Document:

a105pdpcreditagreementda

EXECUTION COPY  [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item  601(b)(10). Such excluded information is not material and would likely cause competitive harm to  the registrant if publicly disclosed.         PDP CREDIT AGREEMENT    dated as of September 30, 2022    between    ALLEGIANT AIR, LLC,  as Borrower,    NORDDEUTSCHE LANDESBANK GIROZENTRALE,  acting through its New York Branch  and  LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE,  as Original Lenders,    LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE,  as Facility Agent    and    BANK OF UTAH,  not in its individual capacity but solely as Security Trustee    ______________________    Pre-Delivery Payment Financing of up to  20 Boeing 737 MAX Aircraft  ______________________      Landesbank Hessen-Thüringen Girozentrale,  Norddeutsche Landesbank Girozentrale, acting through its New York Branch  as Lead Arrangers 

 

TABLE OF CONTENTS    Page    i     ARTICLE I  DEFINITIONS  Section 1.1 Definitions and Other Definitional Provisions ................................................ 1  ARTICLE II  THE LOAN  Section 2.1 The Loans......................................................................................................... 2  Section 2.2 Terms of the Loans .......................................................................................... 4  Section 2.3 Withholding Taxes; Information Reporting..................................................... 4  Section 2.4 Method of Payment ........................................................................................ 10  Section 2.5 Application of Payments ................................................................................ 10  Section 2.6 Registration and Transfer of Loans................................................................ 10  Section 2.7 Optional Prepayment ..................................................................................... 11  Section 2.8 Mandatory Prepayment .................................................................................. 12  Section 2.9 Break Funding Losses - When Payable ......................................................... 13  Section 2.10 Increased Costs .............................................................................................. 14  Section 2.11 Illegality ......................................................................................................... 15  Section 2.12 Market Disruption .......................................................................................... 15  Section 2.13 Execution ....................................................................................................... 16  Section 2.14 Application of Proceeds from the Collateral ................................................. 16  Section 2.15 Commitment Fee ............................................................................................ 16  Section 2.16 Benchmark Replacement ............................................................................... 16  Section 2.17 Increase in Commitment ................................................................................ 18  ARTICLE III  CONDITIONS PRECEDENT  Section 3.1 The Effective Date and Conditions Precedent to Closing Date ..................... 19  Section 3.2 Conditions Precedent to Subsequent Funding Dates ..................................... 22  ARTICLE IV  THE FACILITY AGENT  Section 4.1 Acceptance of Duties ..................................................................................... 24  Section 4.2 Absence of Duties .......................................................................................... 24  Section 4.3 No Representations or Warranties ................................................................. 24  Section 4.4 Reliance; Agents ............................................................................................ 25  Section 4.5 Resignation or Removal of Facility Agent .................................................... 25  Section 4.6 Erroneous Payments by Facility Agent.......................................................... 26  Section 4.7 Facility Agent as Lender ................................................................................ 29  ARTICLE V  EXTENT OF INTEREST OF LENDERS  Section 5.1 Interest of Lenders ......................................................................................... 29  

 

TABLE OF CONTENTS  (continued)  Page    ii     ARTICLE VI  BORROWER’S REPRESENTATIONS, WARRANTIES AND INDEMNITIES  Section 6.1 Representations and Warranties of Borrower ................................................ 29  Section 6.2 General Indemnity ......................................................................................... 32  ARTICLE VII  REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITY TRUSTEE  AND THE FACILITY AGENT  Section 7.1 Representations, Warranties and Covenants of the Security Trustee ............ 36  Section 7.2 Reporting Covenant of the Facility Agent ..................................................... 36  ARTICLE VIII  OTHER COVENANTS  Section 8.1 Other Covenants............................................................................................. 37  ARTICLE IX  OTHER DOCUMENTS  Section 9.1 Other Documents ........................................................................................... 40  ARTICLE X  CONDITIONS PRECEDENT TO BORROWER’S OBLIGATIONS  Section 10.1 Conditions Precedent to Borrower’s Obligations on Closing Date ............... 41  ARTICLE XI  CERTAIN COVENANTS OF BORROWER  Section 11.1 Certain Covenants of Borrower ..................................................................... 42  ARTICLE XII  NOTICES  Section 12.1 Notices ........................................................................................................... 47  ARTICLE XIII  MISCELLANEOUS  Section 13.1 Miscellaneous ................................................................................................ 48  Section 13.2 USA Patriot Act ............................................................................................. 49  Section 13.3 Immunity Waiver ........................................................................................... 49  Section 13.4 Acknowledgement and Consent to Bail-In .................................................... 50  Section 13.5 German Foreign Trade and Payments Ordinance .......................................... 50  

 

TABLE OF CONTENTS  (continued)  Page    iii     SCHEDULE I   Certain Economic Terms  SCHEDULE IA  Administrative Details  SCHEDULE II  Aircraft and Pre-Delivery Payments  APPENDIX A – Definitions  EXHIBIT A – Form of Borrowing Notice [...***...]  EXHIBIT B – Form of Transfer Agreement  EXHIBIT C-1 – [...***...]  EXHIBIT C-2 – [...***...]    

 

  1     PDP CREDIT AGREEMENT  THIS PDP CREDIT AGREEMENT (this “Credit Agreement”), dated as of  September 30, 2022, is between (i) ALLEGIANT AIR, LLC, a limited liability company duly  formed under the laws of the State of Nevada (herein, together with its successors and permitted  assigns, called the “Borrower”), (ii) LANDESBANK HESSEN-THÜRINGEN  GIROZENTRALE (“Helaba”) and NORDDEUTSCHE LANDESBANK  GIROZENTRALE, acting through its New York Branch (each, herein called an “Original  Lender”, and collectively, herein called the “Original Lenders”), (iii) LANDESBANK  HESSEN-THÜRINGEN GIROZENTRALE, as facility agent (herein, together with any  successor thereto, the “Facility Agent”) and (iv) BANK OF UTAH, not in its individual  capacity but solely as security trustee (herein, together with its successors and permitted assigns,  the “Security Trustee”) under the Security Agreement (such term and other capitalized terms  used herein without definition being defined as hereinafter provided).  W I T N E S S E T H:  WHEREAS, pursuant to the Purchase Agreement between the Borrower and the  Manufacturer, the Manufacturer has agreed to sell to the Borrower certain aircraft, including the  Aircraft described on Schedule II hereto;  WHEREAS, the Borrower desires to finance in part from time to time the pre-delivery  payments in respect of the Aircraft through secured loans; and  WHEREAS, concurrently with the execution and delivery of this Credit Agreement, the  Security Trustee and the Borrower have entered into the Security Agreement, pursuant to which,  among other things, the Borrower will grant to the Security Trustee a security interest in all right,  title and interest of the Borrower in and to the assigned Purchase Agreement, to the extent related  to the Aircraft, and certain other property described therein;  NOW, THEREFORE, in consideration of the mutual agreements herein contained and  other good and valuable consideration, receipt of which is acknowledged, the parties hereto  agree as follows:  ARTICLE I    DEFINITIONS  Section 1.1 Definitions and Other Definitional Provisions.  For all purposes of  this Credit Agreement, except as otherwise expressly provided or unless the context otherwise  requires:  (a) Capitalized terms used herein and not defined herein have the meanings  set forth in Appendix A hereto;  (b) the definitions stated herein and those stated in Appendix A apply  equally to both the singular and the plural forms of the terms defined;  

 

  2     (c) the words “herein”, “hereof” and “hereunder” and other words of similar  import refer to this Credit Agreement as a whole and not to any particular article, section or other  subdivision;  (d) the words “including,” “including, without limitation,” “including, but  not limited to,” and terms or phrases of similar import when used in this Credit Agreement, with  respect to any matter or thing, mean including, without limitation, such matter or thing;  (e) all references herein to articles, sections, appendices, schedules and  exhibits pertain to articles, sections, appendices, schedules and exhibits in or to this Credit  Agreement; and  (f) “government” includes any instrumentality or agency thereof.  ARTICLE II    THE LOAN  Section 2.1 The Loans.  (a)  Subject to the terms and conditions of this Credit  Agreement, each Lender severally agrees to make revolving loans to the Borrower from time to  time during the Commitment Period by advancing its Percentage Share of each Funding to the  Borrower, with the first Funding to occur on the Closing Date.  Each subsequent Funding shall  occur on a Payment Date during the Commitment Period.  Upon each advance of a Funding on a  Funding Date, the Commitment of each Lender shall reduce automatically by the principal  amount of such Funding advanced by such Lender, effective as of such Funding Date.  During  the Commitment Period, the Loans may be repaid [...***...] in accordance with the provisions  of this Credit Agreement.  The Commitment of each Lender shall terminate at 5:00 p.m. (New  York time) on the Commitment Termination Date.  (b) Each Funding may include an advance with respect to one or  more Eligible Aircraft; provided that, at any date of determination, (i) [...***...] and (ii)  [...***...].  The amount of a Funding with respect to an Eligible Aircraft shall not exceed  [...***...] (i) [...***...] and (ii[...***...]). (i) [...***...] and (ii) [...***...].  (c) Each Funding [...***...] of an Aircraft shall be requested by the  delivery of a Borrowing Notice [...***...], by the Borrower to the Security Trustee and the  Facility Agent not later than 1:00 pm  (New York City time) on the applicable Borrowing Notice  Date for the proposed Funding [...***...].  [...***...] to the Security Trustee and the Facility  Agent not later than 1:00 pm  (New York City time) on the applicable Borrowing Notice Date  for such Payment Date.  Each such Borrowing Notice[...***...] shall specify (as applicable)  (i) the scheduled Funding Date for such Funding, (ii) [...***...], (iii) [...***...], (iv) [...***...]  and (v) [...***...].  The Closing shall take place on the Closing Date at such time and place as  the parties hereto shall have agreed from time to time.  At the time of each Funding, each Lender  shall make its Loan by causing the Security Trustee to advance to the Borrower an amount equal  to such Funding by transferring such amount in immediately available funds to the Borrower at  its account at [...***...] or as otherwise directed in writing by the Borrower; provided, however,  that Borrower shall remain responsible for, and has paid prior to the disbursement of any Loan  

 

  3     (on the date of or prior to the date of such disbursement), [...***...] in respect of the relevant  Aircraft.  (d) [Intentionally Omitted].  (e) The failure of any Lender to advance its Percentage Share of a  Funding shall not relieve any other Lender of its obligation to advance its Percentage Share of  such Funding, but no Lender shall be responsible for the failure of any other Lender to advance  its Percentage Share of a Funding.  The Borrower shall have no obligation to borrow some or all  of any Funding if any Lender shall fail to advance its Percentage Share thereof; provided that any  decision by the Borrower not to borrow following the failure of any Lender to advance its  Percentage Share of a Funding shall not relieve any Lender of its liability for such failure to  advance.  (f) If any Lender shall fail to fund its Percentage Share of the first  Funding upon satisfaction of the closing conditions (other than the closing conditions within the  control of such Lender) set forth in Section 3.1, and such failure shall continue for two Business  Days:  (i) such Lender shall be deemed to be a Defaulting Lender;  and  (ii) whether or not the Borrower shall so elect to terminate this Credit  Agreement, each Defaulting Lender agrees to bear and pay its own Funding Costs.  (g) Each Funding shall be made as a loan bearing interest, at all  times during an Interest Period, at a rate of interest determined by reference to Term SOFR for  such Interest Period and shall remain as such for the initial Interest Period for such Funding and  at all times thereafter; provided that nothing in this Section 2.1(g) is intended to derogate from  any alternative rate arrangements that may be implemented pursuant to Section 2.11, Section  2.12 or Section 2.16.  (h) The unutilized portion of the Commitments [...***...].  Section 2.2 Terms of the Loans.  (a)  Scheduled Repayment.  The outstanding  principal amount of the Loans for each Aircraft shall be due and payable in a single installment  on the applicable Payoff Date for such Aircraft, in each case without any fee or premium (a  “Scheduled Repayment”); provided that, [...***...]  The Loans shall not amortize.  [...***...]  (b) Interest.  The Loans for each Aircraft shall bear interest at the Debt Rate  on the principal amount thereof outstanding from time to time from and including the Funding  thereof until such principal amount is paid in full.  Following the first Interest Period, the Facility  Agent shall establish the Debt Rate on the Loans from time to time, for each Interest Period for  which interest is payable, by referring to the applicable page referred to in the definition of  “Term SOFR”.  Interest on the Loans shall be computed on the basis of a 360-day year and  actual days elapsed in the Interest Period for which interest is payable.  Notwithstanding the  foregoing, interest at the Past Due Rate shall be payable on overdue principal and, to the extent  permitted by applicable law, on any interest and any other amounts payable by the Borrower  

 

  4     hereunder not paid when due and payable for any period during which the same shall be overdue,  payable on demand.  The Facility Agent shall notify the Borrower, each Lender and the Security  Trustee of the Debt Rate and the interest on the Loans expected to accrue during each Interest  Period at least one (1) Business Day prior to the commencement of each such Interest Period  and, prior to each Payment Date (but in no event later than 11:00 a.m. (New York time) on the  Funding Business Day immediately preceding such Payment Date), provide the Borrower with  notice of the aggregate amount of interest that will be actually due and payable on the Loans on  such Payment Date; provided that the failure to provide any such notification or any error in such  notification shall not affect the accrual of interest during any interest period or the obligation of  the Borrower to pay the same as provided in this Credit Agreement.  Section 2.3 Withholding Taxes; Information Reporting.  (a)  The Security  Trustee and the Borrower shall be permitted to deduct and withhold from each payment due  hereunder or under any other Operative Document any and all present or future Taxes or similar  charges applicable thereto as required by law.  Whenever any present or future Taxes or similar  charges are required to be withheld or deducted with respect to any amounts payable to any  Lender hereunder or under any other Operative Document, the Security Trustee or the Borrower,  as applicable, will withhold such amounts and timely pay the same to the appropriate authority  and it will deliver to such Lender appropriate documentation showing the payment thereof,  together with such additional documentary evidence as such Lender may reasonably request  from time to time.    (b) If the Security Trustee or Borrower is required by law to withhold U.S.  federal withholding Tax from any amounts payable hereunder or under any other Operative  Document to a Relevant Lender (whether an Original Lender or a Lender that acquires its  Commitments and/or its Loans after the Closing Date) with respect to an applicable interest in a  Loan or Commitment and such withholding would not have been required but for a Tax Law  Change that results in such Relevant Lender’s failure to qualify for a complete exemption from  U.S. federal income Tax with respect to payments hereunder or under any other Operative  Document, then, the Borrower shall promptly pay to the Security Trustee for the account of such  Relevant Lender such additional amounts as may be necessary so that, after all required  withholdings for U.S. federal withholding Tax resulting from such Tax Law Change, such  Relevant Lender receives the amount it would have received had no such required withholdings  resulting from such Tax Law Change been made; provided that no such additional amounts shall  be payable with respect to any such Tax that is imposed (w) as a result of the inaccuracy in or  breach by such Relevant Lender of any of its representations, warranties or covenants contained  in any Operative Document (including, without limitation, its failure to provide Internal Revenue  Service forms pursuant to Section 2.3(d)) or the inaccuracy or incompleteness of any form or  document furnished by such Relevant Lender, (x) on or measured by net income (however  denominated), franchise Taxes, and branch profits Taxes, in each case, imposed (A) as a result of  such Relevant Lender being organized under the laws of, or having its principal office or its  applicable lending office located in, the jurisdiction imposing such Tax (or any political  subdivision thereof) or (B) as a result of any present or former connection between such  Relevant Lender and the jurisdiction imposing such Tax, other than a connection arising solely  from such Relevant Lender’s having executed, delivered, enforced, performed its obligations  

 

  5     under, received a payment under, received or perfected a security interest under, engaged in any  other transaction pursuant to or enforced any Operative Document, or sold or assigned an interest  in any Operative Document (all such Taxes in this Section 2.3(b)(x)(B), “Other Connection  Taxes”), (y) with respect to other matters with respect to such Relevant Lender unrelated to such  Tax Law Change or (z) by reason of or pursuant to FATCA.  “Tax Law Change” means (A) in  the case of any Relevant Lender, a change in the income tax treaty between the United States and  the Applicable Jurisdiction in which such Relevant Lender is organized or is a tax resident or a  change in the Code or related regulations that overrides the provisions of such treaty, and (B) in  the case of a Relevant Lender that is not a commercial bank described in Section 881(c)(3)(A) of  the Code, a change in Section 881(c) of the Code, in the case of each of (A) and (B), occurring  after the date such Relevant Lender acquired such interest in the Commitments and/or Loans, as  applicable, other than a change in or inclusion of an “anti-treaty shopping,” “limitation on  benefits” or similar provision in the relevant treaty or the Code.  If any U.S. federal withholding  Tax for which the Borrower is obligated to pay any additional amounts to a Relevant Lender  under the first sentence of this Section 2.3(b) was required by law to be withheld from any  amount payable to a Relevant Lender hereunder or under any other Operative Document and was  not withheld and deposited with the appropriate authority on a timely basis, the Borrower shall,  after written demand from such Relevant Lender therefor describing in reasonable detail the  subject of such demand, promptly pay to such Relevant Lender such additional amounts equal to  the amount of any such Tax asserted directly against such Relevant Lender.  (c) If any Lender or the Security Trustee determines, in its sole discretion  exercised in good faith, that it has received a refund of any Tax in respect of which an additional  amount or indemnity was paid by the Borrower pursuant to this Section 2.3, such Person shall  promptly pay to the Borrower the amount of such refund plus any interest received on such  refund and fairly attributable to such Tax, provided that during the continuation of an Event of  Default any amounts so owing to the Borrower by a Lender or the Security Trustee may be held  by such Person as security for amounts payable by the Borrower to such Person hereunder or  under any other Operative Document and shall be invested by such Person for the Borrower’s  account in Permitted Investments selected by such Person.  If any Lender or the Security Trustee  shall have paid the Borrower any refund described in the preceding sentence and such refund is  subsequently disallowed, in whole or in part, then, promptly after written notice, such Person  shall be reimbursed by the Borrower for the portion of any payment previously made by such  Person corresponding to the portion of such refund so disallowed.  Notwithstanding anything to  the contrary in this paragraph (c), in no event will any Lender or the Security Trustee be required  to pay any amount to the Borrower pursuant to this paragraph (c) to the extent the payment  thereof would place such Lender or the Security Trustee, as the case may be, in a less favorable  net after-Tax position than such Person would have been in if the Tax subject to the payment of  an additional amount or indemnification and giving rise to such refund had not been deducted,  withheld or otherwise imposed and the indemnification payment or additional amounts with  respect to such Tax had not been paid.  This paragraph shall not be construed to require any  Lender or the Security Trustee to make available its Tax returns (or any other information  relating to its Taxes that it deems confidential) to the Borrower or any other Person.    (d) In addition to the requirements of Article 10, upon the written request of  the Borrower or the Security Trustee, each Lender shall provide to the Borrower and the Security  Trustee, and the Security Trustee shall provide to the Borrower, such other forms, documentation  

 

  6     or certifications as may be reasonably required to establish any available exemption from or  reduction of any withholding Taxes.  In addition, any Lender, if reasonably requested by the  Borrower or the Security Trustee, shall deliver such other documentation prescribed by  applicable law or reasonably requested by the Borrower or the Security Trustee as will enable the  Borrower or the Security Trustee to determine whether or not such Lender is subject to backup  withholding or information reporting requirements.  Notwithstanding anything to the contrary in  the preceding two sentences, the completion, execution and submission of such documentation  (other than such documentation set forth in paragraphs (d)(i), (d)(ii), (d)(iv) and (d)(v) of this  Section) shall not be required if in the Lender’s reasonable judgment such completion, execution  or submission would subject such Lender to any material unreimbursed cost or expense or would  materially prejudice the legal or commercial position of such Lender.  Without limitation the  generality of the foregoing:  (i) any Lender that is a U.S. Person shall deliver to the  Borrower and the Security Trustee on or prior to the date on which such Lender  becomes a Lender under this Agreement (and from time to time thereafter upon  the reasonable request of the Borrower or the Security Trustee), executed copies  of IRS Form W-9 certifying that such Lender is exempt from U.S. federal  backup withholding tax;  (ii) any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Security Trustee (in such number of  copies as shall be requested by the recipient) on or prior to the date on which  such Foreign Lender becomes a Lender under this Agreement (and from time to  time thereafter upon the reasonable request of the Borrower or the Security  Trustee), whichever of the following is applicable;  (A) in the case of a Foreign Lender claiming the benefits of an  income tax treaty to which the United States is a party (x) with respect to  payments of interest under any Operative Document, executed copies of IRS  Form W-8BEN or W-8BEN-E (or applicable successor form) establishing an  exemption from, or reduction of, U.S. federal withholding Tax pursuant to the  “interest” article of such tax treaty and (y) with respect to any other applicable  payments under any Operative Document, IRS Form W-8BEN or W-8BEN-E (or  applicable successor form) establishing an exemption from, or reduction of, U.S.  federal withholding Tax pursuant to the “business profits” or “other income”  article of such tax treaty;  (B) executed copies of IRS Form W-8ECI (or applicable  successor form);  (C) in the case of a Foreign Lender claiming the benefits of the  exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate  to the effect that such Foreign Lender is not a “bank” within the meaning of  Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower  within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign  corporation” related to the Borrower as described in Section 881(c)(3)(C) of the  

 

  7     Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS  Form W-8BEN or W-8BEN-E (or applicable successor form); or  (D) to the extent a Foreign Lender is not the beneficial owner,  executed copies of IRS Form W-8IMY (or applicable successor form),  accompanied by IRS Form W-8ECI, IRS Form W-8BEN, or W-8BEN-E (or  applicable successor form), a U.S. Tax Compliance Certificate and/or other  certification documents from each beneficial owner, as applicable; provided, that  if the Foreign Lender is a partnership and one or more direct or indirect partners  of such Foreign Lender are claiming the portfolio interest exemption, such  Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each  such direct and indirect partner;  (iii) any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Security Trustee (in such number of  copies as shall be requested by the recipient) on or prior to the date on which  such Foreign Lender becomes a Lender under this Agreement (and from time to  time thereafter upon the reasonable request of the Borrower or the Security  Trustee), executed copies of any other form prescribed by Applicable Law as a  basis for claiming exemption from or a reduction in U.S. federal withholding  Tax, duly completed, together with such supplementary documentation as may  be prescribed by Applicable Law to permit the Borrower and the Security  Trustee to determine the withholding or deduction required to be made; and  (iv) if a payment made to a Lender under any Operative  Document would be subject to U.S. federal withholding Tax imposed by FATCA  if such Lender were to fail to comply with the applicable reporting requirements  of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code,  as applicable), such Lender shall deliver to the Borrower and the Security  Trustee at the time or times prescribed by law and at such time or times  reasonably requested by the Borrower or the Security Trustee such  documentation prescribed by applicable law (including as prescribed by  Section 1471(b)(3)(C)(i) of the Code) and such additional documentation  reasonably requested by the Borrower or the Security Trustee as may be  necessary for it to comply with its obligations under FATCA and to determine  that such Lender has complied with such Lender’s obligations under FATCA or  to determine the amount to deduct and withhold from such payment.  Solely for  purposes of this clause (iv), “FATCA” shall include any amendments made to  FATCA after the date of this Agreement.  (v) The Security Trustee, the Facility Agent, and their  successors and assigns shall deliver to the Borrower, on or prior to the date on  which the Security Trustee or Facility Agent, as applicable, becomes a party to  this Agreement, executed copies of the documentation prescribed in clause (x) or  (y) of this Section 2.3(d)(v), as applicable (together with all required attachments  thereto): (x) if the Security Trustee or Facility Agent is a U.S. Person, executed  copies of IRS Form W-9 (or any successor form) certifying that the Security  

 

  8     Trustee or Facility Agent, as applicable, is exempt from U.S. federal backup  withholding Tax, or (y) if the Security Trustee or Facility Agent is not a U.S.  Person, (A) with respect to fees received on its own behalf, executed copies of  IRS Form W-8ECI (or any successor form) and any such other documentation  prescribed by applicable law that would allow Borrower to make payments to  such Security Trustee or Facility Agent, as applicable, without deduction or  withholding of any U.S. federal withholding Taxes, and (B) with respect to  payments received on account of any Lender, executed copies of IRS Form W- 8IMY (or any successor form) evidencing that the Security Trustee or Facility  Agent, as applicable, is either (i) a “qualified intermediary” assuming primary  withholding responsibility under Chapters 3 and 4 of the Code and primary Form  1099 reporting and backup withholding responsibility for payments it receives  for the accounts of others, or (ii) a “U.S. branch” and that the payments it  receives for the accounts of others are not effectively connected with the conduct  of a trade or business in the United States and that it is using such form as  evidence of its agreement with the Borrower to be treated as a U.S. Person for  U.S. federal Tax purposes.   (vi) Each Lender and the Security Trustee agree that if any  form or certification it previously delivered expires or becomes inaccurate in any  respect, it shall update such form or certification or promptly notify the Borrower  and the Security Trustee in writing of its legal inability to do so.  (e) Each Lender agrees to use reasonable efforts to (i) investigate  alternatives for reducing any Taxes that would require the payment of any additional amount or  indemnity pursuant to this Section 2.3 and (ii) eliminate or minimize, to the greatest extent  possible, any such Taxes, including, without limitation, by transferring its Commitments and/or  Loans, as the case may be, to an Affiliate or to a third party (but without any affirmative  obligation on such Lender to seek out any such third party as a transferee) or by designating a  different lending office, if such transfer, designation or other action would eliminate, or reduce  the amount of, any such Taxes; provided that the foregoing shall not obligate any Lender to take  any action that would, in its reasonable judgment, (x) cause such Lender to incur any material  loss or Tax or cost, unless the Borrower has agreed to reimburse such Lender therefor, or  (y) cause such Lender to suffer any material legal or regulatory disadvantage; provided, further,  that the foregoing shall not obligate such Lender to re-book its Loans to an office in which it  does not maintain loans comparable to the Loans.  If no such transfer, designation or other action  is effected, or, if effected, fails to avoid the need for the payment of any additional amount or  indemnity under this Section 2.3, the Borrower may prepay such Lender’s Loans in accordance  with Section 2.7(b) (and, for the avoidance of doubt, without any premium).  At any time when  the payment of any additional amount or indemnity pursuant to this Section 2.3 to any Lender is  required, if the Borrower shall identify to such Lender a Person willing to purchase the Loans  held by such Lender, such Lender shall transfer its Commitments and Loans to such Person on  any Business Day specified by the Borrower not earlier than seven Business Days after the  Borrower shall have identified such Person to such Lender, in exchange for a purchase price  equal to the principal amount of such Loans outstanding as of the purchase date, plus accrued  interest thereon to such date, plus Break Funding Loss, if any, that would be payable with respect  to such Loans if such purchase were a prepayment under Section 2.7(b), plus all other sums then  

 

  9     due and owing to such Lender under the Operative Documents (but, for the avoidance of doubt,  without any premium).  (f) Each Lender shall, and by its making or assuming of a Loan shall be  deemed to have agreed to, indemnify and hold harmless the Security Trustee and the Borrower  and their respective successors and permitted assigns against any U.S. withholding Taxes  (including interest and penalties with respect thereto), that the Security Trustee or Borrower fails  to withhold on any payment to such Lender in a situation in which the Security Trustee or the  Borrower was required by applicable law to withhold; provided that such Lender shall not be  liable under this Section 2.3(f) for (i) any U.S. withholding Taxes (including interest and  penalties with respect thereto) in respect of which additional amounts are payable by the  Borrower pursuant to Section 2.3(b) or (ii) any penalties except to the extent (y) assessed by  reason of the inaccuracy in or breach by such Lender of any of its representations, warranties or  covenants contained in any Operative Document (including, without limitation, its failure to  provide Internal Revenue Service forms as may be required by the terms of this Agreement) or  the inaccuracy or incompleteness of any form or document furnished by such Lender, or (z)  assessed as a result of the gross negligence or willful misconduct of such Lender as determined  by a court of competent jurisdiction in a final and non-appealable judgment.  (g) Except as expressly set forth herein, it is agreed that all of the  Borrower’s obligations with respect to Taxes are set forth in Section 2.10 and this Section 2.3  (other than Taxes that represent losses, claims, damages, etc.  arising from any non-Tax claim  that is the obligation of the Borrower under an Operative Document).  (h) The Borrower shall indemnify each Lender and the Security Trustee  (and their respective successors and permitted assigns) on an after-tax basis, after receipt by the  Borrower of written demand therefor describing in reasonable detail the subject of such demand,  from and against any Other Taxes payable by such Person.  At the request and expense of the  Borrower, the amount, if any, payable by the Borrower under the preceding sentence shall be  verified by an independent accounting firm selected by the Lender or the Security Trustee, as  applicable, and reasonably acceptable to the Borrower, but the Borrower shall have no right to  inspect any confidential information relating to such Lender or the Security Trustee.  (i) The provisions of this Section 2.3 shall survive the repayment of the  Loans, the expiration or termination of the Commitments, or the termination of this Credit  Agreement or any provision hereof.  Section 2.4 Method of Payment.  Principal, Break Funding Loss, if any, and  interest and, except to the extent expressly provided herein or in the Security Agreement, all  other amounts due to any Lender hereunder shall be payable by the Borrower in Dollars in  immediately available funds to the Security Trustee by wire transfer to the account of the  Security Trustee as specified in Schedule IA for the account of such Lender not later than  11:00 a.m. (New York time) on the due date therefor.  Payments made by the Borrower to the  Security Trustee for the account of any Lender shall constitute payment by the Borrower to such  Lender.  The Security Trustee shall, no later than 2:00 p.m. (New York time) on the same day,  remit all such amounts so received by it to the applicable Lender or Lenders to such address and  in such manner (by wire transfer of immediately available funds if not otherwise specified) as  

 

  10     specified in Schedule I or as such Lender shall have otherwise designated to the Security Trustee  in writing.  Each such payment shall be made on the date such payment is due.  If, as a result of  the negligence of the Security Trustee, the Security Trustee fails to make any such payment as  provided above after its receipt of funds at the place and by the time specified above, the  Security Trustee shall compensate the Lenders for loss of use of funds at the Debt Rate.  Section 2.5 Application of Payments.  Each payment received by a Lender in  respect of its Loans shall be applied, first, to the payment of any amount (other than principal of  or interest on such Loans) then due in respect of such Loans, including, without limitation, Break  Funding Loss, if any; second, to the payment of accrued interest on such Loans (as well as any  interest on overdue principal, or, to the extent permitted by applicable law, on Break Funding  Loss, if any, on interest and on other amounts due thereunder) due and payable to the date of  such payment; and third, to the payment of the principal of such Loans then due thereunder  (applied, in the case of a partial prepayment, against the Loans for which such prepayment is  made).  Section 2.6 Registration and Transfer of Loans.  The Security Trustee shall  keep a register (herein sometimes referred to as the “Register”) in which provisions shall be  made for the recordation of (i) the names and addresses of the Lenders, (ii) the Commitments of,  and outstanding principal amounts of the Loans owing to, each Lender pursuant to the terms  hereof from time to time (including the outstanding principal amounts of the Loans allocable to  each Aircraft hereunder) and (iii) the transfer by any Lender of its Commitment and/or Loans (or  any portion thereof) (including any Assignment pursuant to Section 8.1(d)).  The Register shall  be kept at the Corporate Trust Department, and the Security Trustee is hereby appointed  “Registrar” for the purpose of recording the information described in the foregoing sentence in  the Register.  As a condition to any transfer of any Commitment and/or any Loan (or any portion  thereof), the Security Trustee, upon the written direction of a Majority in Interest of Lenders, or  the Borrower may require evidence of the compliance of such transfer with the provisions of the  Securities Act of 1933, as amended (the “Securities Act”), any other applicable securities or  similar laws and any other applicable laws.  Each Loan is a registered obligation and may be  transferred only pursuant to, and in accordance with, the provisions of this Section 2.6 and  Section 8.1(d).  The Borrower and the Security Trustee shall deem and treat each Person in  whose name Loans are recorded on the Register as a Lender and the absolute owner hereunder  for the purpose of receiving payment of the principal of and the Break Funding Loss, if any, and  interest on such Loans and for all other purposes, whether or not such Loans shall be overdue,  and neither the Borrower nor the Security Trustee shall be affected by any notice to the contrary.   All references in this Credit Agreement and the other Operative Documents to a “holder” of, or  Lender in respect of, any Loans shall mean the Person in whose name such Loans are at the time  recorded on the Register.  By its execution of this Credit Agreement or a Transfer Supplement  pursuant to and in accordance with Section 8.1(d), each Lender agrees to be bound by and to  perform and comply with the provisions of this Credit Agreement, the Security Agreement and  the other Operative Documents applicable to the Lenders.  The Security Trustee shall permit the  Borrower, any Lender or their respective nominees to inspect the Register during ordinary  business hours and upon reasonable prior notice and notify the Lenders on request of the current  contents of the Register.  In addition to the foregoing, each Lender shall maintain in accordance  with its usual practice an account or accounts evidencing the indebtedness of the Borrower to  

 

  11     such Lender resulting from the Loans held by such Lender, including the amounts of principal  and interest payable and paid to such Lender from time to time hereunder.  Section 2.7 Optional Prepayment.  (a)  The Borrower may for any reason  prepay the Loans in respect of any Aircraft on any Payment Date, in whole at any time or from  time to time in part.  Such prepayment in whole (of the applicable Loan) shall be at a price, in  addition to any other amounts payable to the Lenders hereunder and under the other Operative  Documents, equal to the sum of the aggregate unpaid principal amount of the applicable Loans  together with interest accrued thereon to the date of prepayment (but, for the avoidance of doubt,  without any premium).  Any such partial prepayment (i) shall be in an amount, determined by the  Borrower, aggregating at least [...***...] or an integral multiple thereof, (ii) shall include, on the  date of prepayment, interest accrued on the Loans to be prepaid to the date of prepayment (but,  for the avoidance of doubt, without any premium) and (iii) shall be applied to prepay the Loans  designated in the related prepayment notice provided by the Borrower pursuant to the  immediately succeeding sentence.  An irrevocable notice of any prepayment pursuant to this  Section 2.7(a) shall be given by the Borrower to the Facility Agent in the manner specified in  Section 12.1 at least four Funding Business Days prior to the date fixed for prepayment.  The  Facility Agent shall give prompt written notice of any notice of prepayment received from the  Borrower pursuant to this Section 2.7(a) to all Lenders and the Security Trustee as soon as the  Facility Agent shall have received such notice, which notice shall specify the date of prepayment  and the amount to be prepaid.  For the avoidance of doubt, this Section 2.7(a) shall not apply to  any prepayment made pursuant to Section 2.7(b) or Section 2.8.  (b) The Borrower may prepay any Lender’s Loans (whether or not  the Loans held by other Lenders are then subject to prepayment) on any Business Day to the  extent permitted by Section 2.3, Section 2.10, Section 2.11 or Section 2.12 at a price, in addition  to any other amounts payable to such Lender hereunder and under the other Operative  Documents, equal to the sum of the aggregate unpaid principal amount of such Lender’s Loans  together with interest accrued thereon to the date of prepayment, plus, if payment is not made  on a Payment Date, Break Funding Losses, if applicable (but, for the avoidance of doubt,  without any premium).  An irrevocable notice of prepayment pursuant to this Section 2.7(b)  shall be given by the Borrower to the affected Lender, with a copy to the Security Trustee, in  the manner specified in Section 12.1 at least three Funding Business Days prior to the date fixed  for prepayment and shall specify that it is a notice of prepayment pursuant to this Section 2.7(b)  and the date fixed for prepayment.  Section 2.8 Mandatory Prepayment.  (a) To the extent required by Section 2.11, the Borrower shall  prepay the Loans held by an affected Lender in full (whether or not the Loans held by other  Lenders are then subject to prepayment) at a price, in addition to any other amounts payable to  the affected Lender hereunder and under the other Operative Documents, equal to the sum of the  aggregate unpaid principal amount of such affected Lender’s Loans, together with interest  accrued thereon to the date of prepayment, plus Break Funding Loss, if applicable (but, for the  avoidance of doubt, without any premium).  

 

  12     (b) If on any Payment Date (based on the most recent PDP report  delivered by the Manufacturer pursuant to Section 5.6.1.1(ii) of the Manufacturer’s Consent and  reporting by the Borrower):  (x) [...***...]; or  (y) [...***...].  (c) If the delivery date of an Aircraft [...***...] and such Aircraft is  terminated or cancelled by the Borrower under the applicable provision of the AGTA or  the Purchase Agreement, then the Borrower shall, on the fifth Business Day following  the date of occurrence of such, termination or cancellation, as the case may be, prepay  the outstanding principal amount of the Loans associated with such Aircraft, together  with accrued interest thereon to the date of such prepayment and Break Funding Loss  (if any) but without any premium.  (d) If the Borrower receives notice from the Manufacturer that an  Aircraft will be delivered to the Borrower (or its designee) by the Manufacturer  pursuant to the Purchase Agreement prior to the date of its Scheduled Repayment, then  the Borrower shall on or prior to such date of delivery prepay the outstanding principal  amount of the Loans associated with such Aircraft, together with accrued interest  thereon to the date of such payment and Break Funding Loss (if any), but without any  premium.  For the avoidance of doubt, notwithstanding whether or not the  Manufacturer delivers notice of an Aircraft’s delivery date pursuant to the immediately  preceding sentence, the Borrower shall be required to prepay in full the Loans  associated with an Aircraft prior to taking delivery of such Aircraft from the  Manufacturer.  Section 2.9 Break Funding Losses - When Payable.  If any prepayment of  principal of the Loans pursuant to Section 2.7 or Section 2.8 or pursuant to Article V of the  Security Agreement is made on any date that is not a Payment Date, or any scheduled repayment  is not made on the due date thereof, or, to the extent provided in any Borrowing Notice  [...***...] issued pursuant to Section 2.1(c), if for any reason (other than a default by any  Lender) a Funding [...***...] does not occur on a date specified therefor in such Borrowing  Notice [...***...], then the Borrower shall, on the date of prepayment, repayment or borrowing,  as the case may be, or, if necessary to verify the amount of such Break Funding Loss, within two  Business Days thereafter, pay to the Security Trustee for the account of each affected Lender  such additional amounts as are necessary to reimburse such Lender for any Break Funding Loss  incurred by such Lender as a result thereof.  If a Lender transfers its Loans pursuant to Section  2.3(e), 2.10(c), 2.11 or 2.12 to a Person identified by the Borrower, the purchase price for such  Loans will include such additional amounts as are necessary to reimburse such Lender for any  Break Funding Loss incurred by such Lender as a result of such transfer; provided that, if  necessary to verify the amount of such Break Funding Loss, such portion of such purchase price  as is allocable to such Break Funding Loss shall be payable within two Business Days after the  date of such transfer.  Under the circumstances contemplated by this Section 2.9, each affected  Lender shall furnish as promptly as practicable to the Borrower and the Security Trustee a  certificate describing in reasonable detail the basis for the computation of any Break Funding  

 

  13     Loss, which certificate, in the absence of manifest error, shall be considered prima facie  evidence of such amount for purposes of this Credit Agreement.  Section 2.10 Increased Costs.  (a)  Subject to the limitations set forth in  paragraph (c) below, the Borrower shall pay directly to each Lender from time to time such  amounts as such Lender may determine to be necessary to compensate such Lender for any costs  that such Lender determines are attributable to its making or maintaining any Loans or its  obligation to make any Loans hereunder, or any reduction in any amount received by such  Lender hereunder in respect of any such Loans or such obligation (such increases in costs and  reductions in amounts receivable (including any covered by clause (b) below) being herein called  “Increased Costs”), resulting from any Regulatory Change that:  (i)  subjects any Lender to any Taxes (other than (and excluded from the Borrower’s  responsibility) (A) Taxes payable by the Borrower pursuant to Section 2.3(b) and  (B) Taxes described in clauses (w), (x), (y) or (z) of Section 2.3(b)) on its loans,  loan principal, letters of credit, commitments, or other obligations, or its deposits,  reserves, other liabilities or capital attributable thereto; or  (ii)  imposes or modifies any reserve, special deposit or similar requirements relating  to any extensions of credit or other assets of, or any deposits with or other  liabilities of, such Lender, or any commitment of such Lender (including, without  limitation, the Commitments of such Lender hereunder); or  (iii)  imposes any other condition affecting this Agreement (or any of such extensions  of credit or liabilities) or its Commitments.  (b) Without limiting the effect of the foregoing provisions of this Section 2.10 (but  without duplication) and subject to the limitations in paragraph (c) below, the Borrower shall pay  directly to each Lender from time to time on request such amounts as such Lender may  determine to be necessary to compensate such Lender (or, without duplication, the bank holding  company of which such Lender is a subsidiary) for any increase in its costs that it determines are  attributable to the maintenance of Loans by such Lender (or any applicable lending office or  such bank holding company), pursuant to any Regulatory Change.    (c) Each Lender shall notify the Borrower of any event entitling such Lender to  compensation under paragraph (a) or (b) of this Section 2.10 as promptly as practicable after  such Lender obtains actual knowledge thereof; provided that (i) such Lender shall, with respect  to compensation payable pursuant to this Section 2.10 in respect of any costs resulting from such  event, only be entitled to payment under this Section 2.10 for costs incurred, and attributable to  the period which started [...***...] of such notice by the Borrower by each Lender, (ii) each  Lender will at the sole cost of the Borrower (so long as the Borrower receives reasonable  advance notice of any such costs to be claimed), use commercially reasonable efforts to (A)  designate a different lending office for the Loans of such Lender affected by such event or (B)  adjust the financing structure of the Loans in consultation with the Borrower and the Facility  Agent if such designation or adjustment will avoid the need for, or reduce the amount of, such  compensation and will not, in the sole opinion of such Lender, be disadvantageous to such  Lender, and (iii) no Lender shall discriminate against the Borrower compared to similarly  

 

  14     situated borrowers in aircraft finance transactions in making any claim for compensation under  this Section 2.10 and shall treat the Borrower no less favorably than such Lender’s other  similarly situated borrowers in similarly situated aircraft finance transactions.  Each Lender will  furnish to the Borrower a certificate setting forth the basis and amount of each request by such  Lender for compensation under paragraph (a) or (b) of this Section 2.10, which shall include  such non-proprietary technical information as is reasonably required to establish its costs or rate  of return.  Determinations and allocations by any Lender for purposes of this Section 2.10 of the  effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 2.10, or of the  effect of capital maintained pursuant to paragraph (b) of this Section 2.10, on its costs or rate of  return of maintaining Loans or its obligation to make Loans, or on amounts receivable by it in  respect of Loans, and of the amounts required to compensate such Lender under this Section  2.10, shall be conclusive absent manifest error, provided that such determinations and allocations  are made on a reasonable basis.  Section 2.11 Illegality.  Notwithstanding any other provisions of this  Agreement, in the event that after the date of this Agreement the introduction of or any change in  or in the interpretation of any law or regulation makes it unlawful, or any central bank or other  Governmental Authority of competent jurisdiction asserts that it is unlawful, for any Lender to  honor its obligation to make or maintain Loans hereunder (and, in the sole opinion of such  Lender, the designation of a different lending office or the taking of such other reasonable steps  (not involving the incurrence of any material cost or expense and not implying any obligation of  sale or transfer by such Lender of its Loans) would either not avoid such unlawfulness or would  be disadvantageous to such Lender) (an “Illegality Change”), then such Lender shall promptly  notify the Borrower thereof (with a copy to the Security Trustee) and such Lender’s obligation to  make Loans shall be suspended until such time as such Lender may again make and maintain  Loans and the Borrower shall prepay the Loans of such Lender then outstanding hereunder  together with accrued interest thereon and all other amounts payable to such Lender hereunder  (including any Break Funding Losses, if any) on the last day of the then current Interest Period  with respect thereto or earlier if necessary to avoid such illegality; provided that before making  any such demand, such Lender agrees, at the sole cost of the Borrower upon giving the Borrower  reasonable advance notice of the cost to be incurred, to use reasonable efforts (consistent with its  internal policy and legal and regulatory restrictions) to transfer this facility to a different lending  office if the making of such transfer would allow the Lender or its lending office to continue to  perform its obligations to fund or maintain Loans to the Borrower, and would not, in the  judgment of such Lender, be otherwise disadvantageous to such Lender.  Section 2.12 Market Disruption.  (a)  If a Market Disruption Event occurs in  relation to the Loans for any Interest Period, then the rate of interest on each affected Lender’s  share of that outstanding Loan amount for such Interest Period shall be the percentage rate per  annum which is the sum of (a) the Applicable Margin, plus (b) the rate [...***...], plus  (c) Increased Costs (as specified in Section 2.10) (if any).  The continuation of a Market  Disruption Event and the rate notified by the Facility Agent to the Borrower of the Lenders’ cost  related to a Market Disruption Event shall be conclusive for any Interest Period absent manifest  error.  The notification by the Facility Agent of a rate to the Borrower shall constitute a  certification by each Lender to the Borrower that the rate so provided is an accurate and fair  calculation of [...***...].  

 

  15     (b) During a period of 30 days following the reception of notice of a  Market Disruption Event arising under clause (b) of the definition thereof the Facility Agent,  each affected Lender and the Borrower shall negotiate in good faith in order to arrive at a  mutually acceptable alternative basis for determining the interest rate applicable to the affected  Lenders.  At any time following the receipt of such notice by the Borrower, the Borrower shall  have the right (i)  to require any affected Lender to assign its interest in its Loan, its  Commitment and other rights and obligations hereunder to a transferee (selected by the  Borrower and consented to by the Facility Agent) pursuant and subject to Section 8.1(d) for a  purchase price equal to the unpaid principal amount of the affected Loans then outstanding  together with interest accrued thereon, Break Funding Losses (if any) as if such Loans have  been prepaid and any other amounts owed hereunder, owing to such Lender as of the date of  payment, and (ii) to cancel the affected Commitment and prepay in full the affected Loans in  accordance with Section 2.7(b), in each case of any Lender claiming such Market Disruption  Event together with interest accrued thereon, Break Funding Losses (if any) and any other  amounts owed hereunder, owing to such Lender at the date of prepayment.  Section 2.13 Execution.  By execution and delivery hereof, each Original  Lender requests and directs the Security Trustee to execute and deliver the Security Agreement  (including each Security Agreement Supplement), and the Security Trustee agrees to do so.  Section 2.14 Application of Proceeds from the Collateral.  After an Event of  Default shall have occurred and be continuing and the unpaid principal in respect of all Loans  then outstanding and accrued interest thereon shall have become (or be deemed to be) due and  payable, the Security Trustee shall promptly apply any payments received, any amounts then  held and any amounts realized by the Security Trustee with respect to the Collateral in the  exercise of remedies pursuant to Section 5.2 of the Security Agreement in the manner set forth in  Section 4.1 of the Security Agreement.  Section 2.15 Commitment Fee.  The Borrower shall pay to the Security Trustee  for the account of each Lender a commitment fee (the “Commitment Fee”) [...***...] provided  that no Commitment Fee shall be payable to a Lender that is a Defaulting Lender.  The accrued  Commitment Fee shall be due and payable on each Payment Date.  Section 2.16 Benchmark Replacement  (a) Benchmark Transition Event.  Notwithstanding anything to the contrary  herein or in any other Loan Document, if a Benchmark Transition Event and its related  Benchmark Replacement Date have occurred prior to the setting of the then-current Benchmark,  then if a Benchmark Replacement is determined in accordance with the definition of  “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark  Replacement will replace such Benchmark for all purposes hereunder and under any Operative  Document in respect of any Benchmark setting at or after 10:00 a.m. (New York City time) on  the fifth Business Day after the date notice of such Benchmark Replacement is provided to the  Lenders without any amendment to, or further action or consent of any other party to, this  Agreement or any other Operative Document so long as the Facility Agent has not received, by  such time, written notice of objection to such Benchmark Replacement from Lenders comprising  the Majority in Interest of Lenders.  

 

  16     (b) Benchmark Replacement Conforming Changes.  In connection with the  use, administration, adoption or implementation of a Benchmark Replacement, the Facility  Agent will propose and the Borrower, acting reasonably, will review and consent in good faith  (placing reasonable emphasis to remain substantially consistent with the terms of this Agreement  and any other Operative Document) to make Conforming Changes from time to time and,  notwithstanding anything to the contrary herein or in any other Operative Document, any  amendments implementing such Conforming Changes will become effective without any further  action or consent of any other party to this Agreement or any other Operative Document.  (c) Notices; Standards for Decisions and Determinations.  The Facility Agent  will promptly notify the Borrower and the Lenders of (A) the implementation of any Benchmark  Replacement and (B) the effectiveness of any Conforming Changes in connection with the use,  administration, adoption or implementation of a Benchmark Replacement.  The Facility Agent  will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark  pursuant to Section 2.16(d) and (v) the commencement of any Benchmark Unavailability Period.   Any determination, decision or election that may be made by the Facility Agent (and, where  applicable, with the consent of the Borrower, such consent not to be unreasonably withheld) or,  if applicable, any Lender (or group of Lenders) pursuant to this Section 2.16, including any  determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence  of an event, circumstance or date and any decision to take or refrain from taking any action or  any selection, will be conclusive and binding absent manifest error and without consent from any  other party to this Agreement or any other Operative Document, except, in each case, as  expressly required pursuant to this Section 2.16.  (d) Unavailability of Tenor of Benchmark.  Notwithstanding anything to the  contrary herein or in any other Operative Document, at any time (including in connection with  the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term  rate (including Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not  displayed on a screen or other information service that publishes such rate from time to time as  selected by the Facility Agent in its reasonable discretion or (B) the regulatory supervisor for the  administrator of such Benchmark has provided a public statement or publication of information  announcing that any tenor for such Benchmark is not or will not be representative, then the  Facility Agent may modify the definition of “Interest Period” (or any similar or analogous  definition) for any Benchmark settings at or after such time to remove such unavailable or non- representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is  subsequently displayed on a screen or information service for a Benchmark (including a  Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not  or will not be representative for a Benchmark (including a Benchmark Replacement), then the  Facility Agent may modify the definition of “Interest Period” (or any similar or analogous  definition) for all Benchmark settings at or after such time to reinstate such previously removed  tenor.  (e) Benchmark Unavailability Period.  Upon the Borrower’s receipt of notice  of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any  pending request for a Term SOFR Funding of Term SOFR Loans to be made during any  Benchmark Unavailability Period.  

 

  17     Section 2.17 Increase in Commitment.   (a) Increase Request.  The Borrower may by written notice to the Facility  Agent request, prior to the Maturity Date, an increase to the existing Commitments.  Such notice  shall specify (i) the date (the “Increase Effective Date”) on which the Borrower proposes that  the increased Commitments shall be effective, which shall be (A) a Payment Date and (B) a date  not less than 10 Business Days after the date on which such notice is delivered to the Facility  Agent and (ii) the identity of each assignee to whom the Borrower proposes any portion of such  increased Commitments be allocated (each, a “New Lender”) and the amounts of such  allocations; provided that any existing Lender approached to provide all or a portion of the  increased Commitments may elect or decline, in its sole discretion, to provide such increased  Commitment.  (b) Conditions.  The increased Commitments shall become effective, as of the  Increase Effective Date provided that:  (i) all representations and warranties contained in this Agreement and  the other Operative Documents shall be true and correct in all material respects on and as of the  date of the Increase Effective Date with the same effect as if made on and as of such date except  to the extent such representations and warranties expressly relate to an earlier date and in such  case as of such date;  (ii) no Event of Default shall have occurred and be continuing or  would result from giving effect to the increased Commitments on the Increase Effective Date;  and  (iii) after giving effect to the increased Commitments, as of any date of  determination, the Total Commitment shall not exceed the $300,000,000.  (c) Terms of Commitments.  The terms and provisions of the increased  Commitments (and any Loans made pursuant to such increased Commitments) shall be identical  to the Loans.  (d) Adjustment of Loans.  Each of the existing Lenders shall assign to each of  the New Lenders, and each of the New Lenders shall purchase from each of the existing Lenders,  at the principal amount thereof (together with accrued interest), such interests in the Loans  outstanding on the Increase Effective Date as shall be necessary in order that, after giving effect  to all such assignments and purchases, the Loans will be held by the existing Lenders and New  Lenders ratably in accordance with their Commitments after giving effect to the increased  Commitments on the Increase Effective Date.  If there is a new borrowing of Loans on the  Increase Effective Date, the Lenders after giving effect to the Increase Effective Date shall make  such Loans in accordance with Section 2.01 and 2.02.    (e) Equal and Ratable Benefit.  The Loans and Commitments established  pursuant to this paragraph shall constitute the Loans and Commitments under, and shall be  entitled to all the benefits afforded by, this Agreement and the other Operative Documents and  shall, without limiting the foregoing, benefit equally and ratably from the security interests  created by the Security Agreement.  

 

  18     (f) Lender’s Failure to Respond.  Any Lender that does not respond to a  request for a Commitment increase shall be deemed to have declined such request.  ARTICLE III    CONDITIONS PRECEDENT  Section 3.1 The Effective Date and Conditions Precedent to Closing Date.   The obligations of the parties shall commence and be effective upon the Effective Date. The  obligation of the Original Lenders to make the first Funding on the Closing Date, as  contemplated by Article II, is subject to the fulfillment (or the waiver by the Lenders) prior to or  on the Closing Date of the following conditions precedent:  (a) No change shall have occurred after the date of this Credit  Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate  regulatory authorities or any court that would make it a violation of law or governmental  regulations for the Lenders to make their Commitments available.  (b) This Credit Agreement and the following documents shall have  been duly authorized, executed and delivered by the respective party or parties thereto (other  than the Lenders), shall be in full force and effect and executed counterparts (or copies thereof  where indicated) thereof shall have been delivered to the Lenders:  (i) the Security Agreement;  (ii) the Guarantee;  (iii) the Fee Letter;  (iv) the Manufacturer’s Consent (attaching as an exhibit  thereto the “Assigned Purchase Agreement” (as defined in the Manufacturer’s  Consent));  (v) a confirmation of the Borrower that each Manufacturer  Agreement has been executed by each party thereto and remains in full force and  effect and no default (however defined) shall have occurred under any  Manufacturer Agreement; and  (vi) the Engine Manufacturer’s Consent.  (c) (i) A Uniform Commercial Code financing statement shall  have been duly filed (or shall be in the process of being so duly filed), in each case, by counsel to  the Lenders, in all places necessary or desirable within the State of Nevada.   (ii) The Original Lenders shall have received a lien search conducted  in the State of Nevada in respect of the Borrower, in form and substance reasonably  satisfactory to the Facility Agent, reflecting the absence of Liens on the Collateral on the  Closing Date, other than Permitted Liens not Of Record.  

 

  19     (d) The Original Lenders shall have received the following:  (i) a certificate dated the Closing Date of the Secretary or  Assistant Secretary of each of the Borrower and the Guarantor, certifying as to  (A) a copy of the resolutions of the Board of Directors of the Borrower or the  Guarantor, as the case may be, or the executive committee thereof duly  authorizing the transactions contemplated hereby and the execution, delivery and  performance by the Borrower or the Guarantor, as the case may be, of each of the  Operative Documents to which it is a party and any other documents required to  be executed and delivered by the Borrower or the Guarantor, as the case may be,  in accordance with the provisions hereof and (B) a copy of the Certificate of  Incorporation or the Certificate of Formation, as applicable, and By-Laws or  Operating Agreement, as applicable, of the Borrower or the Guarantor, as the  case may be, as in effect on the Closing Date;  (ii) a certificate or other evidence from the Secretary of State  of the State of Nevada, dated as of a date reasonably near the Closing Date, as to  the due incorporation and good standing of the Borrower and the Guarantor in  such state;  (iii) an incumbency certificate of the Borrower and the  Guarantor as to the person or persons authorized to execute and deliver the  Operative Documents to which it is a party and any other documents to be  executed by the Borrower or the Guarantor, as the case may be, in connection  with the transactions contemplated hereby and the specimen signatures of such  person or persons;  (iv) one or more certificates (including an incumbency  certificate) of the Security Trustee certifying to the reasonable satisfaction of the  Original Lenders as to the due authorization, execution, delivery and  performance by the Security Trustee of each of the Operative Documents to  which the Security Trustee is a party and any other documents to be executed by  or on behalf of the Security Trustee in connection with the transactions  contemplated hereby or thereby; and  (v) such other documentation or information concerning the  Borrower, the Guarantor or the Security Trustee as shall reasonably be required  to be obtained by the Original Lenders to satisfy the “know your customer”  requirements of the Original Lenders, the Facility Agent and the Security  Trustee.  (e) On the Closing Date, the following statements shall be correct:   (i) the representations and warranties of the Borrower and the Guarantor herein and in the  Guarantee, as applicable, are correct as though made on and as of such date, except to the extent  such representations and warranties relate solely to an earlier date (in which case such  representations and warranties are correct on and as of such earlier date); and (ii) no event has  occurred and is continuing that constitutes an Event of Default.  

 

  20     (f) Each of the Security Trustee and each Original Lender shall have  received opinions addressed to it from (A) the General Counsel to the Borrower and the  Guarantor, with respect to Nevada law, (B) Vedder Price, P.C., special counsel to the Original  Lenders, with respect to New York law and such other matters as may be required by them, and  (C) Parr Brown Gee & Loveless, special counsel to the Security Trustee.  (g) Each of the Security Trustee and each Original Lender shall have  received a certificate or certificates signed by the chief financial or accounting officer, any  Executive Vice President, any Senior Vice President, the Treasurer, any Vice President, any  Assistant Vice President or any Assistant Treasurer (or any other Responsible Officer) of the  Borrower and the Guarantor, dated the Closing Date, certifying as to the correctness of each of  the matters stated in Section 3.1(e).  (h) Each Original Lender shall have received a certificate from the  Security Trustee dated the Closing Date, signed by an authorized officer of the Security Trustee,  certifying that no Security Trustee Liens exist, and further certifying as to the correctness of each  of the matters stated in Section 7.1.  (i) Each Original Lender shall have received (i) either an opinion or  an officer’s certificate from the Manufacturer, in each case in the Manufacturer’s customary  form, and (ii) a legal opinion from the Engine Manufacturer, in the Engine Manufacturer’s  customary form.  (j) The Borrower shall have paid the Structuring Fee and the  Facility Agent Fee on the Effective Date to the Security Trustee in immediately available funds.  (k) No action or proceeding shall have been instituted nor shall any  governmental 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 Closing Date to set aside, restrain, enjoin or prevent the completion and  consummation of this Credit Agreement or the transactions contemplated hereby.  (l) There has been no material adverse change in the business or  financial condition of the Borrower and the Guarantor taken as a whole since June 30, 2022,  which could reasonably be expected to have a material adverse effect on the ability of the  Borrower and the Guarantor to perform its obligations under the Operative Documents.  (m) There shall be no continuing Market Disruption Event that has a  material adverse change that increases the financing costs of the Lenders.  (n) (i) No later than five Funding Business Days prior (or four  Funding Business Days prior, if the confirmation from the Manufacturer referenced below has  not been received by the Borrower by such fifth Funding Business Day prior) to the Closing  Date, the Facility Agent shall have received a report from the Borrower attaching a copy of the  most recent confirmation delivered by the Manufacturer pursuant to Section 5.6.1.1(i) of the  Manufacturer’s Consent, demonstrating that the Manufacturer has received (A) the PDPs that are  due and payable for all Aircraft (as the same may, from time to time, be adjusted pursuant to the  Purchase Agreement) and (B) [...***...] all other PDPs (if applicable) as of such Closing Date  

 

  21     for the Aircraft which will have PDPs financed [...***...] pursuant to such Funding and (ii)  within one Funding Business Day of receipt of the report referenced in the foregoing clause (i),  the Facility Agent shall have provided written confirmation to the Original Lenders that the  calculations set forth in such report are correct; provided that if the Facility Agent shall have  neither provided such confirmation nor objected to the calculations set forth in such report by  such date, the Facility Agent shall be deemed to have confirmed its acceptance of the same.  (o) The Facility Agent shall have received confirmation from the  Manufacturer that there are no PDP payment obligations due and owing by the Borrower as of  such date under the Purchase Agreement.  Section 3.2 Conditions Precedent to Subsequent Funding Dates.  The  obligation of the Lenders to make a Funding on each Funding Date after the Closing Date  [...***...], as contemplated by Article II, is subject to the fulfillment (or the waiver by the  Lenders) prior to or on such Funding Date of the following conditions precedent:  (a) No change shall have occurred after the date of this Credit  Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate  regulatory authorities or any court that would make it a violation of law or governmental  regulations for the Lenders to make their Commitments available.  (b) On such Funding Date, the following statements shall be correct:  (i) the representations and warranties of the Borrower and the Guarantor herein and in the  Guarantee, as applicable, are correct as though made on and as of such date, except to the extent  such representations and warranties relate solely to an earlier date (in which case such  representations and warranties are correct on and as of such earlier date); and (ii) no event has  occurred and is continuing that constitutes an Event of Default.  (c) No action or proceeding shall have been instituted nor shall any  governmental 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 such Funding Date to set aside, restrain or enjoin this Credit Agreement or  the transactions contemplated hereby.  (d) A Borrowing Notice [...***...] in respect of such Funding shall  have been duly authorized, executed and delivered by the Borrower, shall be in full force and  effect and executed counterparts (or copies thereof where indicated) thereof shall have been  delivered to the Lenders.  (e) The Purchase Agreement shall not have been (i) terminated  pursuant to the relevant provision of the AGTA or cancelled for breach or (ii) cancelled with  respect to the Eligible Aircraft which will have PDPs financed [...***...] pursuant to such  Funding.  (f) (i) No later than the second Funding Business Day (or third  Funding Business Day, if the confirmation from the Manufacturer referenced below has not been  received by the Borrower by such second Funding Business Day) in the month of such Funding,  the Facility Agent shall have received a report from the Borrower attaching a copy of the most  

 

  22     recent confirmation delivered by the Manufacturer pursuant to Section 5.6.1.1(i) of the  Manufacturer’s Consent, demonstrating that the Manufacturer has received (A) the PDPs that are  due and payable for all Aircraft (as the same may, from time to time, be adjusted pursuant to the  Purchase Agreement) and (B) [...***...] and all other PDPs (if applicable) as of such Funding  Date for the Aircraft which will have PDPs financed [...***...] pursuant to such Funding and (ii)  within one Funding Business Day of receipt of the report referenced in the foregoing clause (i),  the Facility Agent shall have provided written confirmation to the Lenders that the calculations  set forth in such report are correct; provided that if the Facility Agent shall have neither provided  such confirmation nor objected to the calculations set forth in such report by such date, the  Facility Agent shall be deemed to have confirmed its acceptance of the same.  (g) The Facility Agent shall have received a copy of the invoice  from the Manufacturer in respect of the PDPs paid or to be paid by the Borrower on or before  such Funding Date.  (h) The Facility Agent shall have received confirmation from (i) the  Manufacturer that there are no supplemental agreements or modifications to the Purchase  Agreement that changes the Net Purchase Price from the pricing set forth in the Manufacturer’s  Consent (excluding, for the avoidance of doubt, BFE) and (ii) the Borrower of (a) the amount of  any “Optional Features” then contracted in respect of such Aircraft and (b) any known or  contracted increases of the price of an Aircraft resulting from changes incorporated into such  Aircraft pursuant to Article 3 (Regulatory Requirements and Certificates) and Article 4 (Detail  Specifications, Changes) of the AGTA (as referenced in Schedule 1, Part B, Paragraph 1 to the  Manufacturer’s Consent), and (c) the contracted cost of BFE for such Aircraft.  (i) The Facility Agent shall have received confirmation from the  Manufacturer that there are no outstanding payment obligations due and owing by the Borrower  as of such date under the Purchase Agreement.  ARTICLE IV    THE FACILITY AGENT  Section 4.1 Acceptance of Duties.  Each Lender hereby appoints, and Helaba  hereby accepts for so long as it is a Lender, Helaba as Facility Agent.  Helaba hereby agrees to  perform the following duties in its capacity as Facility Agent:  (a) pursuant to, in accordance with and subject to the terms of,  Section 2.2 and Section 2.12 to (i) establish the Debt Rate on the Loans from time to time,  (ii) notify the Borrower of the interest on the Loans expected to accrue during each Interest  Period and (iii) provide the Borrower with notice of the aggregate amount of interest that will be  actually due and payable on the Loans on each Payment Date; and  (b) wherever it is necessary or contemplated under or in respect of  this Credit Agreement or under any of the other Operative Documents for the Lenders acting  together, or a Majority in Interest of Lenders, to form an opinion or make a decision upon or  consent to any matter or to give instructions or directions of any kind or nature to the Security  

 

  23     Trustee or to any other Person, as the case may be, upon any matter, then the Facility Agent shall  be responsible for ascertaining the opinion, decision or instructions of each Lender concerned  and making known to the Security Trustee or to such other Person, as the case may be, the  opinion formed, the decision made or the instructions of, the Lenders acting together or the  Majority in Interest of Lenders, as the case may be.  The Facility Agent shall not be responsible  to any Lender for any action taken or omitted to be taken by it hereunder or under any other  document, agreement or instrument referred to or provided for herein or in connection herewith,  except for its own gross negligence or willful misconduct, and each of the Lenders agrees that it  will not assert or seek to assert against any director, officer or employee of the Facility Agent  any claim it might have against any of them in respect of such matters.  Nothing herein or in any  of the other Operative Documents shall require the Facility Agent to expend or risk its own funds  or otherwise incur any financial liability in the exercise of any of its rights hereunder or under  any other Operative Document.  The Facility Agent shall be entitled to a non-refundable fee of  $20,000 per year (plus VAT, if applicable), payable on the Effective Date and on each  anniversary thereof falling prior to the Maturity Date, annually in advance (such fee, the  “Facility Agent Fee”) pursuant to Section 8.1.  Section 4.2 Absence of Duties.  The Facility Agent shall have no duty to  confirm, verify or inquire into the failure to receive the opinion, decision or instructions of any of  the Lenders.  Notwithstanding the foregoing, the Facility Agent shall, as promptly as possible,  make known the opinion, decision or instructions of the Lenders or the Majority in Interest of  Lenders to the Security Trustee or to any other interested person, as the case may be.  Section 4.3 No Representations or Warranties.  The Facility Agent, in its  capacity as such but not as a Lender hereunder, shall not be deemed to have made any  representation or warranty as to the validity, legality or enforceability of this Credit Agreement,  any other Operative Document or any other document or instrument, or as to the correctness of  any statement (other than a statement by the Facility Agent under Section 4.1(a)) contained  herein or therein, except that the Facility Agent hereby represents and warrants that each of the  said specified documents to which it is a party has been or will be duly executed and delivered  by one of its officers who is and will be duly authorized to execute and deliver such documents  on its behalf.  Section 4.4 Reliance; Agents.  As between the Facility Agent and any Lender,  the Facility Agent shall be entitled to rely upon any signature, instrument, notice, resolution,  request, consent, order, certificate, report, opinion, bond or other document or paper believed by  it to be genuine and believed by it to be signed by the proper party or parties.  The Facility Agent  may accept a copy of a resolution of the Board of Directors or any applicable committee thereof  of any Lender, certified by the Secretary or an Assistant Secretary of such Lender, as duly  adopted and in full force and effect, as conclusive evidence that such resolution has been duly  adopted and that the same is in full force and effect.  As between the Facility Agent and any  Lender, as to any matters not expressly provided for by this Credit Agreement, the Facility Agent  shall in all cases be fully protected in acting, or in refraining from acting, hereunder in  accordance with instructions signed by a Majority in Interest of Lenders, and such instructions of  a Majority in Interest of Lenders and any action taken or failure to act pursuant thereto shall be  binding on all of the Lenders.  

 

  24     The Facility Agent may perform its powers and duties hereunder either directly or  through agents or attorneys and may, at the expense of the Lenders (but without expense or  liability to the Borrower) consult with independent skilled persons to be selected and employed  by it, and the Facility Agent shall not be liable to any Lender for anything done, suffered, or  omitted in good faith by it in accordance with the written advice or opinion of any such  independent skilled persons acting within such persons’ area of competence (so long as the  Facility Agent shall have exercised reasonable care in selecting such persons).  Section 4.5 Resignation or Removal of Facility Agent.  The Facility Agent  may resign at any time by giving at least 30 days’ prior written notice thereof to the Lenders and  the Borrower, such resignation to be effective upon the acceptance of a successor Facility Agent  and to be at no cost or expense to the Borrower.  In addition, the Facility Agent may be removed  at any time with or without cause by a Majority in Interest of Lenders, such removal to be  effective upon the acceptance of a successor Facility Agent.  Upon any such resignation or  removal, a Majority in Interest of Lenders shall have the right to appoint a successor Facility  Agent; provided that so long as no Event of Default has occurred and is continuing, no successor  Facility Agent may be appointed without the Borrower’s consent, such consent not to be  unreasonably withheld.  If no successor Facility Agent shall have been so appointed by a  Majority in Interest of Lenders and shall have accepted such appointment within 30 days after  the retiring Facility Agent’s giving of notice of resignation or the Majority in Interest of Lenders’  removal of the retiring Facility Agent, then the retiring Facility Agent may, on behalf of the  Lenders, appoint a successor Facility Agent that shall be a bank having a combined capital and  surplus of at least $500,000,000.  In addition, any successor Facility Agent, however appointed  as Facility Agent, shall thereupon succeed to and become vested with all the rights, powers,  privileges and duties of the retiring Facility Agent, and the retiring Facility Agent shall  thereupon be discharged from its duties and obligations hereunder.  After any retiring Facility  Agent’s resignation or removal hereunder as Facility Agent, the provisions of this Article IV  shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it  while it was acting as the Facility Agent.  Section 4.6 Erroneous Payments by Facility Agent.    (a) If the Facility Agent (x) notifies a Lender, or any Person who has  received funds on behalf of a Lender (any such Lender or other recipient (and each of their  respective successors and assigns), a “Payment Recipient”) that the Facility Agent has  determined in its sole discretion (whether or not after receipt of any notice under immediately  succeeding clause (b)) that any funds (as set forth in such notice from the Facility Agent)  received by such Payment Recipient from the Facility Agent or any of its Affiliates were  erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by,  such Payment Recipient (whether or not known to such Lender or other Payment Recipient on its  behalf)  (any such funds, whether transmitted or received as a payment, prepayment or  repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an  “Erroneous Payment”) and (y) demands in writing the return of such Erroneous Payment (or a  portion thereof), such Erroneous Payment shall at all times remain the property of the Facility  Agent pending its return or repayment as contemplated below in this Section 4.6 and held in trust  for the benefit of the Facility Agent, and such Lender shall (or, with respect to any Payment  Recipient who received such funds on its behalf, shall cause such Payment Recipient to)  

 

  25     promptly, but in no event later than two Business Days thereafter (or such later date as the  Facility Agent may, in its sole discretion, specify in writing), return to the Facility Agent the  amount of any such Erroneous Payment (or portion thereof) as to which such a demand was  made, in same day funds (in the currency so received), together with interest thereon (except to  the extent waived in writing by the Facility Agent) in respect of each day from and including the  date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the  date such amount is repaid to the Facility Agent in same day funds at the greater of the Federal  Funds Rate and a rate determined by the Facility Agent in accordance with banking industry  rules on interbank compensation from time to time in effect.  A notice of the Facility Agent to  any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.  (b) Without limiting immediately preceding clause (a), each Lender  or any Person who has received funds on behalf of a Lender (and each of their respective  successors and assigns), agrees that if it receives a payment, prepayment or repayment (whether  received as a payment, prepayment or repayment of principal, interest, fees, distribution or  otherwise) from the Facility Agent (or any of its Affiliates) (x) that is in a different amount than,  or on a different date from, that specified in this Agreement or in a notice of payment,  prepayment or repayment sent by the Facility Agent (or any of its Affiliates) with respect to such  payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of  payment, prepayment or repayment sent by the Facility Agent (or any of its Affiliates), or (z) that  such Lender, or other such recipient, otherwise becomes aware was transmitted, or received, in  error or by mistake (in whole or in part), then in each such case:  (i) it acknowledges and agrees that (A) in the case of  immediately preceding clauses (x) or (y), an error and mistake shall be presumed  to have been made (absent written confirmation from the Facility Agent to the  contrary) or (B) an error and mistake has been made (in the case of immediately  preceding clause (z)), in each case, with respect to such payment, prepayment or  repayment; and  (ii) such Lender shall (and shall cause any other recipient that  receives funds on its respective behalf to) promptly (and, in all events, within  one Business Day of its knowledge of the occurrence of any of the circumstances  described in immediately preceding clauses (x), (y) and (z)) notify the Facility  Agent of its receipt of such payment, prepayment or repayment, the details  thereof (in reasonable detail) and that it is so notifying the Facility Agent  pursuant to this Section 4.6(b).  For the avoidance of doubt, the failure to deliver a notice to the Facility Agent pursuant to this  Section 4.6(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section  4.6(a) or on whether or not an Erroneous Payment has been made.  (c) Each Lender hereby authorizes the Facility Agent to set off, net  and apply any and all amounts at any time owing to such Lender under any Operative Document,  or otherwise payable or distributable by the Facility Agent to such Lender under any Operative  Document with respect to any payment of principal, interest, fees or other amounts, against any  amount that the Facility Agent has demanded to be returned under preceding Section 4.6(a).  

 

  26     (d) (i) In the event that an Erroneous Payment (or portion thereof) is  not recovered by the Facility Agent for any reason, after demand therefor in accordance with  preceding Section 4.6(a), from any Lender that has received such Erroneous Payment (or portion  thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion  thereof) on its respective behalf)  (such unrecovered amount, an “Erroneous Payment Return  Deficiency”), upon the Facility Agent’s notice to such Lender at any time, then effective  immediately (with the consideration therefor being acknowledged by the parties hereto), (A)  such Lender shall be deemed to have assigned its Loans (but not its Commitments) with respect  to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an  amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Facility  Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous  Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) (on a cashless  basis and such amount calculated at par plus any accrued and unpaid interest (with the  assignment fee to be waived by the Facility Agent in such instance)), and is hereby (together  with the Borrower) deemed to execute and deliver an assignment as provided in Section 2.6 and  Section 8.1(d) with respect to such Erroneous Payment Deficiency Assignment, (B) the Facility  Agent as the assignee Lender shall be deemed to have acquired the Erroneous Payment  Deficiency Assignment, (C) upon such deemed acquisition, the Facility Agent as the assignee  Lender shall become a Lender, as applicable, hereunder with respect to such Erroneous Payment  Deficiency Assignment and the assigning Lender shall cease to be a Lender, as applicable,  hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the  avoidance of doubt, its obligations under the indemnification provisions of this Agreement and  its applicable Commitments which shall survive as to such assigning Lender, (D) the Facility  Agent and the Borrower shall each be deemed to have waived any consents required under this  Agreement to any such Erroneous Payment Deficiency Assignment, and (E) the Facility Agent  will reflect in the Certificate Register its ownership interest in the Loans subject to the Erroneous  Payment Deficiency Assignment.  For the avoidance of doubt, no Erroneous Payment Deficiency  Assignment will reduce the Commitments of any Lender and such Commitments shall remain  available in accordance with the terms of this Agreement.   (ii)  Subject to Section 2.6 (but excluding, in all events, any assignment consent or  approval requirements (whether from the Borrower or otherwise)), the Facility Agent may, in its  discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment  and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing  by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or  portion thereof), and the Facility Agent shall retain all other rights, remedies and claims against  such Lender (and/or against any recipient that receives funds on its respective behalf).  In  addition, an Erroneous Payment Return Deficiency owing by the applicable Lender (x) shall be  reduced by the proceeds of prepayments or repayments of principal and interest, or other  distribution in respect of principal and interest, received by the Facility Agent on or with respect  to any such Loans acquired from such Lender pursuant to an Erroneous Payment Deficiency  Assignment (to the extent that any such Loans are then owned by the Facility Agent) and (y)  may, in the sole discretion of the Facility Agent, be reduced by any amount specified by the  Facility Agent in writing to the applicable Lender from time to time.  (e) The parties hereto agree that (x) irrespective of whether the  Facility Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion  

 

  27     thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment  (or portion thereof) for any reason, the Facility Agent shall be subrogated to all the rights and  interests of such Payment Recipient (and, in the case of any Payment Recipient who has received  funds on behalf of a Lender, to the rights and interests of such Lender, as the case may be) under  the Operative Documents with respect to such amount (the “Erroneous Payment Subrogation  Rights”) (provided that the Secured Obligations under the Operative Documents in respect of the  Erroneous Payment Subrogation Rights shall not be duplicative of such Secured Obligations in  respect of Loans that have been assigned to the Facility Agent under an Erroneous Payment  Deficiency Assignment) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or  otherwise satisfy any Secured Amounts owed by the Borrower or any Guarantor; provided that  this Section 4.6 shall not be interpreted to increase (or accelerate the due date for), or have the  effect of increasing (or accelerating the due date for), the obligations of the Borrower relative to  the amount (and/or timing for payment) of the obligations that would have been payable had  such Erroneous Payment not been made by the Facility Agent; provided, further, that for the  avoidance of doubt, immediately preceding clauses (x) and (y) shall not apply to the extent any  such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment  that is, comprised of funds received by the Facility Agent from the Borrower for the purpose of  making such Erroneous Payment.  (f) To the extent permitted by applicable law, no Payment Recipient  shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to  waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any  demand, claim or counterclaim by the Facility Agent for the return of any Erroneous Payment  received, including, without limitation, any defense based on “discharge for value” or any similar  doctrine.  (g) Each party’s obligations, agreements and waivers under this  Section 4.6 shall survive the resignation or replacement of the Facility Agent, any transfer of  rights or obligations by, or the replacement of, a Lender, the termination of the Commitments  and/or the repayment, satisfaction or discharge of all Secured Amounts (or any portion thereof)  under any Operative Document.  Section 4.7 Facility Agent as Lender.  Nothing contained in this Article IV:   (a) shall diminish in any respect any duties or obligations, or enhance in any respect any rights,  of the Facility Agent as a Lender under this Credit Agreement or any other Operative Document  or (b) shall diminish in any respect any rights, or enhance in any respect any duties or  obligations, of the Borrower or the Security Trustee under this Credit Agreement or any other  Operative Document.  ARTICLE V    EXTENT OF INTEREST OF LENDERS  Section 5.1 Interest of Lenders.  A Lender shall have no further interest in, or  other right with respect to, the Collateral when and if all amounts due and owing to it under this  Credit Agreement and the other Operative Documents shall have been paid in full.  

 

  28     ARTICLE VI    BORROWER’S REPRESENTATIONS, WARRANTIES AND INDEMNITIES  Section 6.1 Representations and Warranties of Borrower.  The Borrower  represents and warrants on the date hereof and on each Funding Date (as well as, in the case of  the representations and warranties in Sections 6.1(k), (m), (n) and (o)  on each other Payment  Date) that:  (a) the Borrower is a limited liability company duly formed and  validly existing in good standing under the laws of the State of Nevada, has the limited liability  company power and authority to own or hold under lease its properties and to enter into and  perform its obligations under the Operative Documents to which it is a party and is duly qualified  to do business as a foreign corporation in good standing in each state in which failure to so  qualify would have a material adverse effect on the consolidated financial condition of the  Borrower and its subsidiaries, considered as a whole;  (b) the execution, delivery and performance by the Borrower of this  Credit Agreement and the other Operative Documents to which the Borrower is a party have  been duly authorized by all necessary corporate action on the part of the Borrower, do not  require any stockholder approval or approval or consent of any trustee or holder of any  indebtedness or obligations of the Borrower, except such as have been duly obtained and are in  full force and effect, and do not contravene any law, governmental rule, regulation, judgment or  order binding on the Borrower or the Certificate of Formation or Limited Liability Company  Agreement of the Borrower or contravene or result in a breach of, or constitute a default under,  or result in the creation of any Lien (other than as permitted under the Security Agreement) upon  the property of the Borrower under, any indenture, mortgage, contract or other agreement to  which the Borrower is a party or by which it or any of its properties may be bound or affected;  (c) neither the execution and delivery by the Borrower of this Credit  Agreement and the other Operative Documents to which it is a party, nor the consummation by  the Borrower of any of the transactions contemplated hereby or thereby, requires the consent or  approval of, the giving of notice to, the registration with or the taking of any other action in  respect of any Federal, state or foreign governmental authority or agency, except for (i) the filing  of a financing statement (as provided for in Section 3.1(c)) with respect to the security interests  created by the Security Agreement under the Uniform Commercial Code of Nevada (and  continuation statements at periodic intervals), (ii) such action, as a result of any act or omission  by the Original Lenders or any of their respective Affiliates, as may be required under the United  States federal securities laws or the securities or other laws of any state thereof or any other  jurisdiction applicable to offers and sales of the Loans or interests therein or similar instruments  and (iii) such action required of Borrower or Guarantor under the United States federal securities  laws or the securities or other laws of any state thereof;  (d) this Credit Agreement and each other Operative Document to  which the Borrower is a party have been duly executed and delivered by the Borrower and  constitute legal, valid and binding obligations of the Borrower enforceable against the Borrower  in accordance with their terms, except as the same may be limited by bankruptcy, insolvency,  

 

  29     reorganization, moratorium or other similar laws affecting the rights of creditors generally and  by general principles of equity and except, in the case of the Security Agreement, as limited by  applicable laws that may affect the remedies provided in the Security Agreement, which laws,  however, do not make the remedies provided in the Security Agreement inadequate for the  practical realization of the rights and benefits intended to be provided thereby;  (e) the Borrower is not an investment company or a company  controlled by an investment company within the meaning of the Investment Company Act of  1940, as amended;  (f) neither the Borrower nor any Person authorized to act on its  behalf (it being agreed that no Lender is authorized to act on the Borrower’s behalf for this  purpose) has directly or indirectly offered any interest in the Loans for sale to, or solicited any  offer to acquire any of the same from, in a manner that would violate the Securities Act;  (g) there are no pending or (to the best of the Borrower’s  knowledge) threatened actions or proceedings before any court, arbitrator or administrative  agency which individually (or in the aggregate in the case of any group of related lawsuits) is  expected to have a material and adverse effect on the financial condition of the Borrower or the  ability of the Borrower to perform its obligations under the Operative Documents to which it is a  party and no nationalization or expropriation of all or substantially all of the assets of the  Borrower;  (h) each of the Manufacturer Agreements is in full force and effect,  no default (however defined in such Manufacturer Agreement) is continuing under a  Manufacturer Agreement which would give the Manufacturer or the Engine Manufacturer the  right to terminate such Manufacturer Agreement and, to the knowledge of the Borrower, neither  the Manufacturer nor the Engine Manufacturer is in default of its obligations thereunder.  Except  for Permitted Liens or as otherwise contemplated by the Operative Documents, the Borrower has  not assigned or granted any Lien in its rights under either Manufacturer Agreement in respect of  any of the Aircraft or the Engines;  (i) the Borrower has filed or caused to be filed all federal, state,  local and foreign tax returns which are required to be filed and has paid or caused to be paid or  provided adequate reserves for the payment of all Taxes shown to be due and payable on such  returns or on any assessment received by the Borrower, to the extent that such Taxes have  become due and payable, except (i) except to the extent being contested in good faith and by  appropriate proceedings and for the payment of which adequate reserves have been provided in  accordance with GAAP or (ii) such returns or Taxes as to which the failure to file or pay, as the  case may be, could not be reasonably expected to materially and adversely affect the assets,  operations or financial condition, of the Borrower;  (j) none of the written information furnished by or on behalf of the  Borrower to the Facility Agent or any Lender in connection with the negotiation of this  Agreement or the other Operative Documents delivered hereunder or thereunder (as modified or  supplemented by other information so furnished) contains any material misstatement of fact or  

 

  30     omits to state any material fact necessary to make the statements therein, in the light of the  circumstances under which they were made and taken as a whole, not misleading;  (k) payment to the Manufacturer of the Loan proceeds [...***...]  will, to the extent of such payment, satisfy the PDP obligations of the Borrower to the  Manufacturer;  (l) on and from the  Closing Date the Collateral will be free and  clear of all Liens (except Liens contemplated by the Security Agreement and Permitted Liens);  (m) no action has been taken or event has occurred that increases the  amount payable by the Lenders to purchase the Aircraft following enforcement above the Net  Purchase Price (excluding BFE);  (n) the information in Schedule II, as updated from time to time  pursuant to Section 11.1(g) is accurate and correct;  (o) there are no provisions in the unassigned portions of the  Manufacturer Agreements which will adversely affect (i) the Collateral, or (ii) the Lenders’ right  to purchase each Aircraft for an amount not to exceed the Net Purchase Price (excluding BFE);  and  (p) (i) the Borrower is not acting for any Sanctioned Person in  connection with this Credit Agreement and the other Operative Documents; (ii) none of (x) the  Borrower, or (y) to the knowledge of the Borrower, any agent, subsidiary or Affiliate of the  Borrower that will act in any capacity in connection with or benefit from the transactions  contemplated hereby, is a Sanctioned Person; and (iii) neither any Funding advanced on the date  this representation is being made or repeated nor the use of proceeds of such Funding will cause  a violation by the Borrower of Anti-Corruption Laws applicable to the Borrower and its  Affiliates, AML Laws applicable to the Borrower and its Affiliates or applicable Sanctions.  Section 6.2 General Indemnity.  (a)  Claims Defined.  For the purposes of this  Section 6.2, “Claims” shall mean any and all liabilities, obligations, losses, damages, penalties,  claims, actions, suits, costs or expenses of whatsoever kind and nature (whether or not on the  basis of negligence, strict or absolute liability or liability in tort) that may be imposed on,  incurred by, suffered by or asserted against an Indemnitee, as defined herein, and, except as  otherwise expressly provided in this Section 6.2, shall include all reasonable out-of-pocket costs,  disbursements and expenses (including reasonable out-of-pocket legal fees and expenses) of an  Indemnitee in connection therewith or related thereto.  (b) Indemnitee Defined.  For the purposes of this Section 6.2,  “Indemnitee” means each Lender, the Facility Agent, the Security Trustee and their respective  successors and permitted assigns, agents and servants, officers, employees and directors (the  respective agents, servants, officers, employees and directors of each of the foregoing  Indemnitees, as applicable, together with such Indemnitee, being referred to herein collectively  as the “Related Indemnitee Group” of such Indemnitee); provided that such Persons shall, to  the extent they are not signatories to this Credit Agreement, have expressly agreed in writing to  be bound by the terms of this Section 6.2 prior to, or concurrently with, the making of a Claim  

 

  31     hereunder.  If an Indemnitee fails to comply with any duty or obligation under this Section 6.2  with respect to any Claim, such Indemnitee shall not, to the extent such failure was prejudicial to  the Borrower, be entitled to any indemnity with respect to such Claim under this Section 6.2.  (c) Claims Indemnified.  Subject to the exclusions stated in  subsection (d) of this Section 6.2, the Borrower agrees to indemnify, protect, defend and hold  harmless each Indemnitee against Claims resulting from or arising out of (i) this Credit  Agreement, the Security Agreement or any other Operative Document or any of the transactions  contemplated hereby or thereby and (ii) any breach of or failure to perform or observe, or any  other non-compliance with, any covenant, condition or agreement or other obligation to be  performed by the Borrower under any of the Operative Documents, or the falsity of any  representation or warranty of the Borrower in any of the Operative Documents.  (d) Claims Excluded.  The following are excluded from the  Borrower’s agreement to indemnify an Indemnitee under this Section 6.2:  (i) Any Claim to the extent such Claim is attributable to acts  or events occurring (x) after the Loans shall have been paid in full and the  Commitments have been permanently terminated or (y) with respect to any  Eligible Aircraft and its related Collateral, after the same has been released from  the Lien of the Security Agreement pursuant to the terms thereof;  (ii) Any Claim to the extent such Claim is, or is attributable  to, a Tax, whether or not the Borrower is required to indemnify therefor under  Section 2.3;  (iii) Any Claim to the extent such Claim is attributable to the  gross negligence or willful misconduct of such Indemnitee or such Indemnitee’s  Related Indemnitee Group;  (iv) Any Claim to the extent such Claim is attributable to the  noncompliance by such Indemnitee or such Indemnitee’s Related Indemnitee  Group with any of the terms of, or any misrepresentation by such Indemnitee or  such Indemnitee’s Related Indemnitee Group contained in, this Credit  Agreement or any other Operative Document to which such Indemnitee or any of  such Related Indemnitee Group is a party or any agreement relating hereto or  thereto;  (v) Any Claim to the extent such Claim constitutes a  Permitted Lien which, if Of Record, ranks junior in priority to the Lien of the  Security Agreement;  (vi) Any Claim to the extent such Claim is attributable to the  offer, sale, assignment, transfer, participation or other disposition (whether  voluntary or involuntary) by or on behalf of such Indemnitee of any of the Loans  or all or any part of such Indemnitee’s interest in the Operative Documents  (other than a transfer by such Indemnitee of its interest in the Collateral pursuant  to Article V of the Security Agreement);  

 

  32     (vii) Any Claim to the extent such Claim is attributable to a  failure on the part of the Security Trustee to distribute in accordance with this  Credit Agreement or the Security Agreement any amounts received and  distributable by it thereunder;  (viii) Any Claim to the extent such Claim is attributable to the  authorization or giving or withholding by such Indemnitee of any future  amendments, supplements, waivers or consents with respect to any of this Credit  Agreement and the other Operative Documents, other than such as have been  requested in writing by the Borrower, or such as are expressly required or  contemplated by the provisions of the Operative Documents;  (ix) Any Claim to the extent payable or borne by a Person  other than the Borrower pursuant to Section 8.1(a) or pursuant to any other  provision of this Credit Agreement or any other Operative Document;  (x) Any Claim to the extent such Claim is an ordinary and  usual operating or overhead expense (other than such expenses caused directly  by the occurrence of an Event of Default); and  (xi) Any Claim to the extent such Claim is attributable to a  failure on the part of the Facility Agent to perform its obligations under Section  4.1 hereunder.  (e) Insured Claims.  In the case of any Claim indemnified by the  Borrower hereunder that is covered by a policy of insurance maintained by the Borrower, each  Indemnitee agrees to cooperate, at the Borrower’s expense, with the insurers in the exercise of  their rights to investigate, defend or compromise such Claim as may be required to retain the  benefits of such insurance with respect to such Claim.  (f) Claims Procedure.  An Indemnitee shall promptly notify the  Borrower of any Claim as to which indemnification is sought; provided that the failure to  provide such prompt notice shall not release the Borrower from any of its obligations to  indemnify hereunder, except to the extent that the Borrower is prejudiced by such failure or the  Borrower’s indemnification obligations are increased as a result of such failure to the extent of  such increase.  Such Indemnitee shall promptly submit to the Borrower, at the Borrower’s  expense, such additional information in such Indemnitee’s possession as the Borrower shall  reasonably request to substantiate such request for payment to the Borrower.  Subject to the  rights of insurers under policies of insurance maintained by the Borrower, the Borrower shall  have the right, at its sole cost and expense, to investigate, and the right in its sole discretion to  defend or compromise, any Claim for which indemnification is sought under this Section 6.2  (provided that in no event shall the right of any Indemnitee under this Section 6.2 be adversely  affected thereby), and, at the Borrower’s expense, the Indemnitee shall cooperate with all  reasonable requests of the Borrower in connection therewith.  Such Indemnitee shall not enter  into a settlement or other compromise with respect to any Claim without the prior written  consent of the Borrower, which consent shall not be unreasonably withheld or delayed, unless  such Indemnitee waives its right to be indemnified with respect to such Claim under this  

 

  33     Section 6.2.  Where the Borrower or the insurers under a policy of insurance maintained by the  Borrower undertake the defense of an Indemnitee with respect to a Claim, no additional legal  fees or expenses of such Indemnitee in connection with the defense of such Claim shall be  indemnified hereunder unless such fees or expenses were incurred at the written request of the  Borrower or such insurers; provided, however, that if in the written opinion of counsel to such  Indemnitee an actual or potential material conflict of interest exists where it is advisable for such  Indemnitee to be represented by separate counsel, then the reasonable fees and expenses of any  such separate counsel shall be borne by the Borrower.  Subject to the requirements of any policy  of insurance, an Indemnitee may participate at its own expense in any judicial proceeding  controlled by the Borrower pursuant to the preceding provisions; provided that such party’s  participation does not, in the opinion of the counsel appointed by the Borrower or its insurers to  conduct such proceedings, interfere with such control; and such participation shall not constitute  a waiver of the indemnification provided in this Section 6.2.  Notwithstanding anything to the  contrary contained herein, the Borrower shall not under any circumstances be liable for the fees  and expenses of more than one counsel for all Indemnitees.  (g) Subrogation.  To the extent that a Claim indemnified by the  Borrower under this Section 6.2 is in fact paid in full by the Borrower or an insurer under a  policy of insurance maintained by the Borrower, the Borrower or such insurer, as the case may  be, shall, without any further action, be subrogated to the rights and remedies of the Indemnitee  on whose behalf such Claim was paid (other than rights of such Indemnitee under insurance  policies maintained at its own expense) with respect to the transaction or event giving rise to  such Claim.  Such Indemnitee shall give such further assurances or agreements and shall  cooperate with the Borrower or such insurer, as the case may be, to permit the Borrower or such  insurer to pursue such rights and remedies, if any, to the extent reasonably requested by the  Borrower and at the Borrower’s expense.  So long as no Event of Default shall have occurred  and be continuing, should an Indemnitee receive any payment from any party other than the  Borrower or its insurers, in whole or in part, with respect to any Claim paid by the Borrower or  such insurers hereunder, it shall promptly pay over to the Borrower the amount received (but not  an amount in excess of the amount the Borrower or any of its insurers has paid in respect of such  Claim).  Subject to Section 10.1 of the Security Agreement, any amount referred to in the  preceding sentence that is payable to the Borrower shall not be paid to the Borrower, or, if it has  been previously paid directly to the Borrower, shall not be retained by the Borrower, if at the  time of such payment an Event of Default shall have occurred and be continuing, but shall be  paid to and held by the Security Trustee as security for the obligations of the Borrower under this  Credit Agreement, the Security Agreement and the other Operative Documents, and shall be  applied against the Borrower’s obligations hereunder and thereunder when and as they become  due and payable and, at such time as there shall not be continuing any such Event of Default,  such amount, to the extent not previously so applied against the Borrower’s obligations, shall be  paid to the Borrower.  (h) No Guaranty.  Nothing set forth in this Section 6.2 shall  constitute a guarantee by the Borrower that any Aircraft, or any other Collateral, shall at any time  have any particular value, useful life or residual value.  Each of the Lenders agrees that the  provisions of Section 2.10 constitute its sole remedy for the reimbursement of Increased Costs  described therein and that nothing in this Section 6.2 shall constitute an indemnity for any  Increased Cost or any cost or loss or reduction in rate of return in the nature of an Increased Cost.  

 

  34     (i) Payments; Interest.  Any amount payable to any Indemnitee  pursuant to this Section 6.2 shall be paid within 30 days after receipt of a written demand  therefor from such Indemnitee accompanied by a written statement describing in reasonable  detail the Claims that are the subject of and basis for such indemnity and the computation of the  amount payable.  Any payments made pursuant to this Section 6.2 directly to an Indemnitee or to  the Borrower, as the case may be, shall be made in immediately available funds at such bank or  to such account as is specified by the payee in written directions to the payor or, if no such  directions shall have been given, by check of the payor payable to the order of the payee and  mailed to the payee by certified mail, return receipt requested, postage prepaid to its address  referred to in Section 12.1.  (j) The provisions of this Section 6.2 shall survive the repayment of  the Loans, the expiration or termination of the Commitments, or the termination of this Credit  Agreement or any provision hereof.  ARTICLE VII    REPRESENTATIONS, WARRANTIES AND COVENANTS  OF THE SECURITY TRUSTEE AND THE FACILITY AGENT   Section 7.1 Representations, Warranties and Covenants of the Security  Trustee.  The Security Trustee represents, warrants and covenants that:  (a) it is a corporation duly organized and validly existing and in  good standing under the laws of Utah and has the full corporate power, authority and legal right  under the laws of Utah and the laws of the United States governing its banking, trust and  fiduciary powers to execute, deliver and carry out the terms of each of the Operative Documents  to which it is a party;  (b) the execution, delivery and performance by it of this Credit  Agreement and each of the other Operative Documents to which it is a party have been duly  authorized by all necessary corporate action on its part, and neither its execution and delivery  thereof nor its performance of any of the terms and provisions thereof will violate any law or  regulation of the State of Utah or any federal law or regulation of the United States governing its  banking or trust powers or any order or judgment applicable to it or contravene or result in any  breach of, or constitute any default under, its corporate charter or by-laws or the provisions of  any indenture, mortgage, contract or other agreement to which it is a party or by which it or its  properties may be bound or affected;  (c) this Credit Agreement and each other Operative Document to  which it is a party have been duly executed and delivered by it and each constitutes its legal,  valid and binding obligation enforceable against it in accordance with its terms; and  (d) it shall not cause or permit to exist any Security Trustee Lien,  and it agrees that it will, at its own cost and expense, promptly take such action as may be  necessary to discharge and satisfy in full any such Security Trustee Lien; and it shall indemnify,  protect, defend and hold harmless each Indemnitee (as defined in Section 6.2(b)) and the  

 

  35     Borrower against Claims in any way resulting from or arising out of a breach by it of its  obligations under this Section 7.1(d); provided that, notwithstanding the foregoing provisions of  this subsection (d) or any other provisions of the Operative Documents, the Security Trustee  shall not be liable for, or otherwise required to incur, monetary damages resulting from Security  Trustee Liens described in subsection (iii), (v) or (vi) of the definition of Security Trustee Liens,  but shall be required to take all actions to lift the Liens resulting from the causes set forth in such  subsections if it receives indemnification from the Borrower or another party with regard to the  lifting of such Liens.  Section 7.2 Reporting Covenant of the Facility Agent.  The Facility Agent  agrees to provide to each Lender, no later than the third Funding Business Day prior to each  Funding Date and (for information under Sections 7.2(b), (c) and (d)) each Payment Date that is  not a Funding Date:  (a) any Borrowing Notice [...***...] received for such Funding Date  or notice of any prepayment to be received on such Funding Date pursuant to Section 2.8(b) or  (d);  (b) any [...***...] for such Payment Date;  (c) the respective Funding allocations of each Lender for such  Funding Date or amounts subject to prepayment on such date; and  (d) confirmation that the information contained in the report  furnished by the Manufacturer pursuant to Section 5.6.1 of the Manufacturer’s Consent is  consistent with the records of the Facility Agent.  ARTICLE VIII    OTHER COVENANTS  Section 8.1 Other Covenants.  (a)  The Borrower agrees promptly to pay  (i) the initial and annual fees of the Security Trustee and other expenses as separately set forth in  writing between Borrower and the Security Trustee in connection with the transactions  contemplated hereby, (ii) the Facility Agent Fees and (iii) the following expenses of the Original  Lenders in connection with the structuring, negotiation, preparation, execution and delivery of  this Credit Agreement, the other Operative Documents and the other documents or instruments  referred to herein or therein:  (x) the reasonable fees, expenses and disbursements of Vedder Price P.C.,  special New York counsel for the Original Lenders and the Facility Agent as separately  agreed;  (y) all fees, Taxes (including license, documentary, stamp, excise and  property taxes) and other charges payable in connection with the recording or filing of  instruments and financing statements; and  

 

  36     (z) the reasonable fees, expenses and disbursements of joint counsel to the  Facility Agent, the Security Trustee and the Lenders in any applicable jurisdiction in  connection with any amendment, waiver or modification (to the extent requested by a  party other than the Facility Agent, the Security Trustee and the Lenders and not  associated with the syndication of the Loans or the Commitments or the sale of  participation interests therein) and administration of the Operative Documents (any travel  expenses of which Borrower has received prior notice and as consented to by the  Borrower).  Each Lender agrees that it shall bear its own costs and expenses, and shall pay the  reasonable out-of-pocket expenses (including, without limitation, legal fees) of the Borrower and  the other parties to the Operative Documents, in connection with any of the transactions  contemplated in Section 8.1(d) or Section 8.1(e).  (b) Each Lender hereby unconditionally agrees with and for the  benefit of the parties to this Credit Agreement that it will not directly or indirectly create, incur,  assume or suffer to exist any Lender Liens, and such Lender agrees that it will, at its own cost  and expense, promptly take such action as may be necessary to discharge and satisfy in full any  such Lender Lien; and such Lender hereby agrees to indemnify, protect, defend and hold  harmless the Borrower, the Security Trustee and any other Lenders against Claims in any way  resulting from or arising out of a breach by it of its obligations under this Section 8.1(b).  (c) The Security Trustee agrees that it will not impose any lifting  charge, cable charge, remittance charge or any other charge or fee on any transfer by the  Borrower of funds to, through or by it pursuant to any Operative Document, except as may be  otherwise agreed to in writing by the Borrower (in which case such charge or fee shall be for the  Borrower’s account).  (d) Subject to the provisions of this Section 8.1(d), each Lender may  assign its Loans or Commitments, in whole or in part (any such sale, assignment, pledge or  transfer hereinafter referred to as an “Assignment”), which Assignment shall be in accordance  with Section 2.6 and effected pursuant to a transfer agreement substantially in the form of  Exhibit B (a “Transfer Supplement”); provided that there may be no more than ten Lenders at  any one time.  In addition, a Lender may effect an Assignment (so long as Borrower has no  financial or other obligations under Section 2.3, Section 6.2, Section 2.10 and Section 2.12 in  respect of such transferee that are greater than the financial or other obligations that would be  owed to the transferor on the basis of law, regulation, directive, concession, guideline, request or  requirement in effect on the date of such assignment or transfer, if such assignment or transfer  had not been made), in whole or in part, of its Commitment in respect of any Loan to any  reputable financial institution (subject to the limit of ten Lenders in the preceding sentence)  which is not a competitor of the Manufacturer, the Borrower or the Guarantor.  While an Event  of Default is not continuing, any Assignment shall require the consent of the Borrower, except  any Assignment to (1) a Lender, (2) an Affiliate of a Lender, (3) any other bank or financial  institution (including an insurance company, including an Affiliate thereof), (4) a single purpose  company established by (or on behalf of) any Lender; provided that the obligations of such  company are guaranteed by an entity which has a credit rating of at least BBB+ by Standard &  Poors or similar rating agency and there is no change in Facility Agent, (5) any member of the  

 

  37     European System of Central Banks, and there is no change in Facility Agent, (6) any trust, fund  (except for any hedge fund) or other entity which is regularly engaged in or established for the  purpose of making, purchasing or investing in loans, securities or other financial assets  guaranteed by an entity which has a credit rating of at least BBB+ by Standard & Poors or  similar rating agency and there is no change in Facility Agent, or (7) an asset fund and there is no  change in Facility Agent, provided that (x) no transferee, assignee or participant which is not a  “Lender” shall have any rights of a Lender under the Operative Documents, (y) no transfer may  be made to an airline or any company holding a controlling interest in an airline based in and  with operations in the United States; and (z) such transfer shall not result in a violation of any  applicable Sanctions.  Effective upon the assignment of any Commitment, the assigning Lender  shall be relieved of its obligations in respect of such Commitment to the extent the assignee  thereof shall have become obligated in respect thereof.  Any purported assignment of a Loan  Certificate, Loan or Commitment in violation of this Section 8.1(d) shall be null and void.  No  Lender shall grant a participation (including, without limitation, a “risk participation”) in any  Commitments or Loans (any such participation, a “Participation”) except in accordance with  Section 8.1(e).  (e) Each Lender agrees for the benefit of the Borrower that it will  not grant any Participation in or to all or a portion of its rights and obligations in respect of the  Commitments or Loans and any amounts from time to time payable to it in respect thereof,  unless all of the following conditions are satisfied:  (i) such Participation is made in accordance  with all applicable laws, including, without limitation, the Securities Act, the Trust Indenture Act  and any other applicable laws relating to the transfer of similar interests and (ii) such  Participation shall not be made under circumstances that require registration under the Securities  Act or qualification of any indenture under the Trust Indenture Act.  Notwithstanding any such  Participation, such Lender agrees that (1) such Lender’s obligations under the Operative  Documents shall remain unchanged, and such participant shall have no rights or benefits as  against the Borrower or the Collateral or under any Operative Document, (2) such Lender shall  remain solely responsible to the other parties to the Operative Documents for the performance of  such obligations, (3) such Lender shall remain the holder of the relevant Commitments and/or  Loans, and the other parties to the Operative Documents shall continue to deal solely and directly  with such Lender in connection with such Commitments and/or Loans and such Lender’s rights  and obligations under the Operative Documents, (4) such Lender shall be solely responsible for  any withholding Taxes or any filing or reporting requirements relating to such Participation and  shall hold the Borrower and the Security Trustee and their respective successors and permitted  assigns harmless against the same and (5) the Borrower shall not be required to pay to any  Lender any amount under Section 2.3, Section 6.2, Section 2.10 and Section 2.12 greater than it  would have been required to pay had there not been any grant of a Participation by such Lender.   Each participant agrees to be subject to the requirements of Section 2.3(d) (it being understood  that the documentation required under Section 2.3(d) shall be delivered to the participating  Lender).  Each Lender may, in connection with any Participation or proposed Participation  pursuant to this Section 8.1(e), disclose to the participant or proposed participant any information  relating to the Operative Documents or to the parties thereto furnished to such Lender thereunder  or in connection therewith and permitted to be disclosed by such Lender; provided, however, that  prior to any such disclosure, the participant or proposed participant shall agree in writing for the  express benefit of the Borrower to preserve the confidentiality of any confidential information  included therein (subject to customary exceptions).  Each Lender that sells a Participation in a  

 

  38     Loan or Commitment shall, acting solely for this purpose as an agent of the Borrower, maintain a  register on which it enters the name and address of each participant and the principal amounts  (and stated interest) of each participant’s interest in the Loan or Commitment (the “Participant  Register”); provided that no Lender shall have any obligation to disclose all or any portion of the  Participant Register (including the identity of any participant or any information relating to a  participant’s interest in a Loan or the Commitment) to any Person except to the extent such  disclosure is necessary to establish that such Loan is in registered form under Section 5f.103-1(c)  of the United States Treasury Regulations. The entries in the Participant Register shall be  conclusive absent manifest error, and such Lender shall treat each Person whose name is  recorded in the Participant Register as the owner of such participation for all purposes of this  Agreement and the Operative Documents notwithstanding any notice to the contrary.  For the  avoidance of doubt, the Security Trustee (in its capacity as Security Trustee) shall have no  responsibility for maintaining a Participant Register.   (f) Each of the Lenders and the Security Trustee agrees that it will  not disclose or suffer to be disclosed the terms of the Operative Documents or any other non- public information provided to it pursuant to or in connection with the Operative Documents or  the transactions contemplated thereby to anyone other than (i) their respective, auditors,  accountants, agents and legal counsel that, in each case, have a need to know, (ii) their respective  bank examiners and any other financial supervisory bodies, (iii) any Person with whom any  Lender is in good faith conducting negotiations relating to the possible transfer, sale or other  disposition of such Lender’s Loans or any participations therein (and their respective advisors  and counsel), if such Person shall have entered into an agreement for the express benefit of the  Borrower to hold (and to cause such Person’s respective advisors and counsel to hold) such  terms confidential in accordance with the provisions of this Section and (iv) the Manufacturer  and the Engine Manufacturer, and except as may be required to enforce the terms hereof or  thereof or by an order of any court or administrative agency or by any statute, rule, regulation or  order of any governmental authority.  (g) Each of the Lenders and the Security Trustee agrees that if the  Security Trustee receives payment of any PDP or other amount from the Manufacturer, the  Engine Manufacturer or any of their respective Affiliates with respect to any Aircraft, then, so  long as no Event of Default is then continuing and the release of such amounts is not conditioned  upon the prepayment of any Loans pursuant to Section 2.8(b), (c) or (d), it shall promptly remit  to the Borrower, in immediately available funds, the full amount of such payment.  (h) If at any time any Lender becomes a Defaulting Lender, then the  Borrower may, on ten Business Days’ prior written notice to the Security Trustee and such  Lender, (i) terminate such Lender’s Commitment, or prepay such Lender’s outstanding Loans, as  applicable, or (ii) replace such Lender by causing such Lender to (and such Lender shall be  obligated to) assign pursuant to Section 8.1(d) all of its rights and obligations under this Credit  Agreement and the other Operative Documents to one or more assignees.  (i) In addition to the assignments and participations permitted under the foregoing  provisions of this Section 8.1, any Lender may assign and pledge all or any portion of its Loans  to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating  circular issued by such Federal Reserve Bank, any European central bank or any other bank or  

 

  39     other financial institution or authority in connection with a programmatic financing by such  Lender of certain of its assets.  No such assignment shall release the assigning Lender from its  obligations hereunder.  ARTICLE IX    OTHER DOCUMENTS  Section 9.1 Other Documents.  By its execution of this Credit Agreement or a  Transfer Supplement pursuant to and in accordance with Section 8.1(d), each Lender  unconditionally agrees for the benefit of the Borrower and the Security Trustee to be bound by  and to perform and comply with all of the terms of this Credit Agreement and the other  Operative Documents applicable to such Lender.  ARTICLE X    CONDITIONS PRECEDENT TO BORROWER’S OBLIGATIONS  Section 10.1 Conditions Precedent to Borrower’s Obligations on Closing Date.   (a)  The Borrower’s obligation to draw the first Funding on the Closing Date is subject to the  fulfillment (or waiver by the Borrower) prior to or on the Closing Date of the following  conditions precedent:  (i) the documents referred to in Section 3.1(b) shall have been  duly authorized, executed and delivered by the respective party or parties thereto  (other than the Borrower), shall be in full force and effect and copies thereof  shall have been delivered to the Borrower, and the Borrower shall have received  such documents and evidence with respect to the Security Trustee as the  Borrower may reasonably request in order to establish the consummation of the  transactions contemplated by this Credit Agreement, the taking of all corporate  and other proceedings in connection therewith and compliance with the  conditions herein set forth;  (ii) on the Closing Date the representations and warranties of  the Security Trustee contained herein shall be correct as though made on and as  of such date, or if such representations and warranties relate solely to an earlier  date, as of such earlier date;  (iii) the Borrower shall have received the opinion referred to in  Section 3.1(f)(C), such opinion addressed to the Borrower or accompanied by a  letter from the counsel rendering such opinion authorizing the Borrower to rely  on such opinion as if it were addressed to the Borrower, and the documents  referred to in Section 3.1(h);  (iv) no change shall have occurred after the date of this Credit  Agreement in applicable law or regulations or interpretations thereof by  appropriate regulatory authorities or any court that would make it a violation of  

 

  40     law or regulations for the Borrower to enter into any transaction contemplated by  the Operative Documents;  (v) each of the Borrower and the Security Trustee shall have  received from each Original Lender two valid completed and executed copies of  Internal Revenue Service Form W-9, Form W-8ECI or Form W-8BEN-E, as the  case may be (and, if necessary, Internal Revenue Service Form W-8IMY), and  each of the Borrower and each Original Lender shall have received from the  Security Trustee a valid completed and executed original of Internal Revenue  Service Form W-9; and  (vi) 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 Closing Date to set aside,  restrain, enjoin or prevent the completion and consummation of this Credit  Agreement or the transactions contemplated hereby.  (b) In the event that (i) the foregoing conditions precedent shall not  have been fulfilled on or prior to the Closing Date (or waived by the Borrower) as provided  above, or (ii) an Original Lender shall not have delivered the Commitment to the Borrower on  the Closing Date notwithstanding the satisfaction of the conditions (other than those within the  control of such Original Lender) set forth in Section 3.1, if the Borrower so elects, this Credit  Agreement shall thereupon terminate and be of no further force and effect.  Promptly following  the termination of this Credit Agreement, the Borrower shall notify the other parties hereto in  writing of such termination and shall reimburse the Original Lenders (other than any Defaulting  Lender) for any Break Funding Losses pursuant to the terms and conditions of the Borrowing  Notice for the first Funding.  ARTICLE XI    CERTAIN COVENANTS OF BORROWER  Section 11.1 Certain Covenants of Borrower.  The Borrower covenants and  agrees with the Lenders and the Security Trustee as follows:  (a) On and after the Closing Date, the Borrower will cause to be  done, executed, acknowledged and delivered such further acts, conveyances and assurances as  the Security Trustee or the Facility Agent shall reasonably request for accomplishing the  purposes of this Credit Agreement and the other Operative Documents; provided that any  instrument or other document so executed by the Borrower will not expand any obligations or  limit any rights of the Borrower in respect of the transactions contemplated by the Operative  Documents.  (b) On and after the Closing Date, the Borrower, at its expense, will  take, or cause to be taken, such action with respect to the re-recording and refiling (it being  understood that counsel to the Lenders will prepare and file all required financing statements  

 

  41     upon execution of this Agreement) of any financing statements and any continuation statements  under the UCC as are necessary to maintain, so long as the Security Agreement is in effect, the  perfection of the security interests created by the Security Agreement, subject in each case, to  Permitted Liens, or will furnish the Security Trustee timely notice of the necessity of such action,  together with such financing statements and continuation statements, and such other information  as may be required to enable the Security Trustee to take such action.  (c) The Borrower shall not enter into any agreement containing any  term or provision which would cause Borrower to violate, contravene or breach its obligations  hereunder and under the Security Agreement and the other Operative Documents.  (d) The Borrower agrees to apply the proceeds of each Loan for each  Aircraft solely and exclusively to the direct payment or reimbursement for payment of  installments of the purchase price of such Aircraft to be purchased under the Purchase  Agreement.  (e) The Borrower shall at all times maintain its corporate existence  except as permitted by Section 11.1(q).  The Borrower will do or cause to be done all things  necessary to preserve and keep in full force and effect its rights (charter and statutory) and  franchises to the extent deemed necessary in the good faith judgment of the Borrower in the  ordinary course of business.  The Borrower shall not change its state of incorporation, corporate  name or corporate status, unless and until the Borrower has provided the Security Trustee with  prior written notice of such change and unless that the Borrower shall have taken all action,  reasonably satisfactory to the Security Trustee, to maintain the security interest of the Security  Trustee in the Collateral at all times fully perfected in full force and effect and subject to no  Liens (other than Permitted Liens).  (f) The Borrower shall deliver such additional “know your  customer” documentation as the Security Trustee, the Facility Agent or any Lender may require  from time to time to the Security Trustee, the Facility Agent and each Lender (as applicable)  upon its reasonable request based on any prevailing banking law requirements applicable to the  Security Trustee, the Facility Agent or such Lender (as applicable) and on any “know your  customer” rules, guidelines, practices and policies observed by the Security Trustee, the Facility  Agent and/or such Lender, as applicable.  (g)  (i) The Borrower shall duly perform in all material respects all  of its obligations under the Manufacturer Agreements, take all actions necessary to keep  the Manufacturer Agreements in full force and effect, and enforce in all material respects  the Manufacturer Agreements in accordance with their terms.  The Borrower shall  immediately notify the Facility Agent of any payment default or any other uncured  material default (whether by the Borrower or the Manufacturer or the Engine  Manufacturer) under or cancellation, termination or rescission or purported or threatened  cancellation, termination or rescission of any Manufacturer Agreement specifying in  reasonable detail the nature of such uncured payment or material default, cancellation,  rescission or termination.  The Borrower shall not in any way modify, terminate, amend  or make any election under a Manufacturer Agreement that would materially adversely  affect the position of the Lenders with respect to the Collateral (including, without  

 

  42     limitation, the due date of any PDPs or the application of PDPs to the purchase price of  the Aircraft, or the right to purchase each Aircraft for an amount not to exceed the Net  Purchase Price (excluding BFE)).  For the avoidance of doubt, (x) [...***...], and (y)  [...***...].  (ii)  The Borrower shall not accept delivery of any Aircraft from the  Manufacturer until all outstanding Loans with respect to such Aircraft shall have been  repaid in accordance with the terms thereof.  (iii) The Borrower will, at its own expense, furnish to the Facility  Agent promptly upon receipt thereof copies of notices of termination and notices of  default received by the Borrower from the Manufacturer or the Engine Manufacturer  under or pursuant to either Manufacturer Agreement.  (iv) The Borrower will promptly furnish to the Facility Agent (A) upon  a change to [...***...] set forth in Schedule II and in any event upon the issuance of the  applicable, Borrowing Notice, [...***...] on or before each Payment Date, all of the  information required herein by such notices and attachments thereto signed by a  responsible officer, (B) upon a change to any of the other information set forth in  Schedule II with respect to the matters set forth in Schedule II the then current  information in respect thereof and (C) such other available information and reports  regarding the Collateral as the Security Trustee may from time to time reasonably  request, if the disclosure of such information and reports under this clause (C) have been  consented to in advance by the Manufacturer or the Engine Manufacturer, and provided  that a breach of this clause (iv)(C) shall not constitute an Event of Default until the  Borrower has received not less than ten (10) days prior written notice of such breach  from the Facility Agent.  (h) The Borrower shall comply with all applicable laws in  connection with the Collateral under the Security Agreement and the performance of its  obligations under this Agreement, and each other Operative Document to which it is a party, the  non-compliance with which would have a material adverse effect on its ability to perform its  obligations under the Operative Documents to which it is a party, except any applicable law the  validity or applicability of which is being contested in good faith by proper proceedings  promptly initiated and diligently conducted and for which such reserves or other appropriate  provision, if any, as shall be required by GAAP shall have been made therefor.  (i) On and from the Closing Date, the Borrower will not directly or  indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Collateral,  title thereto or any interest therein except Permitted Liens.  The Borrower will promptly, at its  own expense, take (or cause to be taken) such actions as may be necessary duly to discharge any  Lien other than a Permitted Lien if the same shall arise at any time and the Borrower will make  restitution to the Security Trustee for any actual loss or expense resulting from any Permitted  Lien described in Section 3.1(c), (d) or (e) of the Security Agreement.  

 

  43     (j) The Borrower agrees to furnish to each Lender and the Facility  Agent:  (i) as soon as available, but not later than 120 days after the  close of each fiscal year of the Guarantor occurring after the date hereof, an  audited consolidated balance sheet and related statements of the Guarantor at and  as of the end of such fiscal year, together with an audited statement of income  and cash flows of the Guarantor for such fiscal year, each of which shall be  prepared in accordance with GAAP which shall be audited by a firm of  independent public accountants of nationally recognized standing and fairly  present in all material respects the consolidated financial condition and results of  operation of the Guarantor as at the end of, and for, such periods in accordance  with GAAP; provided that, so long as the Guarantor is subject to the reporting  provisions of the Securities Exchange Act of 1934, the filing of the Guarantor’s  annual report on Form 10-K with the SEC will satisfy this requirement;  (ii) upon request, which request may not be made to deliver  such reports prior to such reports being available, provided that such reports shall  be available not later than 120 days after the close of each fiscal year of the  Borrower occurring after the date hereof, an unaudited balance sheet and related  statements of the Borrower at and as of the end of such fiscal year, together with  an unaudited statement of income and cash flows of the Borrower for such fiscal  year;  (iii) 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 Guarantor, an  unaudited consolidated balance sheet of the Guarantor at and as of the end of  such quarter, together with an unaudited statement of income and cash flows of  the Guarantor for such quarter, each of which shall be prepared in accordance  with GAAP, certified by the Chief Financial Officer, or Treasurer of the  Guarantor that said financial statements fairly present in all material respect the  financial condition and results of operation of the Guarantor as at the end of, and  for, such period in accordance with GAAP (subject to normal year-end audit  adjustments); provided that; so long as the Guarantor is subject to the reporting  provisions of the Securities Exchange Act of 1934, the filing of the Guarantor’s  quarterly report on Form 10-Q with the SEC will satisfy this requirement; and  (iv) simultaneously with the mailing thereof to its  shareholders, copies of all such financial statements, reports, notices of proxy  statements as the Borrower or the Guarantor shall (x) mail to its shareholders  generally or (y) file with the Securities and Exchange Commission;  provided that, so long as the Guarantor is subject to the reporting requirements of  the Securities Exchange Act of 1934, the filing of such copies with the SEC will  satisfy this requirement; and  (v) [...***...].  

 

  44     (k) (i) The Borrower will ensure that no proceeds of any Loan will be used  knowingly by the Borrower to fund any operations in, finance any investments or activities in, or  make any payments to a Sanctioned Person or a Sanctioned Country;  (ii) the Borrower will not  request any Loan and the Borrower shall not use, and shall procure that its Affiliates and its or  their respective directors, officers, employees and agents shall not use, directly or indirectly, the  proceeds of any Loan, or lend, contribute or otherwise make available such proceeds to any  Person: (x) in furtherance of an offer, payment, promise to pay, or authorization of the payment  or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption  Laws or AML Laws; (y) for the purpose of funding, financing or facilitating any activities,  business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or  involving any goods originating in or with a Sanctioned Person or Sanctioned Country, or (z) in  any manner that would result in the violation of any Sanctions by the Borrower, the Facility  Agent, Security Trustee, and any Lender, and the Borrower will continue to implement and  maintain in effect policies and procedures designed to ensure compliance by the Borrower and its  respective directors, officers, employees and agents with applicable Anti-Corruption Laws,  applicable AML Laws and applicable Sanctions; and (iii) the Borrower shall ensure that:  (x) no  Person that is a Sanctioned Person will have any legal or beneficial interest in any funds repaid  or remitted by the Borrower to any Lender in connection with the Loans; and (y) it shall not  knowingly use any revenue or benefit derived from any activity or dealing with a Sanctioned  Person for the purpose of discharging amounts owing to any Lender in respect of the Loans.  (l) The Borrower shall not suspend or cease to carry on its business as an air  carrier and the Borrower shall not cease to be a Certificated Air Carrier.  (m) The Borrower shall provide quarterly reports to the Facility Agent with  forecasted and actual PDPs for the Aircraft.  (n) The Borrower will promptly and duly execute and deliver to the Security  Trustee such further documents and take such further action as the Security Trustee may from  time to time reasonably request in order to more effectively carry out the intent and purpose of  the Operative Documents and to establish and protect the rights and remedies created or intended  to be created in favor of the Security Trustee hereunder, including, without limitation, if  requested by the Security Trustee, at the expense of Borrower, the execution and delivery of  supplements or amendments to the Security Agreement, each in recordable form, in accordance  with the laws of such jurisdiction as the Security Trustee may reasonably request.  (o) The Borrower agrees to furnish to each Lender and the Facility Agent  promptly after the occurrence thereof and actual knowledge thereof by the Chief Financial  Officer or Treasurer of the Borrower, notice to the Facility Agent of any Event of Default.  (p) The Borrower shall not consolidate with or merge into any other Person or  convey, transfer or lease substantially all of its assets as an entirety to any Person, unless:  (i) the Person formed by such consolidation or into which  the Borrower is merged or the Person that acquires by conveyance, transfer or  lease substantially all of the assets of the Borrower as an entirety (the  “Successor”) shall execute and deliver to the Security Trustee an agreement  

 

  45     containing the assumption by such successor Person of the due and punctual  performance and observance of each covenant and condition of the Operative  Documents to which the Borrower is a party to be performed or observed by the  Borrower;  (ii) immediately after giving effect to such transaction, no  Event of Default shall have occurred and be continuing; and  (iii) the Borrower shall have delivered to the Security Trustee a  certificate signed by a Responsible Officer of the Borrower, and an opinion of  counsel to the Borrower (which may be external counsel or the Borrower’s  General Counsel, Deputy General Counsel or Associate General Counsel or such  other internal counsel to the Borrower, which other internal counsel shall be  reasonably satisfactory to a Majority in Interest of Lenders), each stating that  such consolidation, merger, conveyance, transfer or lease and the assumption  agreement mentioned in clause (i) comply with this Section 11.1(q) and that all  conditions precedent herein provided for relating to such transaction have been  complied with (except that such opinion need not cover the matters referred to in  clause (ii) above and may rely, as to factual matters, on a certificate of an officer  of the Borrower) and, in the case of such opinion, that such assumption  agreement has been duly authorized, executed and delivered by the Successor  and is enforceable against the Successor in accordance with its terms, except as  the same may be limited by applicable bankruptcy, insolvency, reorganization,  moratorium or similar laws affecting the rights of creditors generally and by  general principles of equity.  Upon any consolidation or merger, or any conveyance, transfer or lease of substantially all of the  assets of the Borrower as an entirety, in accordance with this Section 11.1(q), the Successor shall  succeed to, and be substituted for, and may exercise every right and power of, the Borrower  under this Credit Agreement and the other Operative Documents with the same effect as if such  Successor had been named as the Borrower herein.  No such conveyance, transfer or lease of  substantially all of the assets of the Borrower as an entirety shall have the effect of releasing the  Borrower from its liability hereunder unless the Successor shall theretofore have become such in  the manner prescribed in this Section 11.1(q).  ARTICLE XII    NOTICES  Section 12.1 Notices.  Unless otherwise expressly specified or permitted by the  terms hereof, all notices required or permitted under the terms and provisions hereof shall be in  English and in writing, and any such notice may be given by courier service or e-mail (and in the  case of email notifying of an incipient or actual Event of Default such notice shall only be  validly given if such notice is followed by notice delivered by courier service dispatched  promptly following delivery of such email (and dispatched not later than the next Business Day)  ) and any such notice shall be effective when delivered to the recipient thereof in accordance  with the provisions of this Section 12.1, (a) if to the Borrower or the Security Trustee, to its  

 

  46     respective address (including e-mail) set forth below the signature of such party at the foot of this  Credit Agreement, (b) if to an Original Lender, to its address (including e-mail) set forth on  Schedule I or (c) if to any Lender other than an Original Lender, to such address as such Lender  shall have designated in writing to the Borrower and the Security Trustee.  ARTICLE XIII    MISCELLANEOUS  Section 13.1 Miscellaneous.  (a)  To the extent permitted by applicable law,  should any one or more provisions of this Credit Agreement be determined to be illegal or  unenforceable by a court of any jurisdiction, such provision shall be ineffective to the extent of  such illegality or unenforceability without invalidating the remaining provisions hereof or  affecting the validity or enforceability of such provision in any other jurisdiction.  This Credit  Agreement may be executed in any number of counterparts (and each of the parties hereto shall  not be required to execute the same counterpart).  Each counterpart of this Credit Agreement  including a signature page executed by each of the parties hereto shall be an original counterpart  of this Credit Agreement, but all of such counterparts together shall constitute one instrument.   Subject to Section 9.1 of the Security Agreement, any term of this Credit Agreement may be  amended and the observance of any term hereof may be waived only with the written consent of  the Borrower, a Majority in Interest of Lenders and (to the extent the same affects its rights or  obligations hereunder) the Security Trustee; provided that, without the prior written consent of  each affected Lender, no such amendment or waiver of any of the terms of Section 6.2 shall  adversely affect any indemnity under Section 6.2 in favor of such Lender.  Any request, notice,  direction, consent, waiver or other instrument or action by a Lender shall be binding upon such  Lender and the permitted successors and assigns of such Lender.  Any amendment or waiver  effected in accordance with this Section 13.1 shall be binding upon each present and any  subsequent Lender, the Security Trustee and the Borrower.  The section and paragraph headings  in this Credit Agreement and the table of contents preceding this Credit Agreement are for  convenience of reference only and shall not modify, define, expand or limit any of the terms or  provisions hereof.  The terms of this Credit Agreement shall be binding upon, and shall inure to  the benefit of, the Borrower and, subject to the terms of Section 11.1(q), its successors and  permitted assigns, the Security Trustee and its successors as Security Trustee under the Security  Agreement and each Original Lender and, subject to the terms of Section 8.1(d), its successors  and permitted assigns as Lenders hereunder and under the Security Agreement.  Nothing in this  Credit Agreement, whether express or implied, shall be construed to give to any Person other  than the Borrower, the Security Trustee, the Facility Agent and the Lenders (and their respective  permitted successors and assigns) any legal or equitable right, remedy or claim under or in  respect of this Credit Agreement.  All payment obligations by the parties hereto under the  Operative Documents shall be payable in Dollars.  (b) All representations and warranties contained herein or made in  writing by the Borrower, the Security Trustee and the Lenders in connection herewith shall  survive the execution and delivery of this Credit Agreement and the making available of the  Commitment under this Credit Agreement.  

 

  47     (c) THIS CREDIT AGREEMENT HAS BEEN DELIVERED IN  THE STATE OF NEW YORK AND THIS CREDIT AGREEMENT SHALL IN ALL  RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND  PERFORMANCE, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,  THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE  AND PERFORMED WITHIN THE STATE OF NEW YORK.  (d) TO THE EXTENT PERMITTED BY APPLICABLE LAW,  THE BORROWER, THE SECURITY TRUSTEE AND EACH LENDER HEREBY  IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL  ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY  OTHER OPERATIVE DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.  (e) Each of the parties hereto, to the extent it may do so under  applicable law, for purposes hereof and of all other Operative Documents hereby (i) irrevocably  submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in  the City and County of New York and to the non-exclusive jurisdiction of the U.S. District Court  for the Southern District of New York, for the purposes of any suit, action or other proceeding  arising out of this Credit Agreement, the subject matter hereof or any of the transactions  contemplated hereby brought by any party or parties thereto, or their successors or permitted  assigns and (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in  any such suit, action or proceeding, that the suit, action or proceeding is brought in an  inconvenient forum, that the venue of the suit, action or proceeding is improper or that this  Credit Agreement or the subject matter hereof or any of the transactions contemplated hereby  may not be enforced in or by such courts.  (f) Each Original Lender agrees, and by its execution of a Transfer  Supplement pursuant to and in accordance with Section 8.1(d) each other Lender shall be  deemed to have agreed, that the transactions contemplated hereby constitute commercial  activities carried on in the United States for purposes of the United States Foreign Sovereign  Immunities Act of 1976, as amended.  (g) Each party hereto shall execute, acknowledge and deliver or shall  cause to be executed, acknowledged and delivered, all such further agreements, instruments,  certificates or documents, and shall do and cause to be done such further acts and things, in any  case, as any other party hereto shall reasonably request in connection with the administration of,  or to carry out more effectively the purposes of, or to better assure and confirm into such other  party the rights and benefits to be provided under this Credit Agreement; provided that this  sentence is not intended to impose upon the Borrower any additional liabilities not contemplated  by this Credit Agreement.  Section 13.2 USA Patriot Act.  Each Lender that is subject to the USA Patriot  Act (title III of Pub.L.107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the  Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record  information that identifies the borrower, which information includes the name and address of the  Borrower and other information that will allow such Lender to identify the Borrower in  accordance with the Act.    

 

  48     Section 13.3 Immunity Waiver.  To the extent that any Lender or any of its  properties has or may hereafter acquire any right of immunity, whether characterized as  sovereign immunity or otherwise, and whether under the United States Foreign Sovereign  Immunities Act of 1976 (or any successor legislation) or otherwise, from any legal proceedings,  whether in the United States or elsewhere, to enforce or collect upon this Credit Agreement or  any other Operative Document, including, without limitation, immunity from suit or service of  process, immunity from jurisdiction or judgment of any court or tribunal or execution of a  judgment, or immunity of any of its property from attachment prior to any entry of judgment, or  from attachment in aid of execution upon a judgment, each such Lender hereby irrevocably and  expressly waives any such immunity, and agrees not to assert any such right or claim in any such  proceeding, whether in the United States or elsewhere.  Section 13.4 Acknowledgement and Consent to Bail-In.  Notwithstanding any  other term of any Operative Document or any other agreement, arrangement or understanding  between the parties to this Credit Agreement, each party hereto acknowledges and accepts that  any liability of any party hereto to any other party hereto under or in connection with the  Operative Documents may be subject to Bail-In Action by the relevant Resolution Authority and  acknowledges and accepts to be bound by the effect of:   (a) any Bail-In Action in relation to any such liability, including (without limitation):  (i) a reduction, in full or in part, in the principal amount, or outstanding amount  due (including any accrued but unpaid interest) in respect of any such  liability;  (ii) a conversion of all, or part of, any such liability into shares or other  instruments of ownership that may be issued to, or conferred on, it; and  (iii) a cancellation of any such liability; and  (b) a variation of any term of any Operative Document to the extent necessary to give  effect to any Bail-In Action in relation to any such liability.  Section 13.5 German Foreign Trade and Payments Ordinance.  In respect of  each Lender that is resident in Germany (“Inländer”) within the meaning of Section 2  Paragraph 15 of the German Foreign Trade and Payments Act  (Außenwirtschaftsgesetz)(and therefore subject to Section 7 of the German Foreign  Trade and Payments Ordinance (Außenwirtschaftsverordnung, “AWV”)) (each a  “Restricted Lender”), the Borrower’s representations, warranties and covenants in this  Credit Agreement and the other Operative Documents related to compliance with  Sanctions will only apply for the benefit of a Restricted Lender to the extent that such  terms do not result in any violation of or conflict with EU Regulation (EC) 2271/96 or  Section 7 of the AWV or such other similar anti-boycott statute applicable to such  Restricted Lender.  Solely in the event of or on the basis of any breach of any such terms  which do not apply to a Restricted Lender by virtue of the foregoing sentence (but not  with respect to any other breaches), the parties agree that no Restricted Lender will be  entitled to:  

 

  49     (i) vote for:  (A) giving a default notice and declaring an Event of Default to have occurred  in accordance with the Operative Documents; and   (B) exercising the remedies in the Operative Documents; or  (ii) assert any other right, remedy or privilege on the basis of such breach.  *   *   *    

 

         IN WITNESS WHEREOF, the parties hereto have caused this PDP Credit Agreement  to be duly executed by their respective officers thereunto duly authorized as of the day and year  first above written.  ALLEGIANT AIR, LLC  By:      Name:   Title:     Address:  1201 North Town Center Drive  Las Vegas, Nevada 89144  Attn:  Mr. Robert Neal, Sr.Vice President Corporate  Finance and Treasurer  Telephone:  (702) 830-8039  Email:  DebtServicing@AllegiantAir.com   BANK OF UTAH, not in its individual capacity  but solely as Security Trustee  By:      Name:   Title:     Address:  50 South 200 East, Suite 110  Salt Lake City, UT 84111  Attention: Corporate Trust Services  Email: corptrust@bankofutah.com  LANDESBANK HESSEN-THÜRINGEN  GIROZENTRALE, as Facility Agent  By:      Name:   Title:   

 

       By:      Name:   Title:  LANDESBANK HESSEN-THÜRINGEN  GIROZENTRALE, as an Original Lender   By:      Name:   Title:   By:      Name:   Title:  NORDDEUTSCHE LANDESBANK  GIROZENTRALE, acting through its New York  Branch, as an Original Lender  By:      Name:   Title:   By:      Name:   Title:   

 

    SCHEDULE I  Page 1   SCHEDULE I to the  CREDIT AGREEMENT  Certain Economic Terms  Applicable Margin: [...***...] per annum  Maturity Date: December 31, 2024  Premium: [...***...]  Original Lender    LANDESBANK HESSEN- THÜRINGEN GIROZENTRALE    Commitment  $[...***...]  NORDDEUTSCHE LANDESBANK  GIROZENTRALE, acting through its  New York Branch    $[...***...]  Address for Notices:    LANDESBANK HESSEN-THÜRINGEN  GIROZENTRALE, as Facility Agent and as  Original Lender  [...***...]  Account Details: [...***...]  Address for Notices:    NORDDEUTSCHE LANDESBANK  GIROZENTRALE, acting through its New York  Branch, as an Original Lender  For Fundings and payments:  [...***...]    For other matters:    [...***...]    With a copy to:    [...***...]  

 

    SCHEDULE I  Page 2   Account Details: [...***...]  

 

    SCHEDULE I  Page 1   SCHEDULE IA to the  CREDIT AGREEMENT  Administrative Details  The Security Trustee’s account for payment shall be as set forth below or another account of the  Security Trustee in the United States as the Security Trustee may designate to the Borrower in  writing at least two Business Days in advance.  All payments shall be made by the Borrower to  the Security Trustee which shall act in the role of paying agent for all purposes hereof.  Domestic wires:  Bank of Utah  [...***...]      International wires:  Beneficiary Bank:  [...***...]    Beneficiary:  [...***...]  

 

    SCHEDULE II  Page 1    SCHEDULE II to the  CREDIT AGREEMENT    PREDELIVERY PAYMENT SCHEDULE  No.  Aircraft  Type and  MSN  [...***...] Scheduled  Delivery  Month*  Payment  Number  PDP  Payment  Date  Advance  Payment  Cash  Contribution Loan  1 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  2 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  3 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  4 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  5 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  6 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  7 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  8 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  9 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  10 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  11 737- MAX  [...***...]    [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  12 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  13 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  14 737-MAX  [...***...]    [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  15 737- MAX  [...***...]    [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  

 

    SCHEDULE II  Page 2   No.  Aircraft  Type and  MSN  [...***...] Scheduled  Delivery  Month*  Payment  Number  PDP  Payment  Date  Advance  Payment  Cash  Contribution Loan  16 737- MAX  [...***...]    [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  17 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  18 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  19 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]  20 737-MAX  [...***...]  [...***...] [...*** ...]  [...*** ...]  [...***...] [...***...] [...***...]    [...***...]  

 

   EXHIBIT A  Page 1      EXHIBIT A to the  CREDIT AGREEMENT  FORM OF [...***...]NOTICE[...***...]  [BORROWING[...***...]NOTICE  Landesbank Hessen-Thüringen Girozentrale, as Facility Agent  [...***...]    Bank of Utah, not in its individual capacity but solely as Security Trustee  50 South 200 East, Suite 110  Salt Lake City, UT 84111  Attention: Corporate Trust Services  Email: corptrust@bankofutah.com  Ladies and Gentlemen:  Reference is made to the PDP Credit Agreement, dated as of September __, 2022 (the  “Credit Agreement”), among Allegiant Air, LLC (together with its successors and permitted  assigns, the “Borrower”), the Lenders from time to time party thereto, Landesbank Hessen- Thüringen Girozentrale, as facility agent (the “Facility Agent”), and Bank of Utah, not in its  individual capacity but solely as security trustee (the “Security Trustee”).  All capitalized terms  used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.  The Borrower hereby advises that:  1. The Borrower [requests a Funding pursuant to Section 2.1(c) of the Credit  Agreement to finance PDPs in respect of each Eligible Aircraft with an Eligible PDP Amount  listed on Schedule I hereto[...***...].  2. [...***...]The proposed Funding Date of such Funding shall be __________ , 20_  (the “Scheduled Funding Date”). [...***...]  3. [...***...] The aggregate principal amount of the Loans to be advanced on the  Scheduled Funding Date, [...***...] shall be $___________ (the “Funding Amount”).  [...***...] The aggregate principal amount of Loans to be advanced [...***...] are listed on  Schedule [III]. [...***...] All Loans outstanding on such Payment Date are listed on Schedule  [I].]  4. [...***...]The Funding Amount shall be transferred on the Scheduled Funding  Date, in immediately available funds, by the Lenders to the account of the Security Trustee  pursuant to the following wire instructions for receipt no later than the scheduled time for the  Funding determined in accordance with the Credit Agreement:  [________________________][...***...]  5. [...***...].  

 

   EXHIBIT A  Page 2      [...***...]Upon confirmation by the Facility Agent to the Security Trustee that the  conditions precedent to the Funding have been satisfied or waived, the Security Trustee shall (i)  wire the Funding Amount, in immediately available funds, for further credit to:  [______________________]  and (ii) [...***...]  This Letter Agreement shall be governed by the internal laws of the State of New York.  This Letter Agreement may be executed in separate counterparts, each of which when so  executed and delivered shall be an original, but all such counterparts together shall constitute but  one and the same instrument.  By signing and returning an original counterpart hereof, each of the Facility Agent (on  behalf of itself and the other Lenders) and the Security Trustee hereby accepts and agrees to the  foregoing terms and provisions of this Letter Agreement.    Very truly yours,  ALLEGIANT AIR, LLC  By:    Title:     ACKNOWLEDGED AND AGREED:  LANDESBANK HESSEN-THÜRINGEN  GIROZENTRALE, as Facility Agent  By:     Title:     BANK OF UTAH, not in its individual  capacity but solely as Security Trustee  By:    Title:     

 

   EXHIBIT A  Page 3      SCHEDULE I to the  [...***...]BORROWING[...***...] NOTICE  NEW ELIGIBLE AIRCRAFT  No. Aircraft  Type and  MSN  Scheduled  Delivery  Month  New Loan  [__] [________] [_______] $[___________]    

 

   EXHIBIT A  Page 4      SCHEDULE II to the  [...***...]BORROWING[...***...] NOTICE  PAYOFF AIRCRAFT  No. Aircraft  Type and  MSN  Scheduled  Delivery  Month  Paid-Off Loan  [__] [________] [_______] $[___________]    

 

  EXHIBIT A  Page 5  SCHEDULE [I/III] to the  [...***...]BORROWING[...***...] NOTICE  SUMMARY OF ALL LOANS AND PRICING [...***...]AFTER BORROWING[...***...]ON THE PAYMENT DATE]  No.  Aircraft  Type and  MSN  [...***...]  Scheduled  Delivery  Month*  [...***...]** Aggregate  Loans [...***...] [...***...] [...***...]  [__] [________] [___________]    [____________] $[___________] $[___________] $[___________] $[___________]    *[...***...]  ** [...***...].    1. For each Aircraft the subject of Loans, Schedule [I] [III], sets forth [...***...].    

 

  EXHIBIT B  Page 1   EXHIBIT B to  CREDIT AGREEMENT  FORM OF TRANSFER AGREEMENT  TRANSFER AGREEMENT  TRANSFER AGREEMENT dated as of __________ __, ____ between  ________________________________ (the “Assignee”) and ____________________ (the  “Assignor”).  RECITALS  WHEREAS, the Assignor is the Lender under the PDP Credit Agreement, dated as of  September __, 2022 (as amended, modified or supplemented from time to time, the “Credit  Agreement”) among Allegiant Air, LLC, as Borrower (the “Borrower”), the Lenders party  thereto, Landesbank Hessen-Thüringen Girozentrale, as Facility Agent (the “Facility Agent”)  and Bank of Utah, not in its individual capacity but solely as security trustee (the “Security  Trustee”); and  WHEREAS, the Assignor proposes to assign to the Assignee $____________ of the  $_____________ of Assignor’s total Loans and $____________ of Assignor’s total unfunded  Commitments, representing an undivided interest in __% of Assignor’s Loans and Commitments  and __% of the total Loans and Commitments the subject of the Credit Agreement and a pro rata  portion of all of the other rights and obligations of the Assignor under the Credit Agreement and  the other Operative Documents (as defined below) in respect thereof, on the terms and subject to  the conditions set forth herein, and the Assignee proposes to accept the assignment of such rights  and obligations from the Assignor on such terms and subject to such conditions;  NOW, THEREFORE, in consideration of the foregoing and the mutual agreements  contained herein, the parties hereto agree as follows:  Section 1. Definitions.  Unless otherwise defined herein, terms defined in the Credit  Agreement are used herein as therein defined.  Section 2. Assignment.  On __________ __, ____ (the “Effective Date”), and on the  terms and subject to the conditions set forth herein, the Assignor will sell, assign and transfer to  the Assignee, without recourse to or representation, express or implied, by the Assignor (except  as expressly set forth in Section 5), the aforementioned Loans and Commitments a pro rata  portion of the rights and obligations of the Assignor under the Credit Agreement and the other  Operative Documents in respect thereof (but not with respect to any indemnity or other claim,  interest thereon at the Past Due Rate and any Break Funding Losses, if any, accrued and unpaid  as of the Effective Date or thereafter payable to the Assignor in respect of the period prior to the  Effective Date), and the Assignee shall accept such assignment from the Assignor and assume all  of the obligations of the Assignor accruing from and after the Effective Date under the Credit  Agreement and the other Operative Documents relating to the Assignor’s Loans on such terms  and subject to such conditions.  Upon the satisfaction of the conditions set forth in Section 4,  (A) the Assignee shall, on the Effective Date, succeed to the rights and be obligated to perform  

 

  EXHIBIT B  Page 2   the obligations of a Lender under the Credit Agreement and the other Operative Documents, and  (B) the Assignor shall be released from its obligations under the Credit Agreement and the other  Operative Documents accrued from and after the Effective Date, in each case to the extent such  obligations have been assumed by the Assignee.  Section 3. Payments.  As consideration for the sale, assignment and transfer  contemplated in Section 2, the Assignee shall pay to the Assignor, on the Effective Date, in  lawful currency of the United States and in immediately available funds, to the account specified  below its signature on the signature pages hereof, an amount equal to $_______________.  Section 4. Conditions.  This Assignment Agreement shall be effective upon the due  execution and delivery of this Assignment Agreement by the Assignor and the Assignee and the  effectiveness of the assignment contemplated by Section 2 is subject to the receipt by the  Assignor of the payment provided for in Section 3.  If Assignee is a Foreign Lender, Assignee  has provided the forms and certificates as required in Section 2.3(d)(ii) of the Credit Agreement.  Section 5. Representations and Warranties of the Assignor.  The Assignor represents  and warrants to the Assignee as follows:  (a) the Assignor has full power and authority, and has  taken all action necessary to execute and deliver this Assignment Agreement and any other  documents required or permitted to be executed or delivered by it in connection with this  Assignment Agreement and to fulfill its obligations under, and to consummate the transactions  contemplated by, this Assignment Agreement, and no governmental authorizations or other  authorizations are required in connection therewith, (b) the Assignor’s interest in the Assignor’s  Loans is free and clear of any and all Liens created by or through the Assignor, (c) this  Assignment Agreement constitutes the legal, valid and binding obligation of the Assignor,  enforceable against the Assignor in accordance with its terms, and (d) the Assignor has received  no written notice of any Event of Default having occurred and continuing on the date of  execution hereof.  Section 6. Representations and Warranties of the Assignee.  The Assignee hereby  represents and warrants to the Assignor as follows:  that (a) the Assignee has full power and  authority, and has taken all action necessary to execute and deliver this Assignment Agreement  and any and all other documents required or permitted to be executed or delivered by it in  connection with this Assignment Agreement and to fulfill its obligations under, and to  consummate the transactions contemplated by, this Assignment Agreement, and no  governmental authorizations or other authorizations are required in connection therewith, (b) this  Assignment Agreement constitutes the legal, valid and binding obligation of the Assignee,  enforceable against the Assignee in accordance with its terms, and (c) the Assignee has fully  reviewed the terms of the Operative Documents and has independently and without reliance  upon the Assignor and based on such information as the Assignee has deemed appropriate, made  its own credit analysis and decision to enter into this Assignment Agreement.  Section 7. Further Assurances.  The Assignor and the Assignee hereby agree to  execute and deliver such other instruments, and take such other action, as either party may  reasonably request in connection with the transactions contemplated by this Assignment  Agreement.  

 

  EXHIBIT B  Page 3   Section 8. Governing Law.  This Assignment Agreement shall be governed by, and  construed in accordance with, the law of the State of New York.  Section 9. Notices.  All communications between the parties or notices in connection  herewith shall be in writing, and shall be personally delivered or sent by prepaid overnight  courier service, or by facsimile, addressed as set forth on the signature pages hereof.  All such  communications and notices shall be effective upon receipt.  Section 10. Binding Effect.  This Assignment Agreement shall be binding upon and  inure to the benefit of the parties hereto and their respective successors and assigns.  Section 11. Interpretation.  The headings of the various sections hereof are for  convenience of reference only and shall not affect the meaning or construction of any provision  hereof.  Section 12. Integration of Terms.  This Assignment Agreement contains the entire  agreement between the parties relating to the subject matter hereof and supersedes all oral  statements and other writings with respect to the subject matter hereof.  Section 13. Counterparts.  This Assignment Agreement may be executed in one or  more counterparts, each of which shall be an original but all of which, taken together, shall  constitute one and the same instrument.  

 

  EXHIBIT B  Page 4   IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be  executed and delivered by their duly authorized officers as of the date first above written.   [ASSIGNEE]  By     Name:   Title:  Address for Notices:   Wire Instructions:     [ASSIGNOR]  By     Name:   Title:  Address for Notices:   Wire Instructions:    

 

  EXHIBIT C-1  Page 1   EXHIBIT C-1 to the  CREDIT AGREEMENT  [...***...]    

 

  EXHIBIT C-2  Page 1   EXHIBIT C-2 to the  CREDIT AGREEMENT  [...***...]a106purchaseagreementass

EXECUTION COPY    [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item  601(b)(10). Such excluded information is not material and would likely cause competitive harm to  the registrant if publicly disclosed.                  PURCHASE AGREEMENT ASSIGNMENT  AND SECURITY AGREEMENT    dated as of September 30, 2022  between  ALLEGIANT AIR, LLC,  and  BANK OF UTAH,  not in its individual capacity but solely as Security Trustee  ___________________________________________________________________  Pre-Delivery Payment Financing of up to   20 Boeing 737 MAX Aircraft  ___________________________________________________________________  

 

TABLE OF CONTENTS  Page  i     ARTICLE I DEFINITIONS ................................................................................................. 1  Section 1.1 Certain Definitions ..................................................................................... 1  ARTICLE II SECURITY ...................................................................................................... 2  Section 2.1 Grant of Security ........................................................................................ 2  ARTICLE III COVENANTS AND REPRESENTATIONS OF THE BORROWER ........... 5  Section 3.1 Liens ........................................................................................................... 5  Section 3.2 [Intentionally Omitted] .............................................................................. 6  Section 3.3 BFE ............................................................................................................ 6  Section 3.4 [Intentionally Omitted] .............................................................................. 7  Section 3.5 Amendments to Purchase Agreement ........................................................ 7  Section 3.6 Representations .......................................................................................... 8  ARTICLE IV RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME  FROM THE COLLATERAL .......................................................................... 9  Section 4.1 Application of Income from the Collateral ................................................ 9  ARTICLE V EVENTS OF DEFAULT; REMEDIES OF THE SECURITY  TRUSTEE UPON AN EVENT OF DEFAULT ............................................ 10  Section 5.1 Event of Default ....................................................................................... 10  Section 5.2 Remedies .................................................................................................. 12  Section 5.3 Remedies Cumulative .............................................................................. 14  Section 5.4 Discontinuance of Proceedings ................................................................ 14  Section 5.5 Waiver of Past Defaults ........................................................................... 14  ARTICLE VI DUTIES OF THE SECURITY TRUSTEE ................................................... 14  Section 6.1 Notice of Event of Default; Action Upon Event of Default .................... 14  Section 6.2 Action Upon Instructions ......................................................................... 15  Section 6.3 Indemnification ........................................................................................ 15  Section 6.4 No Duties Except as Specified in Security Agreement or  Instructions ............................................................................................... 16  Section 6.5 No Action Except Under Security Agreement or Instructions ................ 16  Section 6.6 Reports, Notices, Etc................................................................................ 16  

 

TABLE OF CONTENTS  (continued)  Page  ii   ARTICLE VII THE SECURITY TRUSTEE ......................................................................... 16  Section 7.1 Acceptance of Trusts and Duties ............................................................. 16  Section 7.2 Absence of Duties .................................................................................... 16  Section 7.3 No Representations or Warranties as to the Documents .......................... 17  Section 7.4 No Segregation of Moneys; No Interest .................................................. 17  Section 7.5 Reliance; Security Trustees; Advice of Counsel ..................................... 17  ARTICLE VIII SUCCESSOR SECURITY TRUSTEE.......................................................... 18  Section 8.1 Resignation of Security Trustee; Appointment of Successor .................. 18  ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO THIS SECURITY  AGREEMENT AND OTHER DOCUMENTS ............................................. 19  Section 9.1 Supplemental Security Agreements ......................................................... 19  Section 9.2 Security Trustee Protected ....................................................................... 20  Section 9.3 Documents Mailed to Lenders ................................................................. 20  ARTICLE X INVESTMENT OF SECURITY FUNDS ..................................................... 21  Section 10.1 Investment of Security Funds .................................................................. 21  Section 10.2 Liability for Losses .................................................................................. 21  ARTICLE XI MISCELLANEOUS ...................................................................................... 21  Section 11.1 Partial Security Release; Termination of Security Agreement ................ 21  Section 11.2 No Legal Title to Collateral in Lenders ................................................... 22  Section 11.3 Sale of the Collateral by Security Trustee is Binding .............................. 23  Section 11.4 Benefit of Security Agreement ................................................................ 23  Section 11.5 [Reserved] ................................................................................................ 23  Section 11.6 Notices ..................................................................................................... 23  Section 11.7 Severability .............................................................................................. 23  Section 11.8 Separate Counterparts .............................................................................. 23  Section 11.9 Successors and Assigns; Amendments and Waivers ............................... 23  Section 11.10 Headings .................................................................................................. 24  Section 11.11 Governing Law ........................................................................................ 24  Section 11.12 Normal Commercial Relations ................................................................ 24    

 

TABLE OF CONTENTS  Page  i   Appendix A – Definitions    Exhibit A – Form of Termination and Partial Release      

 

     PURCHASE AGREEMENT ASSIGNMENT AND SECURITY AGREEMENT  This PURCHASE AGREEMENT ASSIGNMENT AND SECURITY AGREEMENT  (this “Security Agreement”) dated as of September 30, 2022, is between ALLEGIANT AIR,  LLC, a limited liability company duly formed and validly existing under the laws of the State of  Nevada (together with its successors and permitted assigns, the “Borrower”), and BANK OF  UTAH, not in its individual capacity but solely as Security Trustee hereunder (herein called,  together with its permitted successors and permitted assigns, the “Security Trustee”).  W I T N E S S E T H:  WHEREAS, the Lenders (such term and other capitalized terms used herein without  definition being defined as hereinafter provided) have agreed, pursuant and subject to the terms  and conditions of the Credit Agreement, to make revolving loans to the Borrower to finance  PDPs made or to be made to the Manufacturer with respect to the Aircraft pursuant to the  Purchase Agreement; and  WHEREAS, the Borrower desires by this Security Agreement, among other things, to  grant to the Security Trustee a Lien on the Collateral in accordance with the terms hereof, in  trust, as security for, among other things, the Borrower’s obligations to the Lenders, for the  ratable, to the extent and in the manner provided in this Security Agreement, benefit and security  of the Lenders (and for the benefit of the Security Trustee); and  WHEREAS, all things necessary to make this Security Agreement a legal, valid and  binding obligation of the Borrower and the Security Trustee, for the uses and purposes herein set  forth, in accordance with its terms, have been done and performed and have occurred;  NOW, THEREFORE, to secure the prompt and complete payment of, among other  things, all amounts payable by the Borrower under this Security Agreement and the Credit  Agreement, and the performance and observance by the Borrower of, among other things, all the  agreements and covenants to be performed or observed by it for the benefit of the Lenders  contained in the Operative Documents, it is hereby covenanted and agreed by and between the  parties hereto as follows:  ARTICLE I    DEFINITIONS  Section 1.1 Certain Definitions.  For all purposes of this Security Agreement, except  as otherwise expressly provided or unless the context otherwise requires:  (a) capitalized terms used herein have the meanings set forth in Appendix A hereto  or, if not therein defined, as defined in the Credit Agreement;  (b) the definitions stated in Appendix A and those stated in the Credit Agreement  apply equally to both the singular and the plural forms of the terms defined;  

 

  2   (c) the words “herein”, “hereof” and “hereunder” and other words of similar import  refer to this Security Agreement as a whole and not to any particular article, section or other  subdivision;  (d) the words “including,” “including, without limitation,” “including, but not limited  to,” and terms or phrases of similar import when used in this Security Agreement, with respect to  any matter or thing, mean including, without limitation, such matter or thing;  (e) all references herein to articles, sections, appendices and exhibits pertain to  articles, sections, appendices and exhibits in or to this Security Agreement; and  (f) “government” includes any instrumentality or agency thereof.  ARTICLE II    SECURITY  Section 2.1 Grant of Security.  To secure (x) the prompt and complete payment  (whether at the stated maturity, by acceleration or otherwise) of all Secured Amounts and (y) the  performance and observance by the Borrower and the Guarantor of all the agreements and  covenants to be performed or observed by the Borrower and the Guarantor for the benefit of the  Lenders contained in the Operative Documents and in consideration of the premises and of the  covenants contained herein and in the other Operative Documents and of other good and  valuable consideration given to the Borrower and the Guarantor by the Security Trustee at or  before the Closing Date, the receipt of which is hereby acknowledged, the Borrower does hereby  grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto the Security  Trustee and its permitted successors and permitted assigns, for the security and benefit of the  Secured Parties, a security interest in, and mortgage lien on, all estate, right, title and interest of  the Borrower in, to and under, all and singular, the following described properties, rights,  interests and privileges whether now owned or hereafter acquired (hereinafter sometimes  referred to as the “Collateral”):  (a) Purchase Agreement No. 05130, dated as of December 31, 2021, between  the Manufacturer and the Borrower and including certain tables, exhibits and letter agreements  attached thereto, to the extent (and only to the extent) that such Purchase Agreement No. 05130  relates to the Aircraft and constitutes the “Assigned Purchase Agreement” (as defined in the  Manufacturer’s Consent) (as such Purchase Agreement Number No. 05130 may be amended,  supplemented further or otherwise modified from time to time in accordance with the applicable  provisions thereof) (the “Purchase Agreement”); including (i) any and all rights of the  Borrower to receive moneys due and to become due from, and any payments or proceeds payable  to the Borrower from, the Manufacturer under or pursuant to the Purchase Agreement with  respect to the Aircraft, (ii) any and all rights of the Borrower under any warranty provision  arising under the Purchase Agreement with respect to the Aircraft as set forth in the  Manufacturer’s Consent or any property included or to be included in the Aircraft, (iii) any and  all rights of the Borrower to compel performance of the Purchase Agreement in respect of the  Aircraft, (iv) the right to apply amounts representing the Equity Portion for an Aircraft and any  Loans in respect of such Aircraft received by the Manufacturer against the Net Purchase Price  

 

  3   (excluding BFE) for such Aircraft and (v) to the extent permitted under the Manufacturer’s  Consent and the Engine Manufacturer’s Consent, any and all rights of the Borrower to obtain  data and demonstration and test flights under or pursuant to the Purchase Agreement with respect  to the Aircraft;  (b) the right to purchase, accept delivery of and take title to the Aircraft under  the Purchase Agreement and any and all property included in the Aircraft;   (c) any and all rights of the Borrower under any warranty provision arising  under the General Terms Agreement with respect to the Engines included or to be included on  the Aircraft;  (d) all moneys and securities now or hereafter paid or deposited or required to  be paid or deposited to or with the Security Trustee by or for the account of the Borrower  pursuant to any term of this Security Agreement or the Credit Agreement and held or required to  be held by the Security Trustee hereunder or thereunder;   (e) subject to the Manufacturer’s Consent, any BFE installed on any Aircraft;  and  (f) all proceeds of the foregoing;  PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so  long as no Event of Default shall have occurred and be continuing, (i) each of the Secured Parties  shall not (and shall not permit any of its Affiliates or other Person claiming by, through or under  it to) take or cause to be taken any action contrary to the Borrower’s right to quiet enjoyment of  the Collateral, and to possess, use, retain and control the Collateral and all revenues, income and  profits derived therefrom without hindrance and (ii) except as expressly provided in the  Manufacturer’s Consent, the Engine Manufacturer’s Consent, the Credit Agreement and the  other Operative Documents, the Borrower shall have the right, to the exclusion of the Security  Trustee and the other Secured Parties, with respect to the Manufacturer Agreements, to exercise  in the Borrower’s name all rights and powers of the Borrower under the Manufacturer  Agreements (including the right to amend or supplement the Manufacturer Agreements, to waive  compliance with any of the terms thereof and to make elections and give directions thereunder)  and to retain any recovery or benefit resulting from the enforcement of any provision of the  Manufacturer Agreements.  TO HAVE AND TO HOLD all and singular the Collateral unto the Security Trustee,  and its permitted successors and permitted assigns, forever, in trust, upon the terms and trusts  herein set forth, for the ratable, to the extent and in the manner provided in this Security  Agreement, benefit, security and protection of the Secured Parties from time to time and for the  other uses and purposes herein set forth, subject in each case to the terms and provisions set forth  in this Security Agreement, including the priority of distribution provisions set forth in Section  4.1.  It is expressly agreed that notwithstanding anything herein to the contrary, (a) the  Borrower shall remain liable under the Manufacturer Agreements to perform all of its obligations  thereunder, (b) the exercise by the Security Trustee of any of the rights hereunder shall not  

 

  4   release the Borrower from any of its duties or obligations under the contracts and agreements  included in the Collateral except to the extent that such exercise by the Security Trustee  constitutes performance of such duties or obligations or otherwise waives, voids or nullifies such  duties or obligations and, (c) except to the extent expressly provided herein, in the  Manufacturer’s Consent or the Engine Manufacturer’s Consent, unless the Security Trustee  assumes the Borrower’s rights and obligations under the Purchase Agreement or the General  Terms Agreement, as the case may be, pursuant to this Security Agreement and in accordance  with the Manufacturer’s Consent or Engine Manufacturer’s Consent, as applicable, or otherwise  attempts to enforce any rights or remedies under the Purchase Agreement or General Terms  Agreement, as applicable, the Security Trustee shall not have any obligation or liability under the  contracts and agreements included in the Collateral by reason of this Security Agreement and the  Security Trustee shall not be obligated to perform any of the obligations or duties of the  Borrower thereunder or to take any action to collect or enforce any claim for payment secured  hereunder. Further, the parties hereto expressly agree, subject, however, to the terms and  conditions of this Security Agreement, the Manufacturer’s Consent and Engine Manufacturer’s  Consent, that the Security Trustee shall not be entitled to exercise, and the Borrower shall be  entitled to exercise, any and all of the claims, rights, powers, privileges, remedies and other  benefits under or arising out of the Manufacturer Agreements unless and until an Event of  Default shall have occurred and be continuing.  The Lenders and the Security Trustee confirm for the benefit of the Manufacturer and  Engine Manufacturer that (except as provided in the Manufacturer’s Consent and the Engine  Manufacturer’s Consent) nothing contained herein shall subject either the  Manufacturer or  Engine Manufacturer to any liability to which it would not otherwise be subject under the  relevant Manufacturers Agreements or modify in any respect their contract rights of thereunder  or require the Manufacturer to divest itself of title to or possession of the Aircraft until delivery  thereof and payment therefor as provided in the Purchase Agreement.  The Borrower does hereby constitute and appoint the Security Trustee the true and lawful  attorney of the Borrower (which appointment is coupled with an interest) with full power (in the  name of the Borrower or otherwise) (i) to ask for, require, demand and receive any and all  moneys and claims for moneys (in each case including insurance and requisition proceeds) due  and to become due under or in connection with the Collateral, (ii) to endorse any checks or other  instruments or orders in connection therewith, (iii) subject to the terms of the Manufacturer’s  Consent, to exercise the rights of the Borrower under the Purchase Agreement with respect to the  Aircraft and (iv) to file any claims or to take any action or to institute any proceeding that the  Security Trustee may deem to be necessary or advisable in the premises; provided that the  Security Trustee shall not exercise any such rights except during the continuance of an Event of  Default.  Without limiting the provisions of the foregoing, during the continuance of any Event  of Default, but subject to the terms hereof and any mandatory requirements of applicable law, the  Security Trustee shall have the right under such power of attorney in its discretion to file any  claim or to take any other action or proceedings, either in its own name or in the name of the  Borrower or otherwise, that the Security Trustee may reasonably deem necessary or appropriate  to protect and preserve the right, title and interest of the Security Trustee in and to the security  intended to be afforded hereby.  The Borrower hereby agrees that promptly on receipt thereof,  except as otherwise contemplated by this Security Agreement or the Credit Agreement, it will  transfer to the Security Trustee any and all moneys from time to time received by the Borrower  

 

  5   constituting part of the Collateral, for distribution by the Security Trustee pursuant to this  Security Agreement.  The Borrower does hereby warrant and represent that it has not sold, assigned or pledged,  and hereby covenants that it will not sell, assign or pledge, so long as this Security Agreement  shall remain in effect and the Lien hereof shall not have been released pursuant to the provisions  hereof, any of its estate, right, title or interest hereby assigned, to any Person other than the  Security Trustee, except as expressly permitted herein or in any other Operative Document (or,  in the case of a prior assignment or pledge, as to which the same has been reassigned to the  Borrower or released).  ARTICLE III    COVENANTS AND REPRESENTATIONS OF THE BORROWER  Section 3.1 Liens.  The Borrower will not directly or indirectly create, incur, assume  or suffer to exist any Lien on or with respect to any of the Collateral, its title thereto or any of its  interest therein, including, without limitation, any of its right, title or interest in or to any  Aircraft, except:  (a) the respective rights of the Security Trustee and the Borrower as provided  herein and in the other Operative Documents, the Lien of this Security Agreement and the rights  of each Secured Party under this Security Agreement, the Credit Agreement and the other  Operative Documents;  (b) Lender Liens and Security Trustee Liens;  (c) Liens for Taxes of the Borrower either not yet due or being contested in  good faith by appropriate proceedings (and for which adequate reserves have been provided in  accordance with GAAP), so long as the continuing existence of such Liens during such  proceedings do not involve any material risk of the sale, forfeiture or loss of, the Collateral or  any interest therein;  (d) Liens arising out of any judgment or award against the Borrower with  respect to which an appeal or proceeding for review is being prosecuted diligently and in good  faith, so long as such Liens do not result in a material risk of the sale, forfeiture or loss of, the  Collateral or any interest therein; and  (e) any other Lien with respect to which the Borrower shall have provided a  bond, cash collateral or other security adequate in the reasonable opinion of the Security Trustee.  Liens described in clauses (a) through (e) above are referred to herein as “Permitted Liens”.   The Borrower shall promptly, at its own expense, take (or cause to be taken) such action as may  be necessary duly to discharge (by bonding or otherwise) any Lien other than a Permitted Lien  arising at any time with respect to the Collateral.  Section 3.2 [Intentionally Omitted].    

 

  6   Section 3.3 BFE.  During the continuance of an Event of Default:  (a) Promptly following the Security Trustee’s written request, the Borrower  shall provide to the Security Trustee a complete list of BFE that it has on contract and/or has  taken delivery, including the associated purchase price for each item of BFE (subject to  applicable confidentiality requirements), associated completion/delivery schedule and any other  BFE related information reasonably requested by the Security Trustee (the “BFE List”).  (b) In the case of any Assumed Aircraft (as such term is defined in the  Manufacturer’s Consent), following the Security Trustee’s receipt of the BFE List with respect to  such Assumed Aircraft, the Security Trustee shall notify the Borrower as to which of the BFE  items owned by the Borrower it intends to purchase from the Borrower.  If no such election to  purchase BFE owned by the Borrower in respect to such Assumed Aircraft is made, the  Borrower (or its designee), at its own cost, shall, promptly following receipt of written notice  from the Security Trustee that the Security Trustee shall not purchase such BFE, remove (or  request the removal of) any equipment which constitutes such BFE that does not cause damage  to such Assumed Aircraft; provided that if the Borrower receives such notice from the Security  Trustee at least 30 days prior to the date the Security Trustee (or its designee) is scheduled to  purchase such Assumed Aircraft, the Borrower will cause such removal to be completed prior to  such date; provided, further that the Lenders and the Security Trustee shall cooperate with, and  provide reasonable assistance to (at no out-of-pocket cost or expense to the Lenders or the  Security Trustee) the Borrower and the Manufacturer so as to allow each removal to be promptly  completed in the manner set forth herein.  (c) If the Security Trustee elects to purchase any BFE owned by the  Borrower, the Borrower shall sell to the Security Trustee (or its nominee) all such BFE it has  purchased in “as-is”, “where-is” condition with no warranty of any kind other than being free of  any liens, claims or other encumbrances attributable to the Borrower.  (d) The Borrower shall deliver to such location as the Security Trustee (or its  nominee) may direct (i) a copy of the bill of sale for the BFE from the applicable supplier to the  Borrower (if available) and (ii) any pertinent supporting documentation (subject to applicable  confidentiality provisions), within thirty (30) days following the Security Trustee’s request for  such information.  (e) In respect of any BFE that is purchased by the Security Trustee pursuant  to Section 3.3(c), the BFE purchase price shall be the amount paid by the Borrower for such BFE  and shall be paid by netting the purchase price against any amounts then due and payable to the  Lenders under the Credit Agreement, with any excess paid directly to the Borrower.  (f) If requested by the Security Trustee, the Borrower shall (at no out-of- pocket cost or expense to the Borrower) use commercially reasonable efforts to assist the  Security Trustee in its efforts to purchase BFE that is not owned by the Borrower from the  applicable suppliers.  Section 3.4 [Intentionally Omitted].   

 

  7   Section 3.5 Amendments to Purchase Agreement.  The Borrower may not enter into  any change order or other amendment, modification or supplement to either Manufacturer  Agreements without the written consent of the Security Trustee (acting at the direction of the  Majority in Interest of Lenders) if such change order, amendment, modification or supplement  would:  (a) [...***...];  (b) [...***...];  (c) [...***...];   (d) [...***...];  (e) result in the rescission, cancellation or termination of either Manufacturer  Agreement or extend the scope of the Manufacturer’s or the Engine Manufacturer’s rights to  terminate the relevant Manufacturer Agreement;  (f) materially diminish the rights assigned hereunder to the Security Trustee;  (g) result in the reduction or extinguishing of any warranties available to the  Security Trustee or its assignees; or  (h) [...***...].  Upon the reasonable written request of the Security Trustee[...***...].  Section 3.6 Representations.  Borrower hereby represents and warrants on the date  hereof that:  (a) The formula for calculating the Net Purchase Price payable by the  Security Trustee (or its designee) for each Aircraft delivered to the Security Trustee (or its  designee) by the Manufacturer pursuant to the Manufacturer’s Consent and the “Assigned  Purchase Agreement” referenced therein is as of the Closing Date correctly set forth on Schedule  1 to the Manufacturer’s Consent [...***...].   (b) Schedule II to the Credit Agreement correctly set forth for each Aircraft its  model, its current “Scheduled Delivery Month” under the Purchase Agreement, the amount of  PDPs paid to the Manufacturer for such Aircraft and the amount and the timing of the PDPs  required to be made with respect to such Aircraft after the Closing Date.  (c) Each of the Purchase Agreement and the General Terms Agreement is in  full force and effect on the date hereof and the Borrower is not in default in any material respect  of its material obligations thereunder.  (d) All UCC filings necessary to create and perfect the security interests  granted by the Borrower to the Security Trustee in respect of the Collateral under this Security  Agreement shall be filed (without limiting the provisions of this clause (d) it being agreed that  

 

  8   they shall be filed by counsel to the Lenders) to the extent that such security interests can be  perfected by filings under the UCC.  The security interests granted to the Security Trustee  pursuant to this Security Agreement in and to the Collateral constitute a perfected security  interest therein superior and prior to the rights of all other Persons therein (subject to Permitted  Liens not Of Record) to the extent such perfection and priority can be obtained by filings under  the UCC, and the Security Trustee is entitled with respect to such perfected security interest to  all the rights, priorities and benefits afforded by the UCC as enacted in any relevant jurisdiction  to perfected security interests.  ARTICLE IV    RECEIPT, DISTRIBUTION AND APPLICATION  OF INCOME FROM THE COLLATERAL  Section 4.1 Application of Income from the Collateral.  After an Event of Default  shall have occurred and be continuing, and the unpaid principal of all Loans then outstanding and  accrued interest thereon shall have become (or be deemed to be) due and payable, or a Majority  in Interest of Lenders shall have instructed the Security Trustee to pursue remedies pursuant to  Section 5.2, the Security Trustee shall apply any payments received (including, without  limitation, any proceeds received from the Manufacturer pursuant to the Manufacturer’s  Consent), any amounts then held and any amounts realized by the Security Trustee with respect  to the Collateral (including, without limitation, under any lease entered into by the Security  Trustee) in the following order of priority:    first, so much of such payments or amounts as shall be required to reimburse the Security  Trustee for any unpaid fee or out-of-pocket costs and expenses (to the extent not  previously reimbursed), including reasonable compensation to the Security Trustee’s  agents and counsel, and all charges, expenses, liabilities and advances reasonably  incurred or made by the Security Trustee for services under this Security Agreement,  shall be applied by the Security Trustee in reimbursement of such fees, costs and  expenses;   second, so much of such payments or amounts as shall be required to reimburse the  Lenders for payments made by them to the Security Trustee pursuant to Section 6.3 (to  the extent not previously reimbursed), shall be distributed to the Lenders ratably, without  priority of one over any other, in the proportion that the amounts paid by each Lender  bear to the amounts paid by all Lenders pursuant to such Section;   third, so much of such payments or amounts as shall be required to pay to each Lender all  amounts payable pursuant to the indemnification provisions of Article VI of the Credit  Agreement or Section 2.3, 2.10 or 2.11 of the Credit Agreement or pursuant to any other  provision of the Credit Agreement or this Security Agreement (other than amounts  payable pursuant to clause “second” or “fourth” of this Section 4.1) to each Lender and  remaining unpaid shall be distributed to the Lenders ratably, without priority of one over  any other, in the proportion that the aggregate amount due each such Lender under this  clause “third” bears to the aggregate amount due all such Lenders under this clause  “third”;  

 

  9   fourth, subject to the order of priority specified in Section 2.5 of the Credit Agreement, so  much of such payments or amounts as shall be required to pay in full the aggregate  unpaid principal amount of the Loans then due and payable and the accrued but unpaid  interest thereon to the date of distribution and Break Funding Loss, if applicable, shall be  distributed to the Lenders, ratably, without priority of one Lender over any other Lender,  in the proportion that the aggregate unpaid principal amount of all Loans held by each  Lender, and accrued but unpaid interest thereon to the date of distribution and Break  Funding Loss, if applicable, bears to the aggregate unpaid principal amount of all Loans  and accrued but unpaid interest thereon to the date of distribution and Break Funding  Loss, if applicable; and  fifth, the balance, if any, of such payments or amounts remaining thereafter shall be  distributed to, or as directed by, the Borrower.  ARTICLE V    EVENTS OF DEFAULT; REMEDIES OF THE  SECURITY TRUSTEE UPON AN EVENT OF DEFAULT  Section 5.1 Event of Default.  Each of the following events shall constitute an “Event  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 governmental body) and  each such Event of Default shall be deemed to exist and continue so long as, but only as long as,  it shall not have been remedied:  (a) the Borrower shall fail to make payment when the same shall become due  of principal of, Break Funding Loss (if applicable) or interest on, the Loans, and such failure  shall continue unremedied [...***...];  (b) the Borrower shall fail to make payment when the same shall become due  of any amount (other than amounts referred to in Section 5.1(a)) due hereunder or under the  Credit Agreement, and such failure shall continue unremedied [...***...];  (c) the Borrower or the Guarantor shall fail to perform or observe in any  material respect any other covenant, condition or agreement to be performed or observed by it  under any Operative Document (other than Section 11.1(g) of the Credit Agreement), and such  failure shall continue unremedied [...***...]; provided that, if such failure is capable of being  remedied, no such failure shall constitute an Event of Default [...***...];  (d) any representation or warranty made by the Borrower or the Guarantor  herein or in any other Operative Document, as applicable, shall prove to have been incorrect in  any material respect at the time made, and such incorrectness shall continue to be material to the  transactions contemplated by the Operative Documents and unremedied [...***...]; provided  that, if such incorrectness [...***...] is capable of being remedied[...***...];  

 

  10   (e) the Borrower or the Guarantor shall consent to the appointment of a  receiver, trustee or liquidator of itself or of a substantial part of its property or shall make a  general assignment for the benefit of creditors;  (f) the Borrower or the Guarantor shall file a voluntary petition in bankruptcy  or a voluntary petition or an answer seeking reorganization in a proceeding under any bankruptcy  laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition  filed against the Borrower or the Guarantor as a debtor in any such proceeding, or the Borrower  or the Guarantor shall, by voluntary petition or answer, consent to or seek relief under the  provisions of any other now existing or future bankruptcy or other similar law providing for the  reorganization or winding up of corporations, or providing for an agreement, composition,  extension or adjustment with its creditors under such a law;  (g) an order, judgment or decree shall be entered by any court of competent  jurisdiction appointing, without the consent of the Borrower or the Guarantor (as applicable), a  receiver, trustee or liquidator of the Borrower or the Guarantor, or sequestering any substantial  part of the property of the Borrower or the Guarantor, and any such order, judgment or decree of  appointment or sequestration shall remain in force undismissed, unstayed or unvacated for a  period of 90 days after the date of entry thereof;   (h) a petition against the Borrower or the Guarantor as a debtor in a  proceeding under the Federal bankruptcy laws or other insolvency laws, as now or hereafter in  effect, shall be filed and shall not be withdrawn or dismissed within 90 days thereafter, or, under  the provisions of any law providing for reorganization or winding up of corporations that may  apply to the Borrower or the Guarantor, any court of competent jurisdiction shall assume  jurisdiction, custody or control of the Borrower or the Guarantor or of any substantial part of its  respective property and such jurisdiction, custody or control shall remain in force unrelinquished,  unstayed or unterminated for a period of 90 days;  (i) the Purchase Agreement [...***...];   (j) the Borrower shall fail to comply with [...***...] of the Credit  Agreement;  (j) the Security Trustee shall cease to hold a valid and perfected first priority  security interest in any of the Collateral;  (k) the Borrower ceases to be a Certificated Air Carrier or has its operating  license suspended or revoked [...***...]; or  (l) the Guarantee ceases to be valid and enforceable.  Section 5.2 Remedies.  (a)   Remedies Available.  Upon the occurrence of any Event  of Default and at any time thereafter so long as the same shall be continuing, the Security Trustee  (in accordance with the provisions of Article VI) may, and upon the written instructions of a  Majority in Interest of Lenders, the Security Trustee shall, do one or more of the following to the  extent permitted by, and subject to compliance with the mandatory requirements of, applicable  law then in effect:  

 

  11   (i) declare by written notice to the Borrower the termination of all  unfunded Commitments and the following amounts to be forthwith due and payable: the  sum of (A) the aggregate unpaid principal amount of the Loans, plus (B) the amount of  accrued but unpaid interest on the Loans, plus (C) Break Funding Loss, if applicable, plus  (D) all other sums then owing by the Borrower hereunder and under the Credit  Agreement, without any other presentment, demand, protest, notice or any other  formality, all of which are hereby waived; provided that if an Event of Default referred to  in Section 5.1(e), (f), (g) or (h) shall have occurred, then in every such case (W) the  aggregate unpaid principal amount of the Loans, plus (X) the amount of accrued but  unpaid interest on the Loans, plus (Y) Break Funding Loss, if applicable, plus (Z) all  other sums then owing by the Borrower hereunder, under the Loans and under the Credit  Agreement, shall immediately and without further act become due and payable, without  presentment, demand, protest, notice or any other formality, all of which are hereby  waived, and the Commitments shall immediately and without further act be terminated in  full;  (ii) Upon notice to the Manufacturer, to the extent permitted by law,  and the Borrower and compliance with any applicable requirements set forth in the  Manufacturer’s Consent, assume the rights and obligations of the Borrower under the  Manufacturer Agreements with respect to any of the Aircraft;   (iii) Upon compliance with any applicable requirements set forth in the  Manufacturer’s Consent and Engine Manufacturer’s Consent[...***...];   (iv) Upon compliance with any applicable requirements set forth in the  Manufacturer’s Consent and Engine Manufacturer’s Consent, accept delivery of and take  title to any Aircraft and sell, transfer or otherwise convey, or cause to be sold, transferred  or otherwise conveyed, any such Aircraft or any other Collateral, including, without  limitation, any Aircraft completed and delivered under the Purchase Agreement (whether  or not assumed by the Security Trustee pursuant to clause (ii) above) or under any  substitute Purchase Agreement entered into by the Security Trustee pursuant to the terms  of the Manufacturer’s Consent, at a public or private sale, by such advertisement or  publication as the Security Trustee may reasonably determine, or otherwise dispose of,  hold, use, operate, lease or keep idle any of the Collateral, all on such terms and  conditions as the Security Trustee may determine, free and clear of any rights of the  Borrower and of any claim of the Borrower in equity, at law or by statute, whether for  loss or damage or otherwise, and without any duty to account to the Borrower except to  the extent specifically provided in the Operative Documents or as required by law; or  (v) exercise any other remedy of a secured party under the Uniform  Commercial Code of the State of New York (whether or not in effect in the jurisdiction in  which enforcement is sought).  In addition, the Borrower shall be liable, without duplication of any amounts payable  hereunder or under any other Operative Document, for all reasonable legal fees and other  reasonable costs and expenses incurred by reason of the occurrence of any Event of Default or  

 

  12   the exercise of the Security Trustee’s remedies with respect thereto, which amounts shall, until  paid, be secured by the Lien of this Security Agreement.  Nothing in the foregoing shall affect the right of any Lender to receive all amounts owing  to such Lender as and when the same may be due.  The parties agree that the exercise of remedies under this Security Agreement, the Credit  Agreement, and the other documents related thereto, is subject to other applicable law including  without limitation, the UCC (as in effect in the State of New York) and, if applicable, the  Bankruptcy Code, and that nothing herein derogates from the rights of the Security Trustee or the  Borrower under or pursuant to such other applicable law.  (b) Notice of Sale.  The Security Trustee shall give the Borrower at least 10  days’ prior written notice of any public sale or of the date on or after which any private sale of  the Collateral will be held, which notice the Borrower hereby agrees to the extent permitted by  applicable law is reasonable notice.  The Lenders acting through the Security Trustee shall be  entitled to bid for and become the purchaser of any Collateral offered for sale pursuant to this  Section 5.2 and to credit against the purchase price bid at such sale by such Lenders all or any  part of the unpaid amounts owing to such Lenders under any Operative Document and secured  by the Lien of this Security Agreement.  (c) Rescission of Acceleration.  At any time after the Security Trustee has  declared the unpaid principal amount of all Loans then outstanding to be due and payable and  prior to the sale of any part of the Collateral pursuant to this Article V, a Majority in Interest of  Lenders, by written notice to the Borrower and the Security Trustee, may rescind and annul such  declaration and its consequences if:  (i) there has been paid to or deposited with the Security  Trustee an amount sufficient to pay all overdue installments of principal of, and interest on, the  Loans and all other amounts owing under this Security Agreement and the Credit Agreement,  that have become due otherwise than by such declaration of acceleration and (ii) all other Events  of Default, other than nonpayment of principal or interest on the Loans that have become due  solely because of such acceleration, have been cured or waived.  Section 5.3 Remedies Cumulative.  To the extent permitted by applicable law, each  and every right, power and remedy herein specifically given to the Security Trustee or otherwise  in this Security Agreement shall be cumulative and shall be in addition to every other right,  power and remedy herein specifically given or now or hereafter existing at law, in equity, by  statute or by the Operative Documents, and each and every right, power and remedy whether  specifically herein given or otherwise existing may be exercised from time to time and as often  and in such order as may be deemed expedient by the Security Trustee, and the exercise or the  beginning of the exercise of any power or remedy shall not be construed to be a waiver of the  right to exercise at the same time or thereafter any other right, power or remedy.  No delay or  omission by the Security Trustee in the exercise of any right, remedy or power or in the  pursuance of any remedy shall, to the extent permitted by applicable law, impair any such right,  power or remedy or be construed to be a waiver of any default on the part of the Borrower or to  be an acquiescence therein.  

 

  13   Section 5.4 Discontinuance of Proceedings.  In case the Security Trustee shall have  instituted any proceeding to enforce any right, power or remedy under this Security Agreement  by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or  abandoned for any reason or shall have been determined adversely to the Security Trustee, then  and in every such case the Borrower and the Security Trustee shall, subject to any determination  in such proceedings, be restored to their former positions and rights hereunder with respect to the  Collateral, and all rights, remedies and powers of the Security Trustee shall continue, as if no  such proceedings had been undertaken (but otherwise without prejudice).  Section 5.5 Waiver of Past Defaults.  Upon written instructions from a Majority in  Interest of Lenders, the Security Trustee shall waive any past default hereunder and its  consequences, and upon any such waiver such default shall cease to exist and any Event of  Default arising therefrom shall be deemed to have been cured for every purpose of this Security  Agreement and the other Operative Documents, but no such waiver shall extend to any  subsequent or other default or impair any right consequent thereon; provided, however, that in  the absence of written instructions from each of the affected Lenders, the Security Trustee shall  not waive any default (i) in the payment of principal of, Break Funding Loss or interest on any  Loan outstanding (other than with the consent of the holder thereof) or (ii) in respect of a  covenant or provision hereof which, under Section 9.1, cannot be modified or amended without  the consent of each such affected Lender.  ARTICLE VI    DUTIES OF THE SECURITY TRUSTEE  Section 6.1 Notice of Event of Default; Action Upon Event of Default.  If any  payments of the principal of, and interest on, the Loans due and payable on any Payment Date, or  when otherwise due and payable, shall not have been paid in full on such Payment Date or such  other date, the Security Trustee shall give telephonic notice within one Business Day (followed  by prompt written notice) to the Borrower and each Lender specifying the amount and nature of  such deficiency in payment; provided that any failure to give such notice shall not relieve the  Borrower of its obligation to make such payment.  If the Security Trustee has knowledge of an  Event of Default, the Security Trustee shall promptly give notice of such Event of Default to  each Lender and to the Borrower by facsimile or telephone (to be promptly confirmed in  writing).  Subject to the terms of Article V and Section 6.3, the Security Trustee shall take such  action, or refrain from taking such action, with respect to such Event of Default (including with  respect to the exercise of any rights or remedies hereunder), as the Security Trustee shall be  instructed in writing by a Majority in Interest of Lenders.  If the Security Trustee shall not have  received instructions as above provided within 20 days after the giving of notice of such Event of  Default to the Lenders, the Security Trustee may, subject to instructions thereafter received  pursuant to the preceding provisions of this Section 6.1, but shall not be obligated to, take such  action, or refrain from taking such action, with respect to such Event of Default as it shall  reasonably determine to be advisable in the best interests of the Lenders and shall use the same  degree of care and skill in connection therewith as a prudent person would use under the  circumstances in the conduct of his or her own affairs; provided that the Security Trustee may  not sell all or any part of the Collateral without the consent of a Majority in Interest of Lenders.   For all purposes of this Security Agreement, in the absence of actual knowledge, the Security  

 

  14   Trustee shall not be deemed to have knowledge of an Event of Default unless notified in writing  by the Borrower or one or more Lenders; and “actual knowledge” (as used in the foregoing  clause) of the Security Trustee shall mean actual knowledge of an officer in the Corporate Trust  Department of the Security Trustee; provided, however, that the Security Trustee shall be  deemed to have actual knowledge of the failure of the Borrower to pay any principal or interest  on the Loans directly to the Security Trustee when the same shall become due.  Section 6.2 Action Upon Instructions.  Subject to the terms of Article V and this  Article VI, upon the written instructions at any time of a Majority in Interest of Lenders, the  Security Trustee shall promptly (i) give such notice, direction, consent, waiver or approval, or  exercise such right, remedy or power hereunder in respect of all or any part of the Collateral, or  (ii) take such other action, as shall be specified in such instruction; it being understood that  without the written instructions of a Majority in Interest of Lenders the Security Trustee shall not  take any action pursuant to this Section 6.2.  The Security Trustee will execute and file or cause  to be filed (at the expense of the Borrower) such continuation statements with respect to  financing statements relating to the security interest created hereunder in the Collateral as may be  specified from time to time in written instructions of a Majority in Interest of Lenders (which  instructions may, by their terms, be operative only at a future date) or the Borrower.  Section 6.3 Indemnification.  The Security Trustee shall not be required to take any  action or refrain from taking any action under Section 6.1 (other than the first two sentences  thereof) or Section 6.2 or Article V unless it shall have received indemnification against any  risks incurred in connection therewith in form and substance reasonably satisfactory to it,  including, without limitation, adequate advances against costs that may be incurred by it in  connection therewith.  The Security Trustee shall not be required to take any action under  Section 6.1 (other than the first two sentences thereof) or 6.2 or Article V, nor shall any other  provision of this Security Agreement be deemed to impose a duty on the Security Trustee to take  any action, if the Security Trustee shall have been advised in writing by outside counsel that such  action is contrary to the terms hereof or is otherwise contrary to law.  Section 6.4 No Duties Except as Specified in Security Agreement or Instructions.  The  Security Trustee shall not have any duty or obligation to manage, control, lease, use, sell,  operate, store, dispose of or otherwise deal with all or any other part of the Collateral, or to  otherwise take or refrain from taking any action under, or in connection with, this Security  Agreement, except as expressly provided by the terms of this Security Agreement or the Credit  Agreement or as expressly provided in written instructions received pursuant to the terms of  Section 6.1 or 6.2; and no implied duties or obligations shall be read into this Security  Agreement against the Security Trustee.  Section 6.5 No Action Except Under Security Agreement or Instructions.  The  Security Trustee agrees that it will not manage, control, use, sell, lease, operate, store, dispose of  or otherwise deal with all or any part of the Collateral except in accordance with the powers  granted to, or the authority conferred upon, the Security Trustee pursuant to this Security  Agreement and in accordance with the express terms hereof.  Section 6.6 Reports, Notices, Etc.  The Security Trustee will furnish to each Lender  promptly upon receipt thereof, duplicates or copies of all reports, notices, requests, demands,  

 

  15   certificates, financial statements and other instruments furnished to the Security Trustee, to the  extent that the same shall not have been otherwise furnished to such Lender pursuant to this  Security Agreement or to the extent the Security Trustee does not reasonably believe that the  same shall have been furnished by the Borrower directly to such Lender; provided that the failure  of the Security Trustee to furnish each Lender with such duplicates or copies shall not impair or  affect the validity of any such report, notice, request, demand, certificate, financial statement or  other instrument.  ARTICLE VII    THE SECURITY TRUSTEE  Section 7.1 Acceptance of Trusts and Duties.  The Security Trustee accepts the trusts  and duties hereby created and applicable to it and agrees to perform such duties, but only upon  the terms of this Security Agreement and agrees to receive, handle and disburse all moneys  received by it as Security Trustee constituting part of the Collateral in accordance with the terms  hereof.  The Security Trustee shall have no liability hereunder, except (a) for its own willful  misconduct or gross negligence (or ordinary negligence, gross negligence or willful misconduct  in the receipt, handling or disbursement of money) or as provided in Section 2.4 of the Credit  Agreement or breach of any of its representations or warranties or covenants made in its  individual capacity set forth herein or in any other Operative Document to which it is a party,  (b) for the performance of its obligations under Section 2.6 of the Credit Agreement or (c) as  otherwise expressly provided in this Security Agreement or the other Operative Documents.  Section 7.2 Absence of Duties.  Except in accordance with written instructions or  requests furnished pursuant to Section 11.1(b) of the Credit Agreement and except as provided  in, and without limiting the generality of, Section 6.4, the Security Trustee shall have no duty  (a) to see to any recording or filing of this Security Agreement or any other document, or to see  to the maintenance of any such recording or filing or (b) to inspect the Aircraft at any time or  ascertain or inquire as to the performance or observance of any of the Borrower’s covenants  under this Security Agreement with respect to the Aircraft.  Section 7.3 No Representations or Warranties as to the Documents.  Except as  provided in Section 7.1 of the Credit Agreement, the Security Trustee shall not be deemed to  have made any representation or warranty as to the validity, legality or enforceability of this  Security Agreement, any other Operative Document or any other document or instrument, or as  to the correctness of any statement (other than a statement by the Security Trustee) contained  herein or therein, except that the Security Trustee hereby represents and warrants that each of  said specified documents to which it is a party has been or will be duly executed and delivered  by one of its officers who is and will be duly authorized to execute and deliver such document on  its behalf.  Section 7.4 No Segregation of Moneys; No Interest.  No moneys received by the  Security Trustee hereunder need be segregated in any manner except to the extent required by  law, and any such moneys may be deposited under such general conditions for the holding of  trust funds as may be prescribed by law applicable to the Security Trustee, and, except as  otherwise provided herein or as agreed by the Security Trustee, the Security Trustee shall not be  

 

  16   liable for any interest thereon; provided that any payments received or applied hereunder by the  Security Trustee shall be accounted for by the Security Trustee so that any portion thereof paid  or applied pursuant hereto shall be identifiable as to the source thereof.  Section 7.5 Reliance; Security Trustees; Advice of Counsel.  The Security Trustee  shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution,  request, consent, order, certificate, report, opinion, bond or other document or paper reasonably  believed by the Security Trustee to be genuine and reasonably believed by it to be signed by the  proper party or parties.  The Security Trustee may accept a copy of a resolution of the Board of  Directors of the Borrower or any Lender, certified by the Secretary or an Assistant Secretary of  such party or in the case of any Lender by any authorized officer as duly adopted and in full  force and effect, as conclusive evidence that such resolution has been duly adopted and that the  same is in full force and effect.  As to any fact or matter the manner of ascertainment of which is  not specifically described herein, the Security Trustee may for all purposes hereof rely on a  certificate, signed by a Responsible Officer of the Borrower, as to such fact or matter, and such  certificate shall constitute full protection to the Security Trustee for any action taken or omitted  to be taken by it in good faith in reliance thereon. In addition, notwithstanding anything to the  contrary contained herein or in any Operative Document, whenever it is necessary or  contemplated under or in respect of the Credit Agreement, this Security Agreement or any other  Operative Document for the Lenders acting together, or a Majority in Interest of Lenders, to  form an opinion or make a decision upon or consent to any matter, including without limitation  under Article V or VI hereof, or to give instructions or other directions of any kind or nature to  the Security Trustee, the Security Trustee may for all purposes hereof conclusively rely on a  certificate, signed by an officer of the Facility Agent, as to such opinion, decision, consent,  instructions or directions, and such certificate shall constitute full protection to the Security  Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.  The  Security Trustee shall furnish to the Borrower upon request such information and copies of such  documents as the Security Trustee may have and as are necessary for the Borrower to perform its  duties under Article II and Article III; provided that the failure of the Security Trustee to furnish  such information or documents shall not affect the Borrower’s obligations hereunder or under the  Credit Agreement.  The Security Trustee shall assume, and shall be fully protected in assuming,  that the Borrower is authorized to enter into this Security Agreement and to take all actions  permitted to be taken by it pursuant to the provisions hereof, and shall not inquire into the  authorization of the Borrower with respect thereto.  In the administration of the trusts hereunder,  the Security Trustee may execute any trust or power hereof and perform its powers and duties  hereunder directly or through agents or attorneys and may consult with independent counsel,  accountants and other skilled persons to be selected and employed by it, and the Security Trustee  shall not be liable for anything done, suffered or omitted in good faith by it in accordance with  the written advice or opinion of any such independent counsel, accountants or other skilled  persons acting within such persons’ area of competence (so long as the Security Trustee shall  have exercised reasonable care in selecting such persons).  

 

  17   ARTICLE VIII    SUCCESSOR SECURITY TRUSTEE  Section 8.1 Resignation of Security Trustee; Appointment of Successor.  (a)   The  resignation or removal of the Security Trustee and the appointment of a successor Security  Trustee shall become effective only upon the successor Security Trustee’s acceptance of  appointment as provided in this Section 8.1.  The Security Trustee or any successor thereto may  resign at any time without cause by giving at least 60 days’ prior written notice to the Borrower  and each Lender.  In addition, either the Borrower (so long as no Event of Default shall have  occurred and be continuing) or a Majority in Interest of Lenders (with the consent of the  Borrower, which consent shall not be unreasonably withheld, except that such consent shall not  be necessary if an Event of Default is continuing) may at any time remove the Security Trustee  without cause by an instrument in writing delivered to the Security Trustee, each Lender and (in  the case of a removal by a Majority in Interest of Lenders) the Borrower.  In the case of the resignation or removal of the Security Trustee, the Borrower (unless an  Event of Default shall have occurred and be continuing, in which case a Majority in Interest of  Lenders) shall promptly appoint a successor Security Trustee; provided that a Majority in  Interest of Lenders (with the consent of the Borrower, which consent shall not be unreasonably  withheld, except that such consent shall not be necessary if an Event of Default is continuing)  may appoint, within one year after such resignation or removal, a successor Security Trustee,  which may be other than any successor Security Trustee appointed by the Borrower as provided  above, so long as such other successor is (so long as no Event of Default shall have occurred and  be continuing) reasonably satisfactory to the Borrower, and such successor Security Trustee  appointed as provided above shall be superseded by the successor Security Trustee so appointed  by a Majority in Interest of Lenders.  If a successor Security Trustee shall not have been  appointed and accepted its appointment hereunder within 60 days after the Security Trustee gives  notice of resignation as provided above, the retiring Security Trustee, the Borrower or any  Lender may petition any court of competent jurisdiction for the appointment of a successor  Security Trustee.  Any successor Security Trustee so appointed by such court shall immediately  and without further act be superseded by any successor Security Trustee appointed as provided in  the proviso to the second preceding sentence within one year from the date of the appointment by  such court.  (b) Any successor Security Trustee, however appointed, shall execute and  deliver to the Borrower, each Lender and the predecessor Security Trustee an instrument  accepting such appointment and assuming the obligations hereunder, and thereupon such  successor Security Trustee, without further act, shall become vested with all the estates,  properties, rights, powers, duties and trusts of the predecessor Security Trustee hereunder in the  trusts hereunder applicable to it with like effect as if originally named the Security Trustee  herein; but nevertheless, upon the written request of such successor Security Trustee, such  predecessor Security Trustee shall execute and deliver an instrument transferring to such  successor Security Trustee, upon the trusts herein expressed applicable to it, all the estates,  properties, rights, powers and trusts of such predecessor Security Trustee, and such predecessor  Security Trustee shall duly assign, transfer, deliver and pay over to such successor Security  

 

  18   Trustee all moneys or other property (including all books and records, or true, complete and  correct copies thereof) then held by such predecessor Security Trustee hereunder.  (c) Any successor Security Trustee, however appointed, shall be a Citizen of  the United States (as defined in Subtitle VII of Title 49 of the United States Code) and shall also  be a bank or trust company having a combined capital and surplus of at least [...***...] or a bank  or trust company whose obligations are guaranteed by a bank or trust company having a  combined capital and surplus of at least [...***...] or a corporation with a net worth of at least  [...***...].  (d) Any corporation into which the Security Trustee may be merged or  converted or with which it may be consolidated, or any corporation resulting from any merger,  conversion or consolidation to which the Security Trustee shall be a party, or any corporation to  which substantially all of the corporate trust business of the Security Trustee may be transferred,  shall, subject to the terms of paragraph (c) of this Section, be the Security Trustee under this  Security Agreement without further act.  ARTICLE IX    SUPPLEMENTS AND AMENDMENTS  TO THIS SECURITY AGREEMENT AND OTHER DOCUMENTS  Section 9.1 Supplemental Security Agreements.  With the written consent of a  Majority in Interest of Lenders, the Borrower may, and the Security Trustee, subject to  Section 9.2, shall, at any time and from time to time, enter into an amendment or amendments  hereto or to any other Operative Document for the purpose of adding any provisions to or  changing in any manner or eliminating any of the provisions of this Security Agreement or such  other Operative Document or of modifying in any manner the rights and obligations of the  Lenders and of the Borrower under this Security Agreement or such other Operative Document;  provided, however, that, without the consent of each Lender affected thereby, no such  amendment shall:  (1) change the Commitment Termination Date or the Maturity  Date, change the Commitment of any Lender, change the dates or amounts of  payment of any Break Funding Loss or interest on the Loans, or reduce the  principal of, Break Funding Loss, or interest on, the Loans, or change to a  location outside the United States the place of payment where, or the coin or  currency in which, the principal amount of, or interest on, the Loans is payable;  (2) create any Lien with respect to the Collateral except such as  are permitted by this Security Agreement, or deprive any Lender of the benefit of  the Lien on the Collateral created by this Security Agreement (including by way  of any amendment to Section 3.5(c) hereof);  (3) change the definition of “Majority in Interest of Lenders”  so as to reduce the percentage of the outstanding principal amount of the Loans,  the consent of whose holders is required for any such amendment, or the consent  

 

  19   of whose holders is required for any waiver of compliance with certain provisions  of this Security Agreement, or of certain defaults hereunder and their  consequences provided for in this Security Agreement;  (4) modify any provisions of this Section 9.1, except to provide  that certain other provisions of this Security Agreement cannot be modified or  waived without the consent of each Lender affected thereby;  (5) adversely affect any indemnities in favor of such Lender; or  (6) change the [...***...] or [...***...] (each as defined in the  Manufacturer’s Consent).  Section 9.2 Security Trustee Protected.  If in the opinion of the Security Trustee any  document required to be executed pursuant to the terms of Section 9.1 adversely affects any  right, duty, immunity or indemnity in favor of the Security Trustee under this Security  Agreement or the other Operative Documents, the Security Trustee may in its discretion decline  to execute such document.  Section 9.3 Documents Mailed to Lenders.  Promptly after the execution by the  Security Trustee of any document entered into pursuant to this Article IX, the Security Trustee  shall mail, by first class mail (air mail in the case of international), postage prepaid, or by  electronic mail, a conformed copy thereof to each Lender at the address or email address  provided for such Lender on Schedule I to the Credit Agreement or at such other address or  email address as may be specified by such Lender pursuant to the Credit Agreement, but the  failure of the Security Trustee to mail such conformed copies shall not impair or affect the  validity of such document.  ARTICLE X    INVESTMENT OF SECURITY FUNDS  Section 10.1 Investment of Security Funds.  Any monies paid to or retained by the  Security Trustee that are required to be paid to the Borrower or applied for the benefit or at the  direction of the Borrower (including, without limitation, amounts payable to the Borrower under  Sections 2.8(b)(y), 2.8(c) and 2.8(d) of the Credit Agreement), but which the Security Trustee is  entitled to hold under the terms hereof pending the occurrence of some event or the performance  of some act (including, without limitation, the remedying of an Event of Default), shall, until  paid to the Borrower or applied as provided herein, be invested by the Security Trustee at the  written authorization and direction of the Borrower (or the Security Trustee if an Event of  Default is continuing) from time to time at the sole expense and risk of the Borrower in  Permitted Investments.  There shall be promptly remitted to the Borrower any gain (including  interest received) realized as the result of any such investment (net of any fees, commissions and  other expenses, if any, incurred in connection with such investment) unless an Event of Default  shall have occurred and be continuing.  If an Event of Default shall have occurred and be  continuing, the Security Trustee shall hold any such gain as security for the obligations of the  Borrower hereunder and apply it against such obligations as and when due, and at such time as  

 

  20   there shall not be continuing any such Event of Default, such amount, to the extent not  previously so applied against the Borrower’s obligations, shall be paid to the Borrower.  Section 10.2 Liability for Losses.  Except to the extent provided in Section 7.1, the  Security Trustee in its individual capacity shall not be liable for any loss relating to a Permitted  Investment made in accordance with instructions received by it pursuant to this Article X.  The  Borrower will promptly pay to the Security Trustee, on demand, the amount of any loss for  which the Security Trustee is not liable realized as the result of any such investment (together  with any fees, commissions and other expenses, if any, incurred in connection with such  investment).  ARTICLE XI    MISCELLANEOUS  Section 11.1 Partial Security Release; Termination of Security Agreement.    (a) So long as no Event of Default has occurred and is continuing, the security  interest created hereby in all Collateral relating to a particular Aircraft shall be promptly released  by the Security Trustee (any such release pursuant to this Section 11.1(a), a “Partial Security  Release”) either (x) upon written request when no Loan has been drawn in respect of such  Aircraft (and no Borrowing Notice has been issued in respect of such Aircraft) or (y) when the  outstanding principal amount of the Loans associated with such Aircraft have been paid in full,  together with all accrued interest thereon to the date of such payment, Break Funding Loss (if  applicable), and all other amounts then due and payable under this Security Agreement and the  Credit Agreement (such amount with respect to any Aircraft, its “Prepayment Amount”);  provided that if the Borrower deposits an amount equal to the Prepayment Amount for such  Aircraft with the Security Trustee pursuant to Section 2.8(b), 2.8(c) or 2.8(d) of the Credit  Agreement, then such Prepayment Amount shall be deemed to have been paid by the Borrower  for purposes of this Section 11.1(a) on the date of such deposit, and such Partial Security Release  shall instead be effected by the Security Trustee on the date of such deposit.  Upon such Partial  Security Release with respect to an Aircraft, the following shall automatically occur with no  further act by the Borrower, the Facility Agent, the Lenders or the Security Trustee: (i) such  Aircraft (a “Released Aircraft”) and related Collateral shall no longer constitute Collateral for  any purpose hereunder or under the other Operative Documents, (ii) the Collateral granted  hereunder shall exclude Borrower’s rights and interest in the applicable Manufacturer’s  Agreement to the extent it relates to such Released Aircraft, (iii) such Released Aircraft shall  cease to be an Aircraft for purposes of the Operative Documents, and (iv) the terms “Purchase  Agreement” and “General Terms Agreement” shall be deemed no longer to relate to such  Released Aircraft.  In order to effect and evidence such release, the Security Trustee shall  execute and deliver to the Borrower a termination and partial release substantially in the form of  Exhibit A hereto and a UCC financing statement amendment removing such Released Aircraft  and its related Collateral from the Collateral subject to the Lien of this Security Agreement,  together with such other documents as the Borrower (or any of Borrower’s lenders or lessors  with respect to such Released Aircraft) shall reasonably request in order to release and reassign  to the Borrower (or its designee), against receipt but without any recourse, warranty or  

 

  21   representation whatsoever, all the rights and interests of the Security Trustee on behalf of the  Lenders in the Collateral consisting of or relating to such Released Aircraft.  (b) Except in the case of an Aircraft that becomes a Released Aircraft, the  Liens in respect of which shall be terminated in accordance with Section 11.1(a), upon the  payment in full of the principal of, Break Funding Loss, if applicable, and interest on, all Loans  then outstanding and of all other amounts then due and owing under this Security Agreement and  the Credit Agreement and the final termination in full of the Commitment of each Lender, the  Security Trustee shall, upon the written request of the Borrower, execute and deliver to, or as  directed in writing by, and at the expense of, the Borrower an appropriate instrument (in due  form for recording) releasing the balance of the Collateral from the Lien of this Security  Agreement, whereupon this Security Agreement and the trusts created hereby shall terminate and  this Security Agreement shall be of no further force or effect.  (c) Except as otherwise provided in Sections 11.1(a) and (b), this Security  Agreement and the trusts created hereby shall continue in full force and effect in accordance with  the terms hereof.  Section 11.2 No Legal Title to Collateral in Lenders.  The Lenders shall not have legal  title to any part of the Collateral.  No transfer, by operation of law or otherwise, of any right, title  and interest of a Lender in and to the Collateral or this Security Agreement shall operate to  terminate this Security Agreement or the trusts hereunder or entitle any Lender or successor or  transferee of such Lender to an accounting or to the transfer to it of legal title to any part of the  Collateral.  Section 11.3 Sale of the Collateral by Security Trustee is Binding.  Any sale or other  conveyance of all or any part of the Collateral or any interest therein by the Security Trustee  made pursuant to the terms of this Security Agreement shall bind the Lenders and the Borrower,  and shall be effective to transfer or convey all right, title and interest of the Security Trustee, the  Borrower and the Lenders in and to such Collateral or interest therein.  No purchaser or other  grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of  such sale or conveyance or as to the application of any sale or other proceeds with respect thereto  by the Lenders.  Section 11.4 Benefit of Security Agreement.  Nothing in this Security Agreement,  whether express or implied, shall be construed to give to any Person other than the Borrower, the  Security Trustee, the Facility Agent and the Lenders (and their respective permitted successors  and assigns) any legal or equitable right, remedy or claim under or in respect of this Security  Agreement.  Section 11.5 [Reserved].  Section 11.6 Notices.  Unless otherwise expressly specified or permitted by the terms  hereof, all notices required or permitted under the terms and provisions hereof shall be in English  and in writing, and any such notice may be given by means of communication permitted by  Section 12.1 of the Credit Agreement and any such notice shall be effective when delivered to  

 

  22   the recipient thereof and confirmed, as applicable, in accordance with the provisions of such  Section 12.1.  Section 11.7 Severability.  To the extent permitted by applicable law, should any one or  more provisions of this Security Agreement be determined to be illegal or unenforceable by a  court of any jurisdiction, such provision shall be ineffective to the extent of such illegality or  unenforceability without invalidating the remaining provisions hereof or affecting the validity or  enforceability of such provision in any other jurisdiction.  Section 11.8 Separate Counterparts.  This Security Agreement may be executed in any  number of counterparts (and each of the parties hereto shall not be required to execute the same  counterpart).  Each counterpart of this Security Agreement including a signature page executed  by each of the parties hereto shall be an original counterpart of this Security Agreement, but all  of such counterparts together shall constitute one instrument.  Section 11.9 Successors and Assigns; Amendments and Waivers.  All covenants and  agreements contained herein and in the other Operative Documents shall be binding upon, and  inure to the benefit of, the Borrower and its permitted successors and assigns, the Security  Trustee and its permitted successors and permitted assigns and the Lenders and their permitted  successors and registered assigns, all as herein provided; provided that the Security Trustee shall  not have the right to assign its rights, in whole or in part, in and to the Purchase Agreement or the  General Terms Agreement (including the Engine Manufacturer’s Consent) to any Person, unless  the Borrower has provided its prior written consent to such assignment; provided, further that  such consent shall not be required at any time during the continuance of an Event of Default.   Any request, notice, direction, consent, waiver or other instrument or action by a Lender shall be  binding upon such Lender and the permitted successors and assigns of such Lender.  Any  amendment or waiver effected in accordance with Article IX shall be binding upon each present  and any subsequent Lender and the Security Trustee.  Section 11.10 Headings.  The headings of the various articles and sections herein and in  the table of contents hereto are for convenience of reference only and shall not define or limit  any of the terms or provisions hereof.  Section 11.11 Governing Law.  THIS SECURITY AGREEMENT HAS BEEN  DELIVERED IN THE STATE OF NEW YORK, AND THIS SECURITY AGREEMENT  SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,  VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED IN  ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO  CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.  Section 11.12 Normal Commercial Relations.  Anything contained in this Security  Agreement to the contrary notwithstanding, the Borrower, any Lender or the Security Trustee or  any Affiliate of the Borrower, any Lender or the Security Trustee may enter into commercial  banking or other financial transactions with each other and conduct banking or other commercial  relationships with each other, fully to the same extent as if this Security Agreement were not in  effect, including, without limitation, the making of loans or other extensions of credit for any  purpose whatsoever.  

 

  23   * * *  

 

     IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement  Assignment and Security Agreement to be duly executed by their respective officers, as the case  may be, thereunto duly authorized, as of the day and year first above written.     ALLEGIANT AIR, LLC    By:      Name:   Title:  Address:  1201 North Town Center Drive  Las Vegas, Nevada 89144  Attn:  Mr. Robert Neal, Sr.Vice President  Corporate Finance and Treasurer  Telephone:  (702) 830-8039  Email:  DebtServicing@AllegiantAir.com    BANK OF UTAH, not in its individual capacity  but solely as Security Trustee    By:     Name:   Title:  Address:  50 South 200 East, Suite 110  Salt Lake City, UT 84111  Attention: Corporate Trust Services  Email: corptrust@bankofutah.com    

 

  EXHIBIT A  Page 1   Exhibit A to  Security Agreement  Form of Termination and Partial Release   This TERMINATION AND PARTIAL RELEASE is dated as of [          ], 202[   ], by BANK  OF UTAH, not in its individual capacity but solely as Security Trustee (the “Security Trustee”)  in favor of ALLEGIANT AIR, LLC (the “Borrower”).  RECITALS   WHEREAS, the Security Trustee and the Borrower are parties to the Purchase  Agreement Assignment and Security Agreement dated as of ____________ __, 2022 (the  “Security Agreement”), pursuant to which the Borrower granted a security interest in favor of  the Security Trustee in the Collateral (as defined therein);   WHEREAS, Section 11.1(a) of the Security Agreement contemplates that the security  interest created thereunder in all Collateral relating to a particular Aircraft shall be released by  the Security Trustee when the outstanding principal amount of the Loans associated with such  Aircraft have been paid in full, together with all accrued interest thereon to the date of such  payment, Break Funding Loss (if applicable), and all other amounts then due and payable under  the Security Agreement and the Credit Agreement (the “Release Conditions”);   WHEREAS, the Borrower has satisfied the Release Conditions with respect to  [each][the] Aircraft identified below ([each, a][the] “Released Aircraft”):  Airframe Model and Tail  Number  Engines       [_______] [     ]  [___________]   WHEREAS, capitalized terms not otherwise defined herein are used herein with the  same meanings ascribed to such terms in the Security Agreement;  NOW, THEREFORE, in consideration of the foregoing:  1. The Security Trustee hereby terminates, releases and discharges the security  interest and mortgage lien granted under the Security Agreement in and to all Collateral insofar  and only insofar as such Collateral relates to [each of] the Released Aircraft and reassigns all of  its right, title and interest in and to such Collateral to the Borrower without any recourse,  warranty or representation whatsoever.  2. The Security Trustee hereby agrees that [each of] the Released Aircraft shall no  longer constitute “Aircraft” for purposes of the Operative Documents and the terms “Purchase  Agreement” and “General Terms Agreement” shall no longer relate to such Released Aircraft.  

 

  EXHIBIT A  Page 2   3. The Security Trustee agrees that on or prior to the date hereof it will file or cause  to be filed one or more UCC-3 amendment statements removing the Collateral relating to [each  of] the Released Aircraft in each jurisdiction in which a UCC financing statement covering such  Released Aircraft was filed pursuant to the Security Agreement.  IN WITNESS WHEREOF, the Security Trustee has caused this Termination and Partial  Release to be duly executed by its officer, thereunto duly authorized, as of the day and year first  above written.     BANK OF UTAH, not in its individual capacity  but solely as Security Trustee    By:     Name:   Title:

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