Exhibit
10.23


 


***Indicates CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.


 


 


 


CREDIT AGREEMENT


 


Dated as of November 16,
2004


 


Among


 


NORTHWEST AIRLINES, INC.,


 


as Borrower,


 


THE LENDERS PARTY HERETO


 


and


 


***,


 


as
Administrative Agent


 


in respect of
one


 


Airbus
A330-223 Aircraft


 


FAA
Registration No. ***


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.  
  Certain Defined Terms

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.2.  
  Terms Defined in Mortgage

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.3.  
  Computation of Time Periods

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.4.  
  Accounting Terms

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  AMOUNT AND TERMS OF THE LOAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1.  
  The Loan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.2.  
  Making the Loan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.3.  
  Fees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.4.  
  [Intentionally Omitted]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.5.  
  Repayment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.6.  
  Interest

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.7.  
  Interest Rate and Period Determination

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.8.  
  Prepayments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.9.  
  Increased Costs

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.10.  
  Illegality

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.11.  
  Payments and Computations

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.12.  
  Taxes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.13.  
  Sharing of Payments, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.14.  
  Use of Proceeds

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.15.  
  Lender Cooperation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.16.  
  Replacement of Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.17.  
  Airbus Lenders

  	
   

  	
   

  



 


i





















 


	
  SECTION 2.18.  
  Funding Arrangements

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  CONDITIONS TO MAKING THE LOAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.  
  Conditions Precedent to the Loan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1.  
  Representations and Warranties of the Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  COVENANTS OF THE BORROWER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1.  
  Affirmative Covenants

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.2.  
  Compliance with Mortgage

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.3.  
  Maintenance of Office

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.4.  
  Negative Covenants

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  EVENTS OF DEFAULT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1.  
  Events of Default

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  THE AGENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1.  
  Authorization and Action

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.2.  
  Each Agent’s Reliance, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.3.  
  The Agents and Their Affiliates

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.4.  
  Lender Credit Decision

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.5.  
  Indemnification

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.6.  
  Successor Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1.  
  Amendments, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.2.  
  Notices, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.3.  
  No Waiver; Remedies

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.4.  
  Costs and Expenses

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.5.  
  Right of Setoff

  	
   

  	
   

  



 


ii





















 


	
  SECTION 8.6.  
  Binding Effect

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.7.  
  Assignments and Participations

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.8.  
  Confidentiality

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.9.  
  Certain Agreements and Representations of Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.10.  
  GOVERNING LAW

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.11.  
  Execution in Counterparts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.12.  
  Jurisdiction, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.13.  
  WAIVER OF JURY TRIAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.14.  
  Severability

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.15.  
  Headings

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.16.  
  Guarantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.17.  
  Interpretation of Letter Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.18.  
  Quiet Enjoyment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.19.  
  Concerning Clause (i)(y) of Section 3.6(a)(I) of the Mortgage

  	
   

  	
   

  



 


iii





















 


	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  -

  	
  List of Lending Offices

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  -

  	
  Approved Commercial Banks

  
	
   

  	
   

  	
   

  
	
  Schedule III

  	
  -

  	
  Principal Payment Schedule

  
	
   

  	
   

  	
   

  
	
  Schedule IV

  	
  -

  	
  Approved Countries for Reregistration

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  -

  	
  Form
  of Promissory Note

  
	
   

  	
   

  	
   

  
	
  Exhibit
  B

  	
  -

  	
  Form
  of Notice of Loan

  
	
   

  	
   

  	
   

  
	
  Exhibit
  C

  	
  -

  	
  Form
  of Assignment and Acceptance

  
	
   

  	
   

  	
   

  
	
  Exhibit D-1

  	
  -

  	
  Form of
  Opinion of Associate General Counsel of the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit
  D-2

  	
  -

  	
  Form of
  Opinion of Cadwalader, Wickersham & Taft LLP, Special Counsel for the
  Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit
  D-3

  	
  -

  	
  Form of
  Opinion of Cadwalader, Wickersham & Taft LLP, Special Counsel for the
  Borrower, Regarding Section 1110 of the Federal Bankruptcy Code

  
	
   

  	
   

  	
   

  
	
  Exhibit
  D-4

  	
  -

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

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Confidentiality Agreement

  



 


iv





















 


CREDIT
AGREEMENT


 


Dated as of November 16,
2004


 


NORTHWEST
AIRLINES, INC., a Minnesota corporation (the “Borrower”), the lender or
lenders party to this Agreement from time to time (each, a “Lender”) and
***, a Delaware corporation, as Administrative Agent (as hereinafter defined)
for the Lenders hereunder agree as follows:


 


WHEREAS, the
Borrower and AVSA, S.A.R.L., a société à responsabilité limitée organized and
existing under the laws of the Republic of France (“AVSA”), have entered
into the Airbus Purchase Agreement, which covers, among other matters, the sale
by AVSA and the purchase by the Borrower of certain Airbus Aircraft.


 


WHEREAS, the
Borrower and AVSA have agreed pursuant to the A330 Financing Letter Agreement
No. 1, dated as of December 21, 2000, as amended by Amendment No. 1 dated December 20,
2002 (the “Letter Agreement”), to certain additional terms and
conditions regarding the sale of the Airbus Aircraft provided for in the Airbus
Purchase Agreement, including the responsibility of AVSA to arrange specified
financing alternatives for certain of the Airbus Aircraft.


 


WHEREAS,
pursuant to the terms and conditions of the Letter Agreement, AVSA has agreed
to provide (or procure that a nominee provide) debt financing pursuant to the
Letter Agreement, to the Borrower to finance the purchase of the Aircraft
pursuant to the Airbus Purchase Agreement.


 


WHEREAS, on
the basis of the foregoing and subject to the terms and conditions of this
Agreement, the Initial Lender is prepared to make the Loan in the amount of the
Financed Purchase Price for the Aircraft;


 


NOW THEREFORE,
in consideration of the mutual agreements herein contained, the parties hereto
in such capacity agree as follows:


 


ARTICLE I



DEFINITIONS AND ACCOUNTING TERMS


 


SECTION 1.1.  
Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):


 


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


 


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


 





















 


“Affiliate” means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) of a Person means the possession, direct
or indirect, of the power to vote 5% or more of the Voting Stock of such Person
or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by contract or
otherwise.


 


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


 


“AIFS Term Loan” means the Amended and Restated Loan Agreement,
dated as of March 29, 1996, between the Borrower and Airbus Financial
Services (formerly, Airbus Industrie Financial Services), as amended or
otherwise modified from time to time.


 


“AIL Trusts” means the ten (10) A320-200 sub-lease agreements
between the Borrower as sub-lessee and AI Leasing IV, Inc., as sub-lessor.


 


“Airbus” means Airbus S.A.S. (or any person or any entity that
succeeds to substantially all of the business and operations thereof).


 


“Airbus Aircraft” means an Airbus model A330-200 aircraft to be
delivered, or delivered, as the context may require, pursuant to the Airbus
Purchase Agreement.


 


“Airbus Lender” means Airbus, AFC or any of their Affiliates.


 


“Airbus Loan” means any loan (other than the Loan) made by an
Airbus Lender pursuant to the Letter Agreement.


 


“Airbus Purchase Agreement” means that certain Airbus A330
Purchase Agreement dated as of December 21, 2000 between AVSA and the
Borrower as originally executed and as modified, amended or supplemented in
accordance with the terms thereof.


 


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


 


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


 


“Alternate Rate” has the meaning specified in Section 2.7(b).


 


2





















 


“Applicable Margin” means (A) *** % per annum, except that
(B) if the Borrower has elected to extend the final maturity of
the Loan pursuant to Section 2.5(b), from and after the third anniversary of the
date of the Loan, the following: from the third to the fifth anniversary of the date of
the Loan, *** % of the NWA Extended Term Market Margin, from the fifth to the
sixth anniversary of the date of the Loan, *** % of the NWA Extended Term
Market Margin, from the sixth to the ninth anniversary of the date of the Loan,
*** %
of the NWA Extended Term Market Margin, 
from the ninth to the tenth anniversary of the date of the Loan, ***
% of the NWA Extended
Term Market Margin and from the tenth to the twelfth anniversary of the date of
the Loan, *** % of the NWA Extended Term Market Margin, provided
that, if, prior to the third anniversary of the date of the Loan, the Borrower
has extended the final maturity of the Airbus Loans for six (6) or more Letter
Agreement Aircraft pursuant to Section 2.5(b) of the applicable credit
agreements for such Airbus Loans, then the Applicable Margin (the “Multiple Extension
Margin”), from and after the third anniversary of the date of
the Loan, shall be the following: from the third to the fourth anniversary of the date of
the Loan, *** % of the NWA Extended Term Market Margin, from the fourth to the
sixth anniversary of the date of the Loan, *** % of the NWA Extended Term
Market Margin, from the sixth to the seventh anniversary of the date of the
Loan, *** % of the NWA Extended Term Market Margin,  from the seventh to the eighth anniversary of
the date of the Loan, *** % of the NWA Extended Term
Market Margin, from the eighth to the tenth anniversary of the date of the
Loan, *** % of the NWA Extended Term Market Margin and from the tenth to the
twelfth anniversary of the date of the Loan, *** % of the NWA Extended Term
Market Margin; provided further that, notwithstanding anything to the
contrary in this clause (B), in no case shall the Applicable Margin
exceed *** % per annum or be less than *** % per annum (or, if the Multiple
Extension Margin is applicable, in no case shall the Applicable Margin exceed
*** % per annum or be less than *** % per annum) during the period from the
third anniversary of the date of the Loan to the twelfth anniversary of the
date of the Loan.


 


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


 


“AVSA” has the meaning specified in the recitals hereto.


 


“BFE” means all buyer furnished equipment, if any, installed or
loaded on the Aircraft on the date of its purchase and financing hereunder.


 


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


 


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


 


“Business Day” means (i) for all purposes other than as covered
by clause
(ii) below, any day except Saturday, Sunday and any day which shall be in New
York, New York, Dublin, Ireland, Paris, France or Minneapolis, Minnesota a
legal holiday or a day on which banking institutions are authorized or required
by law or other government


 


3





















 


action to
close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, the Loan if it bears interest based upon the
Eurodollar Rate, any day which is a Business Day described in clause (i) above and which is
also a day for trading by and between banks in the interbank Eurodollar market.


 


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


 


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


 


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


 


“Confidential Information” means any information that the
Borrower furnishes to the Agent or any Lender in writing designated as
confidential, but does not include any such information (i) that is or becomes
generally available to the public or (ii) that is or becomes available to the
Agent or such Lender from a source other than the Borrower, unless the Agent or
Lender has the actual knowledge (without being obligated to conduct any
investigation) that such information has been made available by such source in
breach of a confidentiality agreement which such source is bound by with
respect to such information.


 


“Consolidated” refers to the consolidation of accounts in
accordance with GAAP.


 


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


 


“Eligible Assignee” has the meaning specified in Section 8.7.


 


“Engine” means (A) each of the two Pratt and Whitney Model
PW4168A engines installed on the Aircraft at the time of delivery to the
Borrower of the Aircraft, as further specified in the Mortgage, whether or not
from time to time installed on the Aircraft or installed on any other aircraft
and (B) any Replacement Engine that may from time to time be substituted for
such engine; together, in each case, with any and all Parts incorporated or
installed in or attached thereto.


 


“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.


 


“Eurodollar Rate” means, with respect to the Loan, the rate per
annum (rounded to the nearest 1/100 of 1%) equal to the British Bankers’
Association quotation that appears on Page 3750 of the Telerate screen (or
otherwise on such screen or on such other screen, page or service as may
replace the Telerate screen) as of 11:00 A.M., London time, two Business Days
prior to the beginning of the applicable Interest Period as the rate for dollar
deposits to be delivered on the first day of such Interest Period and


 


4





















 


maintained for
such Interest Period.  In the event that
such rate does not so appear on the Telerate Screen (or otherwise as
aforesaid), the “Eurodollar Rate” for purposes of this definition shall
be the arithmetic average (rounded to the nearest 1/100 of 1%) of the offered
quotation to first-class banks in the interbank Eurodollar market by each
Reference Bank in London for dollar deposits with maturities comparable to the
applicable Interest Period determined as of 11:00 A.M. (London time) on the
date which is two Business Days prior to the commencement of such Interest
Period.  If any one or more of the
Reference Banks shall not furnish such timely information to the Administrative
Agent for the purpose of determining any such interest rate, the Administrative
Agent shall determine such interest rate on the basis of timely information
furnished by the remaining Reference Bank or Reference Banks.


 


“Event of Default” has the meaning specified in Section 6.1.


 


“FAA” means the United States Federal Aviation Administration,
and any agency or instrumentality of the United States government succeeding to
its functions.


 


“Federal Bankruptcy Code” means the Bankruptcy Act of Title 11
of the United States Code, as amended from time to time, and any successor
provisions thereof.


 


“Financed Purchase Price” means $ ***.


 


“GAAP” has the meaning specified in Section 1.4.


 


“Governmental Authority” means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.


 


“Initial Lender” means AFC, as the initial lender under this
Agreement.


 


“Interest Payment Date” has the meaning specified in Section 2.6.


 


“Interest Period” means the period commencing on (and including)
the date of the Loan and ending on (but excluding) the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on (and including) the last day of the immediately
preceding Interest Period and ending on (but excluding) the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of the first such Interest Period shall be one month and the duration of each
subsequent Interest Period shall be one month (or any other period acceptable
to the Required Lenders), as the Borrower may elect, by notice received by the
Administrative Agent not later than 5:00 P.M. (New York time) on the fourth
Business Day prior to the first day of the applicable Interest Period; provided,
however, that:


 


(i)                                     whenever
the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur
on the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest Period to occur in the


 


5





















 


next following calendar month, the last day
of such Interest Period shall occur on the next preceding Business Day; and


 


(ii)                                  whenever
the first day of any Interest Period occurs on a day of an initial calendar
month for which there is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.


 


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


 


“Lenders” has the meaning specified in the preamble hereto.


 


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


 


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


 


“Letter Agreement Aircraft” means “Aircraft” as defined in the
Letter Agreement.


 


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


 


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


 


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


 


“Manufacturer” means Airbus.


 


“Mortgage” means the Mortgage and Security Agreement dated as of
November 16, 2004, between the Borrower and the Collateral Agent named
therein, as supplemented, modified or amended from time to time.


 


“NAC” means Northwest Airlines Corporation, a Delaware
corporation.


 


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


 


“Notice of Loan” has the meaning specified in Section 2.2.


 


6





















 


“NWA Extended Term Market Margin” means the lesser of (x) the
prevailing margin over the Eurodollar Rate at which the Borrower could borrow
in a commercial bank loan transaction of the same principal amount with the
same tenor and on the same terms and collateral security as the Loan (the “Prevailing
Margin”) and (y) *** % per annum (or, if the Multiple Extension Margin is
applicable, *** % per annum).  The
Prevailing Margin shall be determined on the third anniversary of the date of
the Loan by the agreement of two commercial banks selected from among those
listed on Schedule II hereto, one of which shall be selected by the
Borrower and the other of which shall be selected by the Administrative Agent
as provided in Section 2.5(b).  If
the two commercial banks fail to agree on the Prevailing Margin, within 30 days
after the date of Borrower’s extension notice delivered under Section 2.5(b),
the parties shall agree upon a third commercial bank to determine the
Prevailing Margin, and the average of the closest two rates determined by the
three commercial banks, as calculated by the Administrative Agent, shall be the
Prevailing Margin.  If the Prevailing
Margin shall not be determinable by the Administrative Agent by the aforesaid
procedure on or before the fifth (5th) Business Day before the twelfth (12th)
Principal Payment Date, the NWA Extended Term Market Margin shall be *** % per
annum (or, if the Multiple Extension Margin is applicable, *** % per annum)
until the Prevailing Margin has been so determined.


 


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


 


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


 


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


 


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


 


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


 


7





















 


“Principal Payment Date” has the meaning specified in Section 2.5.


 


“Reference Banks” means ABN AMRO Bank N.V., Deutsche Bank AG and
JPMorgan Chase Bank.


 


“Register” has the meaning specified in Section 8.7(c).


 


“Required Lenders” means Lenders holding not less than 662/3%
of the aggregate outstanding principal amount of the Loan.


 


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


 


“Taxes” has the meaning specified in Section 2.12.


 


“Transportation Code” means Title 49 of the United States Code,
comprising those provisions formerly referred to as the Federal Aviation Act of
1958, as amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.


 


“U.C.C.” has the meaning set forth in Section 3.1(c).


 


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


 


SECTION 1.2.  
Terms Defined in Mortgage. Terms for which meanings are provided in any
Mortgage are, unless otherwise defined herein, used in this Agreement with such
meanings.


 


SECTION 1.3.  
Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean to but
excluding.”


 


SECTION 1.4.  
Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
in the United States consistent with those applied in the preparation of the
financial statements referred to in Section 4.1(a)(v) (“GAAP”).


 


8





















 


ARTICLE II


 


AMOUNT AND TERMS OF THE LOAN


 


SECTION 2.1.  
The Loan. The Initial Lender agrees, on the terms and conditions
hereinafter set forth, to make the Loan to the Borrower on a Business Day in an
amount equal to the Financed Purchase Price.


 


SECTION 2.2.  
Making the Loan. The Loan shall be made on notice, given not later than 5:00
P.M. (New York time) on the fourth Business Day prior to the date of the
proposed Loan, by the Borrower to the Administrative Agent, which shall give to
the Initial Lender prompt notice thereof. Such notice of the Loan (the “Notice
of Loan”) shall be by telephone, confirmed immediately in writing, or
telecopier or telex, in substantially the form of Exhibit B-1 hereto,
specifying therein (i) the requested date of the Loan (the actual date of the
Loan being the date on which the Loan is made), (ii) the aggregate amount of
the Loan, (iii) the date of delivery to the Borrower of the Aircraft to secure
the Loan, (iv) the Principal Payment Dates for the Loan and the amount of
principal of the Loan to be paid on each such date (expressed as a percentage
of the original principal amount thereof) and (v) identifying information for
the Aircraft to be financed.  The Initial
Lender shall, before 11:00 A.M. (New York time) on the date of the Loan, (i)
make available for the account of its Lending Office to the Administrative
Agent at the account of the Administrative Agent at Deutsche Bank Trust Company
Americas, New York, 280 Park Avenue, New York, New York 10017 (account number
04 875 437 ABA 021 001 033) or (ii) make available for the account of its
Lending Office at its account at Calyon, 1301 Avenue of the Americas, New York,
New York Branch (account number 01 22456 0001 00 ABA 026 008 073), in same day
funds, the amount of the Loan.  After the
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent, if such funds have been
received in its account listed above, or the Initial Lender, if such funds have
remained in its account listed above, will make such funds available to the
Borrower by transfer to AVSA at such account as AVSA may direct.


 


SECTION 2.3.  
Fees. No commitment, arrangement or like fees shall be payable by the
Borrower in connection with this Agreement or any of the other Loan Documents.


 


SECTION 2.4.  
[Intentionally Omitted]


 


SECTION 2.5.  
Repayment. (a)  Initial Term. 
The Borrower shall repay to the Administrative Agent for the ratable
account of each Lender the principal amount of the Loan in consecutive
quarterly installments on the quarterly anniversary dates of the date of borrowing
of the Loan (each such quarterly anniversary date (or if any such date is not a
Business Day, the next Business Day) being referred to as a “Principal Payment
Date”) as follows:  (x) *** % of the
initial principal amount of the Loan shall be due and payable on each of the
first eight (8) Principal Payment Dates, (y) *** percent of the initial
principal amount of the Loan shall be due and payable on each of the ninth
through eleventh Principal Payment Dates, and (z) the unpaid principal amount
of the Loan shall be due and payable on the twelfth Principal Payment Date, all
of which shall be set forth on Schedule III; provided, however, that the
Borrower may elect to extend the final maturity of the Loan as provided in Section 2.5(b).


 


9





















 


(b)                                 Extended
Term.  So long as no Default or Event
of Default shall have occurred and be continuing, the Borrower may elect to
extend the final maturity of the Loan by providing written notice of such
election to the Administrative Agent no less than sixty days prior to the third
anniversary of the date of the Loan. 
Such notice shall set forth the date upon which the Borrower shall repay
in full the outstanding principal amount of the Loan.  Such date shall be a Principal Payment Date
and shall be no later than the *** anniversary of the date of the
Loan.  Such notice shall also set forth
the Borrower’s nomination of a commercial bank from among the commercial banks
listed on Schedule II hereto for purposes of determining the NWA Extended
Term Market Margin.  The Administrative
Agent agrees to make its nomination of a commercial bank from among the
commercial banks listed on Schedule II hereto for such purposes within ten
(10) Business Days after receipt of Borrower’s extension notice.  If Borrower’s extension notice has been
delivered, (i) only *** percent of the initial principal amount of the Loan
shall be due and payable on the twelfth (12th) Principal Payment
Date notwithstanding the provisions of Section 2.5(a), clause (z) or Schedule III,
and (ii) the Administrative Agent shall, at least two Business Days prior to
the twelfth (12th) Principal Payment Date, provide to the Borrower,
the Lenders and the Collateral Agent a written notice containing (A) the
Applicable Margin effective on and after the twelfth (12th)
Principal Payment Date, and (B) a revised Schedule III containing the
additional Principal Payment Dates and the amount of principal of the Loan to
be repaid on each such date (such amounts to be determined by the
Administrative Agent on the basis of a mortgage-style level payment profile at
an assumed fixed interest rate of *** % per annum and a balloon payment at
final maturity of *** % of the initial principal amount of the Loan).  The unpaid principal amount of the Loan will
be due and payable on the final Principal Payment Date.  Such notice of the Administrative Agent,
containing the revised Applicable Margin and revised Schedule III, as so
delivered, shall be conclusive and binding on the parties, absent manifest
error by the Administrative Agent in its preparation.


 


SECTION 2.6.  
Interest. (a)  Scheduled Interest.  The Borrower shall pay interest on the unpaid
principal amount of the Loan from the date of the Loan until the Loan shall be
paid in full, payable in arrears, on the last day of each Interest Period (each
such date, an “Interest Payment Date”), at an interest rate per annum equal to
the sum of (x) the Eurodollar Rate for each Interest Period plus
(y) the Applicable Margin in effect from time to time, except as otherwise
provided in Section 2.6(b), 2.7(b) or 2.10.


 


(b)                                 Default
Interest.  Upon the occurrence and
during the continuance of an Event of Default under Section 6.1(a), the
Borrower shall pay interest on (i) the overdue portion of the unpaid principal
amount of the Loan, payable in arrears on the dates specified in paragraph (a)
above at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on the Loan pursuant to paragraph (a) above and (ii)
to the fullest extent permitted by law, the amount of any interest or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the then applicable rate of interest.


 


SECTION 2.7.  
Interest Rate and Period Determination. (a)  The interest rate
for each Interest Period shall be established by the Administrative Agent.  The Administrative Agent shall give prompt
notice to the Borrower and the Lenders of the applicable interest rate


 


10





















 


determined by the Administrative Agent from time to
time and the rate, if any, furnished by each Reference Bank and used by the
Administrative Agent for the purpose of determining the Eurodollar Rate.


 


(b)                                 In
the event that, prior to the first day of any Interest Period, the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the market generally, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Administrative
Agent shall give telecopy or telephonic notice thereof to the Borrower and the
Lenders as soon as practicable thereafter. 
During the next thirty days, the Borrower and the Administrative Agent
shall negotiate a mutually satisfactory interest rate to be substituted for the
Eurodollar Rate.  If a substituted
interest rate is agreed upon, it shall be effective from the first day of the
applicable Interest Period.  If the
Borrower and the Administrative Agent fail to agree upon a substituted interest
rate, the applicable interest rate for the Loan shall be equal to the rate
determined by the Lenders to be the Lenders’ cost (excluding the margin
(however defined)) to maintain the Loan. 
The replacement interest rate determined pursuant to this paragraph (b)
shall herein be referred to as the “Alternate Rate”.


 


(c)                                  The
Lenders agree to an Interest Period of a specified number of days to be agreed
with and at the request of the Borrower in the event the Borrower requests such
an accommodation in connection with a refinancing and prepayment of the Loan.


 


SECTION 2.8.  
Prepayments. (a)  The Borrower may, upon at least ten Business
Days notice to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment (unless the giving of ten Business Days
notice as aforesaid is not practicable, in which event the Borrower agrees to
give such shorter notice as is practicable but in any event not to be less than
three Business Days), and if such notice is given the Borrower shall prepay the
outstanding principal amount of the Loan in whole but not in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that, in the event of any such prepayment of the
Loan while interest thereon is based on the Eurodollar Rate, the Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.4(c).  The Loan, if prepaid pursuant to this Section 2.8,
may not be reborrowed.


 


(b)                                 If
an Event of Loss occurs with respect to the Aircraft and the Borrower elects
not to substitute another aircraft for the Aircraft in accordance with the
Mortgage, the Borrower shall prepay the outstanding principal amount of the
Loan in whole, together with accrued interest to the date of such prepayment
and all other Obligations then due and payable; provided that (x) the date of
prepayment shall not be later than the earlier of the third Business Day
following receipt of insurance proceeds in respect of the Aircraft (but in no
event earlier than 30 days after the occurrence of such Event of Loss) or the
first Business Day following the 120th day after the occurrence of such Event
of Loss, (y) the date of such prepayment shall be notified by the Borrower to
the Administrative Agent at least two Business Days prior thereto and (z) if
interest on the Loan is based upon the Eurodollar Rate at the time of such
prepayment, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 8.4(c).


 


11





















 


SECTION 2.9.  
Increased Costs. If, due to either (i) the introduction after the date
of this Agreement of or any change after the date of this Agreement in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) issued after the date of this
Agreement, (1) there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining the Loan (excluding for
purposes of this Section 2.9 any such increased costs resulting from (x)
Taxes or Other Taxes (as to which Section 2.12 shall govern) and (y)
changes in the rate of taxation of overall net income of such Lender or (2) any
Lender determines that compliance with any law or regulation or any guideline
or request from any central bank or other governmental authority (whether or
not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender’s commitment to lend hereunder and
other commitments of this type, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender additional
amounts sufficient to compensate, in the case of clause (1) above, such Lender
for such increased cost or, in the case of clause (2) above, such Lender or
such corporation in the light of such circumstances.  A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest
error.


 


SECTION 2.10.  
Illegality. Notwithstanding any other provision of this Agreement, if
any Lender shall notify the Administrative Agent that the introduction after the
date of this Agreement of or any change after the date of this Agreement in or
in the interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
any Lender or its Lending Office to perform its obligations hereunder to make,
fund or maintain its portion of the Loan bearing interest based upon the
Eurodollar Rate as contemplated herein, then: 
(i) such Lender shall notify the Administrative Agent and the Borrower
of the same (ii) such portion of the Loan will convert into a Loan bearing
interest at the Alternate Rate (as determined pursuant to Section 2.7(b)
except that only the Affected Lender shall be involved), and (iii) the
obligation of such Lender to make, fund and maintain its portion of the Loan
based upon the Eurodollar Rate shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist.


 


SECTION 2.11.  
Payments and Computations. (a)  The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York time)
on the day when due in U.S. dollars to the Administrative Agent at Deutsche
Bank Trust Company Americas, New York, 280 Park Avenue, New York, New York
10017, ABA No. 021 001 033, account name *** Collections, account number 04 875
437 (or to such other account as shall be designated by the Administrative
Agent from time to time) in same day funds. The Administrative Agent will
promptly thereafter but in no event later than 3:00 P.M. (New York time) on the
date such funds are received by the Administrative Agent from the Borrower
cause to be distributed like funds relating to the payment of principal or
interest ratably (other than amounts payable pursuant to Section 2.9,
2.12, 2.16, 2.17, 2.18 or 8.4(c) and amounts reflecting different prevailing
interest rates on the Loan) to the Lenders for the account of their respective
Lending Offices, and like funds relating to the payment of any other amount
payable to any


 


12





















 


Lender to such Lender for the account of its Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.7(d),
from and after the effective date specified in such Assignment and Acceptance,
the Administrative Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.


 


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


 


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


 


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


 


(e)                                  Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due to such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Administrative Agent, each such Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Eurodollar Rate or the Alternate
Rate as the case may be.


 


SECTION 2.12.  
Taxes. (a)  All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority or any political subdivision or taxing authority
thereof or therein (all such taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called “Taxes”).  If any Taxes are required to be withheld from


 


13





















 


any amounts payable to the Agent or any Lender
hereunder or under the Notes, the amounts so payable to the Agent or such
Lender shall be increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes.  In addition, the Borrower shall
pay any Other Taxes to the appropriate taxing authority in accordance with
applicable law.  Whenever any Taxes or
Other Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof.  If the Borrower fails to pay any Taxes or
Other Taxes which are subject to indemnification hereunder when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such
failure.  Each Lender agrees to use
reasonable efforts to initially fund the Loan and to change its applicable
lending office, as the case may be, if to do so (i) would reduce amounts
payable by the Borrower to such Lender pursuant to this subsection, (ii) would
not result in the incurrence by such Lender of additional costs or expenses
(unless the Borrower agrees to pay such costs and expenses) and (iii) would
not, in the reasonable judgment of such Lender, be disadvantageous to such
Lender for material regulatory, competitive or internal management
reasons.  The agreements of the Borrower
in this subsection shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder and under the
other Loan Documents.


 


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


 


(1)                                  Any Taxes or Other
Taxes imposed by the United States federal government or any state or local
government or taxing authority therein that is imposed on, based on, or
measured by net or gross income, or that is a franchise tax (imposed in lieu of
a tax on net or gross income) or a branch profits tax (including any such Taxes
or Other Taxes collected by means of withholding) (herein referred to as “United
States Income Taxes”), other than a United States Income Tax that is payable by
means of withholding solely as a result of (A) the enactment after the date of
execution and delivery of this Agreement (the “Applicable Date”) of an
amendment to the Code or the regulations thereunder or (B) ratification after
the Applicable Date of any protocol or other amendment to any United States
income tax convention in effect on the Applicable Date or (C) the ratification
after the Applicable Date of any new United States income tax convention (any
of (A), (B) or (C), a “Change in Law”); provided, however, that the Borrower
shall have no liability for any United States Income Taxes on payments to or
for the benefit of any Lender that is not AFC that is in excess of the United
States Income Taxes that would be imposed on such payment if made to AFC;


 


(2)                                  Any Taxes or Other
Taxes imposed as a result of a transfer or disposition by a Lender or Agent
including, without limitation, of all or any portion of its interest in the
Aircraft, or any other Collateral or any Note or the Loan (including sale of
participations in such Note or the Loan) unless such transfer or disposition
shall occur


 


14





















 


pursuant to the exercise of remedies during the continuation of an
Event of Default or pursuant to a change of lending office that is required
under Section 2.15;


 


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


 


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


 


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


 


(6)                                  Any Taxes or Other
Taxes to the extent arising out of or caused by, or to the extent such Taxes or
Other Taxes would not have been incurred but for, the willful misconduct or
gross negligence of such Lender or Agent or the inaccuracy or breach of any
representation, covenant or agreement by such Lender or Agent in this Agreement
or any related document; and


 


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


 


(c)                                  Each
Lender that is not incorporated under the laws of the United States of America
or a state thereof agrees that, on or before the first Interest Payment Date
after the date on which such Lender becomes a Lender hereunder, it will deliver
to the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service (“IRS”) Form W-8BEN, or W-8ECI or other
applicable form, as the case may be, certifying that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States Federal income taxes or at a reduced rate.  Each such Lender also agrees to deliver to
the Borrower and the Agent two further copies of the said IRS Form W-8BEN or
W-8ECI or other or successor applicable forms or other manner of certification,
as the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or the
Agent.  Notwithstanding any other
provision of this paragraph, a Lender shall not be required to deliver any form
pursuant to this paragraph that such Lender is not legally able to deliver.


 


15





















 


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


 


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


 


(f)                                    If
a written claim is made against any Lender or the Administrative Agent for any
Taxes or Other Taxes, such Lender or Administrative Agent, as the case may be,
shall promptly notify the Borrower in writing of such claim, and upon written
request of Borrower shall, at the Borrower’s sole cost and expense, contest the
validity or amount of such claim or permit the Borrower, to contest the
validity or amount of such claim, provided, however, that the
Lender or Administrative Agent shall not be required and Borrower shall not be
permitted to contest such claim unless (i) the Borrower shall provide to the
Lender an opinion of the Vice President Tax of the Borrower reasonably
satisfactory to such Lender stating that a reasonable basis exists to contest
such claim and (ii) the Borrower agrees to indemnify the Lender for any
additional taxes, interest, penalties or other expenses incurred as a result of
such contest.


 


SECTION 2.13.  
Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loan (other than amounts due to such Lender
pursuant to Section 2.9, 2.12, 2.16, 2.18 or 8.4(c) or on account of
differing rates of interest on portions of the Loan) in excess of its ratable
share of payments on account of the Loan obtained by all the Lenders (such
Lender, the “Overpaid Lender”), such Overpaid Lender shall forthwith (x) notify
the Administrative Agent of such overpayment (and the Administrative Agent
shall notify the Lenders thereof) and (y) pay to the other Lenders such amounts
in cash as shall be necessary to cause such Overpaid Lender to share the excess
payment ratably with each of them, and the Overpaid Lender, upon such payment
to each other Lender, shall be deemed to have purchased a participation in such
other Lender’s Loan in an amount equal to such payment; provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
Overpaid Lender, such payment to and purchase from each Lender shall be
rescinded and such Lender shall repay to the Overpaid Lender such payment to the
extent of such recovery together with an amount equal to such Lender’s ratable
share (according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the Overpaid Lender) of
any interest or other amount paid or payable by the Overpaid Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so deemed
to have purchased a participation from another Lender pursuant to this Section 2.13
may, to the fullest extent permitted by law, exercise all its rights to obtain
payment (including the right of


 


16





















 


set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of
such participation.


 


SECTION 2.14.  
Use of Proceeds. The proceeds of the Loan shall be available (and the
Borrower agrees that it shall use such proceeds) solely in connection with the
purchase of the Aircraft.


 


SECTION 2.15.  
Lender Cooperation. Each Lender agrees that, as promptly as practicable
after it becomes aware of the occurrence of any event or the existence of a
condition which would cause the provisions of Section 2.9 or Section 2.10
to be applicable to such Lender, it will, to the extent not inconsistent with
such Lender’s internal policies, use reasonable efforts to make, fund or
maintain the Loan through another lending office of such Lender if as a result
thereof the additional monies which would otherwise be required to be paid in
respect of the Loan pursuant to Section 2.9 would be materially reduced or
the illegality or other adverse circumstances which would otherwise exist
pursuant to Section 2.10 would cease to exist, and if, as reasonably
determined by such Lender, the making, funding or maintaining of the Loan
through such other lending office would not otherwise materially adversely
affect the Loan or such Lender.


 


SECTION 2.16.  
Replacement of Lenders. The Borrower may, upon written notice to the
Administrative Agent (which shall promptly notify the affected Lender), arrange
for another institution (which may be a Lender) to purchase, in accordance with
Section 8.7, the portion of the Loan made by an affected Lender. For
purposes of this Section 2.16, “affected Lender” shall mean a Lender which
has asserted claims against the Borrower under or sought rights or remedies
provided by Section 2.9, 2.10 or 2.12.


 


SECTION 2.17.  
Airbus Lenders. The Borrower acknowledges and agrees that AFC or another
Airbus Lender may obtain the funds necessary for it to make the Loan (in whole
or in part) from commercial banks or other institutional lenders who, as a
condition to providing such funds, may require an Airbus Lender to enter into
covenants of a nature not substantially different from those described in Section 2.9.
The Borrower agrees to pay on demand to AFC or any other Airbus Lender an
amount equal to any amount AFC or any other Airbus Lender is required to pay
under any such covenant as a result of costs so imposed on AFC or another Airbus
Lender which are of general application. 
Any such Airbus Lender shall provide the Borrower with a statement in
reasonable detail of such costs.


 


SECTION 2.18.  
Funding Arrangements. If the Loan is not made on the date requested in
the applicable Notice of Loan by reason of the failure of the Borrower to
accept delivery of the Aircraft upon valid tender by AVSA under the Airbus
Purchase Agreement, the Borrower agrees to pay to the Initial Lender, promptly
after demand by the Initial Lender, an amount equal to the cost of funds
arranged by the Initial Lender to make the Loan, less earnings from Permitted
Investments (as defined in the Mortgage) by the Initial Lender of such funds,
for the period from the date of the requested borrowing of the Loan as set
forth in the applicable Notice of Loan to the earlier of (x) the actual date of
the Loan and (y) one month after such requested date of borrowing.


 


17





















 


ARTICLE III



CONDITIONS TO MAKING THE LOAN


 


SECTION 3.1.  
Conditions Precedent to the Loan. The obligation of the Initial Lender
to make the Loan shall be subject to the following conditions precedent.


 


(a)                                  The Administrative Agent shall
have received, each dated the date of the Loan, in form and substance
satisfactory to the Administrative Agent:


 


(i)                                     one Note to the
order of the Initial Lender in respect of the Loan;


 


(ii)                                  an Officer’s
Certificate of the Borrower stating (and such statements shall be true) that:


 


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


 


(y)  no Default or Event of Default has occurred
and is continuing.


 


(iii)                               certified copies of the
resolutions of the Board of Directors of the Borrower approving the Airbus Purchase
Agreement and the financing of the Aircraft purchased thereunder and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, to authorize the execution of the Loan Documents and the
performance of the Borrower’s obligations thereunder;


 


(iv)                              a certificate of the
Secretary or an Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to sign the Loan
Documents and the other documents to be delivered hereunder and thereunder;


 


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


 


(vi)                              a favorable opinion of
Cadwalader, Wickersham & Taft LLP, special counsel for the Borrower, substantially
in the form of Exhibit D-2 hereto, and a favorable opinion of the same counsel
as to the availability of benefits under Section 1110 of the Federal
Bankruptcy Code, substantially in the form of Exhibit D-3 hereto; and


 


(vii)                           a favorable opinion of Daugherty,
Fowler, Peregrin & Haught, a Professional Corporation, special aviation
counsel for the Administrative Agent, substantially in the form of Exhibit D-4
hereto and addressed to the Administrative Agent and the Initial Lender.


 


(b)                                 The following documents shall
have been duly authorized, executed and delivered by the respective parties
thereto, shall each be reasonably satisfactory in form and


 


18





















 


substance to the Administrative Agent and shall be in full force and
effect and copies (or an excerpt in the case of the purchase agreement
described in clause (i) below) shall have been delivered to the Administrative
Agent and its counsel:


 


(i)                                     a copy of Clauses
12 and 13 of the Airbus Purchase Agreement in respect of the Aircraft,
certified by an authorized representative of the Borrower to be true and
correct and not to be terminated, amended or waived by the Borrower in respect
of the Aircraft;


 


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


 


(iii)                               a bill of sale for the
Aircraft on AC Form 8050-2 or such other form as may be approved by the FAA on
the date of delivery of the Aircraft executed by AVSA in favor of the Borrower
and dated such date; and


 


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


 


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


 


(i)                                     acknowledgment
copies or stamped receipt copies of proper financing statements, duly filed
under the Uniform Commercial Code (the “U.C.C.”) of all jurisdictions
that the Administrative Agent may deem necessary or desirable in order to
perfect the security interests created by the Mortgage;


 


(ii)                                  evidence of the
completion of all recordings and filings of or with respect to the Mortgage
that the Administrative Agent may deem necessary or desirable in order to
perfect the security interest created by the Mortgage;


 


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


 


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


 


(d)                                 The Borrower has (subject to the
filing of an appropriate bill of sale with the FAA) good title to the Aircraft,
free and clear of Liens other than the Permitted Liens.


 


(e)                                  The Aircraft has been duly
certified by the FAA as to type and airworthiness and the Administrative Agent
has received a copy of such certification (it being agreed that if a copy of
such certification is not available at the time of borrowing of the Loan,


 


19





















 


such copy may be delivered within five Business Days thereafter without
waiving compliance by the Borrower with Section 3.2(b) of the Mortgage).


 


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


 


(g)                                 Letter Agreement Conditions.  The Aircraft shall be one of the aircraft
specified in clause (A)(2.0) of the Letter Agreement as being eligible for
financing hereunder.


 


(h)                                 No applicable law or regulation
or interpretation thereof by appropriate regulatory authorities shall be in
effect which, in the reasonable opinion of the Administrative Agent or its
counsel, would materially restrict, prohibit or make it illegal for the Initial
Lender to make the Loan; and no action or proceeding shall have been instituted
nor shall government action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or governmental agency at the time of the Loan to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or the transactions contemplated hereby.


 


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


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES


 


SECTION 4.1.  
Representations and Warranties of the Borrower. (a)  The
Borrower represents and warrants, on the date of this Agreement, as follows:


 


(i)                                     The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota; is duly qualified to do business as a foreign
corporation in each jurisdiction in which its operations or the nature of its
business requires, other than failures to qualify which would not have a
material adverse effect on the Consolidated business, assets, properties or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole or on the ability of the Borrower to perform its obligations under
this Agreement; is a Certificated Air Carrier; has its location (for purposes
of Article 9 of the Uniform Commercial Code) in Eagan, Minnesota; holds all
licenses, certificates, permits and franchises from the appropriate agencies of
the United States and/or all other governmental authorities having jurisdiction
necessary to authorize the Borrower to engage in air transport and to carry on
scheduled passenger service as presently conducted (other than those licenses,
certificates, permits and franchises which, if not obtained, would not have a
material adverse effect on the Consolidated business, assets, properties or
condition (financial or otherwise) of the


 


20





















 


Borrower and its Subsidiaries taken as a whole or on the ability of the
Borrower to perform its obligations under this Agreement); and has the
corporate power and authority to conduct its business as it is presently being
conducted.


 


(ii)                                  The execution,
delivery and performance by the Borrower of this Agreement and the consummation
of the transactions contemplated hereby, are within the Borrower’s corporate
powers, have been duly authorized by all necessary corporate action, and do not
contravene (1) the Borrower’s charter or by-laws or (2) any law or any
contractual restriction binding on or affecting the Borrower and do not result
in or require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to the Mortgage) upon or with respect to any
of its properties.


 


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


 


(iv)                              This Agreement has been
duly executed and delivered by the Borrower. 
This Agreement is the legal, valid binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.


 


(v)                                 The Consolidated
balance sheet of NAC and its Subsidiaries as at the end of the most recent
fiscal year of NAC for which such balance sheet is available, and the related
Consolidated statements of operations and cash flows of NAC and its
Subsidiaries for such fiscal year, accompanied by an opinion of Ernst &
Young, independent public accountants (or any other firm of independent public
accountants of recognized standing selected by NAC), and the Consolidated
balance sheet of NAC and its Subsidiaries as at the end of the most recent
fiscal quarter of NAC (excluding the final fiscal quarter of each fiscal year)
for which such balance sheet is available, and the related Consolidated
statements of operations and cash flows of NAC and its Subsidiaries for the
fiscal period then ended, duly certified by the chief financial officer of NAC,
copies of which have been furnished to the Administrative Agent, fairly
present, subject, in the case of said balance sheet as at the end of such
fiscal quarter, and said statements of operations and cash flows for such
fiscal period then ended, to year-end audit adjustments, the Consolidated
financial condition of NAC and its Subsidiaries as at such dates and the
Consolidated results of the operations of NAC and its Subsidiaries for the
period ended on such dates, all in accordance with generally accepted
accounting principles consistently applied.


 


(vi)                              There is no pending or
threatened action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries before any court,


 


21





















 


governmental agency or arbitrator that (1) is reasonably likely to have
a material adverse effect on (A) the business, condition (financial or
otherwise), operations or properties of the Borrower and its Subsidiaries taken
as a whole, (B) the rights and remedies of the Administrative Agent or any
Lender under this Agreement or (C) the ability of the Borrower to perform its
obligations under this Agreement, or (2) purports to affect the legality,
validity or enforceability of this Agreement or the consummation of the
transactions contemplated hereby.


 


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


 


(b)                                 On the date of the Loan, the
Borrower represents and warrants as set forth in paragraphs (i), (v) and (vii)
of Section 4.1(a) as of such date and as follows:


 


(i)                                     The Borrower has
the corporate power and authority to own the Aircraft securing the Loan.


 


(ii)                                  The execution,
delivery and performance by the Borrower of each Loan Document to which it is
or will be a party, and the consummation of the transactions contemplated
thereby, are within the Borrower’s corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (1) the Borrower’s
charter or by-laws or (2) any law or any contractual restriction binding on or
affecting the Borrower and do not result in or require the creation of any
Lien, security interest or other charge or encumbrance (other than pursuant to
the Mortgage) upon or with respect to any of its properties.


 


(iii)                               No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or any other third party is required for the due execution, delivery
and performance by the Borrower of any Loan Document to which it is or will be
a party, except for (1) the orders, permits, waivers, exemptions,
authorizations and approvals of the Governmental Authorities having
jurisdiction over the operation of the Aircraft by the Borrower, which orders,
permits, waivers, exemptions, authorizations and approvals have been duly
obtained or will prior to the date of the Loan be duly obtained, and will on
the date of the Loan be in full force and effect and (2) any such authorization
or approval or other action, notice or filing to the extent required to be
given or obtained only after the date of the Loan.


 


(iv)                              Except for (1) the filing
for recording pursuant to the Transportation Code of the Mortgage and the
Mortgage Supplement attached thereto and made a part thereof, (2) the filing of
financing statements (and continuation statements at periodic intervals) with
respect to the security and other interests created by such documents under the
Uniform Commercial Code of Minnesota (which financing statements the Borrower
has caused or is in the process of causing to be presented in due form for
filing to the appropriate filing office in Minnesota) and (3) the taking of
possession by the Agent of the original counterparts of the Mortgage and the
Mortgage Supplement covering the Aircraft, no further action, including any
filing or recording of any document (including


 


22





















 


any financing statement in respect thereof under Article 9 of the
Uniform Commercial Code of any applicable jurisdiction), is necessary or
advisable in order to establish or perfect the Agent’s security interest in the
Aircraft (granted pursuant to the Mortgage and the Mortgage Supplement covering
the Aircraft) as against the Borrower and any third parties in any applicable
jurisdictions in the United States.


 


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


 


(vi)                              This Agreement has been,
and each of the other Loan Documents to which the Borrower will be a party when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Loan Documents to which the
Borrower will be a party when delivered hereunder will be, the legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with their respective terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability.


 


(vii)                           There is no pending or
threatened action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator
that (1) is reasonably likely to have a material adverse effect on (A) the
business, condition (financial or otherwise), operations or properties of the
Borrower and its Subsidiaries taken as a whole, (B) the rights and remedies of
the Agents or any Lender under the Loan Documents or (C) the ability of the
Borrower to perform its obligations under the Loan Documents or (2) purports to
affect the legality, validity or enforceability of this Agreement or any Loan
Document or the consummation of the transactions contemplated hereby or
thereby.


 


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


 


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


 


(x)                                   The Agent, as
secured party under the Mortgage, is entitled to the protection of Section 1110
of the Federal Bankruptcy Code in connection with its right to take possession
of the Airframe and Engines securing the Loan in the event of a case under
Chapter 11 of the Federal Bankruptcy Code in which the Borrower is a debtor.


 


(xi)                                The Borrower is not in
material default under any material financing (including, without limitation,
any other financing pursuant to the Letter Agreement, the financing under the
AIFS Term Loan if Airbus Financial Services (formerly Airbus


 


23





















 


Industrie Financial Services) or an Affiliate remains at risk, any
lease financing pursuant to an AIL Trust, if Airbus Leasing IV Inc. (formerly
AI Leasing IV, Inc.) or an Affiliate remains at risk, or an EETC participation,
if Airbus or an Affiliate remains at risk, or financing drawn under a
commitment provided by the engine manufacturer in respect of Letter Agreement
Aircraft) or under the Airbus Purchase Agreement.


 


(xii)                             After December 31,
2000 and until sixty (60) days before the date of the Loan, there has been no
material adverse change in the financial condition of the Borrower having a
material adverse effect on the Borrower’s ability to perform its material
obligations under the Loan Documents.


 


ARTICLE V



COVENANTS OF THE BORROWER


 


SECTION 5.1.  
Affirmative Covenants. So long as the Loan shall remain unpaid, the
Borrower will:


 


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


 


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


 


(c)                                  Preservation
of Corporate Existence, Etc.  Preserve and maintain and cause each of its
Subsidiaries to preserve and maintain, its corporate existence, rights (charter
and statutory) and franchises; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to preserve any right or franchise if
the Board of Directors of the Borrower or such Subsidiary shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Borrower or such Subsidiary. 
Notwithstanding the foregoing, the Borrower shall at all times be a
Certificated Air Carrier.


 


24





















 


(d)                                 Visitation
Rights.  At any reasonable time and
from time to time, permit the Administrative Agent or any of the Lenders or any
agents or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of their officers
or directors and with their independent certified public accountants, provided
that (i) any Lender exercising its rights under this Section 5.1(d) must act
through the Administrative Agent, (ii) neither the Borrower nor any of its
Subsidiaries shall be required to violate any confidentiality provision of any
agreement by which it is bound and (iii) nothing in this Section 5.1(d)
shall entitle the Agent or Lender or any of their agents or representatives, in
connection with the inspection of the Aircraft, to open any panels, bays or
similar openings without the consent of the Borrower.


 


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


 


(f)                                    Reporting
Requirements.  Furnish to the
Lenders:


 


(i)                                     as soon as
available and in any event within 60 days after the end of each of the first
three quarters of each fiscal year of NAC, the Consolidated balance sheet of
NAC and its Subsidiaries as of the end of such quarter and Consolidated
statements of operations and cash flows of NAC and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the
end of such quarter, duly certified (subject to year-end audit adjustments) by
the chief financial officer of NAC as having been prepared in accordance with
generally accepted accounting principles;


 


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


 


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


 


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


 


25





















 


Borrower or any Subsidiary files with the
Securities and Exchange Commission or any national securities exchange;


 


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


 


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


 


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


 


SECTION 5.2.  
Compliance with Mortgage. Comply with the terms and provisions of the
Mortgage.


 


SECTION 5.3.  
Maintenance of Office. Maintain an office in the State of Minnesota
where notices, presentations and demands in respect of this Agreement and the
other Loan Documents may be made upon it (which office shall be maintained at
2700 Lone Oak Parkway, Eagan, Minnesota 55121 until such time as the Borrower
shall have notified the Administrative Agent of a change of location).


 


SECTION 5.4.  
Negative Covenants. So long as the Loan shall remain unpaid, the
Borrower will not make or permit, or permit any of its Subsidiaries to make or
permit, any change in accounting policies or reporting practices, except as
required or permitted by GAAP.


 


ARTICLE VI



EVENTS OF DEFAULT


 


SECTION 6.1.  
Events of Default. Each of the following events shall constitute an
event of default with respect to the Loan (“Events of Default”) (whether any
such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
government body) and each such Event of Default shall continue so long as, but
only as long as, it shall not have been remedied:


 


(a)                                  the
Borrower shall fail to make any payment within *** days after the same shall
have become due of principal of, or interest on, any Note evidencing the Loan;
or (ii) the Borrower shall fail to make any payment when the same shall become
due of any other Obligations with respect to the Loan, and such failure shall
continue


 


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unremedied for *** days after the receipt by
the Borrower of written notice thereof from the Administrative Agent; or


 


(b)                                 the
Borrower shall have failed to perform or observe (or cause to be performed and
observed) in any material respect any covenant or agreement to be performed or
observed by it under this Agreement or the Mortgage, and such failure shall
continue unremedied for a period of thirty (30) days after receipt by the
Borrower of written notice thereof from the Administrative Agent; provided,
however, that if the Borrower shall have undertaken to cure any such
failure which arises under Section 3.2(c) of the Mortgage or under the
first sentence of Section 3.2(b) of the Mortgage as it relates to
maintenance, service, repair or overhaul or under Section 3.4(a), (b), (c)
or (d) of the Mortgage and, notwithstanding the diligence of the Borrower in
attempting to cure such failure, such failure is not cured within said
thirty-day period but is curable with future due diligence, there shall exist
no Event of Default under this Section 6.1(b) so long as the Borrower is
proceeding with due diligence to cure such failure and such failure is remedied
not later than one hundred eighty (180) days after receipt by the Borrower of
such written notice; or


 


(c)                                  any
representation or warranty made by the Borrower herein or in the Mortgage or
any document or certificate furnished by the Borrower in connection herewith or
therewith or pursuant hereto or thereto shall prove to have been incorrect in
any material respect at the time made and the incorrectness of any such
representation or warranty shall not have been cured (to the extent of the
adverse impact of such incorrectness on the interests of the Lenders) within
thirty (30) days after the receipt by the Borrower of written notice from the
Administrative Agent advising the Borrower of the existence of such
incorrectness; or


 


(d)                                 the
commencement of an involuntary case or other proceeding in respect of the
Borrower in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law in the United States or seeking the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Borrower or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and unstayed for
a period of ninety (90) consecutive days or an order, judgment or decree shall
be entered in any proceeding by any court of competent jurisdiction appointing,
without the consent of the Borrower, a receiver, trustee or liquidator of the
Borrower, or of any substantial part of its property, or sequestering any
substantial part of the property of the Borrower and any such order, judgment
or decree or appointment or sequestration shall be final or shall remain in
force undismissed, unstayed or unvacated for a period of ninety (90) days after
the date of entry thereof; or


 


(e)                                  the
commencement by the Borrower of a voluntary case under the Federal bankruptcy
laws, as now constituted or hereafter amended, or any other applicable federal
or state bankruptcy, insolvency or other similar law in the United States, or
the consent by the Borrower to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or for


 


27





















 


all or substantially all of its property, or
the making by the Borrower of any assignment for the benefit of creditors or
the Borrower shall take any corporate action to authorize any of the foregoing;
or


 


(f)                                    the
Borrower shall fail to carry and maintain on or with respect to the Aircraft
(or cause to be carried and maintained) insurance required to be maintained in
accordance with the provisions of Section 3.6 of the Mortgage and such
failure shall continue for a period of fifteen (15) days after receipt by the
Borrower of written notice thereof from the Administrative Agent; or


 


(g)                                 for
so long as the Loan is then held in whole or in part by a Lender (or Lenders)
who controls at such time the ability to accelerate the Loan, the maturity of
any other Airbus Loan then held in whole or in part by a Lender (or Lenders)
who controls at such time the ability to accelerate such other Airbus Loan
shall have been accelerated;


 


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


 


Upon the
occurrence of any Event of Default, the Administrative Agent shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare all the Notes, all interest thereon and all other amounts
payable under this Agreement in connection with the Loan to be forthwith due
and payable, whereupon the Loan and Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, the Loan, the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.


 


ARTICLE VII



THE AGENTS


 


SECTION 7.1.  
Authorization and Action. Each Lender hereby appoints and authorizes
each Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are expressly delegated to
such Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto.  Each
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and any other Loan Document. 
As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), each
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon


 


28





















 


the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law or is not within the powers and discretion expressly
delegated to such Agent pursuant to the Loan Documents.  Each Agent agrees to give to each Lender
prompt notice of each notice received by it from the Borrower pursuant to the
terms of this Agreement.


 


SECTION 7.2.  
Each Agent’s Reliance, Etc. Neither Agent nor such Agent’s directors,
officers, agents or employees shall be liable for any action taken or omitted
to be taken by it or them under or in connection with the Loan Documents,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent:  (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.7;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties representations (whether written or oral)
made in or in connection with the Loan Documents; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of the Loan Documents on the part of the
Borrower or to inspect the property (including the books and records and the
Airbus Aircraft) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any Lien or security
interest created or purported to be created under or in connection with, the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (vi) shall incur no liability under or in respect of the Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram or telex) believed by it to be genuine
and signed or sent by the proper party or parties.


 


SECTION 7.3.  
The Agents and Their Affiliates. Each Agent (or an Affiliate of such
Agent) shall have the same rights and powers under the Loan Documents as any
other Lender and may exercise the same as though it were not an Agent, and the
term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include
each Agent in its individual capacity. 
Each Agent and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if such Agent were not an Agent and
without any duty to account therefor to the Lenders.


 


SECTION 7.4.  
Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.1(a)(v) and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem


 


29





















 


appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.


 


SECTION 7.5.  
Indemnification. The Lenders agree to indemnify each Agent and such
Agent’s directors, officers, agents or employees (to the extent not reimbursed
by the Borrower), ratably according to the respective principal amounts of the
Notes then held by each such Lender, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of the Loan Documents or any action taken or omitted by such Agent
under the Loan Documents, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from an Agent’s
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse each Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by such
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, the Loan Documents, to the extent that such Agent is
not reimbursed for such expenses by the Borrower.


 


SECTION 7.6.  
Successor Agent. Subject to the appointment and acceptance of a
successor agent as provided below, either Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, or the
earlier written request of such Agent to resign addressed as aforesaid, the
Required Lenders shall have the right to appoint a successor Agent.  If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent’s giving of notice of resignation or
the Required Lenders’ removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent.  In each case, the successor Agent shall be an
entity having a consolidated tangible net worth of at least $75,000,000.  Upon the acceptance of any appointment as an
Agent by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. 
After any retiring Agent’s resignation or removal hereunder as an Agent,
the provisions of this Article VII (including, without limitation, Section 7.5)
shall inure to the retiring Agent’s benefit as to any actions taken or omitted
to be taken by it while it was an Agent under the Loan Documents.  Notwithstanding anything to the contrary
herein, the Administrative Agent and the Collateral Agent under (and as defined
in) the Mortgage shall be the same institution.


 


ARTICLE VIII


 


MISCELLANEOUS


 


SECTION 8.1.  
Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes or the other Loan Documents, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and


 


30





















 


signed by the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders (or, in the
case of clauses (b) and (c) below, by the holder of each Note affected
thereby), do any of the following: (a) reduce the principal of, or interest on,
the Loan or the Notes or any other amounts hereunder, (b) postpone any date
fixed for any payment of principal of, or interest on, the Notes or any other
amounts payable hereunder, (c) change the aggregate unpaid principal amount of
the Notes, or the number of Lenders, that shall be required for the Lenders or
any of them to take any action hereunder, (d) release any material portion of
any collateral held to secure the obligations of the Borrower in respect of the
Loan under the Loan Documents or (e) amend this Section 8.1; and provided
further that no amendment, waiver or consent shall, unless in writing and
signed by the Lenders required above to take such action and by the Agent,
affect the rights or duties of the Agent under this Agreement or any Note.


 


SECTION 8.2.  
Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telecopier or telegraphic
communication) and mailed, telecopied, telegraphed or delivered, if to the
Borrower, at its address at Department A4010, 2700 Lone Oak Parkway, Eagan, MN
55121, Attention: Senior Vice President and Treasurer (Telecopier No. 612-726-2221);
if to the Initial Lender, at its Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; if to the
Administrative Agent, at its address at *** Avenue, New York, NY 10017,
Attention General Counsel (Telecopier No. 212-***), with a copy to *** at its
address at ***  Attention: Contract
Administration (Telecopier No.***); or, as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrower and the
Agent.  All such notices and
communications shall, when mailed, telecopied or telegraphed, be effective when
deposited in the mails, telecopied or delivered to the telegraph company, respectively,
except that notices and communications to the Agent or any Lender pursuant to Article II,
III or VII shall not be effective until received. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this Agreement
or the Notes or of any Exhibit hereto to be executed and delivered hereunder
shall be effective as delivery of a manually executed counterpart thereof.


 


SECTION 8.3.  
No Waiver; Remedies. No failure on the part of any Lender or the Agent
to exercise, and no delay in exercising, any right under any Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.


 


SECTION 8.4.  
Costs and Expenses. (a)  The Borrower agrees to pay on demand
the reasonable and adequately documented fees and expenses of Simpson Thacher
& Bartlett LLP, special counsel to the Initial Lender and the Agents, and
of Daugherty, Fowler, Peregrin & Haught, a Professional Corporation,
special aviation counsel to the Administrative Agent, in connection with the
preparation, execution and delivery of the Loan Documents, but no other legal
fees or expenses. The Borrower further agrees to pay on demand all reasonable
and adequately documented costs and expenses of the Agent and the Lenders, if
any (including,


 


31





















 


without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of the Loan Documents and the other documents
to be delivered under the Loan Documents, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.4(a).


 


(b)                                 The Borrower agrees to indemnify
and hold harmless (x) each Lender, the Agents, Airbus and AVSA, (y) their
respective Affiliates, and (z) their respective officers, directors, employees,
agents and advisors (each, an “Indemnified Party”) from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation
for a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with the Loan Documents, any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
the Loan, whether or not such investigation, litigation or proceeding is
brought by the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability or
expense (i) results from such Indemnified Party’s gross negligence or willful
misconduct, (ii) arises by reason of laws or governmental regulations, orders
or other legal requirements pertaining to secured lending by such Indemnified
Party, (iii) consists of Taxes or Other Taxes (whether or not otherwise
indemnified by the Borrower), (iv) is attributable, in the case of a particular
Indemnified Party, to the incorrectness of any representation or warranty or
the breach of any covenant of such Indemnified Party in the Loan Documents, (v)
is attributable to amendments to the Loan Documents not made in accordance with
the terms thereof, (vi) constitutes an administrative expense, (vii) arises
because of the gross negligence or willful misconduct of the Agent in
distributing funds in accordance with the Loan Documents, (viii) arises due to
a transfer or disposition of an Indemnified Party’s interest in the Aircraft or
in the Loan Documents other than as required therein or following the
occurrence of an Event of Default or (ix) results from actions of Airbus or
AVSA in their respective capacities as manufacturer and seller of the Aircraft.


 


(c)                                  If (i) any payment or prepayment
of principal of the Loan is made by the Borrower (or any replacement lender
pursuant to Section 2.16) to or for the account of a Lender other than on
the last day of the Interest Period for the Loan, as a result of a prepayment
pursuant to Section 2.8, acceleration pursuant to Section 6.1 or for
any other reason or (ii) the Loan is converted from being based on the
Eurodollar Rate to being based on a substitute rate pursuant to Section 2.10
other than on the last day of the Interest Period for the Loan, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the Agent),
pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur and as are set forth in reasonable detail in a certificate
furnished to the Borrower within 90 days after the incurrence of such loss,
cost or expense as a result of such payment or conversion (as the case may be),
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain the Loan.


 


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


 


SECTION 8.5.  
Right of Setoff. Upon (i) the occurrence and during the continuance of
any Event of Default and (ii) the making of the request or the granting of the
consent specified by Section 6.1 to authorize the Administrative Agent to
declare the Notes relating to the Loan to be due and payable pursuant to the
provisions of Section 6.1, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under any Loan Document,
whether or not such Lender shall have made any demand under such Loan Document
and although such obligations may be unmatured; provided that an Airbus Lender
shall not be entitled to set off and apply as aforesaid deposits held by or indebtedness
owing by the Manufacturer or AVSA to the Borrower.  Each such Lender agrees promptly to notify
the Borrower after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and application.
The rights of each such Lender under this Section 8.5 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) that such Lender may have.


 


SECTION 8.6.  
Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower, the Administrative Agent and the Initial Lender
and thereafter shall be binding upon and inure to the benefit of the Borrower,
the Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.


 


SECTION 8.7.  
Assignments and Participations. (a)  Each Lender (x) may, at
any time, and (y) shall, so long as no Default has occurred and is continuing
and if demanded by the Borrower pursuant to the provisions of Section 2.16,
assign to one or more Persons all or a portion of its rights and obligations
under the Loan Documents (including, without limitation, the portion of the
Loan owing to it and the Note or Notes held by it); provided, however, that (i)
each such assignment may be of a constant or of a varying, percentage of all
rights and obligations under this Agreement and the other Loan Documents, (ii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the principal amount of the Loan of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, (iii) each such assignment shall be
(x) (A) to any Airbus Lender or any Affiliate thereof, or (B) to any special
purpose entity formed pursuant to Section 8.7(j), or (y) (A) to a bank or
other financial institution with a combined capital, surplus and undivided
profits of at least $ ***, or a corporation whose consolidated tangible net
worth is at least $ ***, exclusive of goodwill, in either case as of the
proposed date of such sale, as determined in accordance with GAAP or (B) to any
Affiliate of any such bank, financial institution or corporation if such bank,
financial institution or corporation furnishes to the


 


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Borrower an agreement or agreements of such bank,
financial institution or corporation (in form and substance reasonably
satisfactory to the Borrower) unconditionally guaranteeing to the Borrower such
Affiliate’s obligations to the Borrower hereunder, so long as such entity
referred to in clause (x) or (y) is (A) not an airline, a commercial air
carrier, an air freight forwarder, an entity engaged in the business of parcel
transport or other similar business (collectively, a “Potential Competitor”)
and (B) is not a Person (other than a bank or other financial institution)
controlling, controlled by or under common control with any such Potential
Competitor (the entities referred to in clauses (x) and (y) above, subject to
the limitations aforesaid in clauses (A) and (B), collectively, the “Eligible
Assignees”), (iv) each such assignment made as a result of a demand by the
Borrower pursuant to Section 2.16 shall be arranged by the Borrower, shall
be to an Eligible Assignee acceptable to the Administrative Agent (which
acceptance shall not be unreasonably withheld) and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
the Loan Documents or an assignment of a portion of such rights and obligations
made concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
the Loan Documents and (v) no Lender shall be obligated to make any such
assignment as a result of a demand by the Borrower pursuant to Section 2.16
unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Loan owing to
such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under the
Loan Documents.  The parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance together
with any Note subject to such assignment. 
Upon such execution, delivery, acceptance and recording from and after
the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).


 


(b)                                 By executing and delivering an
Assignment and Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.1(a)(v)


 


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and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
the Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee represents and warrants that either (x) no part of the funds to
be used by it for the purchase of a portion of the Loan (or any part thereof)
constitutes assets of any “employee benefit plan” as defined in Section 3(3)
of ERISA or (y) the proposed assignment will not result in a nonexempt
prohibited transaction (as defined in Section 4975 of the Internal Revenue
Code and ERISA); (vii) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (ix) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required
to be performed by it as a Lender.


 


(c)                                  The Administrative Agent shall
maintain at its address referred to in Section 8.2 a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lenders, and the principal
amount of the Loan owing to, each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.


 


(d)                                 Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for any surrendered Notes new Notes to the order of such
Eligible Assignee each in an amount equal to the portion of such surrendered
Note assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a portion of such
surrendered Note, a new Note to the order of the assigning Lender in an amount
equal to such retained portion and such old Note shall be returned to the
Borrower marked “cancelled”. Such new Note or Notes shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.


 


(e)                                  Each Lender may sell
participations to one or more Eligible Assignees in or to all or a portion of
the Loan owing to it and the Note or Notes held by it; provided, however,
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement and the other Loan
Documents, (iv) the Borrower, each Agent and the other Lenders


 


35





















 


shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Loan Documents, and (v) each such participation shall be in a minimum
amount of $5,000,000 (unless otherwise agreed to by the Borrower).


 


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


 


(g)                                 Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Loan owing to it and the Notes held by it)
in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System or any other Person.


 


(h)                                 The Borrower agrees to cooperate
with each Lender to accommodate the efforts of such Lender to transfer, sell or
assign all or any part of its rights and obligations under this Agreement
pursuant to this Section 8.7.  Each
Lender severally agrees to reimburse the Borrower’s reasonable and adequately
documented external legal and investment bank fees and expenses in respect of
any such transfer, sale or assignment.


 


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


 


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


 


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


 


36





















 


(2)                                  that not more than
two Initial Lender Sell-Down transactions (as defined herein and in the credit
agreements in respect of other Airbus Loans) per calendar year shall be subject
to the provisions of this Section 8.7(j)(or the comparable provisions of
the credit agreements in respect of other Airbus Loans) (it being understood
that any one Initial Lender Sell-Down transaction may involve more than one
credit agreement for purposes of this subclause) in which review and approval
of the placement or offering materials by the Borrower is required as provided
in the preceding subclause (1);


 


(3)                                  that a special
purpose entity (an “SPV”) organized in a manner acceptable to the placement
agents, rating agencies and other participants in an Initial Lender Sell-Down
transaction shall be an acceptable “Eligible Assignee” under the Loan Documents
(it being understood that such SPV may have only nominal capitalization);


 


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


 


(5)                                  that, if requested by
the Initial Lender, the Borrower will provide reliance letters with respect to
the legal opinions delivered at the closing of the Loan at the closing of an
Initial Lender Sell-Down transaction, provided that such reliance letters need
only relate to the date of the closing of the Loan; and


 


(6)                                  from and after the
closing of an Initial Lender Sell-Down transaction, that Section 2.11 of
this Agreement shall be deemed amended by adding a new paragraph (f) to read as
follows:


 


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


 


; it being agreed that the reasonable costs and expenses of Borrower
(including reasonable legal fees and disbursements) incurred by the Borrower in
complying with clauses (4) and (5) above and in connection with its review and
approval of any widely circulated (as, for example, in a Rule 144A offering)
placement or offering materials to be utilized in connection with an Initial
Lender Sell-Down shall be reimbursed by the Initial Lender.


 


SECTION 8.8.  
Confidentiality. Neither Agent nor any Lender nor the Borrower shall
disclose any Confidential Information to any other Person without the consent
of each


 


37





















 


other, except (a) to such Agent’s or such Lender’s
Affiliates and their officers, directors, employees, agents and advisors and,
as contemplated by Section 8.7(f), to actual or prospective assignees and
participants, and then only on a confidential basis or as otherwise permitted
under Section 8.7(j), (b) as required by any law, rule or regulation or
judicial process and (c) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.  Notwithstanding anything herein to the contrary,
any party subject to confidentiality obligations hereunder or under any other
related document (and any employee, representative or other agent of such
party) may disclose to any and all persons, without limitation of any kind,
such party’s U.S. federal income tax treatment and the U.S. federal income tax
structure of the transactions contemplated by this Agreement relating to such
party and all materials of any kind (including opinions or other tax analyses)
that are provided to it relating to such tax treatment and tax structure. However,
no such party shall disclose any information relating to such tax treatment or
tax structure to the extent nondisclosure is reasonably necessary in order to
comply with applicable securities laws.


 


SECTION 8.9.  
Certain Agreements and Representations of Lenders. Each Lender
represents and warrants that: (i) such Lender qualifies as an Eligible
Assignee; (ii) such Lender will not make the Loan or acquire any interest in
the Loan with the assets of any “employee benefit plan” as defined in Section 3(3)
of ERISA or of any “plan” within the meaning of Section 4975(e)(1) of the
Internal Revenue Code, unless the acquisition will not result in a non-exempt
prohibited transaction (as defined in Section 4975 of the Code and ERISA;
and (iii) such Lender will acquire the Loan and each Note for investment and
not with a view to resale or distribution (it being understood that such Lender
may pledge or assign as security its interest in the Loan and each Note issued
to it), provided that the disposition of its property shall at all times be and
remain within its control, except that such Lender may sell, transfer or
otherwise dispose of any Note or any portion thereof or grant participations
therein, in a manner which in itself will not require registration under the
Securities Act of 1933, as amended.


 


SECTION 8.10.  
GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


SECTION 8.11.  
Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.


 


SECTION 8.12.  
Jurisdiction, Etc. (a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America, in each case sitting in New York City, in any action
or proceeding arising out of or relating to the Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the


 


38





















 


judgment may be heard and determined in such state
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in such action or proceeding or in
any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.


 


(b)                                 The Borrower hereby irrevocably
designates, appoints and empowers CT Corporation System, with offices on the
date hereof at 111 Eighth Avenue, New York, New York 10011 as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and agent shall cease to be available
to act as such, the Borrower agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this provision
satisfactory to the Administrative Agent under this Agreement. The Borrower
further irrevocably consents to the service of process out of any of the
aforementioned courts specified in paragraph (a) above in any such action or
proceeding by the mailing of copies there by registered or certified mail,
postage prepaid, to the Borrower, such service to become effective 30 days
after such mailing.  Nothing herein shall
affect the right of the Agent under this Agreement, any Lender or the holder of
any Note to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Borrower in any other
jurisdiction.


 


(c)                                  Each of the parties hereto
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
the Loan Documents in any New York State or federal court referred to in Section 8.12(a).  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


SECTION 8.13.  
WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THE LOAN DOCUMENTS OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.


 


SECTION 8.14.  
Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


SECTION 8.15.  
Headings. All headings in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement.


 


SECTION 8.16.  
Guarantee. To the extent that AVSA or an Affiliate of AVSA (other than
AFC, if AFC is a Lender) is a Lender hereunder prior to any transfer or
assignment


 


39





















 


by such Lender pursuant to Section 8.7, any
undertaking or obligation of such Lender under this Agreement shall be
unconditionally guaranteed by Airbus.  In
the event that a Subsidiary of AFC is a Lender, then such Subsidiary’s
obligations to the Borrower hereunder shall be unconditionally guaranteed by
AFC (and not by Airbus).


 


SECTION 8.17.  
Interpretation of Letter Agreement. Nothing in this Agreement or the
other Loan Documents shall be deemed to interpret the provisions of the Letter
Agreement for purposes of, and no reliance shall be made on the terms of this
Agreement or the other Loan Documents in the negotiation of, any other
financing required to be provided by AVSA under the Letter Agreement.


 


SECTION 8.18.  
Quiet Enjoyment. Each Lender and the Administrative Agent covenant to
the Borrower as follows:


 


(a)                                  the Lenders and the
Administrative Agent acknowledge and consent to the provisions contained in the
proviso in Section 2.1 of the Mortgage; and


 


(b)                                 each Lender and the
Administrative Agent shall not, through its own actions or inactions, interfere
with, or suffer to exist with respect to the Aircraft, any Lien attributable to
itself which might interfere with the Borrower’s (or any Lessee’s thereof)
continued possession, use and operation of, and quiet enjoyment (including,
without limitation, administrative quiet enjoyment) of, the Aircraft during the
term of the Mortgage and in accordance with the terms of the Loan Documents so
long as no Event of Default shall have occurred and be continuing.


 


SECTION 8.19.  
Concerning Clause (i)(y) of Section 3.6(a)(I) of the Mortgage. The
Borrower agrees that the dollar amount referred to in Clause (i)(y) of Section 3.6(a)(I)
of the Mortgage shall be: $750,000,000 per occurrence.


 


40





















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
to be delivered in New York, New York by their proper and duly authorized
officers as of the day and year first above written.


 


	
   

  	
  NORTHWEST AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  *** ,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AIRBUS FINANCE COMPANY LIMITED,

  
	
   

  	
  as the Initial Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


Schedule I

to

Credit Agreement


 


Lending Office
of Airbus Finance Company Limited


 


5th Floor

6 George’s Dock 

International Financial Services Centre

Dublin 1, Ireland

Attn:  Director


 





















Schedule II

to

Credit Agreement


 


Approved
Commercial Banks


 


ABN-Amro Bank

Citibank

Calyon

JPMorgan Chase Bank

Deutsche Bank

The Mitsubishi Trust and Banking Corporation

The Bank of Tokyo-Mitsubishi Limited

Kreditanstalt für Wiederaufbau

Credit Suisse


 


their
successors or assigns.


 





















Schedule III

to

Credit Agreement


 


Principal Payment Schedule


 




	
  Principal Payment

  Date

  	
   

  	
  Dollar

  Amount

  	
   

  
	
  February 16, 2005

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 16, 2005

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 16, 2005

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 16, 2005

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 16, 2006

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 16, 2006

  	
   

  	
  ***

  	
   

  
					






 





















 




	
  August 16, 2006

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 16, 2006

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 16, 2007

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 16, 2007

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 16, 2007

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 16, 2007

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  ***

  	
   

  
					






 





















 


Schedule IV

to

Credit Agreement


 


Approved Countries for Reregistration


 


Argentina

Australia


Belgium


Brazil


Canada


Chile


Denmark


Finland


France


Germany


Greece


Iceland


India


Indonesia


Ireland


Italy


Japan


Luxembourg


Malaysia


Netherlands


New Zealand


Norway


People’s Republic of China


Philippines


Portugal


Republic of China (Taiwan)(1)


Singapore


South Korea


Spain


Sweden


Switzerland


Thailand


Trinidad and Tobago


United Kingdom


Venezuela


 










(1)           So long as on the
date of entering into the proposed reregistration such country and the United
States have diplomatic relations as good as those in effect as of the date of
the Letter Agreement.


 





















 


EXHIBIT A - FORM OF

PROMISSORY NOTE


 


U.S.$ ***


 


Dated:
       ,    


 


FOR VALUE RECEIVED, the undersigned,
NORTHWEST AIRLINES, INC., a Minnesota corporation (the “Borrower”),
HEREBY PROMISES TO PAY to
           (the “Lender”)
for the account of its Lending Office as defined in the Credit Agreement
referred to below) the principal sum of U.S.$ *** (the “Original Amount”)
representing a Loan made by the Lender to the Borrower pursuant to the Credit
Agreement dated as of November 16, 2004 between the Borrower, Airbus Finance
Company Limited, as the Initial Lender, and ***, as Administrative Agent (as
amended or modified from time to time, the “Credit Agreement”; the terms
defined therein being used herein as therein defined).  The Original Amount shall be payable in
installments in the amounts and on the dates specified in Section 2.5 of the
Credit Agreement.  Notwithstanding the
foregoing, the final payment made on this Promissory Note shall be in an amount
sufficient to discharge in full the unpaid Original Amount and all accrued and
unpaid interest on any amounts due under this Promissory Note.


 


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


 


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


 


This Promissory Note is one of the Notes
referred to in, and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified. The obligations of the Borrower
under this Promissory Note and the Credit Agreement are secured by collateral
as provided in the Credit Agreement and in the Mortgage and Security Agreement,
dated as of November 16, 2004, executed by the Borrower and pertaining to the
Aircraft bearing FAA Registration No. ***.


 


	
   

  	
  NORTHWEST AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					



 


A-1





















 


EXHIBIT B
- FORM OF


NOTICE OF LOAN


 


*** , as
Administrative Agent 

  for the Lenders under to the Credit

  Agreement referred to below


 


[Date]


 


Attention:


 


Ladies and Gentlemen:


 


The undersigned, Northwest Airlines, Inc.,
refers to the Credit Agreement, dated as of November 16, 2004 (as amended or
modified from time to time, the “Credit Agreement”, the terms defined
therein being used herein as therein defined), between the undersigned, Airbus
Finance Company Limited, as the first Initial Lender, and ***, as
Administrative Agent for the Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.2 of the Credit Agreement that the undersigned hereby
requests the Loan under the Credit Agreement, and in that connection sets forth
below the information relating to the Loan (the “Proposed Loan”) as
required by Section 2.2(a) of the Credit Agreement:


 


The Business Day of the Proposed Loan is
November 16, 2004.


 


The aggregate amount of the Proposed Loan is
$ ***.


 


The first Interest Period the Proposed Loan
is one month.


 


The Aircraft related to the Proposed Loan is
the Airbus model A330-223 aircraft bearing manufacturer’s serial number 0633
and [will be] [has been] delivered to the Borrower on November 16, 2004.


 


The undersigned hereby certifies that the
following statements are true on the date hereof, and will be true on the date
of the Proposed Loan:


 


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


 


B-1





















 


(y)  no Default or Event of
Default has occurred and is continuing.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  NORTHWEST AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					



 


B-2





















 


EXHIBIT C - FORM OF

ASSIGNMENT AND ACCEPTANCE


 


Reference is made to the Credit Agreement
dated as of November 16, 2004 (as amended or modified from time to time, the “Credit
Agreement”) between Northwest Airlines, Inc., a Minnesota corporation (the “Borrower”),
Airbus Finance Company Limited, as Initial Lender, and ***, as Administrative
Agent for the Lenders (the “Administrative Agent”).  Terms defined in the Credit Agreement are
used herein with the same meaning.


 


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


 


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


 


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


 


3.             The
Assignee (i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in Section
4.1(a)(v) thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agents, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) represents and


 


C-1





















 


warrants that either (x) no part of the funds to be used by it for the
purchase of the Loan (or any part thereof) constitutes assets of any “employee
benefit plan” as defined in Section 3(3) of ERISA or (y) the proposed
assignment will not result in a non-exempt prohibited transaction (as defined
in Section 4975 of the Internal Revenue Code and ERISA); (v) represents and
warrants that it will acquire Notes for investment and not with a view to sale
or distribution (it being understood that the Assignee may pledge or assign as
security its interest in each Note or each such instrument issued to it), provided
that the disposition of its property shall at all times be and remain within
its control, except that the Assignee may sell, transfer or otherwise dispose
of any Note, any such instrument or any portion thereof or grant participations
therein, in a manner which in itself will not require registration under the
Securities Act of 1933, as amended; (vi) appoints and authorizes each Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (vii) agrees, for the benefit of the assigning Lender and Borrower, that
it will perform in accordance with their terms all of the obligations that by
the terms of the Credit Agreement are required to be performed by it as a
Lender; and (viii) attaches any U.S. Internal Revenue Service forms required
under Section 2.12 of the Credit Agreement.


 


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


 


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


 


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


 


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


 


8.             This
Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall


 


C-2





















 


constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.


 


IN WITNESS WHEREOF, the Assignor and the
Assignee have caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the date specified
thereon.


 


C-3





















 


Schedule 1

to

Assignment and Acceptance


 


Percentage
interest assigned:


 


Outstanding
principal amount of the Loan assigned:


 


Effective
Date:


 


	
  Note

  	
   

  	
  Principal Amount of

  Note payable to Assignee

  	
   

  	
  Principal Amount of

  Note payable to Assignor

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
   

  	
  [NAME OF ASSIGNOR], as Assignor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:         ,      

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNEE], as Assignee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Lending Office:

  
	
   

  	
   

  	
  [Address]

  
					



 


C-4





















 


	
  Accepted this

  	
   

  
	
      day
  of       ,     

  	
   

  
	
   

  	
   

  
	
  ***, as

  	
   

  
	
  Administrative
  Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


C-5





















 


EXHIBIT D-1


 


FORM OF
OPINION OF ASSOCIATE GENERAL COUNSEL OF THE BORROWER


 


D-1-1





















 


EXHIBIT D-2


 


FORM OF
OPINION OF CADWALADER, WICKERSHAM & TAFT LLP,

SPECIAL COUNSEL FOR THE BORROWER


 


 


D-2-1





















 


EXHIBIT D-3


 


FORM OF
OPINION OF CADWALADER, WICKERSHAM & TAFT LLP,

SPECIAL COUNSEL FOR THE BORROWER,

REGARDING SECTION 1110 OF THE FEDERAL BANKRUPTCY CODE


 


D-3-1





















 


EXHIBIT D-4


 


FORM OF
OPINION OF DAUGHERTY, FOWLER, PEREGRIN & HAUGHT,

SPECIAL AVIATION COUNSEL FOR THE AGENT


 


D-3-1





















 


EXHIBIT E - FORM OF

CONFIDENTIALITY AGREEMENT


 


[FORM OF
CONFIDENTIALITY AGREEMENT]


 


[Insert Name
and Address of

the Prospective Assignee or Holder

of a Participation]


 


Ladies and Gentlemen:


 


You have expressed interest in establishing a
credit relationship with Northwest Airlines, Inc., a Minnesota corporation
(together with its subsidiaries and affiliates, the “Borrower”).  In connection therewith, you have asked for
certain information about the Borrower.  In consideration for and as a condition of
your receiving the Materials (as hereinafter defined), you acknowledge the
confidential and proprietary nature of the Materials and agree to hold and keep
the same confidential as provided in this letter agreement and to take or
refrain from taking certain other actions as set forth in this letter
agreement.


 


The term “Materials” means any information
concerning the Borrower which was furnished to us by or on behalf of the
Borrower and which we furnish to you.  The
term “Materials” does not include information which (i) is or becomes generally
available to the public or (ii) is or becomes available to you from a source
other than the Borrower, unless you have the actual knowledge (without being
obligated to conduct any investigation) that such information has been made
available by such source in breach of a confidentiality agreement by which such
source is bound with respect to such information.


 


We are prepared to provide you with a copy of
the Materials, as necessary, which have been or may be provided pursuant to the
information provisions under the Credit Agreement (the “Credit Agreement”)
dated as of November 16, 2004 between Northwest Airlines, Inc., Airbus Finance
Company Limited, as the Initial Lender, and ***, as Administrative Agent.  Pursuant to Section 8.7(f) of the Credit
Agreement, we are required to have you, as a prospective assignee or holder of
a participation in the Loan (as defined in the Credit Agreement) enter into
this Confidentiality Agreement (the “Agreement”) before receiving the
Materials.  Such Materials will be made
available to you upon your execution of this Agreement.  In consideration thereof, you agree that
Materials will be kept confidential, in accordance with your customary procedure
for handling confidential information and in accordance with safe and sound
banking practices, and not be used by you except in connection with the
proposed credit relationship referred to above. 
Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party’s U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated by the Credit Agreement relating to such party and
all materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is reasonably necessary in order to
comply with applicable securities laws.


 





















 


You acknowledge that the Materials are
internal information that may include allocations, projections data, analyses
and calculations that may not completely and accurately reflect the results of
the Borrower’s operations.  In addition,
you acknowledge that the Materials regarding operations have not been prepared
for financial statement disclosure purposes.


 


You hereby acknowledge that you are aware,
and that you will advise such of your representatives who are informed as to
the matters which are the subject of this letter agreement, that the United
States securities law impose restrictions on any person who has received from
an issuer material, non-public information concerning the matters which are the
subject of this letter agreement from purchasing or selling securities of such
issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.


 


You and your affiliates, directors, officers,
employees and representatives agree to be bound by the terms of this
Agreement.  This Agreement shall inure to
the benefit of the Borrower.


 


In this connection, we acknowledge that you
may make disclosure as required by any governmental agency or representative
thereof or pursuant to legal process and that you are subject to oversight by
bank or other financial regulatory agencies and may be required to provide to,
or otherwise make available for review by, the representatives of such agencies
the Materials.  You also agree to request
confidential treatment of the Materials to the extent permitted by law.


 


Please indicate your agreement to the
foregoing at the place provided below.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  The foregoing
  is agreed to as of

  	
   

  
	
  the date of this letter.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: