   | By:                                 |  /s/ |   |
|   |                                | Name: |
|   |                                | Title: |

 

127

----

 
|   | STATE OF SOUTH DAKOTA        |
|--------|------------------------------|
|   | RETIREMENT SYSTEM FUND       |
|   | By: Post Advisory Group, LLC |
|   | As Authorized Agent          |
|   |                         |
|   |                         |
|   | By:                          |  /s/  Carl Goldsmith |   |
|   |                         | Name: Carl Goldsmith |
|   |                         | Title: Chief Investment Officer |

 

128

----

 
|   | State Street Bank and Trust Company |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By:                                 |  /s/  Mary H. Carey |   |
|   |                                | Name: Mary H. Carey |
|   |                                | Title: Vice President |

 

129

----

 
|   | STERLING FARMS FUNDING LLC |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        |  /s/ Meredith J. Koslick |   |
|   |                       | Name: Meredith J. Koslick |
|   |                       | Title: Assistant Vice President |

 

130

----

 
|   | STRONG HIGH YIELD            |
|--------|------------------------------|
|   | BOND FUND                    |
|   | By: WELLS CAPITAL MANAGEMENT |
|   |                         |
|   |                         |
|   | By:                          |  /s/  Gilbert L.  Southwell III |   |
|   |                         | Name: Gilbert L. Southwell III |   |
|   |                         | Title: Vice President |   |

 

131

----

 
|   | SUN AMERICA SENIOR FLOATING RATE FUND  |
|--------|----------------------------------------|
|   |  by: AIG Global Investment  Corp. |
|   | Investment Sub-Adviser                 |
|   |                                   |
|   |                                   |
|   | By:                                    |  /s/ W. Jeffrey Baxter |   |
|   |                                   | Name: W. Jeffrey Baxter |   |
|   |                                   | Title: Vice President |   |

 

132

----

 
|   | TCH SPECTRUM FUND (QP) LP                              |
|--------|--------------------------------------------------------|
|   |                                                   |
|   | Signed: Troob Capital Management LLC, General  Partner |
|   |                                                   |
|   |                                                   |
|   | By:                                                    |  /s/ Peter Troob |   |
|   |                                                   | Name: Peter Troob |
|   |                                                   | Title: Managing Member of General Partner |

 

133

----

 
|   | [TENOR OPPORTUNITY MASTER FUND LTD.,                           |
|--------|----------------------------------------------------------------|
|   | AS ASSIGNEE                                                    |
|   |                                                           |
|   | BY: TENOR OPPORTUNITY ASSOCIATES, LLC, ITS INVESTMENT ADVISOR] |
|   |                                                           |
|   |                                                           |
|   | By:                                                            |  /s/  Alexander C.  Robinson |   |
|   |                                                           | Name: Alexander C. Robinson |
|   |                                                           | Title: Partner |

 

134

----

 
|   | THE TRAVELERS INSURANCE COMPANY, |
|--------|----------------------------------|
|   | as Tranche C Term Lender         |
|   |                             |
|   |                             |
|   | By:                              |  /s/  John Wills |   |
|   |                             | Name: John Wills |   |
|   |                             | Title: Investment Officer |   |

 

135

----

 
|   | TRS IO LLC |
|--------|------------|
|   |       |
|   |       |
|   | By:        |  /s/  Alice L. Wagner |   |
|   |       | Name: Alice L. Wagner |   |
|   |       | Title: Vice President |   |

 

136

----

 
|   | TRS Stark LLC |
|--------|---------------|
|   |          |
|   |          |
|   | By:           | /s/ Alice L. Wagner |   |
|   |          | Name: Alice L. Wagner |
|   |          | Title: Vice President |

 

137

----

 
|   | UBS AG, Stamford Branch, |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      |  /s/  Edward Cripps |   |
|   |                     | Name: | Edward Cripps |
|   |                     | Title: | Director |
|   |                     |   | Banking Products Services, US |
|        |                          |  |  |  |  |

 
|   | By:    |  /s/  Toba  Lumbantobing |                          |
|--------|--------|-----------------------------------------|-------------------------------|
|   |   | Name:                                   | Toba Lumbantobing             |
|   |   | Title:                                  | Associate Director            |
|   |   |                                    | Banking Products Services, US |
|        |        |                                         |                               |  |  |

 

138

----

 
|   | U.S. BANK NATIONAL ASSOCIATION |
|--------|--------------------------------|
|   |                           |
|   |                           |
|   | By:                            |  /s/  Mark R. Olmon |   |
|   |                           | Name: Mark R. Olmon |
|   |                           | Title: Senior Vice President |

 

139

----

 
|   | Victoria Falls CLO, LTD |
|--------|-------------------------|
|   |                    |
|   |                    |
|   | By:                     |  /s/  Mark D.  Senkpiel |   |
|   |                    | Name: Mark D. Senkpiel |
|   |                    | Title: Managing Director |

 

140

----

 
|   | Watershed Capital Institutional Partners, L.P. |
|--------|------------------------------------------------|
|   | By:                                            | WS Partners, L.L.C. |
|   |                                           | Its General Partner |
|   |                                           | As Existing Lenders |
|   |                                           |
|   |                                           |
|   | By:                                            | /s/ Meridee Moore |   |
|   |                                           | Name: | Meridee Moore |   |
|   |                                           | Title: | Senior Managing Member |   |
|        |                                                |  |  |  |  |

 

141

----

 
|   | Watershed Capital Partners, L.P. |
|--------|----------------------------------|
|   | By:                              | WS Partners, L.LC. |
|   |                             | Its General Partner |
|   |                             | As Existing Lenders |
|   |                             |
|   |                             |
|   | By:                              | /s/ Meridee Moore |   |
|   |                             | Name: | Meridee Moore |   |
|   |                             | Title: | Senior Managing Member |   |
|        |                                  |  |  |  |  |

 

142

----

 
|   | Watershed Capital Partners (Offshore), Ltd. |
|--------|---------------------------------------------|
|   | By:                                         | Watershed Asset Management, L.LC. |
|   |                                        | Its Investment Manager |
|   |                                        | As Existing Lenders |
|   |                                        |
|   | By:                                         | /s/ Meridee Moore |   |
|   |                                        | Name: | Meridee Moore |   |
|   |                                        | Title: | Senior Managing Member |   |
|        |                                             |  |  |  |  |

 

143

----

 
|   | WB LOAN FUNDING 2, LLC,  |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      | /s/ Diana M. Himes |   |
|   |                     | Name: Diana M. Himes |
|   |                     | Title: Associate |

 

144

----

 
|   | WhiteHorse I LTD, as Lender |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |  /s/  Ethan M.  Underwood |   |
|   |                        | Name: Ethan M. Underwood |
|   |                        | Title: Portfolio Manager |

 

145

----

 
|   | WhiteHorse II, LTD,      |
|--------|--------------------------|
|   | as Tranche C Term Lender |
|   |                     |
|   |                     |
|   | By:                      |  /s/  Ethan M.  Underwood |   |
|   |                     | Name: Ethan M. Underwood |
|   |                     | Title: Portfolio Manager |

 

146

----

 
|   | Whitney CLO I |                                    |
|--------|---------------|-----------------------------------------|
|   |          |                                    |
|   |          |                                    |
|   | By:           |  /s/  John M.  Casparian |   |   |
|   |          | Name:                                   |  John M. Casparian |
|   |          | Title:                                  | Chief Operating Officer |
|   |          |                                    | Centre Pacific Manager |
|        |               |                                         |  |  |  |

 

147

----

 
|   | Windsor Loan Funding, Limited |
|--------|-------------------------------|
|   | By:                           | Stanfield Capital Partners LLC |
|   |                          | as its Investment Manager |
|   |                          |
|   |                          |
|   | By:                           |  /s/ |   |
|   |                          | Name: |
|   |                          | Title: |

 

148

----