EXHIBIT 10.21


 


PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES 

AND EXCHANGE COMMISSION IN A CONFIDENTAL TREATMENT REQUEST UNDER RULE 24b-2 OF 

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.  THE SYMBOL “[***]” IN THIS EXHIBIT INDICATES

THAT INFORMATION HAS BEEN OMITTED.  IN SECTION 1.1
- DEFINED TERMS, CERTAIN DEFINED TERMS

WERE MOVED TO THE END OF SECTION 1.1 TO PRESERVE THE CONFIDENTIALITY OF
THE 

OMITTED INFORMATION.


 


CREDIT AGREEMENT


 


Dated as of July 30,
2003


 


Among


 


FRONTIER AIRLINES, INC.,


 


as Borrower,


 


THE LENDERS PARTY HERETO


 


and


 


[***]


 


as
Administrative Agent


 





















 


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 AMOUNTS AND TERMS OF THE LOAN

  	
   

  
	
  SECTION 2.1.   The Loan

  	
   

  
	
  SECTION 2.2.   Making the Loan

  	
   

  
	
  SECTION 2.3.  
  Fees

  	
   

  
	
  SECTION 2.4.   Use of Proceeds

  	
   

  
	
  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.   Lender Cooperation

  	
   

  
	
  SECTION 2.15.   [***] Lenders

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  
	
  SECTION 5.5.   Cape Town
  Convention

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  



 


i





















 


	
  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

  	
   

  
	
  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; Prevalence of Loan Documents

  	
   

  
	
  SECTION 8.12.   Jurisdiction, Etc.

  	
   

  
	
  SECTION 8.13.   WAIVER OF
  JURY TRIAL

  	
   

  
	
  SECTION 8.14.   Severability

  	
   

  
	
  SECTION 8.15.   Headings

  	
   

  



 


ii





















 


Schedules


 


	
  Schedule I

  	
  -

  	
  Lending Office of Initial Lender

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  -

  	
  Principal Payment Schedule

  
	
   

  	
   

  	
   

  
	
  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 David Sislowski, Esq., General Counsel
  of the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit D-2

  	
  -

  	
  Form of Opinion of [***], Special Counsel for the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit D-3

  	
  -

  	
  Form of Opinion of [***], Special Aviation Counsel

  



 


iii





















 


CREDIT
AGREEMENT


 


Dated as of July 30,
2003


 


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


 


WHEREAS, the
Borrower and [***], have entered into the Airbus Purchase Agreement, which
covers, among other matters, the sale by [***] and the purchase by the Borrower
of certain Airbus A318 Aircraft.


 


WHEREAS, [***]
has agreed to provide debt financing pursuant to the Term Sheet, to the
Borrower to finance the purchase of the first four (4) Airbus A318
Aircraft firmly ordered under the Airbus Purchase Agreement on the terms and
subject to the conditions set forth in the Term Sheet.


 


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 Amount 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.


 


“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, (i) 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 and (ii) neither
(x) the shareholders of [***] from time to time nor (y) [***] (or any of its
Affiliates) shall be deemed to be an Affiliate of [***] for any purpose
hereunder.


 


“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.


 





















 


“Airbus
A318 Aircraft” means an Airbus model A318 aircraft delivered or to be
delivered, as the context may require, pursuant to the Airbus Purchase
Agreement.


 


 “Airbus Purchase Agreement” means that
certain Airbus A318/A319 Purchase Agreement dated as of March 10, 2000
between [***] and the Borrower as originally executed and as modified, amended
or supplemented in accordance with the terms thereof.


 


“Aircraft”
means the Airframe, together with 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
such Airframe or may be installed on any other airframe or any other aircraft,
as further specified in the Mortgage.


 


“Airframe”
means (A) the Airbus A318-111 Aircraft (excluding the Engines or engines
from time to time installed thereon) further 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).


 


“Applicable
Margin” means [***].


 


“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, entered into pursuant to and
in accordance with the provisions of Section 8.7 hereof.


 


“Board”
means the Board of Governors of the Federal Reserve System of the United States
(or any successor).


 


“Business Day” means (i) for all purposes other than as covered
by clauses (ii) and (iii) below, any day except Saturday, Sunday and any day
which shall be in New York, New York, [***] or Denver, Colorado a legal holiday
or a day on which banking institutions are authorized or required by law or
other government action to close, (ii) where used in relation to payments, any
day on which banks are open for business in New York, New York, and (iii) where
used in relation to Eurodollar Rate determination, any day on which banks are
open for business in London.


 


“Cancellation
Date” means the date of termination in whole of the unused Commitment under
and pursuant to the Term Sheet and as provided in Section 6.1.


 


“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.


 


2





















 


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


 


“Commitment”
means the commitment of [***] to provide financial accommodations to the
Borrower as set forth in the Term Sheet.


 


“Confidential
Information” means the Loan Documents and 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.


 


“Convention”
means the Convention on International Interests in Mobile Equipment and the
Protocol to the Convention on Matters Specific to Aircraft Equipment signed in
Cape Town on 16 November 2001.


 


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


 


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


 


“Engine”
means (A) each of the two CFM International model CFM56 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 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 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 


 


3





















 


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.  


 


“Events 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
Aviation Act” means Title 49 of the United States Code, as amended, or any
successor or substitute provisions.


 


“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 Amount” means [***]


 


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


 


“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.


 


“Inflight
Equipment” has the meaning specified in the Mortgage.


 


“Initial
Lender” means [***], 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 date three months after such date and,
thereafter, each subsequent period commencing on (and including) the last day
of the immediately preceding Interest Period and ending on (but excluding) the
date three months after such date; 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
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 a calendar month for
which there is no numerically corresponding day in the 


 


4





















 


calendar month that succeeds such 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.


 


“Lease
Assignment” has the meaning specified in the Mortgage.


 


“Lending
Offices” means, with respect to the Initial Lender, the office of such
Lender specified on Schedule I hereto, and with respect to any other
Lender, means the office of such Lender specified 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.


 


“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.


 


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


 


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


 


“Manufacturer”
means Airbus.


 


“Mortgage”
means the Mortgage and Security Agreement, dated as of July 30, 2003,
between the Borrower and the Collateral Agent named therein, as originally
executed and as supplemented by the Mortgage and Security Agreement Supplement No. 1,
as the same may be further amended, modified or supplemented from time to time.


 


“Note”
means a promissory note of the Borrower issued in connection with and 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.


 


“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 Loan and the Notes
(including interest at the rate specified herein after the occurrence of an
Event of Default, including interest accruing after the maturity of the Loan
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), (ii) all sums payable by the Borrower
under the Mortgage and (iii) all other sums payable by the Borrower to the
Lenders or the Agent under Sections 2.9, 2.12 and 8.4 of, or elsewhere under,
this Agreement.


 


5





















 


“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 and (b) any items
leased by the Borrower from a third party (including without limitation leased
Inflight Equipment)) which may from time to time be incorporated or installed
in or attached to any Airframe or any Engine.


 


“Payment
Date” shall have the meaning specified in Section 2.5.


 


“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.


 


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


 


“Reference
Banks” means the principal London offices of Credit Lyonnais and Citibank,
NA or such other bank or banks as may be appointed by the Administrative Agent
in consultation with the Lenders.


 


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


 


“Related
Loan Documents” means the “Loan Documents” as defined in the definitive
credit agreement(s) and mortgage and security agreement(s) for the Related
Obligations.


 


“Related
Obligations” means “Obligations” as defined in the mortgage and security
agreement entered into by the Borrower pursuant to the Term Sheet with respect
to the financing of any other Airbus A318 Aircraft thereunder.


 


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


 


“Requirement
of Law” means, as to any Person, any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.


 


6





















 


“Secured
Obligations” has the meaning specified in the Mortgage.


 


“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.


 


“10-Year
Loan” means a Loan with a final maturity date of the tenth anniversary of
the date the Loan is made.


 


“12-Year
Loan” means a Loan with a final maturity date of the twelfth anniversary of
the date the Loan is made.


 


“Term Sheet”
means the Term Sheet for the Financing Support of A318 Aircraft dated May 21,
2003, between [***] and the Borrower.


 


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


 


“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.


 


[***] A
definition identifying a lender has been redacted from the definitions listed
above.  The redaction is not indicated at
in the definition list above since the alphabetical listing of the redaction
would indicate the name of the confidential lender.


 


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 GAAP.


 


7





















 


ARTICLE II



AMOUNTS AND TERMS OF THE LOAN


 


SECTION 2.1.  
The Loan. 
The Initial Lender agrees, subject to the terms and conditions
hereinafter set forth, to make the Loan to the Borrower on a Business Day
during the period from the date hereof until the Cancellation Date in an amount
equal to the Financed Purchase Price Amount of the Aircraft.


 


SECTION 2.2.  
Making the Loan.  (a)  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) whether the Loan is to be a 10-Year Loan
or a 12-Year Loan, and (v) identifying information for the Aircraft to be
financed.  The Administrative Agent
shall, after receipt of such notice and prior to two (2) Business Days
before the requested date of the Loan, provide to the Borrower and the Initial
Lender a schedule containing the Principal Payment Dates for the Loan and
the amount of principal of the Loan to be paid on each such date, which shall
be attached hereto as Schedule II. 
The Initial Lender shall, before 11:00 A.M. (New York time) on the
date of the Loan, make available for the account of its Lending Office to the
Administrative Agent at the account of the Administrative Agent at Credit
Lyonnais, 1301 Avenue of the Americas, New York, New York Branch (account
number [***], in same day funds, the amount of the Loan.  After the Administrative Agent’s receipt of
such funds and upon fulfillment of the applicable conditions set forth in Article III,
the Administrative Agent will make such funds available to the Borrower by
direct transfer to [***] at such account as [***] may direct.


 


SECTION 2.3.  
Fees. 
The Borrower agrees to pay to the Administrative Agent an administrative
fee in the amount of [***] per annum for the Loan, payable on the date of the
borrowing of the Loan and annually on the anniversary of such date until the
Obligations shall have been satisfied in full.


 


SECTION 2.4.  
Use of Proceeds.  The proceeds of the Loan shall be available
(and the Borrower agrees that it shall use such proceeds) solely to finance the
purchase of the Aircraft.


 


SECTION 2.5.  
Repayment. 
The Borrower shall repay to the Administrative Agent for the ratable
account of each Lender the principal amount of the Loan in the monthly
installments on the monthly anniversary dates of the date of borrowing of the
Loan (each such monthly anniversary date (or quarterly anniversary date to the
extent specified by the Administrative Agent as described below) being referred
to as a “Payment Date”) in accordance with Schedule II; provided
that the Payment Dates for the Loan may be changed from monthly to quarterly at
the option of the Administrative Agent, in which case the Administrative Agent
shall provide to the Borrower and the Lender a revised Schedule II
reflecting such change, the terms 


 


8





















 


of which revised Schedule shall be conclusive and binding on the
parties hereto, absent manifest error.


 


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 each Payment Date, at an interest rate per
annum equal to the sum of (x) the Eurodollar Rate for the then applicable
Interest Period plus (y) the Applicable Margin, 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 or a Default in the payment of
any principal of the Loan, the Borrower shall pay interest on the unpaid
principal amount of the Loan, payable upon demand at a rate per annum equal at
all times to [***] per annum above the rate per annum that would otherwise be
required to be paid on the Loan pursuant to paragraph (a) above.  In addition, if any interest, fee or other
amount payable hereunder is not paid when due, then, to the fullest extent
permitted by law, the Borrower shall pay interest on such amount from the date
such amount shall be due until such amount shall be paid in full, payable on
demand, at a rate per annum equal at all times to [***] per annum above the
rate of interest then applicable on the Loan pursuant to paragraph(a) above.


 


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 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, acting reasonably (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.  In such case, during the next thirty days,
the Borrower and the Administrative Agent, in consultation with the Lenders,
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 sum of (x)
the rate determined in good faith by the Administrative Agent, in consultation
with the Lenders, to be the Lenders’ cost to maintain the Loan plus (y) the
Applicable Margin.  The replacement
interest rate determined pursuant to this paragraph (b) (not including
the Applicable Margin) shall hereinafter be referred to as the “Alternate
Rate”.


 


SECTION 2.8.  
Prepayments. 
(a)  The Borrower may, upon at least ten (10) 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
five Business Days), and if such notice is given the Borrower 


 


9





















 


shall prepay the outstanding principal amount of the Loan in whole but
not in part (except as otherwise expressly permitted pursuant to Section 2.14
hereof), together with accrued interest to the date of such prepayment on the
principal amount prepaid, and without premium or penalty except to the extent
of any costs required to be reimbursed by Borrower pursuant to the applicable
provisions of Section 8.4(b) hereof.  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, 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 or the first Business Day following the 90th 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 five Business
Days prior thereto and (z) such prepayment shall be without premium or
penalty except to the extent of such costs are required to be reimbursed by
Borrower pursuant to the applicable provisions of Section 8.4(b) hereof.  


 


SECTION 2.9.  
Increased Costs.  (a)  If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any applicable request or directive (whether or
not having the force of law but, if not having the force of law, is generally
applied by the Lender to similarly situated borrowers) from any central bank or
other Governmental Authority made subsequent to the date hereof:


 


(i)                                     shall subject any
Lender to any Tax of any kind whatsoever with respect to this Agreement or the
Loan made or held by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Taxes covered by Section 2.12 and
changes in the rate of tax on the overall net income of such Lender);


 


(ii)                                  shall impose, modify
or hold applicable any reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender; or


 


(iii)                               shall impose on such
Lender any other condition;


 


and the result
of any of the foregoing is to increase the cost to such Lender, by an amount
that such Lender, acting reasonably, deems to be material, of making, funding
or maintaining the Loan based upon the Eurodollar Rate, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable.  If any Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.


 


(b)                                 Without
duplication of any amount payable by Borrower under § 2.9(a), if any
Lender, acting reasonably, shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or 


 


10





















 


compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law but, if not having the
force of law, is generally applied by the Lender to similarly situated
borrowers) from any Governmental Authority made subsequent to the date hereof
shall have the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount
deemed by such Lender, acting reasonably, to be material, then from time to
time, after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation for such reduction. 


 


(c)                                  A
certificate as to any additional amounts payable pursuant to this Section submitted
by any Lender to the Borrower (with a copy to the Administrative Agent) shall
be conclusive in the absence of manifest error. 
Notwithstanding anything to the contrary in this Section, the Borrower
shall not be required to compensate a Lender pursuant to this Section for
any amounts incurred more than 180 days prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim
have a retroactive effect, then such 180 day period shall be extended to
include the period of such retroactive effect.


 


SECTION 2.10.  
Illegality. 
Notwithstanding any other provision of this Agreement, if any Lender,
acting reasonably, shall determine 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 make, fund, continue 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 based upon the Alternate Rate (as
determined pursuant to Section 2.7(c) except that only the affected
Lender shall be involved) such that the interest due and payable thereon shall
be the sum of (x) the Applicable Margin and (y) the Alternate Rate in
effect from time to time, and (iii) the obligation of such Lender to make,
fund, continue or 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 Credit
Lyonnais, New York Branch, 1301 Avenue of the Americas, New York, New York,
[***] (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 or 8.4(c) and amounts reflecting different prevailing interest rates
on the outstanding Loan) to the Lenders for the account of their 


 


11





















 


respective Lending Offices, and like funds relating to the payment of
any other amount payable to any 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, if and to the extent any payment owed
to such Lender is not made by the Borrower 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 if
accruing interest at the Eurodollar Rate to be made in the next following
calendar month, such payment shall be made on the immediately preceding
Business Day.


 


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 any amounts payable to any Agent or
any Lender hereunder or under the Notes, the amounts so payable to such Agent
or such Lender shall be increased to the extent necessary to yield to such
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 Administrative 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 


 


12





















 


authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agents and the Lenders for any incremental taxes, interest or penalties
that may become payable by each Agent or any Lender as a result of any such
failure.  The agreements of the Borrower
in this subsection shall survive the termination of this Agreement and the
Commitments 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, any Agent or any of their respective Affiliates
with respect to any of the following Taxes or Other Taxes:


 


(1)                                  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 each
Agent or Affiliate thereof and the jurisdiction imposing such Taxes or Other
Taxes (other than a connection arising solely from such Agent, Lender or
Affiliate 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; or 


 


(2)                                  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) that the
Lender is legally entitled to comply with such requirements.


 


(3)                                  Any
Taxes or Other Taxes imposed upon such Lender, Agent or Affiliate based upon
its net income, net profits or net gains;


 


(4)                                  Any
incremental Taxes or Other Taxes imposed upon such Lender as of the date of
such transfer (or imposed based on a Requirement of Law enacted prior to the
date of such transfer but effective as of a later date) solely as a result of (i) a
transfer by any Lender of its lending office in respect of the Loan other than
as a result of a circumstance contemplated by Sections 2.9, 2.10 or 2.14
or otherwise at the request of Borrower or (ii) the gross negligence,
willful misconduct or breach of any obligation undertaken by any Lender or
Agent hereunder; or


 


(5)                                  Any
Taxes or Other Taxes the imposition or amount of which is being contested by
Borrower on reasonable grounds by appropriate proceedings or, at Borrower’s
request, by any Agent or Lender pursuant to the provision of Section 2.12(f) during
the period such contest is pending provided, however, that if the Agent
or the Lender is required to pay such Taxes or Other Taxes regardless of such
contest, the Borrower shall pay such Taxes or Other Taxes to the appropriate
Government Authority and shall be entitled to the refund, if any, received upon
a successful resolution of such claim.


 


(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 


 


13





















 


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
Administrative 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
Administrative 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.


 


(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
Administrative 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)(6) hereof.


 


(f)                                    If
a written claim is made against any Lender or either Agent for any Taxes or
Other Taxes, such Lender or 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 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 Chief Financial Officer
of the Borrower reasonably satisfactory to such Lender stating that a reasonable
basis exists to contest such claim, (ii) the Borrower agrees to indemnify
the Lender for any additional taxes, interest, penalties or other expenses
incurred as a result of such contest and (iii) the contest of such claim
would not, in the sole judgment, exercised in good faith, of such Lender, be
materially disadvantageous to such Lender. 
The failure of a Lender or Agent to promptly notify the Borrower of any
such claim as required above in this clause (f) shall not diminish
the obligations of the Borrower under this Section 2.12 with respect to
such claim, except to the extent that a contest that would otherwise be
available in accordance with this clause (f) is precluded as a result
of such failure or to the extent of any penalty that would have been avoided
absent such failure.


 


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 


 


14





















 


Section 2.9, 2.12 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 other Lenders thereof) and (y) pay to the other Lenders such
amounts in cash as shall be necessary (as calculated by the Administrative
Agent) 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 Loans
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
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.  
Lender Cooperation.  (a)  Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.9,
2.10, 2.12(a) or 2.15 with respect to such Lender, it will, if requested
by the Borrower and at the Borrower’s cost for all of such Lender’s
out-of-pocket costs and expenses, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
the Loan with the objective of avoiding or, if avoidance is not possible,
reducing the consequences of such event; provided, that such designation
is made on terms that, in the reasonable judgment of such Lender, cause such
Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage.


 


(b)                                 If
any Lender is unable to avoid or reduce, to Borrower’s reasonable satisfaction,
the amount payable by Borrower as compensation or indemnification under
Sections 2.9, 2.10, 2.12(a) or 2.15, the Borrower shall be entitled
(but shall not be obligated) to prepay such Obligations as shall then be due
and owing to such Lender in respect of the portion of the Loan owing to it,
with accrued interest to the date of prepayment but without premium or penalty.


 


(c)                                  Nothing
in this Section shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender pursuant to Section 2.9, 2.10,
2.12(a), 2.15 or elsewhere in the Loan Documents.


 


SECTION 2.15.  
[***] Lenders. 
The Borrower acknowledges and agrees that [***] or another [***] Lender
or if the Loan is transferred to [***], [***] may obtain the funds necessary
for it to make or maintain 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 [***] Lender or [***] to enter into covenants substantially similar
to those described in Section 2.9. The Borrower agrees to pay on demand,
and without duplication of any other amount it is 


 


15





















 


required to pay under Section 2.9, to [***] or any other [***]
Lender or [***] an amount equal to any amount [***] or any other  [***] Lender or [***] is required to pay
under any such covenant as a result of costs so imposed on [***] or another
[***] Lender or [***] which are of general application, subject, in each case
to the provisions of Section 2.14 requiring mitigation on the part of the
relevant commercial bank or other institutional lender (it being agreed that
the Borrower shall be entitled to prepay the Loan in connection with a claim
under this Section 2.15 to the extent provided in Section 2.14(b)).  Any such [***] Lender shall provide the
Borrower with a statement in reasonable detail of such costs.


 


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 from the Borrower a duly executed
Notice of Loan in accordance with Section 2.2 hereof.


 


(b)                                 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 evidencing 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 are correct 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 such 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
David Sislowski, Esq., General Counsel of the Borrower, substantially in
the form of Exhibit D-1 hereto;


 


16





















 


(vi)                              a favorable opinion of
[***] special counsel for the Borrower, substantially in the form of Exhibit D-2
hereto; and


 


(vii)                           a favorable opinion of
[***], special aviation counsel for the Administrative Agent, substantially in
the form of Exhibit D-3 hereto and addressed to the Administrative Agent
and the Lender.


 


(c)                                  The
following documents shall have been duly authorized, executed and delivered by
the respective parties thereto, shall each be reasonably satisfactory in form
and 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)                                     subject to the
prior written consent of [***] and the manufacturer, a copy of Clauses 12 and
13 of the Airbus Purchase Agreement, 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 [***] 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 [***] in favor of the
Borrower and dated such date; and


 


(iv)                              a consent and agreement,
relating to the Collateral Agent’s Lien on the Purchase Agreement Rights
pursuant to the Mortgage, executed by [***] in favor of the Borrower, dated the
date of delivery of the Aircraft.


 


(d)                                 The
Administrative Agent shall have received a copy of the Mortgage, duly executed
by the Borrower, 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 certificate(s) of insurance, in form and substance satisfactory to the
Administrative Agent, acting reasonably, as to due compliance with the terms of
such Mortgage relating to insurance with respect to the Aircraft, and


 


17





















 


(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).


 


(e)                                  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.


 


(f)                                    The
Aircraft shall have been duly certified by the FAA as to type and airworthiness
and the Administrative Agent has received a copy of such certification (or
delivery of such copy will occur as soon after the closing as is practicable).


 


(g)                                 No
applicable law or regulation or interpretation thereof by appropriate
regulatory authorities shall be in effect which, in the opinion of the
Administrative Agent or its counsel, acting reasonably, would materially
restrict, prohibit or make it illegal for the Initial Lender to make the Loan
or to realize the benefits of the security afforded by the Mortgage in respect
thereof; 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.


 


(h)                                 The
Administrative Agent shall have received payment of the arrangement fee in the
amount of 1% of the principal amount of the Loan and of the initial
administrative fee pursuant to Section 2.3, and payment of or arrangements
satisfactory to the Administrative Agent for the payment of all costs and
expenses then required to be paid by the Borrower under Section 8.4.


 


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 Federal Aviation Act, the Borrower shall cause [***], 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 Colorado; 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 ability of the Borrower to perform its
obligations under this Agreement; is a 


 


18





















 


Certificated Air Carrier; maintains its location (as such term is
defined in Article 9 of the Uniform Commercial Code) in Colorado; 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; 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 articles of incorporation or by-laws or (2) any
Requirement of 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 normal periodic and other
reporting requirements under the Federal Aviation Act and the regulations
promulgated thereunder and the applicable rules and regulations of the
FAA, in each case 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 and 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 the Borrower and its Subsidiaries as at the end of the most
recent fiscal year of the Borrower for which such balance sheet is available,
and the related Consolidated statements of operations and cash flows of the
Borrower and its Subsidiaries for such fiscal year, accompanied by an opinion
of KPMG LLP, independent public accountants, and the Consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of the most recent fiscal
quarter of the Borrower (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 the Borrower and its Subsidiaries
for the fiscal period then ended, duly certified by the Chief Financial Officer
of the Borrower, 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 


 


19





















 


the Borrower and its Subsidiaries as at such dates and the Consolidated
results of the operations of the Borrower and its Subsidiaries for the period
ended on such dates, all in accordance with GAAP.


 


(vi)                              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 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 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
articles of incorporation or by-laws or (2) any Requirement of 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 relating to the Loan) 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 normal
periodic and other reporting requirements under the Federal Aviation Act and
the regulations promulgated thereunder and the applicable rules and
regulations of the FAA, in each case to the extent required to be given or
obtained only after the date of the Loan.


 


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(iv)                              Except for (1) the
filing for recording pursuant to the Federal Aviation Act 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 Colorado (which financing
statement 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 Colorado)
and (3) the taking of possession by the Collateral Agent of the original
counterparts of such Mortgage and the Mortgage Supplement, no further action,
including any filing or recording of any document (including any financing
statement in respect thereof under Article 9 of the Uniform Commercial
Code of any applicable jurisdiction), is necessary or advisable in order to
establish or perfect the Collateral Agent’s security interest in the Aircraft
(granted pursuant to the Mortgage and the Mortgage Supplement) as against the
Borrower and any third parties in any applicable jurisdictions in the United
States.


 


(v)                                 There has not occurred
any event which constitutes a Default or an Event of Default which is
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)                        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 such Mortgage and is in the condition and state of
repair required under the terms of such Mortgage.


 


(ix)                                The Collateral Agent,
as secured party under the Mortgage, is entitled to all of the benefits and
protections of Section 1110 of the Federal Bankruptcy Code with 


 


21





















 


respect to the Aircraft and the Mortgage, including with respect to its
right to take possession of the Airframe and Engines in the event of a case
under Chapter 11 of the Federal Bankruptcy Code in which the Borrower is a
debtor.


 


(x)                                   Since March 31,
2003, there has been no material adverse change in the condition (financial or
other), business, assets, properties or prospects of the Borrower.


 


ARTICLE V



COVENANTS OF THE BORROWER


 


SECTION 5.1.   Affirmative Covenants.  So long as the Loan shall remain unpaid or
any Lender shall have any Commitment, 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 (other than such taxes, assessments
and governmental charges or levies as are being contested by Borrower on
reasonable grounds by appropriate proceedings during the period such
proceedings remain pending and for which adequate reserves have been
established in accordance with GAAP) 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.


 


(c)                                  Preservation
of Corporate Existence Etc.  Except
as otherwise expressly provided herein, 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 and the Mortgage shall at all
times be entitled to all of the benefits and protections of Section 1110
of the Federal Bankruptcy Code.


 


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(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.


 


(e)                                  Keeping
of Books.  Keep, and cause each of
its Subsidiaries to keep, proper books of record and account, in accordance
with GAAP.


 


(f)                                    Reporting
Requirements.  Furnish to the
Lenders:


 


(i)                                     as
soon as available, but not later than 90 days after the close of each fiscal
year of the Borrower, an audited balance sheet and related statements of the
Borrower at and as of the end of such fiscal year, together with an audited
statement of income and cash flows of the Borrower for such fiscal year, each
of which shall be prepared in accordance with GAAP and shall be accompanied by
an unqualified opinion of a firm of independent public accounts of nationally
recognized standing that said financial statements fairly present in all
material respects the financial condition and results of operation of the
Borrower as at the end of, and for, such period in accordance with GAAP;


 


(ii)                                  as
soon as available, but not later than 60 days after the close of each of the
first three quarters of each fiscal year of the Borrower, an unaudited balance
sheet of the Borrower at and as of the end of such quarter, together with an
unaudited statement of income and cash flows of the Borrower for such quarter,
each of which shall be prepared in accordance with GAAP, certified by the Chief
Financial Officer of the Borrower that said financial statements fairly present
in all material respects the financial condition and results of operation of
the Borrower as at the end of, and for, such period in accordance with GAAP
(subject to normal year-end audit adjustments);


 


(iii)                               on
an annual basis, together with the financial statements delivered pursuant to
the preceding paragraph (i), a certificate of the chief financial officer,
Treasurer, any Vice President, or other officer of the Borrower elected by the
Borrower’s Board of Directors stating that such authorized officer has reviewed
the activities of the Borrower and that, to the best knowledge of such
authorized officer, there exists as at the relevant date no Default or Event of
Default hereunder or should a Default or Event of Default exist, setting forth
a description of such Default or Event of Default and the relevant measures
being taken to cure the same;


 


(iv)                              simultaneously
with the filing thereof or the mailing thereof to its shareholders, copies of
all such financial statements, SEC Forms 10-K and 10-Q reports, notices of
proxy statements and any other documents as the Borrower shall file with the
Securities and Exchange Commission or mail to its shareholders or to creditors
generally;


 


23





















 


(v)                                 from
time to time, such other information as the Administrative Agent or any Lender
may reasonably request; and


 


(vi)                              promptly
after the occurrence thereof and actual knowledge thereof by a responsible
officer of the Borrower, notice to the Administrative Agent and the Lenders of
any Default or Event of Default.


 


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 Colorado
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 the
address specified in Section 8.2 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 or
any Lender shall have any Commitment, 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.


 


SECTION 5.5.  
Cape Town Convention.  The parties undertake to enter into new
transaction documents, effective from the date the Convention takes effect in
the United States that constitute (an) “international interest(s)” under the
Convention.  The new transaction
documents shall retain the commercial agreements set forth herein modified only
to ensure that an international interest is constituted and to reflect and
enhance the enforceability of the commercial agreements of the parties in the
context of the Convention.  The parties
intend that the Lender’s current priority position is not prejudiced thereby,
and, should there be a risk thereof that the creditor finds unacceptable, the
current documents shall remain in force. 
In that case, an additional international interest shall be created in
favor of the Lender and appropriate subordination arrangements shall be
made.  All such international interest(s)
shall be registered in the international registry, on that effective date, by
one party and the other shall consent thereto. 
Reasonable costs arising under this clause shall be for the account of
Borrower.


 


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)                                  (i) the
Borrower shall fail to make any payment within two (2) Business Days after
the same shall have become due of principal of, or interest on, the Loan or any



 


24





















 


Note evidencing the Loan; or (ii) the
Borrower shall fail to make any payment when the same shall become due of any
other Obligations, and such failure shall continue unremedied for five (5) Business
Days after the receipt by the Borrower of written notice of such failure from
the Administrative Agent;


 


(b)                                 the
Borrower shall have failed to perform or observe (or cause to be performed and
observed) any other covenant or agreement to be performed or observed by it
under this Agreement, the Mortgage or any other Loan Document, and such failure
shall continue unremedied for a period of thirty (30) days after knowledge
thereof by a senior officer of the Borrower or, if earlier, receipt by the
Borrower of written notice thereof from the Administrative Agent; or


 


(c)                                  any
representation or warranty made by the Borrower herein or in such 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, if capable of cure is not cured
within ten (10) Business Days of the actual knowledge thereof by a senior
officer of the Borrower or, if earlier, receipt by the Borrower of written
notice thereof from the Administrative Agent; 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 sixty (60) 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 sixty (60) 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 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; or


 


25





















 


(g)                                 the
Lien of the Mortgage ceases to be a valid and enforceable, first and prior
perfected Lien on the Collateral; or


 


(h)                                 the
Borrower fails or ceases to be a Certificated Air Carrier or shall have been
suspended as a Certificated Air Carrier and such suspension shall not be lifted
or vacated within thirty (30) days, or if reinstatement of the same cannot
reasonably be accomplished within such thirty (30) day period, such further
period, not to exceed ninety (90) days, during which the Borrower is diligently
pursuing such reinstatement, provided that during any such period, but for such
suspension, no other Event of Default shall have occurred; or


 


(i)                                     the
Borrower shall default in the payment when due of any principal of or interest
on, or fail to make a scheduled rental payment on, any of its other
indebtedness or any lease obligation; or (ii) any event specified in any
note, agreement, indenture, lease or other document evidencing or relating to
any indebtedness or any lease obligation shall occur, and, after giving effect
to any applicable notice and/or grace periods, the effect of such default (in
the case of clause (i)) or event (in the case of clause (ii)) is to cause, or
to permit the holder or holders of such indebtedness or lease obligation (or a
trustee or agent on behalf of such holder or holders) to cause, such
indebtedness or lease obligation to become due or to be terminated, or to be
prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; provided that, (x) the
outstanding amount of such indebtedness, (y) the capitalized amount of such
lease obligation shall, singly or in the aggregate, be in excess of
$10,000,000, and (z) in respect of any lease obligations, the event giving
rise to any such default is not frivolous or vexatious; or


 


(j)                                     for
so long as the Loan is held in whole or in part by a Lender, the maturity of any
Related Obligations then held in whole or in part by such Lender or its
Affiliates shall have been accelerated; or 


 


(k)                                  for
so long as the Loan is held in whole or in part by an  [***] Lender, Borrower shall default under
the Airbus Purchase Agreement or any other contractual or financial obligation
between the Borrower or its Affiliates, on the one hand, and an [***] Lender or
its Affiliates, on the other hand


 


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 (i) shall at
the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Commitment to be terminated, whereupon the same shall
forthwith terminate, and/or (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Loan
and all the Notes, all interest thereon and all other amounts payable under
this 


 


26





















 


Agreement in
connection with the Loan to be forthwith due and payable and/or the Commitment
terminated, 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 and the Commitment shall be terminated; 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, (A) the
Commitment shall automatically be terminated and (B) all 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.  In addition, upon the occurrence of an Event
of Default, the Agents shall be entitled to exercise all rights, residing in
powers provided in the Mortgage or by applicable law. 


 


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 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 or 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 


 


27





















 


Documents on the part of the Borrower or to inspect the property
(including the books and records and the Airbus A318 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, as the context requires, 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 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.


 


28





















 


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, which may be ACL.  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.  


 


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 signed by the Required Lenders, and then such
waiver or consent shall (except as otherwise expressly agreed, in writing, by
such Required Lenders) 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 Loan or the Notes or any other amounts payable hereunder, (c) change
the aggregate unpaid principal amount of the Loan or 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; 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, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when confirmation of
receipt is received by the sender, addressed (a) in the case of the
Borrower and the Agents, as follows and (b) in the case of any Lender
other than the Initial Lender, the Assignment and Acceptance pursuant to which
such Lender becomes a 


 


29





















 


party hereto or (c) in the case of any party, to such other
address as such party may hereafter notify to the other parties hereto:


 




	
  The
  Borrower:

  	
   

  	
  Frontier Airlines, Inc.

  
	
   

  	
   

  	
  Frontier Center One

  
	
   

  	
   

  	
  7001 Tower Road

  
	
   

  	
   

  	
  Denver, Colorado 80249-7312

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telecopy: (720) 374-4379

  
	
   

  	
   

  	
  Telephone: (720) 374-4542

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Each Agent and Initial Lender:

  
	
   

  	
   

  	
  [***]

  






 


provided
that any notice, request or demand to or upon the any 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 any
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 (i) to
pay or reimburse the Initial Lender and each Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including the reasonable fees
and disbursements of counsel to such Agent and filing and recording fees and
expenses and (ii) to pay or reimburse each Lender and each Agent for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to such Agent.


 


(b)                                 The
Borrower agrees to indemnify each Lender for, and to hold each Lender harmless
from, any loss or expense that such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of the
Loan after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the Borrower in
making any prepayment of the Loan if based upon the Eurodollar Rate after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of the Loan if based upon the
Eurodollar Rate on a day that is not the last day of an Interest Period with
respect thereto.  A certificate as to 


 


30





















 


any amounts payable pursuant to
this Section 8.4(b) submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. 
This covenant shall survive the termination of this Agreement and the
payment of the Loan and all other amounts payable hereunder.


 


(c)                                  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 the occurrence and during the
continuance of any Event of Default, 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.  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 Agent and [***], as the initial Lender and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Agent and
each Lender and their respective successors and permitted 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 may, at any time
after the Loan is made, assign to one or more Persons all or a portion of its
rights and obligations under the Loan Documents; 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, and (ii) each such assignment shall be (x) to any [***]
Lender or any Affiliate thereof or to [***], or an Affiliate thereof, or (y) to
a bank or other financial institution or financial company (each such person,
an “Eligible Assignee”).  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).


 


31





















 


(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 finished. 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) 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 the Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (ix) such assignee 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 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 


 


32





















 


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
(including, without limitation, its Commitment to the Borrower hereunder) 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 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, (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note or any other Loan Documents, or any
consent to any departure by the Borrower therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest
on, the Notes or any other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation.


 


(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
containing an undertaking as provided in Section 8.8.


 


(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.


 


(h)                                 The
Borrower agrees to cooperate with any 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.  Without limiting the generality of the
foregoing, the Borrower also agrees to cooperate with the Initial Lender to
refinance or sell down its exposure under the Loan, through a securitization or
tax enhanced structure or otherwise. 
Such cooperation may involve dividing the Loan into senior and junior
tranches, allocating voting and 


 


33





















 


other rights as between the
senior and junior tranches of the Loan (which allocation of voting rights may
include changes to the percentage of Lenders required to approve or to take
specified actions) and/or cross-collateralizing the senior and/or junior
tranches of the Loan with any other Secured Obligations, and, generally,
restructuring the Loan in such manner as the Initial Lender shall determine in
good faith to be necessary or desirable to accomplish such refinancing or sell
down; provided that none of the obligations of the Borrower under the
Loan Documents shall be increased as a result of any such transaction as of the
closing date of such transaction (or based on a Requirement of Law enacted
prior to the closing date of such transaction but effective as of a later date)
and the Initial Lender agrees to reimburse the Borrower’s reasonable and
adequately documented external legal fees and expenses in respect of any such
transaction.


 


(i)                                     Notwithstanding
any other provision hereof, no payment obligation of the Borrower shall be
incurred or increased as a result of an assignment or participation by the
Lender on the closing date of such transaction.


 


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 other, except (a) to the 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, (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)(I) of the
Internal Revenue Code; 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.


 


34





















 


SECTION 8.11.   Execution in Counterparts;
Prevalence of Loan Documents.  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. 
The provisions of the Loan Documents shall prevail over the Term Sheet
in case any provision thereof shall be in conflict.


 


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 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 Corporation
Service Company, with offices on the date hereof at 1177 Avenue of the
Americas, 17th Floor, New York, New York 10036-2721 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 


 


35





















 


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.


 


36





















 


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.


 


	
   

  	
  FRONTIER AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [***],

  
	
   

  	
  as Administrative Agent and Initial Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


SCHEDULE I

TO

CREDIT AGREEMENT


 


Lending Office

(Initial Lender)


 


[***]


 





















 


SCHEDULE II

TO

CREDIT AGREEMENT


 


Original Amortization Schedule


 


Monthly
Payments


 




	
  Payment

  Date

  	
   

  	
  Outstanding Principal

  	
   

  	
  Principal Payments

  
	
   

  	
   

  	
   

  	
   

  	
  (in Dollars)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 





















 


EXHIBIT A – FORM OF


PROMISSORY NOTE


 


FRONTIER AIRLINES,
INC.


PROMISSORY NOTE


 


	
  U.S [***]

  	
   

  	
  Dated:
                  ,     

  



 


FOR VALUE RECEIVED, the undersigned, FRONTIER
AIRLINES, INC., a Colorado corporation (the “Borrower”), HEREBY PROMISES
TO PAY to the order of  [***] (the “Lender”) for
the account of its Lending Office (as defined in the Credit Agreement referred
to below) the principal sum of TWENTY-FIVE MILLION FIVE HUNDRED THOUSAND
DOLLARS (U.S. $25,500,000) (the “Original Amount”) representing the Loan
made to the Borrower pursuant to the Credit Agreement dated as of July 30,
2003 between the Borrower, the lenders party thereto 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, in the Mortgage and Security Agreement, dated
as of July 21, 2003, executed by the Borrower and pertaining to the
Aircraft bearing FAA Registration No. N802FR, and in the other Collateral
Documents referred to therein.


 


	
   

  	
  FRONTIER AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 





















 


EXHIBIT B – FORM OF



NOTICE OF LOAN


 


[***], as Administrative Agent 
  for the Lenders under to the Credit
  Agreement referred to below


 


July     , 2003


 


Attention: Managing Director


 


Ladies and Gentlemen:


 


The undersigned, Frontier Airlines, Inc.,
refers to the Credit Agreement, dated as of July 30, 2003 (as amended or
modified from time to time, the “Credit Agreement”, the terms defined
therein being used herein as therein defined), between the undersigned, the
Lenders party thereto 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:


 


(i)                                     The Business Day of the
Proposed Loan is                     .


 


(ii)                                  The aggregate amount of the
Proposed Loan is $                .


 


(iii)                               The Proposed Loan is to be a
[10-Year Loan] [12-Year Loan].


 


(iv)                              The Aircraft related to the
Proposed Loan is the Airbus model A318 aircraft bearing manufacturer’s serial
number 1991 and will be delivered to the Borrower on                   .


 


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


 


(x)  the representations and
warranties made by the Borrower and contained in the Loan Documents 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


 


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


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  FRONTIER AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  



 





















 


EXHIBIT C - FORM OF

ASSIGNMENT AND ACCEPTANCE


 


Reference is made to the Credit Agreement
dated as of July 30, 2003 (as amended or modified from time to time, the “Credit
Agreement”) between Frontier Airlines, Inc., a Colorado corporation
(the “Borrower”) and [***], 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 the
Note held by the Assignor and requests that the Administrative Agent exchange
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 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 and a new Note payable to
the order of 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 Agent, 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



 


C-1





















 


not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) represents and warrants that either (x) no part of the
funds to be used 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 its Note 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 the Note
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 its 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; (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 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, 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:


 


Aggregate outstanding principal amount of
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 GENERAL COUNSEL OF
THE BORROWER


 


[in the form delivered at closing]


 


D-1-1





















 


EXHIBIT D-2


 


FORM OF OPINION OF [***],

SPECIAL COUNSEL FOR THE BORROWER


 


[in the form delivered at closing]


 


D-2-1





















 


EXHIBIT D-3


 


FORM OF
OPINION OF [***],

SPECIAL AVIATION COUNSEL FOR THE AGENT


 


[in the form delivered at closing]


 


D-3-1