10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                          to                     

Commission file number 0-10795

BOEING CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-2564584
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
500 Naches Ave. SW, 3rd Floor • Renton, Washington 98055
(Address of principal executive offices)	(Zip Code)

(425) 965-4002

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $100 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check one):

Large accelerated filer    ¨    Accelerated filer    ¨    Non-accelerated filer    x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

No common stock is held by non-affiliates of the registrant. Common stock shares outstanding at February 24, 2006: 50,000 shares

Registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format.

DOCUMENTS INCORPORATED BY REFERENCE: None

Table of Contents

			Page
Part I
	Item 1.	Business	1
	Item 1A.	Risk Factors	3
	Item 1B.	Unresolved Staff Comments	5
	Item 2.	Properties	5
	Item 3.	Legal Proceedings	5
	Item 4.	Submission of Matters to a Vote of Security Holders *	5
Part II
	Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	6
	Item 6.	Selected Financial Data	7
	Item 7.	Management’s Narrative Analysis of the Results of Operations	8
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	18
	Item 8.	Financial Statements and Supplementary Data	18
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
	Item 9A.	Controls and Procedures	49
	Item 9B.	Other Information	49
Part III
	Item 10.	Directors and Executive Officers of the Registrant *	50
	Item 11.	Executive Compensation *	50
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters *	50
	Item 13.	Certain Relationships and Related Transactions *	50
	Item 14.	Principal Accounting Fees and Services	50
Part IV
	Item 15.	Exhibits and Financial Statement Schedules	51
	Signatures		53

* Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

PART I

Forward-Looking Information is Subject to Risk and Uncertainty

Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Litigation Reform Act of 1995. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our actual results and future trends may differ materially depending on a variety of factors, including:

– various business environment trends, including general economic conditions, (including changes to fuel prices), and the airline industry, in particular (including air traffic growth rates, the impact of bankruptcies or restructurings on certain commercial airline customers, and changes in aircraft valuations);

– the sufficiency of our liquidity and our ability to access other forms of liquidity, including access to capital markets;

– the impact on us of strategic decisions by Boeing, including the level of financing opportunities and transactional or other financial support made available to us by Boeing and the end of production of certain aircraft programs;

– our ability to meet our current contractual obligations;

– continued competition from numerous providers of financing solutions in the commercial aircraft and space and defense markets;

– financial, legal, tax, regulatory, legislative, accounting changes or actions that may affect the overall performance of our business;

– future earnings, costs, expenditures and allowance for receivable losses; and

– other risk factors listed from time to time in our filings with the Securities and Exchange Commission (SEC).

Item 1. Business

GENERAL

Boeing Capital Corporation together with its subsidiaries (herein referred to as “us,” “we,” “our” or the “Company”) is an indirect wholly owned subsidiary of The Boeing Company (Boeing). Boeing Capital Services Corporation (BCSC), an inactive holding company, owns 100% of our stock and is an indirect wholly owned subsidiary of Boeing. The Company was incorporated in Delaware in 1968. In the commercial aircraft market, we facilitate, arrange, structure and provide selective financing solutions to Boeing’s Commercial Airplanes segment customers. In the space and defense markets, we primarily arrange and structure financing solutions for Boeing’s Integrated Defense Systems (IDS) segment customers.

At December 31, 2005, our portfolio consisted of finance leases, notes and other receivables, equipment under operating leases, investments, and assets held for sale or re-lease. At December 31, 2005, our portfolio totaled $9.2 billion, which was substantially all Boeing commercial aircraft. At December 31, 2005, we owned 331 commercial aircraft, four C-40 aircraft, two Boeing Business Jets (BBJ) and had partial ownership or security interests in an additional 191 commercial aircraft, including those owned in a joint venture, an Equipment Trust Certificate (ETC), Enhanced Equipment Trust Certificates (EETCs) and other investment transactions.

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RISK MANAGEMENT

We monitor the potential volatility of our portfolio and the amount of capital required to support our portfolio, using internally developed statistical models. In addition, we track and analyze our exposure to potential net income fluctuations, analyze and assess transactional support and guarantees, and have enhanced our process to assess individual transaction values considering forecasted aircraft prices. This analysis allows us to structure transactions that are designed to achieve our targeted balance of risks and rewards.

RELATIONSHIP WITH BOEING

We have agreements with Boeing that are significant to our operation. These agreements provide for financial support and corporate services, among other things. At December 31, 2005, Boeing provided us with various types of partial and full guarantees, including first loss deficiency guarantees, residual value guarantees and rental loss guarantees, with a maximum potential value of $2.9 billion related to portfolio assets totaling $4.3 billion. For further discussion of these guarantees and agreements, see Item 8. Financial Statements and Supplementary Data, Note 3.

For a further description of significant factors that may affect Boeing, see Boeing’s Annual Report on Form 10-K for the year ended December 31, 2005.

COMPETITIVE CONDITIONS

The Boeing sales and deliveries we finance are influenced by conditions prevailing in the aerospace and financial markets, and in business generally. The financing solutions we develop are part of an overall sales campaign and, in numerous cases, may be integral to Boeing winning orders in the commercial aircraft and space and defense markets. During campaigns we face competition from other aerospace and defense companies also offering in-house customer financing. Customers often require a financing commitment prior to ordering aircraft. Some third party financiers are unwilling to offer financing when orders are made since there may be a delay of several years between order and delivery. Therefore, we or Boeing may provide a financing commitment when aircraft are ordered and subsequently assist our customers in obtaining a replacement financing commitment from third parties in advance of delivery.

In the sale or remarketing of returned aircraft, we compete with other leasing companies and financial institutions in the used aircraft market. We compete primarily on the basis of pricing, terms, structure and service. The prices at which we sell aircraft or rental rates at which we lease aircraft are impacted by the demand for suitable aircraft and the quantity and type of aircraft that are available, including those aircraft parked and/or currently out of service. For further discussion on the airline industry environment, see Item 7. Management’s Narrative Analysis of the Results of Operations, Business Environment and Trends.

SIGNIFICANT CONCENTRATIONS

For a discussion of our geographic and portfolio concentrations, see Item 8. Financial Statements and Supplementary Data, Note 15.

EMPLOYEES

At December 31, 2005, we had 186 employees, compared with 183 at December 31, 2004. While we believe that our current level of employment is adequate to support our current and projected business operations over the next year, our actual employment levels may vary from our current levels due to changes in the needs and requirements of our business operations. No employees are covered by collective bargaining agreements. We believe our employee relations are satisfactory. As of February 24, 2006, we had 182 employees.

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AVAILABLE INFORMATION

General information about us can be found at www.boeing.com. Our current Annual Report on Form 10-K and Quarterly Report on Form 10-Q are available free of charge through Boeing’s website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. Our other SEC filings, including any amendments, and our Current Reports on Form 8-K may be obtained at the SEC’s public reference room at 450 Fifth Street N.W., Washington, DC 20549. Information on the operation of the public reference room may be obtained by calling the SEC at 1-800-SEC-0330.

The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding SEC issuers, including Boeing and Boeing Capital Corporation.

Item 1A. Risk Factors

An investment in our debt securities involves risks and uncertainties and our actual results and future trends may differ materially from our past performance due to a variety of factors, including, without limitation, the following:

A substantial deterioration in the financial condition of the commercial airline industry may adversely impact us.

The financial condition of the airline industry is of particular importance to us because substantially all of our portfolio consists of lease and loan financing with commercial airline customers. If future events such as terrorist attacks, a serious health epidemic or continued increases in oil and jet fuel price levels were to occur, there could be a material adverse effect on the airline industry resulting in significant defaults by airline customers, repossessions of aircraft or airline bankruptcies and restructurings. If this were to occur, aircraft values or lease rates could be significantly lower than currently estimated by us. These events could have a material adverse effect on our earnings, cash flows and/or financial position.

We may be unable to obtain unsecured and secured debt to fund our operations and contractual commitments at competitive rates, on commercially reasonable terms or in sufficient amounts.

We are dependent, in part, upon the issuance of unsecured and secured debt to fund our operations and contractual commitments. If we were called upon to fund all outstanding financing commitments made by us and Boeing, our market liquidity may not be sufficient. A number of factors could cause us to incur increased borrowing costs and to have greater difficulty accessing public and private markets for both secured and unsecured debt. These factors include disruptions or declines in the global capital markets and a decline in Boeing’s or our own financial performance or outlook. The occurrence of any or all of these events may adversely affect our ability to fund our operations and contractual commitments or financing commitments made by us or Boeing.

Our allowance for losses on finance lease and notes receivable may prove to be inadequate.

Our allowance for receivable losses is intended to cover anticipated probable losses on notes receivable and finance leases. Unexpected adverse changes in the economy or other events adversely affecting our customers or the airline industry as a whole could cause us to make additional provisions. Such additional provisions could have a material adverse effect on our earnings and/or financial position.

We may be required to recognize asset impairment charges on equipment under operating leases.

Our portfolio of equipment under operating leases is subject to periodic review for impairment. The carrying value of these assets is currently recoverable through the cash flows expected to result from

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the use and eventual disposition of these assets. However, the fair value of certain of these assets is less than their current carrying value. To the extent that the expected cash flows are adversely affected by factors including, credit deterioration of a lessee, declines in future rental rates, and environmental factors, this may result in the recognition of impairment charges which could have a material adverse effect on our earnings and/or financial position.

We may be unable to maintain assets on lease at satisfactory lease rates.

Our profitability is largely dependent on our ability to maintain assets on lease at satisfactory lease rates. A number of factors can adversely affect utilization and lease rates, including, but not limited to an economic downturn causing reduced demand or oversupply in the markets in which the company operates, and changes in customer preferences. For example, additional bankruptcies or restructurings of our current or potential customers could lead to reduced demand for leased aircraft and reduced aircraft lease rates. If aircraft lease rates fall or if a significant number of our aircraft were to remain idle for an extended period, there could be a material adverse effect on our earnings, cash flows and/or financial position.

We face competition which could cause us to lower our lease rates and offer terms which may adversely affect our financial results.

Our primary competitors include the customer financing activities of other commercial aircraft, aerospace and defense companies offering in-house customer financing as well as other finance companies. Additionally, when selling or re-leasing aircraft, we face competition from other leasing companies and finance companies in the used aircraft market. We compete primarily based upon pricing, terms, structure, service and type of aircraft offered. Increased competition could have a material adverse effect on our earnings, cash flows and/or financial position.

We operate in a highly regulated industry and changes in laws or regulations may adversely affect us.

Certain aspects of our business are subject to regulation and require the oversight and regulation by state, federal and foreign governmental authorities. We are also subject to various laws and judicial and administrative decisions, mostly as a result of our activities as a secured lender and lessor, that restrict or regulate (a) our credit granting and financing activities, (b) the establishment of maximum interest rates, (c) the secured transactions we enter into, (d) our collection, foreclosure, repossession and claims-handling procedures and other trade practices, (e) the use and reporting of information related to a borrower’s or lessee’s credit experience and other data collection and (f) disclosure requirements. It may not be possible to forecast changes to legislation, regulations (including, but not limited to, taxation and accounting), judicial and administrative decisions and orders or interpretations and these changes could have a material adverse effect on our earnings, cash flows and/or financial position.

We are an indirect wholly owned subsidiary and therefore subject to strategic decisions of Boeing.

We are an indirect wholly owned subsidiary of Boeing and therefore are subject to a wide range of possible strategic decisions which may be made from time to time by Boeing. Such strategic decisions could relate to the level and types of new financing opportunities or support made available to us. Significant changes in Boeing’s overall strategy or its relationship with us could have a material adverse effect on us.

Circumstances and conditions may change. Accordingly, additional risks and uncertainties not presently known, or that we currently deem not material, may also adversely affect our business operations.

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Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Our corporate headquarters is located in Renton, Washington where we lease our main administrative and operational facility from a third party, with additional space leased in a building owned by Boeing. We also sublease marketing and administrative office space in El Segundo and Irvine, California in buildings under lease to Boeing. Having relocated our corporate and administrative offices to Renton, Washington, in 2004, we vacated our Long Beach, California office in 2005. Certain space in the vacated Long Beach office was subleased, and the remaining space was held by us until the lease terminated in the third quarter of 2005.

We have four international offices in Stockholm, Sweden; Hong Kong, China; London, England; and Moscow, Russia.

We believe that our properties are suitable and adequate to meet the requirements of our business.

Item 3. Legal Proceedings

Various legal proceedings and claims are pending or have been asserted against us. We believe that the final outcome of these proceedings and claims will not have a material adverse effect on our earnings, cash flows and/or financial position.

Item 4. Submission of Matters to a Vote of Security Holders

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

We are a wholly owned subsidiary of Boeing Capital Services Corporation (BCSC), an indirect wholly owned subsidiary of The Boeing Company (Boeing), and accordingly, there is no public trading market for our common stock. In 2005, we declared and paid cash dividends (including return of capital) totaling $338 million to BCSC which were ultimately paid as dividends to Boeing. In 2004, we declared and paid cash dividends totaling $705 million to BCSC which were ultimately paid as dividends to Boeing.

Our various debt agreements have restrictive provisions which require us to limit the payment of cash dividends to the extent that our consolidated assets would be less than 115% of our consolidated liabilities (excluding deferred taxes) after dividend payments. At December 31, 2005, as well as during the year, we were in compliance with these provisions.

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Item 6. Selected Financial Data (Unaudited)

The selected consolidated financial data should be read in conjunction with our audited Consolidated Financial Statements and with Item 7. Management’s Narrative Analysis of the Results of Operations.

	Years Ended December 31,
(Dollars in millions)	2005			2004			2003			2002			2001
New business volume (1)	$	601		$	606		$	1,711		$	2,820		$	2,970
Statement of operations data:
Revenue	$	966		$	959		$	991		$	764		$	587
Income from continuing operations	$	146		$	121		$	73		$	26		$	148
Dividends paid to Boeing (including return of capital)	$	338		$	705		$	–		$	2		$	4
Capital contributions from Boeing (2)	$	17		$	9		$	173		$	286		$	569
Ratio of income from continuing operations to fixed charges (3)		1.6			1.5			1.3			1.1			1.7
Balance sheet data:
Cash and cash equivalents	$	297		$	642		$	716		$	686		$	400
Portfolio (4)	$	9,206		$	9,680		$	10,118		$	9,341		$	6,796
Receivables	$	4,949		$	5,702		$	5,952		$	5,696		$	4,096
Allowance for losses on receivables	$	(101	)	$	(240	)	$	(303	)	$	(219	)	$	(114	)
Total assets	$	9,544		$	10,320		$	12,836		$	12,563		$	9,790
Total debt	$	6,322		$	7,024		$	9,177		$	9,465		$	7,295
Shareholder’s equity	$	1,256		$	1,404		$	1,942		$	1,656		$	1,371
Debt to equity ratio		5.0			5.0			4.7			5.7			5.3

⁽¹⁾ New business volume equals funded transactions that have been recorded as notes or leases excluding transfers from Boeing.

⁽²⁾ Capital contributions include cash and non-cash contributions from Boeing and BCSC.

⁽³⁾ For the purpose of computing the ratio of income from continuing operations to fixed charges, income consists of income from continuing operations before provision for income tax and fixed charges; and fixed charges consist of interest and preferred stock dividend requirement (on a pre-tax basis).

⁽⁴⁾ Portfolio consists of finance leases, notes and other receivables, equipment under operating leases, investments and assets held for sale or re-lease (excluding allowance).

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Item 7. Management’s Narrative Analysis of the Results of Operations

The following should be read in conjunction with our Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data.

Business Environment and Trends

Gross domestic product growth, the primary driver of air traffic growth, remained resilient in the face of rising energy prices in 2005. As a result, worldwide passenger traffic growth continued above the long-term trend in 2005 following double-digit growth in 2004. Traffic growth outpaced capacity increases pushing world load factors to historical highs. Industry forecasts predict above average traffic growth through at least 2007, although disease outbreaks, increasing armed conflict or terrorist attacks, and global economic imbalances represent ongoing risks.

Crude oil prices have doubled since the beginning of 2004. In addition, the price differential between oil and jet fuel rose to historically high levels in 2005, triple the average over the past 20 years. Although economic indicators show that the world economy has adjusted to the current higher oil price levels without significant slowdown, the rise in jet fuel prices is outpacing airlines’ ability to increase revenues through fare hikes and fuel surcharges and is principally pressuring less efficient airlines.

Worldwide, many airlines continue to report operating profits although performance varies significantly by region and business model. Industry financials generally show increasing unit revenues and some improvement in fares. Combined with progress on cost-cutting initiatives and efficiency improvements, these trends are helping many airlines remain profitable despite rising fuel prices and intense competition. Although the industry’s aggregate financial health remains under the shadow of the U.S. network carriers whose financial difficulties are forecast to push the industry into losses of $6 billion in 2005, the many airlines that are profitably growing to meet increased demand are acquiring new capacity from manufacturers. Future airline profitability may lead to an increase in demand for new and used aircraft resulting in overall increases in values and lease rates for the aircraft in our portfolio.

The pace of air traffic rights liberalization between countries has been brisk during the past year, with many new air service agreements having been signed or announced. High growth markets including China and India announced multiple new agreements spurring the opening of new routes. In addition, the United States and European Union made significant advances towards “open skies” late in 2005. Continued liberalization is an important factor in the growth and network development of commercial aviation.

While worldwide traffic levels are well above traffic levels carried by the airlines in the recent past, the effects of higher fuel prices on the airline industry continue to impact commercial aircraft values. Recently published sources and market transactions indicate that passenger load factors are at record high levels, the supply of economically viable used aircraft is limited and lease rates for aircraft are increasing. However, despite these positive environmental factors, values for the various aircraft types serving as collateral in our portfolio generally have not increased. Aircraft valuations could decline if significant numbers of aircraft, particularly types with relatively few operators, are placed out of service. At the same time, the credit ratings of many airlines, particularly in the United States, have remained at low levels. A substantial portion of our portfolio is concentrated among U.S. commercial airline customers. Certain customers have filed for bankruptcy protection or requested lease or loan restructurings; these negotiations were in various stages as of December 31, 2005. We do not expect that the current bankruptcies or reorganizations of ATA Holdings Corp. (ATA), Viacao Aerea Rio-Grandense (VARIG), Delta Air Lines, Inc. (Delta) or Northwest Airlines, Inc. (Northwest), including a return of some or all of the aircraft financed, will have a material adverse effect on our earnings, cash flows and/or financial position. For a discussion of our restructurings and restructuring requests, see Item 8. Financial Statements and Supplementary Data, Note 12.

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Aircraft values and lease rates are impacted by the number and type of aircraft that are currently out of service. Approximately 1,900 commercial jet aircraft (10.2% of current world fleet) continue to be parked, including both in production and out-of-production aircraft types of which over 50% are not expected to return to service.

Overview

During 2005, we continued to focus on supporting Boeing’s major businesses and managing our overall corporate exposures.

Our portfolio at December 31, 2005 decreased to $9.2 billion from $9.7 billion at December 31, 2004 due to the impact of normal portfolio run-off, restructuring certain finance leases to operating leases resulting in a $200 million charge-off to the allowance, the sale of certain portfolio assets and prepayments.

The following table summarizes the net change in our total portfolio for the years ended December 31:

(Dollars in millions)	2005			2004
New business volume	$	601		$	606
Charge-off due to customer restructuring		(200	)		–
Transfer from assets of discontinued operations		67			–
Asset impairment and other related charges (1)		(89	)		(107	)
Asset run off and dispositions		(609	)		(719	)
Depreciation expense		(244	)		(218	)
Net change in portfolio	$	(474	)	$	(438	)

⁽¹⁾ Asset impairment and other related charges does not include our interest in collateral which has been classified as Other assets in our Consolidated Balance Sheets at December 31, 2005.

At December 31, 2005 and 2004, we had $47 million and $37 million of assets that were held for sale or re-lease which, at December 31, 2005, included $36 million of assets currently under lease. Of the remaining $11 million and $37 million of assets held for sale or re-lease at December 31, 2005 and 2004, $6 million and $25 million had firm contracts to be placed on lease. Additionally, leases with a carrying value of approximately $363 million are scheduled to terminate in the next 12 months. The related aircraft are being remarketed, of which $238 million were identified with firm contracts in place at December 31, 2005, to be sold or placed on lease.

Our net income was $139 million for 2005 compared with $173 million for 2004. The decrease in our net income in 2005 compared with 2004 was principally driven by a gain on the sale of a substantial portion of our Commercial Financial Services (CFS) business to General Electric Capital Corporation (GECC) in 2004.

Net income from continuing operations was $146 million for 2005 compared with $121 million for 2004. For the years ended December 31, 2005 and 2004, our return on average assets calculated on net income from continuing operations was 1.5% and 1.1%. The increase in our net income from continuing operations and return on average assets was primarily due to lower asset impairment expense and the absence of debt redemption costs. As previously noted, certain leases were reclassified from finance leases to operating leases in the first quarter of 2005, resulting in increased operating lease income and increased depreciation expense and reduced finance lease income.

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Consolidated Results of Operations

The following table presents our consolidated results of operations for the years ended December 31:

(Dollars in millions)	2005			2004
REVENUE
Finance lease income	$	190		$	227
Interest income on notes receivable		178			183
Operating lease income		504			437
Investment income		33			29
Net gain on disposal		25			31
Other income		36			52
		966			959
EXPENSES
Interest expense		359			350
Depreciation expense		244			218
Recovery of losses		(25	)		(38	)
Operating expenses		72			67
Asset impairment expense		59			106
Debt redemption costs		–			42
Other expense		27			36
		736			781
Minority interest		2			5
Income from continuing operations before provision for income tax		232			183
Provision for income tax		86			62
Income from continuing operations		146			121
Income from discontinued operations, net of tax		–			10
Net gain (loss) on disposal of discontinued operations, net of tax		(7	)		42
Net income	$	139		$	173

Results of Operations

Finance lease income. The decrease in finance lease income for 2005 compared with 2004 was primarily due to a 20% decrease in the average balance of finance lease receivables, as a result of the reclassification of certain finance leases to operating leases.

Interest income on notes receivable. The decrease in interest income on notes receivable for 2005 compared with 2004 was due to an 8% decrease in the average balance of our notes receivable portfolio partially offset by increases in the underlying rates on our variable rate notes receivable during 2005.

Operating lease income. The increase in operating lease income for 2005 compared with 2004 reflects the increased balance of equipment under operating leases primarily due to the reclassification of certain leases from finance leases to operating leases.

Investment income. The increase in investment income for 2005 was primarily due to the increased accretion of discounts of $12 million on the Delta C tranche Enhanced Equipment Trust Certificates (EETC) recognized prior to Delta filing for Chapter 11 bankruptcy protection in September 2005. The increase was partially offset by a $3 million decrease in dividend income on certain preferred stock. As a result of Delta and Northwest filing for Chapter 11 bankruptcy protection in September 2005, we stopped recognizing income on their Equipment Trust Certificate (ETC) and EETCs, which reduced income by $5 million.

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Net gain on disposal. The net gain on disposal for 2005 was primarily due to the sale of four aircraft. The net gain on disposal in 2004 was primarily due to a gain on sale of partial interests in a note receivable. These types of gains are intermittent in nature and depend in part on market conditions at the time of disposal and our decision to sell or re-lease when equipment is returned. There can be no assurance that we will recognize such gains in the future.

Other income. Other income for 2005 primarily consisted of $15 million related to interest income on short-term investments, $9 million of fees related to expired commitments and $5 million related to a realized gain on certain warrants. Other income for 2004 primarily consisted of $15 million related to the approval of our claim in the Hawaiian Airlines, Inc. (Hawaiian) bankruptcy in 2004, $15 million of aircraft maintenance reserves from expired leases taken into income and $10 million related to interest income on short-term investments.

Interest expense. The increase in interest expense for 2005 was primarily due to an increase in short-term rates impacting our floating rate debt partially offset by a reduction in average debt balances. The weighted average annual effective interest rate incurred on all borrowings increased to 5.3% in 2005 from 4.6% in 2004.

Depreciation expense (on equipment under operating leases and assets held for re-lease). The higher depreciation expense for 2005 was primarily due to the increase in average equipment under operating leases in 2005 compared with 2004.

Recovery of losses. During 2005, we had a net recovery through the provision for losses of $25 million. This amount consisted of a net benefit of $26 million as a result of Hawaiian’s emergence from bankruptcy (including a partial offset due to a decline in the collateral value of 717 aircraft leased to Hawaiian), a benefit of $16 million as a result of the repayment of certain notes and a net provision of $17 million.

During 2004, we had a net recovery of $38 million primarily due to the following: a benefit of $53 million as a result of recognizing the full effect of certain collateral agreements; a benefit of $28 million due to refinements in the methodology for measuring collateral values by changing from an averaging method to a median value and changing from a portfolio based weighted average life to the weighted average life of each receivable; a benefit of $11 million due to the sale of various notes (thus decreasing collateral exposure); a $49 million increase of additional exposure for ATA; and a $17 million increase to cover normal exposure due to changes in portfolio assets and changes in aircraft collateral values.

The provision for losses adjusts the allowance for losses on loan and finance lease receivables to a level we deem to be adequate to cover probable losses. See Item 1A. Risk Factors.

Operating expense. The increase in operating expense for 2005 was primarily due to an $8 million increase in share-based plan expense resulting from the attainment of performance thresholds in 2005 converting certain performance shares to Boeing stock and the application of Statement of Financial Accounting Standards (SFAS) No. 123R. This increase was offset by a decrease in legal and professional services expense.

Asset impairment expense. We recognized asset impairment expense of $59 million in 2005 compared with $106 million in 2004. In 2005, we reduced the carrying value of certain of our EETCs and an ETC due to an other-than-temporary impairment of $53 million, partially offset by the value of other collateral in the amount of $27 million. In addition, we recorded an impairment charge of $20 million related to a CFS asset, which was not subject to the purchase and sale agreement with GECC and impairment charges of $13 million on certain leased and held for sale or re-lease aircraft due to the reduction of estimated future cash flows. Asset impairment expense during 2004 included $47 million related to an

11

other-than-temporary impairment of a held-to-maturity investment with ATA, $32 million related to a write-down of an investment in an EETC which finances aircraft with Delta, $16 million of specific impairment charges related primarily to aircraft trading and $11 million of valuation loss on one Boeing Business Jet (BBJ). See Item 1A. Risk Factors.

Debt redemption costs. Debt redemption costs were a result of our early debt extinguishment of $1.0 billion face value of outstanding senior notes in 2004 which consisted of a $52 million prepayment penalty for early redemption offset by $10 million of benefit derived from fair value hedges of the redeemed debt.

Other expenses. The decrease in other expenses for 2005 was primarily attributable to a $25 million decrease in aircraft modification expense. In 2004, other expenses included a net expense recovery of $16 million primarily related to the settlement of our Hawaiian bankruptcy claim.

Provision for income tax. The effective income tax rate was 37.1% in 2005 compared with 33.9% in 2004. The increase in the effective income tax rate is primarily due to lower Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) exclusion tax benefits of $6 million in 2005 compared with $7 million in 2004 and an increase in the effective state income tax rate to 4.3% in 2005 compared to 2.0% in 2004. The effective income tax rates for both years vary from the federal statutory tax rate of 35% primarily due to the FSC and ETI benefits and state income taxes.

Income from discontinued operations, net of tax. The decrease in income from discontinued operations is due to the sale of substantially all of our CFS business in 2004.

Net gain on disposal of discontinued operations, net of tax. In 2005, we recognized a net loss of $7 million attributable to a net increase in reserves of $10 million offset by a net gain of $3 million on the sale of certain assets of our CFS business. In 2004 we recognized a net gain of $46 million related to the sale of assets of our CFS business to GECC and a net loss of $4 million related to the revaluation of discontinued operations assets held for sale at December 31, 2004, to their fair value.

Liquidity and Capital Resources

Our total cash and cash equivalents were $297 million at December 31, 2005, down from $642 million at December 31, 2004. We generated $709 million in net cash from operating activities. This source of cash in combination with our cash on hand allowed for repayment of $605 million of our debt and payment of $338 million in cash dividends (including return of capital) to Boeing.

The following is a summary of the change in our cash and cash equivalents at December 31:

(Dollars in millions)	2005			2004
Net cash provided by operating activities	$	709		$	284
Net cash provided by (used in) investing activities		(111	)		2,468
Net cash used in financing activities		(943	)		(2,826	)
Net decrease in cash and cash equivalents	$	(345	)	$	(74	)

Outstanding debt at December 31, 2005 decreased to $6.3 billion from $7.0 billion at December 31, 2004. During 2005, we did not issue any new debt and had no commercial paper borrowings outstanding. Our leverage (ratio of debt to equity) at December 31, 2005 and 2004 was 5.0-to-1.

12

Liquidity

We have liquidity requirements primarily to fund financing commitments, meet debt obligations and fund our operating expenses. We could satisfy these liquidity needs from the following sources:

– cash from operations and other receipts from our portfolio,

– issuance of commercial paper and other debt,

– asset sales and securitization, and

– funding from Boeing.

We attempt to schedule our debt payments in relation to scheduled portfolio receipts. A significant amount of our cash requirements are satisfied from diversified global funding sources and are not dependent on any one lender. We believe our internally generated liquidity, together with access to external capital resources or funding from Boeing, will be sufficient to satisfy existing commitments and plans, and also provide adequate financial flexibility to meet potential business funding requirements should they arise within the next year. If this does not prove to be correct, we would be required to access other forms of liquidity, sell assets and/or limit new business volume.

Risks that could affect our sources of liquidity include among others:

– a severe or prolonged downturn in the economy,

– significant restructurings, defaults or bankruptcies by airlines,

– disruptions or declines in the global capital markets, and

– a decrease in our and/or Boeing’s credit ratings and/or financial performance.

We continually assess our leverage, as measured by our debt to equity ratio, in light of the risks in our business. These risks include, among others, the exposure in our portfolio; general market conditions, especially those associated with our customers; and our ability to access the capital markets.

We believe we have substantial borrowing capacity. We have $1.5 billion of unused borrowing limits under Boeing’s committed revolving credit line agreements. We have a support agreement with Boeing that includes a liquidity maintenance provision. Under this provision, Boeing has committed to make contributions to us, if needed, to maintain our fixed-charge coverage at not less than 1.05-to-1 on a four-quarter rolling basis.

For a discussion of our liquidity and debt programs, see Item 8. Financial Statements and Supplementary Data, Note 9.

The most restrictive provisions of our various debt agreements require us to (a) limit the payment of cash dividends to the extent that our consolidated assets would be less than 115% of our consolidated liabilities (excluding deferred taxes) after dividend payments and (b) restrict the amount of liens on our property to secure indebtedness to 15% or less of consolidated assets, other than liens specifically excluded. At December 31, 2005, as well as during the year, we were in compliance in all material respects with these and our various other debt covenants.

Credit Ratings

Our access to capital at rates that allow for a reasonable return on new business can be affected by ratings of our debt by credit rating agencies. As a wholly owned finance company, our credit ratings are closely tied to those of Boeing due to the Support Agreement entered into between Boeing and us in December 2003 and transactional support and guarantees. Our ratings and spreads could be impacted positively or negatively by changing perceptions of Boeing, which in turn may reflect changing views of the airline industry or the defense industry or of Boeing’s competitive positions in them. It is possible that these changes could affect our access to the capital markets.

13

We have the following credit ratings as of the filing date of this report:

Debt	Standard & Poor’s	Moody’s Investors Service	Fitch Ratings
Short-term	A-1	P-2	F-1
Senior	A	A3	A+

On January 25, 2006, Moody’s placed our credit ratings (Short-term ratings and Senior ratings) under review for possible upgrade.

Although credit ratings may impact the rate at which we can borrow funds, a credit rating is not a recommendation to buy, sell or hold securities. In addition, a credit rating is subject to revision or withdrawal at any time by the assigning rating organization.

Given our current ratings and ratings outlook from the credit rating agencies, we believe we have adequate access to the capital markets.

Off-Balance Sheet Arrangements

We are a party to off-balance sheet arrangements as defined by the Securities and Exchange Commission (SEC), including guarantor obligations and variable interests in unconsolidated entities.

Guarantor Obligation

The following table provides quantitative data regarding our third party guarantees at December 31, 2005 and 2004. The maximum potential payment amounts represent a “worst-case scenario,” and do not necessarily reflect results that we expect. Estimated proceeds from collateral and recourse represent the anticipated values of assets we could liquidate or receive from other parties to offset our payment obligations under guarantees. The carrying value of liabilities recorded on the Consolidated Balance Sheets reflects fees received for extending those guarantees.

(Dollars in millions)	Maximum Potential Payments		Estimated Proceeds from Collateral/ Recourse		Carrying Value of Liabilities (2)
Residual value guarantees	$	75	$	75	$	4
Credit and deficiency guarantees (1)		7		–		–
	$	82	$	75	$	4

⁽¹⁾ This amount is indemnified by Boeing.

⁽²⁾ Amounts included in Other liabilities.

Under these residual value guarantees, we are obligated to make payments to a guaranteed party if the related aircraft or equipment fair values fall below a specified amount at a future time. These obligations are collateralized principally by commercial aircraft and expire in three to five years.

Under these credit and deficiency guarantees, we are obligated to make payments to a guaranteed party if the original debtor or lessee does not make payments. Current outstanding credit and deficiency guarantees expire within the next seven years.

14

Material Variable Interests in Unconsolidated Entities

Our investments in an ETC, EETCs and other Variable Interest Entities (VIEs) are included within the scope of Revised Interpretation No. 46 (FIN 46(R)), Consolidation of Variable Interest Entities.

We have investments in an ETC and a number of EETCs which were acquired between 1999 and 2005. ETCs and EETCs are trusts that passively hold investments in aircraft or pools of aircraft. The ETC and EETCs provide investors with a collateral position in the related assets. The ETC provides investors with rights to cash flows from a financial instrument. EETCs provide investors with tranched rights to cash flows from a financial instrument. Our investments in an ETC and EETCs do not require consolidation under FIN 46(R). At December 31, 2005, our maximum exposure to economic loss from an ETC and EETCs is $269 million. Accounting losses from our investments in an ETC and EETCs, if any, could differ from period to period. At December 31, 2005, the ETC and EETCs transactions in which we invested had total assets of $4.0 billion and total debt (which is non-recourse to us) of $3.7 billion. During 2005, we recorded revenue of $36 million and cash flows of $65 million related to these investments.

From 1998 through 2005 we have provided subordinated loans to certain VIEs. VIEs are financial structures commonly utilized by airlines, lenders and loan guarantors including, for example, the Export-Import Bank of the United States. These VIEs are included in the scope of FIN 46(R); however, only certain VIEs require consolidation. VIE arrangements are utilized to isolate individual transactions for legal liability or tax purposes, or to perfect security interests or for other structuring reasons. At December 31, 2005, our maximum exposure to economic loss from these non-consolidated VIEs is $12 million. At December 31, 2005, VIEs of which we were not the primary beneficiary, other than the ETC and EETCs noted above, had total assets of $161 million and total debt (which is non-recourse to us) of $150 million. During 2005, we recorded revenue of $1 million and cash flows of $6 million related to these VIEs.

Capital lease obligations

We have off-balance sheet items that relate to capital lease obligations for four cross-border financing transactions each involving an MD-11 aircraft leased to us and subleased by us to our commercial aircraft customers. At December 31, 2005 these transactions included restricted cash deposits denominated in yen in an amount equivalent to $101 million and an equal amount of liabilities reflecting our obligations to purchase underlying aircraft with these deposits by 2008. These liabilities and corresponding deposits are considered defeased based upon their structure.

Disclosures About Contractual Obligations and Commercial Commitments

The following table summarizes our contractual obligations to make future payments under certain contracts, as well as an estimate of the timing in which we expect to satisfy these obligations at December 31, 2005:

15

Contractual Obligations

			Payments due by period
(Dollars in millions)	Total		Less Than 1 Year			1–3 Years		3–5 Years		More Than 5 Years
Debt (1)	$	6,137	$	671	(3)	$	1,956	$	1,156	$	2,354
Capital lease obligations (1)		194		45			79		18		52
Interest (2)		1,547		349			555		400		243
Operating lease obligations		1		1			–		–		–
	$	7,879	$	1,066		$	2,590	$	1,574	$	2,649

⁽¹⁾ Debt and Capital lease obligations reflect principal payments.

⁽²⁾ Interest includes the effect of our interest rate swaps. We have assumed LIBOR forward rates at December 31, 2005 on floating rate debt.

⁽³⁾ Includes $20 note payable to BCSC.

We expect to meet our current obligations through internally generated cash flows (which include scheduled receipts from our portfolio and sales of portfolio assets) and from future borrowings.

The following table summarizes our commercial commitments outstanding as well as an estimate of the timing in which we expect these commitments to mature at December 31, 2005:

Commercial Commitments

			Payments due by period
(Dollars in millions)	Total		Less Than 1 Year		1–3 Years		3–5 Years		More Than 5 Years
Guarantor obligations (1)	$	82	$	–	$	–	$	54	$	28
Financing commitments (2)		2,130		482		645		240		763
	$	2,212	$	482	$	645	$	294	$	791

⁽¹⁾ Primarily consists of residual value and credit and deficiency guarantees provided by us.

⁽²⁾ Represents commitments to provide leasing and other financing based on estimated earliest delivery dates.

In addition to our financing commitments of $2.1 billion, at December 31, 2005, Boeing and BCSC had unfunded commercial aircraft financing commitments of $11.4 billion, consisting of both firm and contingent contracts. These commitments are provided to give Boeing customers reasonable assurance of financing in connection with orders of Boeing products in advance of delivery. However, customers typically seek lower cost financing from other sources prior to actual delivery. In addition, we continue to work with third party financiers to provide alternative financing to customers, which eliminates the need for our financing. Based on historical experience, we anticipate that a significant portion of these commitments will not be exercised by the customer or will expire without being fully drawn upon. To the extent we are obligated to provide financing, such financing generally includes participation by engine manufacturers which further reduces our obligation. Therefore, the reported amount of commitments does not necessarily represent a future cash requirement. However, if there were requirements to fund all Boeing and BCSC commitments totaling $11.4 billion, the timing in which these commitments may be funded (based on estimated earliest delivery dates) is as follows:

– up to $0.4 billion in less than one year,

– an additional $6.0 billion in one to three years,

16

– an additional $1.8 billion in three to five years and

– an additional $3.2 billion after five years.

We expect to ultimately provide funding for those Boeing and BCSC commitments which are exercised.

Critical Accounting Estimates

For the discussion on our accounting policies, see Item 8. Financial Statements and Supplementary Data, Note 1 in our Consolidated Financial Statements. The more critical of these policies are described in the following paragraphs.

Impairment Review for Equipment Under Operating Leases and Held for Sale or Re-lease We evaluate equipment under operating lease or assets held for re-lease for impairment when the expected undiscounted cash flow over the remaining useful life is less than the carrying value. We use various assumptions when determining the expected undiscounted cash flow. A key assumption is the expected future lease rates. Additional assumptions include lease terms, end of economic life value of the aircraft or equipment, periods in which the asset may be held in preparation for a follow-on lease, maintenance costs, remarketing costs and the remaining economic life of the asset. We state assets held for sale at the lower of carrying value or fair value less costs to sell.

When we determine that impairment is indicated for an asset, the amount of the asset impairment expense recorded is the excess of the carrying value less residual value guarantees, if applicable, over the fair value of the asset.

Had future lease rates on these assets been 10% lower, we estimate that asset impairment expense would have increased by approximately $46 million during 2005. We are unable to predict the magnitude or likelihood of any future impairment.

Allowance for Losses on Receivables The allowance for losses on receivables is a valuation account used to provide for potential impairment of receivables in our portfolio. The balance represents an estimate of probable but unconfirmed losses in the receivables portfolio. The estimate is based on many qualitative and quantitative factors, including historical loss experience, collateral values, intercompany guarantees, results of individual credit reviews and the general state of the economy and airline industry. Factors considered in assessing collectibility include, but are not limited to, a customer’s extended delinquency, requests for restructuring and filings for bankruptcy. The adequacy of the allowance is assessed quarterly. There can be no assurance that actual results will not differ from estimates or that the consideration of these factors in the future will not result in an increase/decrease to the allowance for losses on receivables. In recognition of the uncertainty of the ultimate loss experience and relatively long duration of the portfolio, a range of reasonably possible outcomes of the portfolio’s credit-adjusted collateral exposure is calculated by varying the applicable default rate by approximately plus and minus 15%. The resulting range of allowance necessary to cover credit-adjusted collateral exposure at December 31, 2005, was approximately $88 million to $111 million.

Lease Residual Values Equipment under operating leases is carried at cost less accumulated depreciation and is depreciated to estimated residual value using the straight-line method over the lease term or projected economic life of the asset. At December 31, 2005, the projected residual value of our total equipment under operating leases was $2.5 billion. Estimates used in determining residual values significantly impact the amount and timing of depreciation expense for equipment under operating leases. For example, a change in the estimated residual values of 1% could result in a cumulative pre-tax earnings impact of $25 million at December 31, 2005, to be recognized over the remaining term of the lease portfolio.

17

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

A key function of a finance company is to manage market risk arising in the ordinary course of business. One of our principal sources of market risk relates to interest rate changes. This risk is managed by matching the profile of our liabilities with the profile of our assets. In a state of perfect matching, assets would be funded by debt of an equivalent term and other attributes. Perfect matching is impractical and inefficient given the irregular and unexpected amortization of some assets. The ensuing exposure to mismatch risk is measured and managed with the use of interest rate derivatives. We do not use interest rate derivatives for speculative or trading purposes. In addition, we may from time to time be exposed to foreign exchange risk in which case we may use currency derivatives to manage that risk.

Every quarter we use duration-based measures and analysis to estimate the impact of changes in interest rates. Potential changes in the net fair value of assets, liabilities and derivatives are calculated based on the amount and timing of projected cash flows. It is important to note that these measures and sensitivity analysis are estimates and tools that depend on the assumptions and parameters used in the related models. These models must be complemented by the experience and judgment of management.

Although the assets, liabilities and derivatives affected by a change in interest rates are not traded, based on an immediate, one-time, 100 basis-point increase in market interest rates at December 31, 2005, we estimated that the tax-adjusted net fair value of these items would have decreased by $15 million compared to a decrease of $7 million at December 31, 2004.

Item 8. Financial Statements and Supplementary Data

The following pages include our Consolidated Financial Statements as described in Item 14 (a)1 and (a)2 of Part IV herein.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

Boeing Capital Corporation

Renton, Washington

We have audited the accompanying consolidated balance sheets of Boeing Capital Corporation and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholder’s equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Boeing Capital Corporation and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

February 24, 2006

19

Boeing Capital Corporation and Subsidiaries

Consolidated Balance Sheets

	December 31,
(Dollars in millions, except par value)	2005			2004
ASSETS
Cash and cash equivalents	$	297		$	642
Receivables:
Finance leases		2,768			3,474
Notes and other		2,181			2,228
		4,949			5,702
Allowance for losses on receivables		(101	)		(240	)
		4,848			5,462
Equipment under operating leases, net		3,940			3,615
Investments		270			326
Assets held for sale or re-lease, net		47			37
Assets of discontinued operations		–			70
Other assets		142			168
	$	9,544		$	10,320
LIABILITIES AND SHAREHOLDER’S EQUITY
Liabilities:
Accounts payable and accrued expenses	$	156		$	149
Other liabilities		384			332
Accounts with Boeing and Boeing Capital Services Corporation		147			210
Deferred income taxes		1,274			1,194
Debt		6,322			7,024
		8,283			8,909
Minority interest		5			7
Shareholder’s equity:
Common stock – $100 par value; authorized 100,000 shares; issued and outstanding 50,000 shares		5			5
Additional paid-in capital		1,242			1,272
Accumulated other comprehensive income (loss), net of tax		9			(25	)
Retained earnings		–			152
		1,256			1,404
	$	9,544		$	10,320

See Notes to Consolidated Financial Statements.

20

Boeing Capital Corporation and Subsidiaries

Consolidated Statements of Operations

	Years Ended December 31,
(Dollars in millions)	2005			2004			2003
REVENUE
Finance lease income	$	190		$	227		$	238
Interest income on notes receivable		178			183			174
Operating lease income		504			437			416
Investment income		33			29			49
Net gain on disposal		25			31			38
Other income		36			52			76
		966			959			991
EXPENSES
Interest expense		359			350			358
Depreciation expense		244			218			213
Provision for (recovery of) losses		(25	)		(38	)		151
Operating expenses		72			67			53
Asset impairment expense		59			106			92
Debt redemption costs		–			42			–
Other expense		27			36			42
		736			781			909
Minority interest		2			5			9
Income from continuing operations before provision for income tax		232			183			91
Provision for income tax		86			62			18
Income from continuing operations		146			121			73
Income from discontinued operations, net of tax		–			10			33
Net gain (loss) on disposal of discontinued operations, net of tax		(7	)		42			–
Net income	$	139		$	173		$	106

See Notes to Consolidated Financial Statements.

21

Boeing Capital Corporation and Subsidiaries

Consolidated Statements of Shareholder’s Equity and Comprehensive Income

(Dollars in millions, except stated value)	Total			Common Shares		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Comprehensive Income
Balance at December 31, 2002	$	1,656		$	5	$	1,090		$	(17	)	$	578
Capital contributions from Boeing (1)		173			–		173			–			–
Net income		106			–		–			–			106		$	106
Unrealized gain on derivative investments, net of tax of $(1)		7			–		–			7			–			7
Balance at December 31, 2003	$	1,942		$	5	$	1,263		$	(10	)	$	684		$	113
Capital contributions from Boeing (1)		9			–		9			–			–
Cash dividends to Boeing		(705	)		–		–			–			(705	)
Net income		173			–		–			–			173		$	173
Reclassification adjustment for losses realized in net income, net of tax of $(7)		12			–		–			12			–			12
Unrealized gain on derivative instruments, net of tax of $(1)		1			–		–			1			–			1
Unrealized loss on investments, net of tax of $16		(28	)		–		–			(28	)		–			(28	)
Balance at December 31, 2004	$	1,404		$	5	$	1,272		$	(25	)	$	152		$	158
Capital contributions from Boeing (1)		17			–		17			–			–
Cash dividends to Boeing (including return of capital)		(338	)		–		(47	)		–			(291	)
Net income		139			–		–			–			139		$	139
Reclassification adjustment for losses realized in net income, net of tax of $(15)		25			–		–			25			–			25
Unrealized gain on derivative instruments, net of tax of $(1)		2			–		–			2			–			2
Unrealized gain on investments, net of tax of $(4)		7			–		–			7			–			7
Balance at December 31, 2005	$	1,256		$	5	$	1,242		$	9		$	–		$	173

⁽¹⁾ Balance represents $0, $0 and $167 of cash contributions and $17, $9 and $6 of non-cash contributions from Boeing and BCSC at December 31, 2005, 2004 and 2003, respectively.

We have authorized 100,000 shares of Series A preferred stock with no par value and a $5,000 stated value. No shares were issued and outstanding at December 31, 2005, 2004 and 2003.

See Notes to Consolidated Financial Statements.

22

Boeing Capital Corporation and Subsidiaries

Consolidated Statements of Cash Flows

	Years Ended December 31,
(Dollars in millions)	2005			2004			2003
OPERATING ACTIVITIES
Net income (1)	$	139		$	173		$	106
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		243			210			217
Net (gain) loss on disposal of discontinued operations		12			(66	)		–
Net gain on disposal		(25	)		(31	)		(38	)
Provision for (recovery of) losses		(25	)		(38	)		151
Net (gain) loss on derivative instruments and investments		–			1			(33	)
Asset impairment and other related expenses		62			107			118
Share-based plans expense		17			9			6
Other non-cash adjustments related to discontinued operations		–			15			63
Provision (benefit) from deferred income tax		60			(40	)		166
Change in assets and liabilities:
Other assets		4			22			130
Accrued interest and rents		5			(27	)		(26	)
Accounts payable and accrued expenses		8			(7	)		29
Other liabilities		11			(41	)		43
Accounts with Boeing and Boeing Capital Services Corporation		202			(11	)		36
Other		(4	)		8			(15	)
Net cash provided by operating activities		709			284			953
INVESTING ACTIVITIES
Net change in short-term leases, notes and other receivables		–			–			124
Transfer of net assets from Boeing		(178	)		178			–
Purchase of investments		–			(11	)		(33	)
Proceeds from available-for-sale investments		42			21			41
Proceeds from held-to-maturity investments		–			63			78
Purchase of equipment for operating leases		(165	)		(238	)		(663	)
Proceeds from disposition of equipment and receivables		267			285			59
Principal payments of leases, notes and other receivables		357			335			383
Origination of leases, notes and other receivables		(436	)		(357	)		(1,015	)
Proceeds from disposal of discontinued operations		–			2,017			–
Collection of leases, notes and other receivables of discontinued operations		2			–			–
Adjustments relating to discontinued operations		–			175			234
Net cash provided by (used in) investing activities		(111	)		2,468			(792	)
FINANCING ACTIVITIES
Net change in commercial paper and short-term bank debt		–			–			(73	)
Proceeds from issuance of debt		–			–			1,034
Repayment of debt		(605	)		(2,121	)		(1,259	)
Payment of cash dividends (including return of capital)		(338	)		(705	)		–
Capital contributions from Boeing		–			–			167
Net cash used in financing activities		(943	)		(2,826	)		(131	)
Net (decrease) increase in cash and cash equivalents		(345	)		(74	)		30
Cash and cash equivalents at beginning of year		642			716			686
Cash and cash equivalents at end of year	$	297		$	642		$	716

⁽¹⁾ Includes net income (loss) of $(7), $52 and $33 from discontinued operations for the years ended December 31, 2005, 2004 and 2003, respectively.

See Notes to Consolidated Financial Statements.

23

Boeing Capital Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

	Years Ended December 31,
(Dollars in millions)	2005			2004			2003
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Effect of joint venture consolidation	$	–		$	–		$	(3	)
Mark-to-market for fair value hedge derivatives on underlying debt	$	62		$	(21	)	$	(18	)
Net transfer to (from) assets held for sale or re-lease	$	51		$	(167	)	$	–
Net transfer to equipment under operating leases	$	526		$	177		$	–
Net transfer from finance leases	$	(508	)	$	(10	)	$	–
Transfer from notes and other	$	(2	)	$	–		$	–
Transfer from assets of discontinued operations	$	(67	)	$	–		$	–

See Notes to Consolidated Financial Statements.

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Boeing Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in millions)

Note 1 – Summary of Significant Accounting Policies

Organization Boeing Capital Corporation (together with its subsidiaries, referred to as “us,” “we,” “our” or the “Company”) is an indirect wholly owned subsidiary of The Boeing Company (Boeing). Boeing Capital Services Corporation (BCSC), an inactive holding company, owns 100% of our stock and is an indirect wholly owned subsidiary of Boeing. The Company was incorporated in Delaware in 1968. In the commercial aircraft market, we facilitate, arrange, structure and provide selective financing solutions to Boeing’s Commercial Airplanes segment customers. In the space and defense markets, we primarily arrange and structure financing solutions for Boeing’s Integrated Defense Systems segment customers.

In 2004, we sold substantially all of the assets related to our Commercial Financial Services (CFS) business.

Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications Certain reclassifications have been made to prior periods to conform to the current year’s presentation.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make assumptions and estimates that directly affect the amounts reported in the Consolidated Financial Statements. Significant estimates for which changes in the near term are considered reasonably possible and that may have a material impact on the financial statements are disclosed in these notes to the Consolidated Financial Statements.

Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments, such as time deposits and money market instruments, which have original maturities of less than three months. At December 31, 2005 we did not have restricted cash. In 2004, we had classified as Other assets restricted cash deposited with banks in interest-bearing accounts of $30 for specific lease obligations and contractual purchase options related to certain aircraft leased by us under capital lease obligations.

Portfolio Our portfolio consists of finance leases, leveraged leases, notes and other receivables, equipment under operating leases (net of accumulated depreciation), investments and assets held for sale or re-lease (net of accumulated depreciation).

Direct Finance Leases At lease inception, we record an asset (“net investment”) representing the aggregate future minimum lease payments, estimated residual value of the leased equipment, deferred incremental direct costs less unearned income. Income is recognized over the life of the lease to approximate a level rate of return on the net investment. Residual values, which are reviewed quarterly, represent the estimated amount we expect to receive at lease termination from the disposition of leased equipment. Actual residual values realized could differ from these estimates. Write-downs of estimated residual value are recognized as permanent impairments in the current period as a reduction to Finance lease income.

Leveraged Leases Direct finance leases that are financed by non-recourse borrowings and meet certain criteria are classified as leveraged leases. For leveraged leases, aggregate rental

25

receivables are reduced by the related non-recourse debt service obligation including interest (“net rental receivables”). The difference of the net rental receivables and the cost of the asset less estimated residual value at the end of the lease term is recorded as unearned income. Unearned income is recognized over the life of the lease at a constant rate of return applied to any positive net investment, which includes the effect of deferred income taxes.

Notes and Other Receivables At commencement of a note receivable we record the note and any unamortized discounts. Interest income and amortization of any discounts are recorded ratably over the related term of the note.

Equipment Under Operating Leases, Net of Accumulated Depreciation Equipment under operating leases is recorded at cost and depreciated over the lease term to an estimated residual or salvage value, using the straight-line method. We periodically review our estimates of residual value on initial leases, and for equipment that is not intended to be leased beyond the current lease we recognize forecasted decreases in residual values by prospectively adjusting depreciation expense. If at the beginning of a subsequent lease, the equipment is intended to be leased beyond that current lease term, the equipment is depreciated over the estimated remaining useful life to an estimated salvage value. Revenue on the leased equipment is recorded using the straight-line method over the term of the lease.

Investments Available-for-sale securities include an Equipment Trust Certificate (ETC) and Enhanced Equipment Trust Certificates (EETCs). Available-for-sale securities are recorded at their fair values and unrealized gains and losses are reported as part of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. Debt and equity securities are assessed for impairment quarterly. To determine if an impairment is other-than-temporary we consider the duration of the loss position, the strength of the underlying collateral, the duration to maturity credit reviews and analyses of the counterparties. Losses deemed other-than-temporary are recorded as asset impairment expense. For investments where we are not able to reliably estimate future cash flows, we use the cost recovery method to account for payments received.

The fair value of publicly traded fixed income and equity securities is based quoted prices. The fair value of non-publicly traded securities, such as EETCs, is based on independent third party pricing sources. In cases where we determine that it is probable that recovery of our investment will come from recovery of collateral, the fair value is based on the value of the underlying collateral.

Assets Held for Sale or Re-lease, Net of Accumulated Depreciation When aircraft collateral related to a finance lease or note receivable is repossessed, returned in satisfaction of the receivable or returned at the end of the finance lease or when aircraft are made available-for-sale, the asset is carried at the lower of cost or estimated fair value less costs to sell. We calculate a median value from published collateral values from multiple external equipment appraisers based on the type and age of the aircraft to estimate the fair value of aircraft. Under certain circumstances, we adjust values based on the attributes of the specific aircraft or equipment, usually when the features or use of the aircraft vary significantly from the more generic aircraft attributes covered by outside publications. Aircraft assets held for re-lease are depreciated over the remaining useful life of the equipment to an estimated residual or salvage value, on a straight-line basis.

Impairment Review for Equipment Under Operating Leases and Assets Held for Re-lease We evaluate equipment under operating lease or assets held for re-lease for impairment when the expected undiscounted cash flow over the remaining useful life is less than the carrying value. We use various assumptions when determining the expected undiscounted cash flow. A key assumption is the expected future lease rates. Additional assumptions include lease terms, end of economic life value of the aircraft or equipment, periods in which the asset may be held in preparation for a follow-on lease, maintenance costs, remarketing costs, and the remaining economic life of the asset.

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When we determine that impairment is indicated for an asset, the amount of the asset impairment expense recorded is the excess of the carrying value less asset value guarantees, if applicable, over the fair value of the asset.

Allowance for Losses on Receivables We record the potential impairment of receivables in our portfolio in a valuation account, the balance of which is an accounting estimate of probable but unconfirmed losses in the receivables portfolio. The allowance for losses on receivables relates to two components of receivables: (a) specifically identified receivables that are evaluated individually for impairment and (b) all other receivables.

We determine a receivable is impaired when, based on current information and events, it is probable that we will be unable to collect amounts due according to the original contractual terms of the receivable agreement, without regard to any subsequent restructurings. Factors considered in assessing collectibility include, but are not limited to, a customer’s extended delinquency, requests for restructuring and filings for bankruptcy. We determine a specific impairment allowance based on the difference between the carrying value of the receivable and the estimated fair value of the related collateral, taking into account Boeing and other guarantees.

We review the adequacy of the allowance attributable to the remaining other receivables (after excluding receivables subject to a specific impairment allowance) by assessing both the collateral exposure and the applicable cumulative default rate. Collateral exposure for a particular receivable is the excess of the carrying value of the receivable over the fair value of the related collateral taking into account Boeing and other guarantees. A receivable with an estimated fair value in excess of the carrying value is considered to have no collateral exposure. The applicable cumulative default rate is determined using two components: customer credit ratings and weighted average remaining contract term. Credit ratings are determined for each customer in the portfolio. Those ratings are updated based upon public information and information obtained directly from our customers.

We have entered into agreements with certain customers that entitle us to look beyond the specific collateral underlying the receivable for purposes of determining the collateral exposure as described above. Should the proceeds from the sale of the underlying collateral asset resulting from a default condition be insufficient to cover the carrying value of our receivable (creating a shortfall condition), these agreements would, for example, permit us to take the actions necessary to sell or retain certain other assets in which the customer has an equity interest and use the proceeds to cover the shortfall.

Each quarter, we review customer credit ratings, published historical credit default rates for different rating categories, Boeing and other guarantees (if applicable), third party aircraft valuations, and the general state of the economy and airline industry as a basis to validate the reasonableness of the allowance for losses on receivables. There can be no assurance that actual results will not differ from estimates or that the consideration of these factors in the future will not result in an increase/decrease to the allowance for losses on receivables.

Non-accrual Receivables Income recognition on an accrual basis is generally suspended for leases and notes and other receivables at the date when a full recovery of income and principal, including the effect of intercompany guarantees, become doubtful. Generally we also place accounts greater than 90 days past due on non-accrual status. Income recognition is resumed when leases or notes and other receivables become contractually current and performance is demonstrated to be resumed. To the extent that income is accruable under the contractual terms, any cash received in the interim is recorded to income.

Derivative Financial Instruments All derivative instruments are recognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them. We record our interest

27

rate swaps at fair value based on discounted cash flow analysis and for warrants and other option-type instruments based on option pricing models. For derivatives designated as hedges of the exposure to changes in fair value of the recognized asset or liability or a firm commitment (referred to as fair value hedges), the gain or loss is recognized in Other income in the period of change together with an offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect of this accounting is to reflect in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For our cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported in shareholder’s equity (as a component of Accumulated other comprehensive income (loss)) and is subsequently reclassified into income, as an increase or decrease to interest expense, in the same period or periods during which the hedged forecasted transaction affects income. The ineffective portion of the gain or loss is reported in Other income immediately. We also hold certain instruments for economic purposes that do not qualify for hedge accounting treatment. For these derivative instruments not receiving hedge accounting treatment the changes in fair value are recorded in Other income.

Income Tax Our operations are included in the consolidated federal income tax return of Boeing. Under an agreement with Boeing, we pay or receive our allocated share of income taxes or credits.

Federal, state and foreign income taxes are computed at current tax rates, less tax credits. Taxes are adjusted both for items that do not have tax consequences and for the cumulative effect of any changes in tax rates from those previously used to determine deferred tax assets or liabilities. Tax provisions include amounts that are currently payable, plus changes in deferred tax assets and liabilities that (a) arise because of temporary differences between the time when items of income and expense are recognized for financial reporting and income tax purposes and (b) are assumed in connection with intercompany transactions with Boeing. Under this agreement, the current provision for state income tax based on an agreed upon rate is paid to Boeing, and the state income tax deferred asset or liability is carried on Boeing’s Consolidated Financial Statements.

Note 2 – Discontinued Operations

On May 24, 2004, we entered into a purchase and sale agreement with General Electric Capital Corporation (GECC) to sell substantially all of the assets related to our CFS business and the final asset sale closed December 27, 2004. The assets sold to GECC consisted of leases and financing arrangements which had a carrying value of $1,872 as of May 31, 2004.

Part of the purchase and sale agreement with GECC includes a loss sharing arrangement for losses that may exist at the end of the initial financing terms of the transferred portfolio assets, or, in some instances, prior to the end of the financing term, such as certain events of default and repossession. The loss sharing arrangement provides that cumulative net losses (if any) are to be shared between us and GECC in accordance with the following formula: (i) with respect to the first $150 of cumulative net losses, we are liable to GECC for 80% of the amount thereof (in such event GECC will bear 20% of such losses); (ii) with respect to cumulative net losses between $150 and $275, we are liable to GECC for 100% of such additional cumulative net losses; and (iii) if cumulative losses exceed $275, GECC bears 100% of the loss risk above $275. These provisions effectively limit our exposure to any losses to $245. In the event there are cumulative net gains on the portfolio, GECC is required to make an earn-out payment to us in an amount equal to 80% of such cumulative net gain. Gains and losses on the portfolio are to be measured on a cumulative basis over the remaining life of the portfolio assets. The amount of the gain or loss on any particular portfolio asset is the difference between the fair market value of the equipment asset securing the portfolio asset and the carrying value of the portfolio asset. We have the right in certain circumstances to participate in a refinancing or other redeployment of a portfolio asset for the purpose of minimizing any loss on such asset.

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Liability under the loss sharing arrangement was as follows for the year ended December 31:

Reserve at December 31, 2004	$	90
Increase in reserve		25
Payments made to GECC		(34	)
Reserve at December 31, 2005	$	81

Operating results of the discontinued operations were as follows for the years ended December 31:

	2005			2004		2003
Revenue	$	3		$	96	$	229
Income from discontinued operations	$	–		$	16	$	51
Provision for income tax		–			6		18
Income from discontinued operations, net of tax	$	–		$	10	$	33
Net gain (loss) on disposal of discontinued operations	$	(12	)	$	66	$	–
Provision (benefit) for income tax		(5	)		24		–
Net gain (loss) on disposal of discontinued operations, net of tax	$	(7	)	$	42	$	–

Note 3 – Relationship and Transactions with Boeing and BCSC

We have a number of agreements with Boeing as outlined below. There can be no assurances that these intercompany arrangements will not change from time to time.

Operating Agreement

An operating agreement (“Operating Agreement”) dated September 13, 2000, governs certain important aspects of the relationship between us, BCSC and Boeing relating to the financing of Boeing products and the leasing of commercial aircraft, the remarketing of aircraft returned to or repossessed by us under leases or secured loans and the allocation of federal income taxes between the companies.

Under the Operating Agreement, subject to some exceptions, Boeing will make available to us the opportunity to provide financing of Boeing products. Additionally, under limited circumstances, we may tender to Boeing commercial aircraft that we are attempting to remarket, at a price equal to the fair market value of the aircraft less a remarketing fee.

Support Agreement

We have a support agreement (“Support Agreement”) dated December 23, 2003, with Boeing with these principal features:

– Boeing will maintain 51% or greater ownership of us,

– Boeing will make contributions to us, if needed, to maintain our fixed-charge coverage at not less than 1.05-to-1 on a four-quarter rolling basis, and

– Boeing will make contributions to us, if needed, to maintain our tangible net worth at a level of at least $50.

The Support Agreement may not be modified or terminated unless (a) two-thirds of the debt holders consent or (b) the modification or termination does not adversely affect the credit ratings of our debt. This Support Agreement is not a guarantee of any of our indebtedness, nor is it directly enforceable against Boeing by third parties.

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Intercompany Credit Arrangements

The backup credit facility between Boeing and its banks was renewed on November 18, 2005. The 364-day line was reduced in total size from $2,000 to $1,500; Boeing will continue to allocate $750 of this line exclusively to us. Boeing will also continue to make $750 of its $1,500 five-year revolving credit line expiring in 2010 exclusively available to us. At December 31, 2005, we had no amounts outstanding under these intercompany credit arrangements.

Federal Income Tax

Our operations are included in the consolidated federal income tax return of Boeing with the tax payments, if any, being made by Boeing. The Operating Agreement provides that so long as consolidated federal tax returns are filed, Boeing will pay, or we will pay Boeing, as appropriate, an amount equal to the difference between the consolidated tax liability and Boeing’s tax liability computed without consolidation with us. If, after Boeing pays us, Boeing incurs tax losses that may be carried back to the year for which those payments were made, we will not be obligated to repay to Boeing any portion of these payments. Furthermore, we have been operating under an agreement with Boeing, which has positively impacted our pricing in our leasing activities. Under this agreement, alternative minimum taxes are disregarded and an intercompany payable/receivable is made when federal income taxes are due or federal income tax benefits are generated.

Intercompany Transactions

Accounts with Boeing and BCSC consisted of the following at December 31:

	2005		2004
Notes payable to BCSC	$	20	$	20
Federal income tax payable (receivable)		30		(10	)
Other (1)		97		200
	$	147	$	210

⁽¹⁾ At December 31, 2004, Other included $178 related to our purchase of a 100% participation in a D tranche Delta EETC.

For the years ended December 31, 2005, and 2004, we paid cash dividends (including return of capital) totaling $338 and $705 to BCSC which were ultimately paid to Boeing.

Total interest paid to BCSC was $2, $3 and $4 for the years ended December 31, 2005, 2004 and 2003, respectively.

We also enter into certain transactions with Boeing in the form of intercompany guarantees and other subsidies.

Intercompany guarantees primarily relate to residual value guarantees, first loss deficiency guarantees and rental loss guarantees. Residual value guarantees cover a specified asset value at the end of a lease agreement in the event of a decline in market value of the financed aircraft. First loss deficiency guarantees cover a specified portion of our losses on aircraft that we finance in the event of a loss upon disposition of the aircraft following a default by the lessee. Rental loss guarantees are full or partial guarantees covering us against the lessee’s failure to pay rent under the lease agreement or our inability to re-lease these aircraft at or above a specified rent level. Due to intercompany guarantees from Boeing, our accounting classification of certain third party leases may differ from the accounting classification in Boeing’s Consolidated Financial Statements. As a result of these intercompany guarantees, the required balance for the allowance for losses on receivables and the required

30

provision for losses we recognized have been mitigated. Receipts under Boeing guarantees would be net of realization of underlying residual values, partial rent receipts, re-lease rental receipts or other mitigating value received. At December 31, 2005, we were the beneficiary under $2,901 of guarantees ($2,584 for domestic airlines and $317 for foreign airlines) from Boeing which mitigates our risk with respect to portfolio assets totaling $4,344.

Intercompany guarantee amounts by portfolio type are summarized as follows at December 31:

	2005				2004
	Guarantee Amount		Carrying Value		Guarantee Amount		Carrying Value
Receivables	$	1,946	$	3,115	$	1,982	$	3,162
Equipment under operating leases, net		945		1,136		895		1,142
Investments		10		93		10		99
	$	2,901	$	4,344	$	2,887	$	4,403

Intercompany guarantee amounts by aircraft type are summarized as follows at December 31:

	2005				2004
	Guarantee Amount		Carrying Value		Guarantee Amount		Carrying Value
717	$	1,894	$	2,524	$	1,695	$	2,295
Out of production twin-aisle aircraft		293		402		360		495
Out of production single-aisle aircraft		322		322		630		656
Other including other Boeing and regional aircraft		392		1,096		202		957
	$	2,901	$	4,344	$	2,887	$	4,403

During 2005 we and Boeing agreed to terminate various guarantee and subsidy agreements by transferring cash to us representing the settlement value of the agreements. We are principally accounting for these cash receipts as deferred income that will be recognized over the period of the underlying transaction that was the basis of the terminated agreement.

We recorded the following activity under the intercompany guarantee agreements for the years ended December 31:

	2005			2004			2003
Applied to income	$	25		$	31		$	60
Net change in carrying value of related aircraft		2			5			23
Net change in unearned income		5			–			–
Applied to reserves		87			11			–
Guarantee fees paid to Boeing		(3	)		(3	)		(3	)
Net cash received under intercompany guarantee agreements	$	116		$	44		$	80

We recorded the following activity under the intercompany subsidy agreements for the years ended December 31:

	2005		2004		2003
Applied to income	$	64	$	45	$	49
Net change in carrying value of related aircraft		–		1		–
Net change in unearned income		85		2		–
Net cash received under intercompany subsidy agreements	$	149	$	48	$	49

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Additionally, under the terms of the intercompany guarantee agreements, for the years ended December 31, 2005, 2004 and 2003, Boeing recorded charges of $112, $84, and $65, respectively, related to asset impairment, accrued expenses, loan loss provision and allowance for losses on receivables in our portfolio.

For the years ended December 31, 2005, 2004 and 2003, we recorded operating lease income from Boeing, exclusive of guarantees and subsidies of $46, $26 and $26, respectively.

For the years ended December 31, 2005, 2004 and 2003, we recorded new business volume of $322, $530 and $1,700, respectively, related to our purchase of aircraft and equipment from Boeing.

During 2003, we purchased two Boeing Business Jets (BBJ) from a third party. During 2004, we purchased two additional BBJs from Boeing. These aircraft were converted to a C-40 configuration under a head lease structure with Boeing, which has a concurrent sublease with the U.S. Government. At December 31, 2005 and 2004, the carrying value of the C-40 aircraft was $177 and $175. The fourth C-40 aircraft was delivered in January 2006.

During 2004, we amended our operating lease with Boeing for a BBJ, which requires annual lease payments by Boeing of $7 through September 2007. At December 31, 2005 and 2004, the carrying value of the BBJ was $40 and $42.

During 2001 we entered into a note receivable agreement with Boeing for a BBJ. At December 31, 2004, the carrying value of this note was $23. This note was repaid in January 2005.

Other Intercompany Transactions

Substantially all employees of Boeing and its subsidiaries are members of defined benefit pension plans and insurance plans. Boeing also provides eligible employees the opportunity to participate in savings plans that permit both pre-tax and after-tax contributions. Executive compensation includes performance shares, options and other compensation programs. Boeing generally charges us with the actual costs of these plans attributable to our employees and these expenses are reflected in Operating expenses.

We receive support services from Boeing and its subsidiaries. The charges for these services during 2005, 2004 and 2003 totaled $11, $9 and $9, respectively.

Note 4 – Investment in Receivables

The investment in receivables consisted of the following at December 31:

	2005			2004
Investment in finance leases:
Direct finance leases	$	2,593		$	3,299
Leveraged leases		175			175
		2,768			3,474
Notes and other		2,181			2,228
Total investment in finance leases and notes and other		4,949			5,702
Less allowance for losses on receivables		(101	)		(240	)
	$	4,848		$	5,462

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The net investment in finance leases consisted of the following at December 31:

	2005			2004			2005			2004
	Direct Finance Leases						Leveraged Leases
Minimum lease payments	$	3,869		$	5,011		$	1,003		$	1,072
Less principal and interest payable on non-recourse debt		–			–			(735	)		(804	)
Estimated residual value		681			791			58			58
Unearned income and deferred incremental direct costs		(1,957	)		(2,503	)		(151	)		(151	)
Less deferred taxes		–			–			(277	)		(227	)
Net investment in finance leases	$	2,593		$	3,299		$	(102	)	$	(52	)

Scheduled minimum lease payments on direct finance leases and leveraged leases (less principal and interest payable on non-recourse debt) are as follows for the years ended December 31:

	2006		2007		2008		2009		2010		Thereafter
Finance leases	$	311	$	374	$	277	$	265	$	250	$	2,660

At December 31, 2005 and 2004, finance lease receivables of $59 and $62 were assigned as collateral to secure senior debt. Finance lease receivables of $92 and $177 at December 31, 2005 and 2004 related to commercial aircraft leased by us under capital lease obligations and subleased to third parties.

The investment in notes and other receivables consisted of the following at December 31:

	2005			2004
Principal	$	2,177		$	2,215
Accrued interest		14			16
Unamortized discount and deferred incremental direct costs		(10	)		(3	)
	$	2,181		$	2,228

Scheduled principal payments on Notes and other receivables are as follows for the years ended December 31:

	2006		2007		2008		2009		2010		Thereafter
Notes and other	$	173	$	171	$	365	$	157	$	168	$	1,143

Note 5 – Allowance for Losses on Receivables

The following table reconciles the activity in the allowance for losses on receivables at December 31:

	2005			2004			2003
Allowance for losses on receivables at beginning of year	$	240		$	303		$	219
Provision (recovery) due to changes in customer credit ratings		(30	)		–			11
Reduction due to the repayment of certain notes		(16	)		(11	)		–
Provision for losses		–			13			92
Reduction due to portfolio run-off		(21	)		–			–
Provision (recovery) due to changes in collateral value		42			(40	)		48
Write-offs, net of recoveries		(120	)		(36	)		(67	)
Allowance transferred from Boeing		6			11			–
Allowance for losses on receivables at end of year	$	101		$	240		$	303
Allowance as a percentage of total receivables		2.0	%		4.2	%		5.1	%

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The following table reconciles, on a pro forma basis, the changes in the allowance for losses on receivables calculated in accordance with the method discussed in Note 1 – Summary of Significant Accounting Policies, if the impact of intercompany guarantees from Boeing were to be excluded. The exclusion of intercompany guarantees would increase the applicable collateral exposure for various receivables, and would change the classification of certain finance lease receivables to operating leases.

	2005			2004			2003
	Pro Forma
Allowance for losses on receivables at beginning of year	$	402		$	400		$	299
Recovery due to changes in customer credit ratings		(24	)		–			–
Provision due to changes in collateral value		97			44			212
Write-offs, net of recoveries		(201	)		(42	)		(111	)
Allowance for losses on receivables at end of year	$	274		$	402		$	400
Allowance as a percentage of total receivables (pro forma)		5.5	%		7.1	%		6.7	%

The carrying value of impaired receivables consisted of the following at December 31:

	2005		2004
Impaired receivables with specific impairment allowance	$	47	$	1,179
Impaired receivables with no specific allowance		1,464		1,053
Carrying value of impaired receivables	$	1,511	$	2,232

Allowance for losses on impaired receivables was $21 and $222 at December 31, 2005 and 2004.

During 2005, due to new lease terms with ATA Holdings Corp. (ATA), we reclassified our leases for 12 757 aircraft with ATA with a carrying value of $699 from finance leases to operating leases, which were written down to their fair value. As a result of the reclassification there was a charge-off to the allowance.

During 2005, based on our evaluation of Hawaiian Airlines, Inc.’s (Hawaiian) financial position and performance under the aircraft leases, we determined that a specific impairment allowance was not necessary on receivables from Hawaiian, which are no longer considered impaired.

On September 14, 2005, due to Northwest Airlines, Inc. (Northwest) filing for Chapter 11 bankruptcy protection, we deemed the note and lease receivables from Northwest to be impaired. Based on the fair value of the collateral and the guarantees available to us from Boeing, we have not provided a specific allowance for these impaired receivables.

Our average recorded investment in impaired receivables, calculated on a quarterly weighted average, was $1,196, $1,940 and $1,688 in 2005, 2004 and 2003, respectively. In 2005, 2004 and 2003, we recognized income of $90, $118, and $106, respectively on these impaired receivables during the periods in which they were considered impaired. Included in impaired receivables are $1,008 relating to United Air Lines, Inc. (United) which emerged from bankruptcy on February 1, 2006.

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Non-Performing Assets

Non-performing assets (assets either not earning income on an accrual basis or equipment without current contractual lease revenue) consisted of the following at December 31:

	2005			2004
Assets placed on non-accrual status:
Receivables	$	127		$	715
Equipment under operating leases, net		246			21
Investments		155			–
		528			736
Assets held for sale or re-lease, net		11	(1)		37
	$	539		$	773
Percentage of non-accrual receivables to total receivables		2.6	%		12.5	%
Percentage of total non-performing assets to total portfolio		5.9	%		8.0	%

⁽¹⁾ At December 31, 2005, this does not include a BBJ with a carrying value of $36, which was performing under an operating lease.

At December 31, 2005, ATA, Viacao Aerea Rio-Grandense (VARIG), Delta Air Lines, Inc. (Delta) and Northwest were considered customers with non-performing assets. Due to guarantees available to us from Boeing, we are continuing to accrue income on certain receivables from Northwest in the amount of $357 and VARIG operating lease assets in the amount of $270. At December 31, 2004, ATA was considered a customer with non-performing assets. For further information on our portfolio assets with these customers, see Note 12 – Commitments and Contingencies.

For the portfolio assets that were non-performing at December 31, 2005 and 2004, we recorded income of $20 and $7 based on cash received of $25 and $7.

At December 31, 2005 we had accrued less than $1 of income on receivables with amounts past due greater than 90 days. At December 31, 2004, no income had been accrued on receivables or equipment under operating leases with amounts past due greater than 90 days.

Note 6 – Equipment Under Operating Leases, Net of Accumulated Depreciation

Equipment under operating leases, net of accumulated depreciation, consisted of the following at December 31:

	2005			2004
Commercial aircraft	$	4,404		$	3,997
Space and defense equipment		213			191
Other aircraft and equipment		68			88
		4,685			4,276
Accumulated depreciation		(745	)		(661	)
	$	3,940		$	3,615

Future minimum rentals scheduled to be received under the non-cancelable portion of operating leases are as follows at December 31, 2005:

	2006		2007		2008		2009		2010		Thereafter
Operating leases	$	451	$	390	$	341	$	296	$	253	$	1,247

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At December 31, 2005 and 2004, equipment under operating leases of $223 and $238 were assigned as collateral to secure senior debt. At December 31, 2005 and 2004 equipment under operating leases of $108 and $121 related to commercial aircraft leased by us under capital lease obligations and subleased to third parties.

Note 7 – Investments

Available-for-sale securities consisted of the following at December 31:

	2005		2004
Carrying value (estimated fair value)	$	269	$	325
Amortized cost		258		364
Net unrealized gain (loss) carried in Accumulated other comprehensive income (loss) (1)	$	11	$	(39	)

⁽¹⁾ At December 31, 2005, this includes total unrealized loss of $15 and unrealized gains of $26. At December 31, 2004, there were no unrealized gains.

Included in Investments at December 31, 2005 and 2004 was $1 related to an investment reported at cost, which was not classified as available-for-sale securities for financial statement purposes.

On September 17, 2004, we sold to Boeing for net book value of $181 a D tranche Delta EETC. The sale was in connection with the significant deterioration of Delta’s financial condition in the period just prior to the sale and qualified as an exception under the held-to-maturity accounting rules. In November 2004, we and Delta signed a term sheet whereby we agreed to exchange the D tranche Delta EETC for two C tranche Delta EETCs owned by Delta and certain other rights. On December 31, 2004, Boeing sold us a 100% participation in the D tranche Delta EETC at the carrying value of $178.

As a result of our decision to participate in an exchange of assets with Delta, we determined that we did not intend to hold our investment in the D tranche Delta EETC until maturity. As a result, we determined that our entire portfolio of held-to-maturity securities would have to be reclassified and accounted for as available-for-sale. Since our economic commitment to the exchange of assets occurred in mid-December 2004, we reclassified our held-to-maturity investments as available for sale securities effective December 31, 2004. We do not expect that we will be able to account for any of our investments as held-to-maturity investments earlier than 2007.

On March 4, 2005, we completed the exchange transaction of our investment with Delta in a D tranche Delta EETC with a carrying value of $145 and a face value of $176 for two C tranche Delta EETCs with face values totaling $176. The assets we received were recorded at their fair values of $143 and we recorded an asset impairment charge of $2. On September 14, 2005, Delta filed for Chapter 11 bankruptcy protection. Due to the financial difficulties of Delta, during the third quarter of 2005, we deemed these investments to be other-than-temporarily impaired. We reduced the carrying value of these investments to their fair value and recorded an asset impairment charge of $27. This asset impairment charge was offset by the value of other collateral available to us. During the fourth quarter of 2005, based on our assessment of Delta’s financial position and planned reorganization, we concluded that these investments continue to be impaired.

As a result of the financial difficulties of Northwest, during the third quarter of 2005, we deemed our investments in the Northwest ETC and EETC to be other-than-temporarily impaired. We reduced the carrying value of these investments to their fair value and recorded an asset impairment charge of $24. During the fourth quarter of 2005, based on our assessment of Northwest’s financial position and planned reorganization, we concluded that these investments continue to be impaired.

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Our available-for-sale investments include subordinated debt investments in two other EETCs. At December 31, 2005, these investments had estimated fair values totaling $113. Additionally, due to the commercial aviation market downturn in the United States these securities with unrealized losses totaling $15 have been in a continuous unrealized loss position for 12 months or longer. Despite the unrealized loss position of these debt securities we concluded that they are not other-than-temporarily impaired. This assessment was based on the value of the underlying collateral to the securities, the term of the securities, our ability to hold the investment until it recovers its carrying value and both internal and third party credit reviews and analysis of the counterparties, principally major domestic airlines. Accordingly, we have concluded that it is probable that we will be able to collect all amounts due according to the contractual terms of these debt securities. For the year ended December 31, 2005, we received all payments contractually required for these remaining debt securities.

At December 31, 2005, our available-for-sale investments also included an investment in mandatorily redeemable preferred stock of ATA. During 2004, our assessment of ATA’s continued financial difficulties led us to conclude that the unsecured preferred stock investment maturing in 2015 was other-than-temporarily impaired. Accordingly, during 2004, we recorded total pre-tax non-cash charge to Asset impairment expense of $47 resulting in a reduction of the carrying value to zero.

There were no other-than-temporary impairments recorded during the year ended December 31, 2003.

At December 31, 2005 and 2004, none of our investment securities were considered investment grade securities.

Maturities of available-for-sale debt securities were as follows at December 31, 2005:

	Estimated Fair Value
Due in one year or less	$	31
Due from one to five years		180
Due from five to ten years		37
Due after ten years		21
	$	269

Note 8 – Income Tax

The components of the provision (benefit) for tax on income were as follows at December 31:

	2005		2004			2003
Current:
Federal	$	17	$	100		$	(357	)
State		9		3			2
		26		103			(355	)
Deferred:
Federal		60		(41	)		373
	$	86	$	62		$	18

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Temporary differences represent the cumulative taxable or deductible amounts recorded in the financial statements in different years than recognized in the tax returns. The components of the net deferred income tax liability consisted of the following at December 31:

	2005			2004
Deferred tax assets:
Allowance for losses on receivables	$	202		$	151
Other		46			44
		248			195
Deferred tax liabilities:
Leased assets		(1,494	)		(1,399	)
Other		(23	)		(5	)
		(1,517	)		(1,404	)
		(1,269	)		(1,209	)
Deferred tax on accumulated other comprehensive income (loss)		(5	)		15
Net deferred tax liability	$	(1,274	)	$	(1,194	)

Income tax computed at the United States federal income tax rate and the provision (benefit) for tax on income differ as follows for the years ended December 31:

	2005					2004					2003
Tax computed at federal statutory rate	$	81		35.0	%	$	64		35.0	%	$	32		35.0	%
State income taxes, net of federal tax benefit		7		2.8			2		1.3			2		1.8
Foreign sales corporation/extraterritorial income tax benefit		(6	)	(2.5	)		(7	)	(4.0	)		(16	)	(17.0	)
Other		4		1.8			3		1.6			–		–
	$	86		37.1	%	$	62		33.9	%	$	18		19.8	%

We, as part of the consolidated Boeing organization, reached a settlement with the IRS for the years 1998 through 2001. Boeing has filed protests contesting certain adjustments made by the IRS in that audit and will be reviewing those items with the IRS appeals office. IRS examinations have been completed through 2001 and income taxes settled with the IRS for all years through 1996 and for McDonnell Douglas Corporation (MDC), a subsidiary of Boeing, for all years through 1992. Boeing has filed appeals with the IRS for 1993 through 1997 for MDC. The outcome of such matters is not expected to have a material impact on our earnings, cash flows and/or financial position.

Pursuant to our tax sharing agreement with Boeing, we received payments with respect to tax benefits from Boeing of $25 and $157 in 2005 and 2003, and made a payment with respect to tax obligations to Boeing of $123 in 2004. We made income tax payments to or had receipts from other federal, state and foreign tax agencies of $2, $4 and $1 in 2005, 2004 and 2003, respectively.

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Note 9 – Debt and Credit Agreements

Debt, including the effects of interest rate swaps and deferred debt costs, net, consisted of the following at December 31:

	2005		2004
Senior debt:
Variable rate (three-month LIBOR plus 0.06%) note due 2012	$	–	$	5
4.75% note due 2008		486		498
5.65% note due 2006		507		514
5.75% note due 2007		749		748
5.80% note due 2013		602		610
6.10% note due 2011		760		772
6.50% note due 2012		747		757
7.375% note due 2010		516		537
Non-recourse variable rate note due 2012 (one-month LIBOR plus 1.1%-2.46%)		43		45
4.84% – 5.79% non-recourse notes due through 2013		37		39
3.25% – 6.35% retail medium-term notes due through 2013		772		874
4.76% – 7.64% medium-term notes due through 2023		909		1,345
1.67% – 7.00% capital lease obligations due through 2015		194		280
	$	6,322	$	7,024

On February 16, 2001, we filed a public shelf registration of $5,000 of debt securities with the Securities and Exchange Commission (SEC). As of December 31, 2005, an aggregate amount of $402 remains available for issuance. On February 22, 2002, we filed a public shelf registration of $5,000 of debt securities with the SEC. As of December 31, 2005 an aggregate amount of $3,019 (which includes $119 of retail medium-term notes) remains available for issuance. The availability of funding under these shelf registrations as a funding source is dependent on investor demand and market conditions.

On June 6, 2002, we established a Euro medium-term note program in the amount of $1,500. At December 31, 2005 and 2004, we had zero debt outstanding under the program such that $1,500 would normally be available for potential debt issuance. However, debt issuance under this program requires that documentation, information and other procedures relating to us and the program be updated within the prior twelve months. In view of our cash position and other available funding sources, we determined during 2004 that it was unlikely we would need to use this program in the foreseeable future. The program is thus inactive but available with updated registration statements.

We have a $2,000 Commercial Paper (CP) program that serves as a potential low-cost source of short-term liquidity subject to market conditions. Throughout 2005 and at December 31, 2005, there were no amounts outstanding under the CP program.

The most restrictive provisions of various debt agreements require us to (a) limit the payment of cash dividends to the extent that our consolidated assets would be less than 115% of our consolidated liabilities (excluding deferred taxes) after dividend payments and (b) restrict the amount of liens on our property to secure indebtedness to 15% or less of consolidated assets, other than liens specifically excluded. At December 31, 2005, as well as during the year, we were in compliance in all material respects with these and our various other debt covenants.

In July 2004, we redeemed $1,000 face value of our outstanding senior notes ahead of their scheduled redemption. This included the entire principal balance, equal to $500 face value, of our 7.10% senior notes due in 2005 and $500 face value of our 5.65% senior notes due in 2006. We recognized a loss

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of $42 related to this early debt redemption which consisted of a $52 prepayment penalty for early redemption offset by $10 related to the amount by which the fair value of our hedged redeemed debt exceeded the carrying value of our hedged redeemed debt.

Maturities of principal payments for debt and capital lease obligations are as follows at December 31:

	Debt		Capital Leases
2006	$	651	$	45
2007		1,262		57
2008		694		22
2009		520		9
2010		636		9
Thereafter		2,354		52
	$	6,117	$	194

In 2005, 2004 and 2003, interest payments were $361, $388 and $448, respectively.

Note 10 – Derivative Financial Instruments

We manage interest rate risk through the use of derivatives. We enter into interest rate swap contracts with a number of major financial institutions. Since we believe it is unlikely that any of our counterparties will be unable to perform under the terms of these derivative financial instruments, we generally do not require collateral or other security.

Fair Value Hedges

Interest rate swaps, under which we agree to pay variable rates of interest, are designated as fair value hedges of fixed rate debt. For our fair value hedges that qualify for hedge accounting treatment we use the short-cut method and thus there are no gains or losses recognized due to hedge ineffectiveness. Unrealized gains or losses from changes in the value of fair value hedges are offset by changes in the fair value of the hedged underlying debt. In addition, the transition adjustment related to fair value hedges that did not qualify for hedge accounting treatment under SFAS No. 133, as amended, is being reclassified into interest income over the remaining maturity of the hedged debt.

For the years ended December 31, 2005, 2004 and 2003, we recorded $12, $14, and $13 of income related to the amortized basis adjustment of certain terminated swaps as a reduction of interest expense, respectively.

In July 2004, as part of an early debt redemption, we redeemed 50% of our senior notes due in 2006. Since we hedged a portion of this specific debt instrument, we recorded our hedges as proportionate hedges. As a result of the early debt redemption, 50% of the outstanding hedges no longer qualified for hedge accounting treatment and 50% of the unamortized fair value adjustment related to previously terminated swaps was recognized in income, resulting in a $10 reduction in the cost of early debt redemption.

Cash Flow Hedges

Interest rate swap contracts under which we agree to pay a fixed rate of interest are designated as cash flow hedges of variable-rate debt obligations.

For our cash flow hedges that qualify for hedge accounting treatment we use the short-cut method, and thus there are no gains or losses recognized due to hedge ineffectiveness. We record unrealized gains

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or losses from changes in the fair value of cash flow hedges in Accumulated other comprehensive income (loss). We also reclassify into income, as an increase or decrease to interest expense, over the remaining maturity of the hedged variable rate debt the transition adjustment related to cash flow hedges that were recorded in Accumulated other comprehensive income as they did not qualify for hedge accounting treatment under SFAS No. 133, as amended.

The amount expected to be reclassified to interest expense in the next 12 months is immaterial.

Other Derivative Instruments

We hold certain interest rate exchange agreements and interest rate swaps which do not receive hedge accounting treatment. For the years ended December 31, 2005, 2004 and 2003, we recorded net losses of $4, $3, and $1, respectively, on these derivative instruments.

For the years ended December 31, 2005, 2004 and 2003, the warrants recorded in Other assets had changes in fair value, resulting in an addition to Other income of $5, a reduction to Other income of $2 and an addition to Other income of $26, respectively.

Note 11 – Share-Based Plans Expense

We early adopted the provisions of SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment as of January 1, 2005, using the modified prospective method.

Share-based plans relate to Performance Shares, which are stock units that are convertible to Boeing stock, on a one-to-one basis, contingent upon the Boeing stock price performance. Share-based plans expense is included in Operating expenses since the expense relates to incentive compensation issued primarily to our executives. For the years ended December 31, 2005, 2004 and 2003 we recorded $17, $9 and $6 attributable to share-based plans expense. The increase in share-based plans expense for 2005 was primarily due to the attainment of performance thresholds.

For Performance Shares granted prior to 2005, share-based plans expense was determined based upon the market price of Boeing stock at the time of the award, applied to the maximum number of shares contingently issuable based on stock price. This expense is being amortized over a five-year period.

For Performance Shares granted in 2005, the fair value of each award was estimated on the date of grant using a Monte Carlo simulation model instead of the grant date market price used for previous awards. We changed our valuation technique based on further clarification provided in SFAS No.123R and the fact that our Performance Shares contain a market condition, which in accordance with SFAS No. 123R, should be reflected in the grant date fair value of an award.

Note 12 – Commitments and Contingencies

Litigation

Various legal proceedings and claims are pending or have been asserted against us. We believe that the final outcome of these proceedings and claims will not have a material adverse effect on our earnings, cash flows and/or financial position.

Restructurings and Restructuring Requests

At December 31, 2005 and 2004, United accounted for $1,080 and $1,131 (11.7% and 11.7%) of our total portfolio. At December 31, 2005, United was our second largest customer based on portfolio

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carrying value. At December 31, 2005, our United portfolio was secured by security interests in two 767 aircraft and 13 777 aircraft and by an ownership and security interests in five 757 aircraft. At December 31, 2005, United was current on all of its obligations related to these 20 aircraft. On February 1, 2006, United emerged from bankruptcy and assumed all of the Boeing-related notes receivable and leases which were restructured in September, 2003 as part of the bankruptcy proceeding.

At December 31, 2005 and 2004, ATA accounted for $253 and $705 (2.7% and 7.3%) of our total portfolio. At December 31, 2005, the ATA portfolio consisted of operating leases for six 757 aircraft and a note receivable. At December 31, 2005 and December 31, 2004, we had no receivables from ATA with installments more than 90 days delinquent. ATA is planning to emerge from bankruptcy during the first quarter of 2006.

On October 26, 2004, ATA filed for Chapter 11 bankruptcy protection. As a result, on December 29, 2004, we entered into an agreement in principle with ATA whereby ATA agreed to continue to lease the 12 757 aircraft under restructured terms and agreed to return eight of the 12 757 aircraft during the second half of 2005 and early 2006. ATA is obligated to pay rent on all aircraft until returned. We concurrently entered into an agreement with Continental Airlines (Continental) to lease each of these eight 757 aircraft as they are returned by ATA. In February 2005, following completion of certain conditions, we reclassified the 12 757 aircraft from finance leases to equipment under operating leases. On July 14, 2005, the bankruptcy court approved ATA’s assumption of 11 of the restructured 757 aircraft leases by mutual agreement between us and ATA, one 757 aircraft lease was rejected and the aircraft returned to accommodate our timely re-leasing of the aircraft to Continental. The bankruptcy court order also approved a settlement agreement setting forth our deficiency claim for the four 757 aircraft to be retained by ATA and a process for determining the amount of our deficiency claim for the remaining eight 757 aircraft that will be returned to us. During 2005, six of the eight aircraft were returned and subsequently delivered to Continental. The remaining two aircraft were returned to us and delivered to Continental in January 2006.

At December 31, 2005 and 2004, VARIG accounted for $270 and $400 (2.9% and 4.1%) of our total portfolio. At December 31, 2005, the VARIG portfolio consisted of two 737 aircraft and six MD-11 aircraft. We exercised early lease termination rights and took possession of two MD-11 aircraft in the second quarter of 2005 with a carrying value of $73 and sold the aircraft to Boeing. The aircraft were subsequently sold to another customer. On June 17, 2005, VARIG filed a request for reorganization which was granted on June 22, 2005 by Brazilian Reorganization Courts. VARIG presented a reorganization plan to the court on September 12, 2005. In October 2005, VARIG returned one MD-11 aircraft which was immediately re-leased to another customer. In December 2005, VARIG’s reorganization plan was approved by the creditors and the Brazilian Reorganization Court. In recent years, VARIG has repeatedly defaulted on its obligations under leases with us, which has resulted in deferrals and restructurings, some of which are ongoing. Boeing has provided us with first loss deficiency and partial rental guarantees covering $230 of the VARIG obligations. In December 2005, we committed to provide a loan facility of $14 to VARIG to assist with payment for the repair of certain MD-11 engines, for which we recorded a liability of $14 offset by a receivable from Boeing for $14. Taking into account the guarantees from Boeing, we do not expect the VARIG bankruptcy, including the impact of any restructurings, to have a material adverse effect on our earnings, cash flows and/or financial position.

At December 31, 2005 and 2004, Delta accounted for $118 and $146 (1.3% and 1.5%) of our total portfolio. At December 31, 2005, the Delta portfolio consisted of two EETCs secured by 17 767 aircraft, 18 737 aircraft and 13 757 aircraft. On September 14, 2005, Delta filed for Chapter 11 bankruptcy protection. Delta retains certain rights by operating under Chapter 11 bankruptcy protection, including the right to reject the restructuring terms with its creditors and return aircraft, including our aircraft. To date, none of the aircraft securing our investments have been rejected or returned. Although Delta has

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affirmed its obligations for the two EETCs in the bankruptcy court, Delta still reserves the right to reject or return the aircraft. We do not expect that the current bankruptcy or reorganization of Delta, including a return of some or all of the aircraft financed, will have a material effect on our future earnings, cash flows and/or financial position.

At December 31, 2005 and 2004, Northwest accounted for $494 and $295 (5.4% and 3.0%) of our total portfolio. At December 31, 2005, the Northwest portfolio consisted of notes receivable on three 747 aircraft, three 757 aircraft, and three additional notes receivable, as well as an EETC secured by 11 A319 aircraft, three A330 aircraft and six 757 aircraft and an ETC secured by one 747 aircraft. On September 14, 2005, Northwest filed for Chapter 11 bankruptcy protection. Northwest retains certain rights by operating under Chapter 11 bankruptcy protection, including the right to reject executory contracts with its creditors and return aircraft, including our aircraft. Northwest has filed a motion to reject leases or return certain aircraft. Although Northwest has identified one 747 aircraft financed by an ETC in which we own an interest as being subject to potential rejection, this aircraft has not yet been rejected or returned. In October 2005, Northwest requested a restructuring of certain obligations and we are currently negotiating restructuring terms. Taking into account the guarantees from Boeing on certain notes receivable from Northwest, we do not expect the Northwest bankruptcy, including the impact of any restructurings, to have a material effect on our future earnings, cash flows and/or financial position.

In addition to the customers discussed above, certain other customers have requested a restructuring of their transactions with us. We have not reached agreement on any other restructuring requests that we believe would have a material adverse effect on our earnings, cash flows and/or financial position.

Commitments

At December 31, 2005, we had financing commitments of $2,130, and Boeing and BCSC had unfunded commercial aircraft financing commitments of $11,366, consisting of both firm and contingent contracts. These commitments are provided to give Boeing customers reasonable assurance of financing in connection with orders of Boeing products in advance of delivery. However, customers typically seek lower cost financing from other sources prior to actual delivery. In addition, we continue to work with third party financiers to provide alternative financing to customers, which eliminates the need for our financing. Based on historical experience, we anticipate that a significant portion of these commitments will not be exercised by the customer or will expire without being fully drawn upon. To the extent we are obligated to provide financing, such financing generally includes participation by engine manufacturers which further reduces our obligation. Therefore, the reported amount of commitments does not necessarily represent a future cash requirement. However, if there were requirements to fund all Boeing and BCSC commitments totaling $11,366, the timing in which these commitments may be funded (based on estimated earliest delivery dates) is as follows:

– up to $389 in less than one year,

– an additional $6,027 in one to three years,

– an additional $1,757 in three to five years and

– an additional $3,193 after five years.

We expect to ultimately provide funding for those Boeing and BCSC commitments which are exercised.

However, if we were required to fund all of our commitments totaling $2,130, the timing in which these commitments may be funded (based on estimated earliest delivery dates) is as follows:

– up to $482 in less than one year,

– up to $645 in one to three years,

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– an additional $240 in three to five years and

– an additional $763 after five years.

We expect to ultimately provide funding for those commitments which are exercised.

Lease Commitments

Rent expense for office leases under operating lease agreements was $1, $4 and $3 for the years ended December 31, 2005, 2004 and 2003, respectively. At December 31, 2005, the minimum future rental commitments under these non-cancelable leases payable over the remaining lives of the leases aggregated $1 and are due to be funded in less than one year.

Note 13 – Off-Balance Sheet Arrangements

We are a party to off-balance sheet arrangements, including guarantor obligations and variable interests in unconsolidated entities.

Guarantor Obligations

The following table provides quantitative data regarding our third party guarantees at December 31, 2005 and 2004. The maximum potential payment amounts represent a “worst-case scenario,” and do not necessarily reflect results that we expect. Estimated proceeds from collateral and recourse represent the anticipated values of assets we could liquidate or receive from other parties to offset our payment obligations under guarantees. The carrying value of liabilities recorded on the consolidated balance sheets reflects fees received for extending these guarantees.

	Maximum Potential Payments		Estimated Proceeds from Collateral/ Recourse		Carrying Value of Liabilities (2)
Residual value guarantees	$	75	$	75	$	4
Credit and deficiency guarantees (1)		7		–		–
	$	82	$	75	$	4

⁽¹⁾ This amount is indemnified by Boeing.

⁽²⁾ Amounts included in Other liabilities.

Under these residual value guarantees, we are obligated to make payments to a guaranteed party if the related aircraft or equipment fair values fall below a specified amount at a future time. These obligations are collateralized principally by commercial aircraft and expire in three to five years.

Under these credit and deficiency guarantees, we are obligated to make payments to a guaranteed party if the original debtor or lessee does not make payments. Current outstanding credit and deficiency guarantees expire within the next seven years.

Material Variable Interest in Unconsolidated Entities

Our investments in an ETC, EETCs and other Variable Interest Entities (VIEs) are included within the scope of Revised Interpretation No. 46 (FIN 46(R)), Consolidation of Variable Interest Entities.

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We have investments in an ETC and a number of EETCs which were acquired between 1999 and 2005. ETCs and EETCs are trusts that passively hold investments in aircraft or pools of aircraft. The ETC and EETCs provide investors with a collateral position in the related assets. The ETC provides investors with rights to cash flows from a financial instrument. EETCs provide investors with tranched rights to cash flows from a financial instrument. Our investments in an ETC and EETCs do not require consolidation under FIN 46(R). At December 31, 2005, our maximum exposure to economic loss from an ETC and EETCs is $269. Accounting losses from our investments in an ETC and EETCs, if any, could differ from period to period. At December 31, 2005, the ETC and EETC transactions in which we invested had total assets of $3,985 and total debt (which is non-recourse to us) of $3,716. During 2005, we recorded revenue of $36 and cash flows of $65 related to these investments.

From 1998 through 2005 we provided subordinated loans to certain VIEs. VIEs are financial structures commonly utilized by airlines, lenders and loan guarantors including, for example, the Export-Import Bank of the United States. These VIEs are included in the scope of FIN 46(R); however, only certain VIEs require consolidation. VIE arrangements are utilized to isolate individual transactions for legal liability or tax purposes, or to perfect security interests or for other structuring reasons. At December 31, 2005, our maximum exposure to economic loss from these non-consolidated VIEs is $12. At December 31, 2005, VIEs of which we were not the primary beneficiary, other than the ETC and EETCs noted above had total assets of $161 and total debt (which is non-recourse to us) of $150. During 2005, we recorded revenue of $1 and cash flows of $6 related to these VIEs.

Capital lease obligations

We have off-balance sheet items that relate to capital lease obligations for four cross-border financing transactions each involving an MD-11 aircraft leased to us and subleased by us to our commercial aircraft customers. At December 31, 2005 these transactions included restricted cash deposits denominated in yen in an amount equivalent to $101 and an equal amount of liabilities reflecting our obligations to purchase underlying aircraft with these deposits by 2008. These liabilities and corresponding deposits are considered defeased based upon their structure.

Note 14 – Fair Value of Financial Instruments

The carrying values and estimated fair values of our financial instruments were as follows at December 31:

	2005						2004
	Carrying Value			Fair Value			Carrying Value			Fair Value
ASSETS
Notes and other	$	2,181		$	2,241		$	2,228		$	2,240
Interest rate swaps	$	26		$	26		$	67		$	67
Other derivative instruments	$	–		$	–		$	6		$	6
LIABILITIES
Debt, excluding capital lease obligations	$	(6,128	)	$	(6,440	)	$	(6,744	)	$	(7,243	)
Interest rate swaps	$	(32	)	$	(32	)	$	(8	)	$	(8	)
OFF-BALANCE SHEET ARRANGEMENTS
Guarantor obligations from us	$	(4	)	$	(4	)	$	(4	)	$	(2	)

Items not included in the above disclosures are Cash and cash equivalents and Investments. The estimated fair value of those items approximate their fair value at December 31, 2005 and 2004 as reflected in the Consolidated Balance Sheets.

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Notes and other. The fair value of our variable rate notes that reprice frequently approximate their carrying values. The fair values of fixed rate notes are estimated using discounted cash flows analysis using interest rates currently offered on loans with similar terms to borrowers of similar credit quality.

Interest rate swaps and Other derivative instruments. The fair values of our interest rate swaps and other derivative instruments are based on standard discounted cash flow techniques or quoted market prices of comparable instruments.

Debt, excluding capital lease obligations. The fair values of debt are based on current market rates for debt of the same risk and maturities. Our debt is generally not callable until maturity.

Financing commitments. It is not practicable to estimate the fair value of future financing commitments because the amount and timing of funding those commitments are uncertain.

Guarantees. For residual value, credit and deficiency guarantees where we are the guarantor, the present value of the expected liability has been used to approximate fair value.

Note 15 – Concentrations

Generally, each asset in our portfolio is backed both by the value of the equipment that we have financed and by a particular customer’s credit. Our risk is that both a customer defaults and the current market value of the related equipment does not equal or exceed the amount of our investment. That risk is sometimes mitigated by cross-collateralization or other transactional features. Our risk on certain transactions has been mitigated in part by transactional support provided by Boeing; that support is concentrated on the 717 financing in our portfolio. Because of our mission, our portfolio is concentrated in Boeing equipment financed for Boeing customers. However, because our risk of loss is determined by many factors, the single-factor analyses of our portfolio shown below should not be interpreted as defining our concentrations of risk.

Portfolio carrying values for our five largest customers were as follows at December 31:

	2005
	Carrying Value		% of Total Portfolio
AirTran	$	1,679	18.2	%
United		1,080	11.7
American		729	7.9
Midwest		552	6.0
Northwest		494	5.4
	$	4,534	49.2	%

	2004
	Carrying Value		% of Total Portfolio
AirTran	$	1,571	16.2	%
United		1,131	11.7
American		779	8.0
ATA		705	7.3
Hawaiian		456	4.7
	$	4,642	47.9	%

46

At December 31, 2005 and 2004, our AirTran Holdings, Inc. (AirTran) portfolio consisted of leases on 75 and 69 717 aircraft and an EETC with a carrying value of $21 and $25. For the years ended December 31, 2005 and 2004, AirTran accounted for more than 10% of our revenue.

At December 31, 2005 and 2004, our American portfolio consisted of leases on 39 MD-83 aircraft and four MD-82 aircraft, subordinated debt in one 777 aircraft, and secured loans on nine 767 aircraft and two 777 aircraft.

At December 31, 2005 and 2004, our Midwest Airlines, Inc. (Midwest) portfolio consisted of leases on 22 and 17 717 aircraft.

Portfolio carrying values were represented in the following regions at December 31:

	2005				2004
	Carrying Value		% of Total Portfolio		Carrying Value		% of Total Portfolio
United States	$	6,783	73.7	%	$	6,898	71.3	%
Europe		1,171	12.7			1,218	12.6
Asia/Australia		624	6.8			843	8.7
Latin America		490	5.3			616	6.3
Other		138	1.5			105	1.1
	$	9,206	100.0	%	$	9,680	100.0	%

Revenue from customers by geographic region was as follows for the years ended December 31:

	2005		2004		2003
United States	$	622	$	578	$	614
Europe		143		152		134
Asia/Australia		95		110		140
Latin America		92		108		93
Other		14		11		10
	$	966	$	959	$	991

Portfolio carrying values were represented by the following product types at December 31:

	2005
	Receivables (1)		Operating Leases (1)		Investments (2)		Held for Sale or Re-Lease		Total
717	$	1,955	$	658	$	21	$	–	$	2,634
757		288		934		–		–		1,222
777		1,048		–		–		–		1,048
767		598		309		–		–		907
737		46		655		–		36		737
MD-11		92		597		–		–		689
747		100		395		9		–		504
MD-80		320		92		–		–		412
Other (3)		502		300		240		11		1,053
	$	4,949	$	3,940	$	270	$	47	$	9,206

47

	2004
	Receivables (1)		Operating Leases (1)		Investments (2)		Held for Sale or Re-Lease		Total
717	$	1,851	$	537	$	25	$	–	$	2,413
757		981		460		–		20		1,461
777		1,061		–		–		–		1,061
767		717		373		–		–		1,090
737		82		696		–		–		778
MD-11		146		701		–		–		847
747		120		419		9		–		548
MD-80		343		101		–		–		444
Other (3)		401		328		292		17		1,038
	$	5,702	$	3,615	$	326	$	37	$	9,680

⁽¹⁾ Includes owned aircraft and receivables secured by aircraft, some of which are subordinated.

⁽²⁾ Represents aircraft and other investments secured by equipment through EETCs, ETC and other trust-related interests and other investments that we hold.

⁽³⁾ Includes receivables, stock, equipment and aircraft. Some of these aircraft are out of production, but are supported by the manufacturer or other third party parts and service providers.

Our aircraft portfolio by vintage, based on carrying value (excluding investments), are categorized as follows at December 31:

	2005		2004
5 years old or less	67.4	%	68.5	%
6 – 10 years old	13.0		13.5
11 – 15 years old	9.8		11.0
Older than 15 years	9.8		7.0
	100.0	%	100.0	%

Note 16 – Quarterly Financial Information (Unaudited)

	Three Months Ended
	March 31		June 30			September 30		December 31
2005
Revenue	$	237	$	261	(1)	$	230	$	238
Income from continuing operations	$	29	$	76	(1)	$	15	$	26
Net income	$	29	$	71		$	13	$	26
2004
Revenue	$	251	$	229		$	253	$	226
Income from continuing operations	$	47	$	12		$	39	$	23
Net Income	$	56	$	33		$	57	$	27

⁽¹⁾ Certain reclassifications have been made to conform to the current year’s presentation.

48

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, based on their evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K, have concluded that our disclosure controls and procedures are effective for ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Change in Internal Controls

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

49

PART III

Item 10. Directors and Executive Officers of the Registrant

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 11. Executive Compensation

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 13. Certain Relationships and Related Transactions

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 14. Principal Accounting Fees and Services

The aggregate fees billed by Deloitte & Touche LLP, our independent auditors, were as follows during the years ended 2005 and 2004:

Services Rendered / Fees (Dollars in millions)	2005		2004
Audit fees (1)	$	2.1	$	2.5

⁽¹⁾ For professional services rendered for the audit of our annual financial statements, the reviews of the financial statements included in our Form 10-Qs for the years ended 2005 and 2004, fees for issuance of comfort letters and consents related to SEC filings and other statutory audits.

The Audit Committee of Boeing serves the audit committee function for us. Boeing’s Audit Committee (Committee) has considered whether the provision of non-audit services is compatible with maintaining the independence of Deloitte & Touche LLP, our independent auditors

The Committee approved all fees noted above.

The Committee has adopted a policy governing its pre-approval of audit and non-audit services to be provided to us by our independent auditors, Deloitte & Touche LLP, in order to facilitate compliance with the requirements of the Sarbanes-Oxley Act. Pursuant to this policy, Boeing’s Office of the Corporate Controller will obtain the Committee’s pre-approval of audit and non-audit services to be provided to us by the independent auditor on an annual basis. Committee pre-approval is also required for additional audit and/or non-audit services outside the scope of previously approved services in the event the fees for such additional services are equal to or greater than $250,000. On a quarterly basis, Boeing’s Office of the Corporate Controller will provide written updates to the Committee showing audit and non-audit services, the amount of audit and non-audit service fees incurred to date, and the estimated cost to complete such services.

50

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)    1.        Financial Statements:

All consolidated financial statements of the Company as set forth under Item 8 of this Annual Report on Form 10-K.

2. Financial Statement Schedule

None.

3. Exhibits

3.1 Restated Certificate of Incorporation of the Company dated June 29, 1989, incorporated herein by reference to Exhibit 3.1 to our Form 10-K for the year ended December 31, 1993.

3.2 Amendment to Certificate of Incorporation of the Company dated August 11, 1997, incorporated herein by reference to Exhibit 3(i) to our Form 10-Q, for the period ended June 30, 1997.

3.3 By-Laws of the Company, as amended to date, incorporated herein by reference to Exhibit 3.2 to our Form 10-K for the year ended December 31, 1993.

4.1 First Supplemental Indenture, dated June 12, 1995, between the Company and Bankers Trust Company, incorporated herein by reference to Exhibit 4(b) to our Form S-3 Registration Statement (File No. 33-58989).

4.2 Subordinated Indenture, dated June 15, 1988, by and between the Company and Bankers Trust Company of California, N.A., as Subordinated Indenture Trustee, incorporated by reference to Exhibit 4(b) to our Form S-3 Registration Statement (File No. 33-26674).

4.3 First Supplemental Subordinated Indenture, dated June 12, 1995, between the Company and Bankers Trust Company, as successor Trustee to Bankers Trust Company of California, N.A., incorporated herein by reference to Exhibit 4(d) to our Form S-3 Registration Statement (File No. 33-58989).

4.4 Indenture, dated April 15, 1987, incorporated herein by reference to Exhibit 4 to our Form S-3 Registration Statement (File No. 33-26674).

4.5 Senior Indenture, dated August 31, 2000, incorporated by reference to Exhibit 4(a) to our Amendment No. 2 to Form S-3 Registration Statement, dated August 30, 2000 (File No. 333-82391).

4.6 Subordinated Indenture, dated August 31, 2000, incorporated by reference to Exhibit 4(b) to our Amendment No. 2 to Form S-3 Registration Statement, dated August 30, 2000 (File No. 333-82391).

4.7 Form of Series X Senior Fixed Rate Medium-Term Note, incorporated herein by reference to Exhibit 4(e) to our Form S-3 Registration Statement (File No. 33-58989).

4.8 Form of Series X Senior Floating Rate Medium-Term Note, incorporated herein by reference to Exhibit 4(h) to our Form S-3 Registration Statement (File No. 33-58989).

4.9 Form of Series X Senior Fixed Rate Medium-Term Note, incorporated by reference to Exhibit 4(e) to our Form S-3 Registration Statement (File No. 333-37635).

4.10 Form of Series X Senior Floating Rate Medium-Term Note, incorporated by reference to Exhibit 4(g) to our Form S-3 Registration Statement (File No. 333-37635).

4.11 Form of Series XI Senior Fixed Rate Medium-Term Note, incorporated by reference to Exhibit 4(c) to our Form S-3 Registration Statement (File No. 333-82391).

4.12 Form of Series XI Subordinated Fixed Rate Medium-Term Note, incorporated by reference to Exhibit 4(d) to our Form S-3 Registration Statement (File No. 333-82391).

51

4.13 Form of Series XI Senior Floating Rate Medium-Term Note, incorporated by reference to Exhibit 4(e) to our Form S-3 Registration Statement (File No. 333-82391).

4.14 Form of Series XI Subordinated Floating Rate Medium-Term Note, incorporated by reference to Exhibit 4(f) to our Form S-3 Registration Statement (File No. 333-82391).

Pursuant to Item 601 (b)(4)(iii) of Regulation S-K, we are not filing certain instruments with respect to our debt, as the total amount of securities currently provided for under each of such instruments does not exceed 10 percent of our total assets on a consolidated basis. We hereby agree to furnish a copy of any such instrument to the SEC upon request.

10.1 364-Day Credit Agreement dated November 18, 2005, between Boeing and the banks listed therein.

10.2 Five-Year Credit Agreement dated November 18, 2005, between Boeing and the banks listed therein.

10.3 Letter agreement relating to the 364-Day Credit Agreement and the Five-Year Credit Agreement, dated November 18, 2005, between Boeing and us.

10.4 Operating Agreement, dated September 13, 2000, by and between us, Boeing Capital Services Corporation and Boeing, incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed September 19, 2000.

10.5 Operating Agreement, dated September 13, 2000, by and between Boeing Capital Services Corporation and Boeing, incorporated herein by reference to Exhibit 10.2 to our Form 8-K filed September 19, 2000.

10.6 Support Agreement, dated December 23, 2003, by and between us and Boeing, incorporated herein by reference to Exhibit 99.1 to our Form 8-K filed December 24, 2003.

10.7 Purchase and Sale Agreement dated May 24, 2004, among Boeing Capital Corporation, BCC Equipment Leasing Corporation, McDonnell Douglas Overseas Finance Corporation, Boeing Capital Loan Corporation and General Electric Capital Corporation, incorporated herein by reference to Exhibit 10.1 to our 8-K dated June 24, 2004.

10.8 Amendment and Joint Waiver dated May 31, 2004, among Boeing Capital Corporation, BCC Equipment Leasing Corporation, McDonnell Douglas Overseas Finance Corporation, Boeing Capital Loan Corporation and General Electric Capital Corporation, incorporated herein by reference to Exhibit 10.2 to our Form 8-K dated June 24, 2004.

12 Computation of Ratio of Income to Fixed Charges.

23 Consent of Independent Registered Public Accounting Firm.

31.1 Certification of President pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of President pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This document is being furnished in accordance with Securities and Exchange Commission Release Nos. 33-8212 and 34-47551.

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This document is being furnished in accordance with Securities and Exchange Commission Release Nos. 33-8212 and 34-47551.

52

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Boeing Capital Corporation
February 27, 2006	/s/ RUSSELL A. EVANS
	Russell A. Evans
	Vice President and Chief Financial Officer (Principal Financial Officer) and Registrant’s Authorized Officer
February 27, 2006	/s/ KEVIN J. MURPHY
	Kevin J. Murphy
	Controller (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Boeing Capital Corporation
February 27, 2006	/s/ JAMES A. BELL
	James A. Bell Chairman and Director
February 27, 2006	/s/ JAMES C. JOHNSON
	James C. Johnson Director
February 27, 2006	/s/ R. PAUL KINSCHERFF
	R. Paul Kinscherff Director
February 27, 2006	/s/ WALTER E. SKOWRONSKI
	Walter E. Skowronski President and Director (Principal Executive Officer)

53

EX-10.1

EXHIBIT 10.1

EXECUTION COPY

THE BOEING COMPANY

364-DAY

CREDIT AGREEMENT

among

THE BOEING COMPANY

for itself and on behalf of its Subsidiaries,

as a Borrower

THE LENDERS PARTY HERETO

CITIBANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.

as Syndication Agent

and

CITIGROUP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Book Managers

dated as of November 18, 2005

TABLE OF CONTENTS

Article and Section			Page
ARTICLE 1 DEFINITIONS
	1.1	Definitions	1
	1.2	Use of Defined Terms; References	11
	1.3	Accounting Terms	11
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES
	2.1	Committed Advances	11
	2.2	Making Committed Advances	11
	2.3	Conversion to Term Loans, Repayment	13
	2.4	Interest Rate on Committed Advances	13
	2.5	Bid Advances	14
	2.6	Lender Assignment or Sale	17
	2.7	Fees	17
	2.8	Reduction of the Commitments	18
	2.9	Additional Interest on Eurodollar Rate Committed Advances	18
	2.10	Eurodollar Interest Rate Determination	18
	2.11	Voluntary Conversion of Committed Advances	19
	2.12	Prepayments	19
	2.13	Increases in Costs	20
	2.14	Taxes	21
	2.15	Illegality	23
	2.16	Payments and Computations	24
	2.17	Sharing of Payments, Etc.	24
	2.18	Evidence of Debt	25
	2.19	Alteration of Commitments and Addition of Lenders	25
	2.20	Assignments; Sales of Participations and Other Interests in Advances	27
	2.21	Extension of Termination Date	29
	2.22	Subsidiary Borrowers	30
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
	3.1	Representations and Warranties by the Borrowers	32
ARTICLE 4 COVENANTS OF TBC
	4.1	Affirmative Covenants of TBC	34
	4.2	General Negative Covenants of TBC	35
	4.3	Financial Statement Terms	37
	4.4	Waivers of Covenants	37

i

ARTICLE 5 CONDITIONS PRECEDENT TO BORROWINGS
	5.1	Conditions Precedent to the Initial Borrowing of TBC	37
	5.2	Conditions Precedent to Each Committed Borrowing of TBC	38
	5.3	Conditions Precedent to Each Bid Borrowing of TBC	38
	5.4	Conditions Precedent to the Initial Borrowing of a Subsidiary Borrower	39
	5.5	Conditions Precedent to Each Committed Borrowing of a Subsidiary Borrower	39
	5.6	Conditions Precedent to Each Bid Borrowing of a Subsidiary Borrower	40
ARTICLE 6 EVENTS OF DEFAULT
	6.1	Events of Default	41
	6.2	Lenders’ Rights upon Borrower Default	42
ARTICLE 7 THE AGENT
	7.1	Authorization and Action	43
	7.2	Agent’s Reliance, Etc.	43
	7.3	Citibank, N.A. and its Affiliates	43
	7.4	Lender Credit Decision	44
	7.5	Indemnification	44
	7.6	Successor Agent	44
	7.7	Certain Obligations May Be Performed by Affiliates	45
	7.8	Other Agents	45
ARTICLE 8 MISCELLANEOUS
	8.1	Modification, Consents and Waivers	45
	8.2	Notices	46
	8.3	Costs, Expenses and Taxes.	47
	8.4	Binding Effect	48
	8.5	Severability	48
	8.6	Governing Law	48
	8.7	Headings	48
	8.8	Execution in Counterparts	48
	8.9	Right of Set-Off	48
	8.10	Confidentiality	49
	8.11	Agreement in Effect	49
	8.12	Patriot Act Notice	49
	8.13	Jurisdiction, Etc.	49

ii

Exhibit A-1	-	Committed Note
Exhibit A-2	-	Bid Note
Exhibit B-1	-	Notice of Committed Borrowing
Exhibit B-2	-	Notice of Bid Borrowing
Exhibit C	-	Request for Alteration
Exhibit D	-	Borrower Subsidiary Letter
Exhibit E	-	Extension Request
Exhibit F	-	Continuation Notice
Exhibit G	-	Opinion of Counsel of the Company
Exhibit H	-	Opinion of Counsel for Agent
Exhibit I	-	Opinion of in-house counsel to Subsidiary Borrower
Exhibit J	-	Guaranty of TBC
Exhibit K	-	Opinion of Counsel to TBC
Schedule I	-	Commitments

iii

CREDIT AGREEMENT

Dated as of November 18, 2005

THE BOEING COMPANY, a Delaware corporation (“TBC” or the “Company”), for itself and on behalf of the other BORROWERS (as defined below), the LENDERS (as defined below), CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN SECURITIES INC., as joint lead arrangers and joint book managers, JPMORGAN CHASE BANK, N.A., as syndication agent, and CITIBANK, N.A., in its capacity as administrative agent for the Lenders (in such capacity, the “Agent”), agree as follows:

ARTICLE 1

Definitions

1.1 Definitions. As used in this Agreement, the following terms have the respective meanings set out below:

“2004 Credit Agreement” means the 364-Day Credit Agreement, dated as of November 19, 2004, by and among TBC, Citibank, N.A., as administrative agent, and certain other banks as lenders.

“Advance” means a Committed Advance or a Bid Advance.

“Agent” means Citibank, N.A. acting in its capacity as administrative agent for the Lenders, or any successor administrative agent appointed pursuant to Section 7.6.

“Agent’s Account” means the account of the Agent maintained by the Agent with Citibank, N.A., at its office at 388 Greenwich Street, New York, New York 10013, Account 36852248, Attention: Bank Loan Syndications.

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

“Agreement” means this agreement, as it may be amended or otherwise modified from time to time, and any written additions or supplements hereto.

“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office, in the case of a Base Rate Advance, and such Lender’s Eurodollar Lending Office, in the case of a Eurodollar Rate Advance, and, in the case of a Bid Advance, the office of such Lender specified by such Lender in a notice to the Agent as its Applicable Lending Office with respect to such Bid Advance.

“Applicable Margin” means,

(i) with respect to Base Rate Advances, 0% per annum; and

(ii) with respect to Eurodollar Rate Advances for any date, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Margin Through the Termination Date		Applicable Margin After the Termination Date
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.070	%	0.300	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.110	%	0.350	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.200	%	0.450	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.280	%	0.550	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.410	%	0.700	%
Level VI	less than Level V	0.475	%	0.900	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Margin will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Margin will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Margin will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Margin will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Margin for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Margin in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Margin thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Margin in effect immediately prior to such cessation or (b) otherwise, the Applicable Margin as set forth under Level VI above.

2

“Applicable Percentage” means, for any date, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Percentage
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.030	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.040	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.050	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.070	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.090	%
Level VI	less than Level V	0.125	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Percentage will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Percentage will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Percentage will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Percentage will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Percentage for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Percentage in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Percentage thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Percentage in effect immediately prior to such cessation or (b) otherwise, the Applicable Percentage as set forth under Level VI above.

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“Applicable Utilization Fee” means, for any date that the aggregate principal amount of outstanding Advances exceed 50% of the aggregate Commitments, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Utilization Fee
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.050	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.050	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.050	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.050	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.050	%
Level VI	less than Level V	0.150	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Utilization Fee will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Utilization Fee will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Utilization Fee will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Utilization Fee will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Utilization Fee for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Utilization Fee in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Utilization Fee thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Utilization Fee in effect immediately prior to such cessation or (b) otherwise, the Applicable Utilization Fee as set forth under Level VI above.

“Available Commitments” means, as of any date of determination, (a) the aggregate Commitments of the Lenders, as such amount may be reduced, changed or terminated in accordance with the terms of this Agreement, reduced by (b) the aggregate Advances outstanding on such date of determination.

“Base Rate” means the higher of (a) the rate of interest announced publicly by Citibank, N.A., in New York City, from time to time, as Citibank’s “base” rate and (b) the Federal Funds Rate plus 0.50% per annum.

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“Base Rate Advance” means a Committed Advance which bears interest at the Base Rate.

“Bid Advance” means an advance by a Lender to a Borrower as part of a Bid Borrowing resulting from the auction bidding procedure described in Section 2.5, and refers to a Fixed Rate Advance or a Eurodollar Rate Bid Advance, each of which shall be a “Type” of Bid Advance.

“Bid Borrowing” means a borrowing consisting of simultaneous Bid Advances from each of the Lenders whose offers to make one or more Bid Advances as part of such borrowing has been accepted by a Borrower under the auction bidding procedure described in Section 2.5.

“Bid Note” means a promissory note of a Borrower payable to the order of a Lender, in substantially the form of Exhibit A-2, evidencing the indebtedness of that Borrower to such Lender resulting from a Bid Advance made by such Lender to such Borrower.

“Bid Reduction” has the meaning specified in Section 2.1(a).

“Borrower” means, individually and collectively, as the context requires, TBC and each Subsidiary Borrower (unless and until it becomes a “Terminated Subsidiary Borrower” pursuant to Section 2.22).

“Borrower Subsidiary Letter” means, with respect to any Subsidiary Borrower, a letter in the form of Exhibit D, signed by such Subsidiary Borrower and TBC.

“Borrowing” means a Committed Borrowing or a Bid Borrowing.

“Business Day” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advance, on which dealings are carried on in the London interbank market.

“Commitment” means, for each Lender, the full amount set forth opposite the name of such Lender in Schedule I or, if such Lender is a Replacement Lender or a Lender that has entered into one or more assignments pursuant to Section 2.20 or Section 2.21, the amount set forth for such Lender in the Register maintained by the Agent pursuant to Section 2.20(d), as such amount may be reduced pursuant to Section 2.3, Section 2.8 or Section 2.19 or increased pursuant to Section 2.19.

“Committed Advance” means an advance made by a Lender to a Borrower as part of a Committed Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Committed Advance, each of which is a “Type” of Committed Advance.

“Committed Borrowing” means a borrowing consisting of simultaneous Committed Advances of the same Type made by each of the Lenders pursuant to Section 2.1.

“Committed Note” means a promissory note of a Borrower payable to the order of any Lender, in substantially the form of Exhibit A-1, evidencing the indebtedness of that Borrower to such Lender resulting from the Committed Advances made by such Lender to that Borrower.

“Company” means The Boeing Company, a Delaware corporation.

“Confidential Information” means information that a Borrower furnishes to the Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Lender from a source other than a Borrower.

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“Consolidated” refers to the consolidation of accounts in accordance with generally accepted accounting principles.

“Consolidated Net Tangible Assets” means the total amount of assets (less applicable reserves and other properly deductible items) after, deducting therefrom (i) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (ii) all good will, trade names, trademarks, patents, unamortized debt discount and expenses and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated Subsidiaries and computed in accordance with generally accepted accounting principles.

“Continuing Lender” has the meaning specified in Section 2.21(a).

“Convert”, “Conversion” and “Converted” each means a conversion of Committed Advances of one Type into Committed Advances of another Type pursuant to Section 2.10, 2.11 or 2.15.

“Debt” of a Person means

(i) indebtedness for borrowed money or for the deferred purchase price of property or services;

(ii) financial obligations evidenced by bonds, debentures, notes or other similar instruments,

(iii) financial obligations as lessee under leases which have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; and

(iv) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or financial obligations of others of the kind referred to in clauses (i) through (iii) above.

“Default” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“Domestic Lending Office” means with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” opposite its name on Schedule I, or in the assignment or other agreement pursuant to which it became a Lender or such other office of such Lender as such Lender may from time to time specify to TBC and the Agent.

“Effective Date” has the meaning specified in Section 2.19(d).

“Eligible Assignee” means

(i) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus in excess of $3,000,000,000;

(ii) a commercial bank organized under the laws of any other country which is a member of the OECD, or a political subdivision of any such country, and having a combined capital and surplus in excess of $3,000,000,000, provided that such bank is acting through a branch or agency located in either (a) the country in which it is organized or (b) another country which is also a member of the OECD or the Cayman Islands;

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(iii) the central bank of any country which is a member of the OECD;

(iv) any Lender;

(v) an Affiliate of any Lender; or

(vi) any other Person approved in writing, so long as no Event of Default has occurred and is continuing, by TBC, which approval has been communicated in writing to the Agent, provided that neither TBC nor an Affiliate of TBC shall qualify as an Eligible Assignee.

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

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Lending Office” means, with respect to any Lender, (a) the office of such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I (or, if no such office is specified, its Domestic Lending Office) or in the assignment or other agreement pursuant to which it became a Lender or (b) such other office of such Lender as such Lender may from time to time specify to TBC and the Agent.

“Eurodollar Rate” means, for an Interest Period for a Eurodollar Rate Committed Advance constituting part of a Committed Borrowing, and for the relevant period specified in the applicable Notice of Bid Borrowing for a Eurodollar Rate Bid Advance, an interest rate per annum equal to either

(a) the offered rate (rounded to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) for deposits in U.S. dollars for a period substantially equal to such Interest Period (if a Committed Advance) or such relevant period specified in the applicable Notice of Bid Borrowing (if a Bid Advance), appearing on Telerate Markets Page 3750 (or any successor page or, if unavailable for any reason by Telerate, then by reference to Reuters Screen) as of 11:00 a.m. (London time) two business days before the first day of such Interest Period or the first day of the relevant period specified in such Notice of Bid Borrowing; or

(b) if the foregoing rate is unavailable from Telerate or the Reuters Screen for any reason, the average (rounded to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rates per annum are offered by the principal office of each of the Reference Banks to prime banks in the London interbank market at 11:00 a.m. (London time) on deposits in U.S. dollars two Business Days before the first day of such Interest Period or the first day of such relevant period specified in the Notice of Bid Borrowing

(i) for such Eurodollar Committed Advance, on an amount substantially equal to such Reference Bank’s Eurodollar Rate Advance constituting part of such Committed Borrowing and for a period equal to such Interest Period, or

(ii) for such Eurodollar Rate Bid Advance, on an amount substantially equal to the amount of the Eurodollar Rate Bid Borrowing which includes such Bid Advance multiplied by a fraction equal to such Reference Bank’s ratable portion of the Commitments and for a period equal to the relevant period specified in such Notice of Bid Borrowing.

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The Eurodollar Rate for any Interest Period for each Eurodollar Rate Committed Advance constituting part of the same Borrowing and for the relevant period specified in a Notice of Bid Borrowing for each Eurodollar Rate Bid Advance shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period or period, as the case may be, subject, however, to the provisions of Section 2.10.

“Eurodollar Rate Advance” means a Committed Advance (a “Eurodollar Rate Committed Advance”) or a Bid Advance (a “Eurodollar Rate Bid Advance”) which bears interest at a rate of interest quoted as a margin (which shall be the Applicable Margin in the case of a Committed Advance or as offered by a Lender and accepted by a Borrower in the case of a Bid Advance) over the Eurodollar Rate.

“Eurodollar Rate Bid Borrowing” has the meaning specified in Section 2.5(b).

“Eurodollar Rate Reserve Percentage” means the reserve percentage applicable to a Lender for any Interest Period for a Eurodollar Rate Advance during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“Event of Default” means any of the events described in Section 6.1.

“Extension Request” has the meaning specified in Section 2.21.

“Facility Fee” has the meaning specified in Section 2.7.

“Federal Funds Rate” means, for each day during a period, an interest rate per annum equal to the weighted average of the fluctuating rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

“Fitch” means Fitch, Inc.

“Fixed Rate Advance” means an Advance made by a Lender to a Borrower as part of a Fixed Rate Borrowing.

“Fixed Rate Borrowing” has the meaning specified in Section 2.5(b).

“Guaranty” means each Guaranty Agreement executed by TBC in favor of the Agent and the Lenders, unconditionally guaranteeing the payment of all obligations of a Subsidiary Borrower hereunder and under any Notes executed or to be executed by it.

“Indemnified Costs” has the meaning specified in Section 7.5.

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“Indemnified Party” has the meaning specified in Section 8.3(b).

“Interest Period” means, for each Eurodollar Rate Committed Advance constituting part of the same Borrowing, the period commencing on the date of such Committed Advance or the date of the Conversion of a Base Rate Advance into such a Eurodollar Rate Committed Advance and ending on the last day of the period selected by the applicable Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by such Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three, or six months (or nine months, with the consent of all Lenders funding those particular Advances), as the applicable Borrower may, upon notice received by the Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the first day of such Interest Period, select, provided, however, that:

(i) no Interest Period shall end on a date later than the Termination Date (or in the case of a Committed Advance which is converted to a Term Loan pursuant to Section 2.3, the Maturity Date);

(ii) Interest Periods commencing on the same date for Committed Advances constituting part of the same Committed Borrowing shall be of the same duration; and

(iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of the Interest Period shall occur on the immediately preceding Business Day.

“Lender”, subject to Section 2.20, means any of the institutions that is a signatory hereto or that, pursuant to Section 2.13, 2.19, 2.20 or 2.21, becomes a “Lender” hereunder.

“Majority Lenders” means Lenders having greater than 50% of the total Commitments or, if the Commitments have been terminated in full, Lenders holding greater than 50% of the then aggregate unpaid principal amount of the Advances.

“Maturity Date” means the Termination Date or, if the Term Loan Conversion Option described in Section 2.3 has been exercised, the date that is the one-year anniversary of the Termination Date.

“Moody’s” means Moody’s Investor Services, Inc.

“Non-Extending Lender” has the meaning specified in Section 2.21(a).

“Note” means a Committed Note or a Bid Note.

“Notice of Bid Borrowing” has the meaning specified in Section 2.5(b).

“Notice of Borrowing” means a Notice of Committed Borrowing or a Notice of Bid Borrowing.

“Notice of Committed Borrowing” has the meaning specified in Section 2.2(a).

“OECD” means the Organization for Economic Cooperation and Development.

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“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Property, Plant and Equipment” means any item of real property, or any interest therein, buildings, improvements and machinery.

“Proposed Increased Commitment” has the meaning specified in Section 2.19(c).

“Reference Banks” means JPMorgan Chase Bank, N.A., Citibank, N.A., [Bank of America, N.A., and Deutsche Bank AG].

“Register” has the meaning specified in Section 2.20(d).

“Replacement Lenders” has the meaning specified in Section 2.21(c).

“Request for Alteration” means a document substantially in the form of Exhibit C, duly executed by TBC, pursuant to Section 2.19.

“Required Assignment” has the meaning specified in Section 2.20(a).

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

“Subsidiary” means any Person in which more than 50% of the Voting Stock or the interest in the capital or profits is owned by TBC, by TBC and any one or more other Subsidiaries, or by any one or more other Subsidiaries.

“Subsidiary Borrower” means, individually and collectively, as the context requires, each Subsidiary that is or becomes a “Borrower” in accordance with Section 2.22; in each case, unless and until it becomes a “Terminated Subsidiary Borrower”.

“TBC” means The Boeing Company, a Delaware corporation.

“Term Loan” means a term loan resulting from the conversion of Committed Advances on the Termination Date pursuant to Section 2.3.

“Term Loan Conversion Option” means the option under Section 2.3 for TBC to convert, as of the Termination Date, all or a part of the Committed Advances then outstanding into Term Loans.

“Terminated Subsidiary Borrower” means, individually and collectively, as the context requires, a Subsidiary Borrower that has ceased to be a “Borrower” in accordance with Section 2.22.

“Termination Date” means the earlier to occur of (i) November 17, 2006, as such date may be extended from time to time pursuant to Section 2.21, and (ii) the date of termination in whole of the Commitments pursuant to Section 2.8 or Section 6.2.

“Total Capital” has the meaning specified in Section 4.2(b).

“Type”, as to Committed Borrowings, means either Base Rate Advances or Eurodollar Rate Committed Advances and, as to Bid Borrowings, means either Fixed Rate Advances or Eurodollar Rate Bid Advances.

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“Voting Stock” means, as to a corporation, all the issued and outstanding capital stock of such corporation having general voting power, under ordinary circumstances, to elect a majority of the Board of Directors of such corporation (irrespective of whether or not any capital stock of any other class or classes shall or might have voting power upon the occurrence of any contingency).

1.2 Use of Defined Terms; References. Any defined term used in the plural preceded by the definite article encompasses all members of the relevant class. Any defined term used in the singular preceded by “a”, “an” or “any” indicates any number of the members of the relevant class. All references in this Agreement to a Section, Article, Schedule or Exhibit are to a Section, Article, Schedule or Exhibit of or to this Agreement, unless otherwise indicated.

1.3 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistently applied.

ARTICLE 2

Amounts and Terms of the Advances

2.1 Committed Advances.

(a) Obligation to Make Committed Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Committed Advances to the Borrowers from time to time on any Business Day during the period from the date hereof until the Termination Date in an aggregate principal amount at any time outstanding not to exceed such Lender’s Commitment, provided that the aggregate amount of the Commitments of the Lenders shall be deemed used from time to time to the extent of the aggregate amount of the Bid Advances then outstanding and such deemed use of the aggregate amount of the Commitments shall be applied to the Lenders ratably according to their respective Commitments (such deemed use of the aggregate amount of the Commitments being a “Bid Reduction”).

(b) Amount of Committed Advances. Each Committed Borrowing shall be in an aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

(c) Type of Committed Advances. Each Committed Borrowing shall consist of Committed Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender’s Commitment, the Borrowers may from time to time borrow, prepay pursuant to Section 2.12, and reborrow under this Section 2.1 and Section 2.2.

2.2 Making Committed Advances.

(a) Notice of Committed Borrowing. Each Committed Borrowing shall be made on notice, given by a Borrower to the Agent not later than 11:00 a.m. (New York City time) on the day of the proposed Committed Borrowing in the case of a Base Rate Borrowing and on the third Business Day prior to the date of the proposed Committed Borrowing in the case of a Eurodollar Rate Borrowing (a “Notice of Committed Borrowing”). Each such Notice of Committed Borrowing shall be in substantially the form of Exhibit B-l, specifying the requested

(i) date of such Committed Borrowing,

(ii) Type of Committed Advances constituting such Committed Borrowing,

(iii) aggregate amount of such Committed Borrowing, and

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(iv) in the case of a Committed Borrowing composed of Eurodollar Rate Advances, the initial Interest Period for each such Committed Advance, which Interest Period may be 1, 2, 3 or 6 months, at the option of the Borrower, or, if acceptable to all the Lenders, 9 months.

Every Notice of Committed Borrowing given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that proposed Committed Borrowing. Upon receipt of a Notice of Committed Borrowing, the Agent shall promptly give notice to each Lender thereof.

(b) Funding Committed Advances. Each Lender shall, before 1:00 p.m. (New York City time) on the date of such Committed Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent’s Account, in same day funds, such Lender’s ratable portion of such Committed Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article 5, the Agent will make such funds available to the relevant Borrower at an account specified by such Borrower.

(c) Irrevocable Notice. Each Notice of Committed Borrowing shall be irrevocable and binding. In the case of any Committed Borrowing that the related Notice of Committed Borrowing specifies is to be composed of Eurodollar Rate Advances, the Borrower requesting such Committed Borrowing shall indemnify each Lender against any loss, cost or expense incurred by such Lender on account of any failure to fulfill on or before the date specified for such Committed Borrowing in such Notice of Committed Borrowing the applicable conditions set forth in Article 5, including, without limitation, any loss (but excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Committed Advance to be made by such Lender as part of such Committed Borrowing when such Committed Advance, as a result of such failure, is not made on such date.

(d) Lender’s Ratable Portion. Unless the Agent has received notice from a Lender prior to 1:00 p.m. (New York City time) on the day of any Committed Borrowing that such Lender will not make available to the Agent such Lender’s ratable portion of such Committed Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Committed Borrowing in accordance with subsection (b) of this Section 2.2 and the Agent may, in reliance upon such assumption, make available to the requesting Borrower on such date a corresponding amount. If and to the extent that a Lender has not so made such ratable portion available to the Agent, such Lender and such Borrower shall severally repay to the Agent forthwith on demand an amount that in the aggregate equals such corresponding amount together with interest thereon for each day from the date such amount is made available by the Agent to such Borrower until the date such amount is repaid to the Agent, at

(i) in the case of such Borrower, the interest rate applicable at the time to Committed Advances constituting such Committed Borrowing, and

(ii) in the case of such Lender, the Federal Funds Rate.

If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Committed Advance as part of such Committed Borrowing for purposes of this Agreement.

(e) Independent Lender Obligations. The failure of any Lender to make the Committed Advance to be made by it as part of any Committed Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Committed Advance on the date of such Committed Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Committed Advance to be made by such other Lender on the date of any Committed Borrowing.

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2.3 Conversion to Term Loans, Repayment. The Borrowers shall, subject to the next succeeding sentence, repay to the Agent for the ratable account of the Lenders on the Termination Date the aggregate principal amount of the Committed Advances then outstanding. TBC may, upon notice given to the Agent not later than 11:00 a.m. (New York City time) on the Termination Date, convert all or a part of the unpaid principal amount of the Committed Advances outstanding as of the Termination Date into Term Loans. If this Term Loan Conversion Option is exercised, then, on the Termination Date, immediately prior to the time when the unpaid principal amount of the Committed Advances would otherwise be due, the Committed Advances shall automatically convert into Term Loans which the respective Borrowers shall repay to the Agent for the ratable accounts of the Lenders on the Maturity Date. The amounts so converted shall be treated for all purposes of this Agreement as Committed Advances except that after the Termination Date:

(i) the Borrowers may not make any additional borrowings;

(ii) any amounts paid or prepaid may not be reborrowed;

(iii) the amount of each Lender’s Commitment shall be equal at all times to the principal amount of the Term Loans payable to such Lender from time to time;

(iv) the provisions of Section 2.19 shall not be effective; and

(v) no Facility Fees or utilization fees shall accrue or be payable after the Termination Date.

2.4 Interest Rate on Committed Advances. Each Borrower shall pay interest on the unpaid principal amount of each of its Committed Advances from the date of such Committed Advance until such principal amount is paid in full, at the following rates per annum:

(i) during each period in which such Committed Advance is a Base Rate Advance, at a rate per annum equal at all times to the Base Rate in effect from time to time plus the Applicable Margin plus the Applicable Utilization Fee, if any, payable quarterly in arrears on the first day of each January, April, July and October and on (x) the Termination Date, or (y) if TBC has exercised the Term Loan Conversion Option, the Maturity Date, and

(ii) during each period in which such Committed Advance is a Eurodollar Rate Advance, at a rate per annum equal at all times during each relevant Interest Period for such Committed Advance to the Eurodollar Rate for such Interest Period plus the Applicable Margin plus the Applicable Utilization Fee, if any, payable on the last day of each such Interest Period, and if such Interest Period has a duration of more than three months, quarterly on each day during such Interest Period that is three months from either (A) the first day of such Interest Period or (B) the last such interest payment date and on the date such Committed Advance is Converted or paid in full;

provided that in the event and during the continuance of an Event of Default (x) the Applicable Margin shall immediately increase by 1.0% above the Applicable Margin then in effect, and, in the case of a Eurodollar Rate Advance, such Advance shall automatically convert to a Base Rate Advance at the end of the Interest Period then in effect for such Eurodollar Rate Advance and (y) to the fullest extent permitted by law, the Borrower shall pay interest on the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 1% above the Base Rate.

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2.5 Bid Advances.

(a) Bid Advances Impact on Commitments. The Borrowers may make Bid Borrowings from time to time on any Business Day during the period from the date hereof until the Termination Date in the manner set forth below, provided that, following the making of each Bid Borrowing, the aggregate amount of the Advances then outstanding shall not exceed the aggregate amount of the Commitments of the Lenders (computed without regard to the Bid Reduction). As provided in Section 2.1 above, the aggregate amount of the Commitments of the Lenders shall be deemed used from time to time to the extent of the aggregate amount of the Bid Advances then outstanding, and such deemed use of the aggregate amount of the Commitments shall be applied to the Lenders ratably according to their respective Commitments; provided, however, that any Lender’s Bid Advances shall not otherwise reduce that Lender’s obligation to lend its pro rata share of the remaining Available Commitments.

(b) Notice of Bid Borrowing. Any Borrower may request a Bid Borrowing by delivering to the Agent a notice of a Bid Borrowing (a “Notice of Bid Borrowing”), in substantially the form of Exhibit B-2, specifying the following:

(i) the date and aggregate amount of the proposed Bid Borrowing,

(ii) the maturity date for repayment of each Bid Advance to be made as part of such Bid Borrowing, which maturity date

(A) may not be later than 5 Business Days prior to the Termination Date, but may otherwise be 7 days or more from the date of such requested Bid Advance if the Borrower specifies in the Notice of Bid Borrowing that the rates of interest to be offered by the Lenders will be fixed rates per annum (a “Fixed Rate Borrowing”), and

(B) shall be either 1, 2, 3, 6 or 9 months from the date of such Bid Borrowing if the Borrower specifies in the Notice of Bid Borrowing that such Bid Borrowing is to consist of Eurodollar Rate Bid Advances (a “Eurodollar Rate Bid Borrowing”),

(iii) the interest payment date or dates relating thereto, and

(iv) any other terms to be applicable to such Bid Borrowing.

A Borrower requesting a Bid Borrowing shall deliver a Notice of Bid Borrowing to the Agent not later than 11:00 a.m. (New York City time) (A) at least one Business Day prior to the date of the proposed Bid Borrowing if the proposed Bid Borrowing is to be a Fixed Rate Borrowing, and (B) at least four Business Days prior to the date of the proposed Bid Borrowing, if the proposed Bid Borrowing is to be a Eurodollar Rate Bid Borrowing. Every Notice of Bid Borrowing given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that proposed Bid Borrowing. The Agent shall in turn promptly notify each Lender of each request for a Bid Borrowing by sending such Lender a copy of the related Notice of Bid Borrowing.

(c) Discretion as to Bid Advances. Each Lender may, in its sole discretion, elect to irrevocably offer to make one or more Bid Advances to the applicable Borrower as part of such proposed Bid Borrowing at a rate or rates of interest specified by such Lender in its sole discretion (each such rate of interest to be a fixed rate if the Borrower requested Fixed Rate Advances or a margin over the Eurodollar Rate if the Borrower requested Eurodollar Rate Bid Advances), by notifying the Agent (which shall give prompt notice thereof to the Company and such Borrower), before 10:00 a.m.

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(New York City time) (A) on the date of such proposed Bid Borrowing, if the proposed Bid Borrowing is to be a Fixed Rate Borrowing and (B) three Business Days before the date of such proposed Bid Borrowing, in the case of a Notice of Bid Borrowing is to be a Eurodollar Rate Bid Borrowing. In such notice the Lender shall specify the following:

(i) the minimum amount and maximum amount of each Bid Advance which such Lender would be willing to make as part of such proposed Bid Borrowing (which amounts may, subject to the first proviso in this Section 2.5(a), exceed such Lender’s Commitment),

(ii) the rate or rates of interest therefor (specified as stated in this paragraph (c)), and

(iii) such Lender’s Applicable Lending Office with respect to such Bid Advance;

provided that if the Agent in its capacity as a Lender, in its sole discretion, elects to make any such offer, it shall notify such Borrower and the Company of such offer before 9:30 a.m. (New York City time) on the date on which notice of such election is to be given to the Agent by the other Lenders. If, by 10:00 a.m. (New York City time) on the date on which notice of a Lender’s election under this Section 2.5(c) is to be made, the Agent fails to receive, at its address specified in Section 8.2, a notice from a Lender provided for in this Section 2.5(c), the Agent may conclusively presume that such Lender has elected not to offer to make any Bid Advances to such Borrower with respect to the related Notice of Bid Borrowing.

(d) Borrower Selection of Lender Bids. The Borrower proposing the Bid Borrowing shall, in turn, (A) before 11:00 a.m. (New York City time) on the date of such proposed Bid Borrowing, in the case of a proposed Bid Borrowing to be a Fixed Rate Borrowing, and (B) before 12:00 noon (New York City time) three Business Days before the date of such proposed Bid Borrowing, in the case of a proposed Bid Borrowing to be a Eurodollar Rate Bid Borrowing, either:

(i) cancel such Bid Borrowing by giving the Agent notice to that effect, or

(ii) accept, in its sole discretion, one or more of the offers made by a Lender or Lenders pursuant to Section 2.5(c), by giving notice to the Agent of the amount of each Bid Advance (which amount shall be equal to or greater than the minimum amount and equal to or less than the maximum amount, notified to such Borrower by the Agent on behalf of such Lender for such Bid Advance pursuant to Section 2.5(c)) to be made by each Lender as part of such Bid Borrowing, and reject any remaining offers made by Lenders pursuant to Section 2.5(c) by giving the Agent notice to that effect; provided that offers will be accepted, if at all, in order of lowest to highest interest rates, and, if two or more Lenders bid at the same rate, the Bid Borrowing with respect to such rate will be allocated among such Lenders in proportion to the amount bid by each such Lender.

If the Borrower proposing the Bid Borrowing notifies the Agent that such Bid Borrowing is canceled pursuant to Section 2.5(d)(i), the Agent shall give prompt notice thereof to the Lenders and such Bid Borrowing shall not be made.

(e) Bid Borrowing. If the Borrower proposing the Bid Borrowing accepts one or more of the offers made by a Lender or Lenders pursuant to Section 2.5(d)(ii), the Agent shall in turn promptly

(i) notify each Lender that has made an offer as described in Section 2.5(c), of the date and aggregate amount of such Bid Borrowing and whether or not any offer or offers made by such Lender pursuant to Section 2.5(c) have been accepted by such Borrower,

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(ii) notify each Lender that is to make a Bid Advance, as part of such Bid Borrowing, of the amount of each Bid Advance to be made by such Lender as part of such Bid Borrowing, and

(iii) upon satisfaction of the conditions set forth in 5.3 or 5.6, as applicable, notify each Lender that is to make a Bid Advance as part of such Bid Borrowing that the applicable conditions set forth in Article 5 appear to have been satisfied.

When each Lender that is to make a Bid Advance as part of such Bid Borrowing has received notice from the Agent pursuant to clause (iii) of the preceding sentence, such Lender shall, before 1:00 p.m. (New York City time) on the date of such Bid Borrowing specified in the notice received from the Agent pursuant to clause (i) of the preceding sentence, make available for the account of its Applicable Lending Office to the Agent at the Agent’s Account such Lender’s portion of such Bid Borrowing, in same day funds. Upon fulfillment of the applicable conditions set forth in Article 5 and after receipt by the Agent of such funds, the Agent will make such funds available to the relevant Borrower at an account specified by such Borrower. Promptly after each Bid Borrowing the Agent shall notify each Lender of the amount of the Bid Borrowing, the consequent Bid Reduction, and the dates upon which such Bid Reduction commenced and will terminate.

(f) If the Borrower proposing such Bid Borrowing notifies the Agent pursuant to Section 2.5(d)(ii) above that it accepts one or more of the offers made by any Lender or Lenders, such notice of acceptance shall be irrevocable and binding on such Borrower. Such Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in the related Notice of Bid Borrowing for such Bid Borrowing the applicable conditions set forth in Article 5, including, without limitation, any loss (but excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Bid Advance to be made by such Lender as part of such Bid Borrowing when such Bid Advance, as a result of such failure, is not made on such date.

(g) Amount of Bid Borrowings. Each Notice of Bid Borrowing shall request an aggregate amount of Bid Advances not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, provided that a Borrower may accept offers aggregating less than $10,000,000 and offers which are not an integral multiple of $1,000,000, and provided further that, as provided in Section 2.5(a), following the making of each Bid Borrowing, the aggregate amount of the Advances then outstanding shall not exceed the aggregate amount of the Commitments of the Lenders (computed without regard to the Bid Reduction). Within the limits and on the conditions set forth in this Section 2.5, the Borrowers may from time to time borrow under this Section 2.5, repay pursuant to Section 2.5(g), and reborrow under this Section 2.5, provided that a Bid Borrowing shall not be made within three Business Days of the date of any other Bid Borrowing.

(h) Repayment of Bid Advances. On the maturity date of each Bid Advance specified by the relevant Borrower for repayment of such Bid Advance in the related Notice of Bid Borrowing, the Borrower shall repay to the Agent for the account of the Lender which has made such Bid Advance the then unpaid principal amount of such Bid Advance. The Borrowers shall have no right to prepay any principal amount of any Bid Advance without the consent of the Lender which extended such Bid Advance.

(i) Interest on Bid Advances; Bid Notes. The relevant Borrower shall pay interest on the unpaid principal amount of each Bid Advance, from the date of such Bid Advance to the date the principal amount of such Bid Advance is repaid in full, at the fixed rate of interest specified by the Lender making such Fixed Rate Advance in its notice with respect thereto delivered pursuant

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to Section 2.5(c) or, in the case of a Eurodollar Rate Bid Advance, the margin specified by the Lender making such Bid Advance in its notice with respect thereto plus the Eurodollar Rate determined with respect to such Bid Borrowing pursuant to Section 2.10, payable on the interest payment date or dates specified by the Borrower for such Bid Advance in the related Notice of Bid Borrowing. Upon the occurrence and during the continuance of an Event of Default, the applicable Borrower shall pay interest on the amount of unpaid principal of and interest on each Bid Advance owing to a Lender, payable in arrears on the date or dates interest is payable thereon, at a rate per annum equal at all times to 1% per annum above the rate per annum required to be paid on such Bid Advance under the terms of the Bid Note evidencing such Bid Advance unless otherwise agreed in such Bid Note. The indebtedness of the applicable Borrower resulting from each Bid Advance made to the Borrower as part of a Bid Borrowing shall be evidenced by a separate Bid Note of such Borrower payable to the order of the Lender making such Bid Advance, which Bid Note shall be returned to the Borrower upon payment in full of such Bid Advance.

2.6 Lender Assignment or Sale. Any Lender may, without the prior written consent of the Borrowers, sell or assign all or any part of such Lender’s rights in any or all of the Bid Advances made by such Lender or in the Bid Notes in connection with such Bid Advances as a participation, provided, however, that

(i) any such sale or assignment shall not require any Borrower to file a registration statement with the Securities and Exchange Commission or apply to qualify the Advances or the Notes under the blue sky laws of any state, and the selling or assigning Lender shall otherwise comply with all federal and state securities laws applicable to such transaction,

(ii) no purchaser or assignee in such a transaction shall thereby become a “Lender” for any purpose under this Agreement,

(iii) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrowers) shall remain unchanged,

(iv) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and

(v) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

2.7 Fees. TBC agrees to pay to the Agent for the account of each Lender a facility fee (“Facility Fee”) on such Lender’s Commitment, without regard to usage. The Facility Fee shall be payable for the periods from the date hereof in the case of each Lender named in Schedule I, and from the effective date on which any other Lender becomes party hereto, until the Termination Date (or such earlier date on which such Lender ceases to be a party hereto) at the rate per annum equal to the Applicable Percentage in effect from time to time. Facility Fees shall be payable in arrears on each January 1, April 1, July 1 and October 1 during the term of this Agreement until and on the Termination Date. The amount of the Facility Fee payable on January 1, 2006 and on the Termination Date shall be prorated based on the actual number of days elapsed either since the date hereof (in the case of the January 1, 2006 payment) or since the date on which the last payment in respect of the Facility Fee was made (in the case of the payment made on the Termination Date).

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2.8 Reduction of the Commitments.

(a) Optional Reductions. TBC shall have the right, upon at least 3 Business Days’ notice to the Agent, to permanently terminate in whole or permanently reduce ratably in part the unused portions of the Commitments, provided that each partial reduction shall be in a minimum amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof, and provided further that the aggregate amount of the Commitments shall not be reduced to an amount which is less than the aggregate principal amount of the Bid Advances then outstanding.

(b) Mandatory Reduction. At the close of business on the Termination Date, the aggregate Commitments shall be automatically and permanently reduced, on a pro rata basis, by an amount equal to the amount by which the aggregate Commitments immediately prior to giving effect to such reduction exceed the aggregate unpaid principal amount of the Committed Advances then outstanding.

2.9 Additional Interest on Eurodollar Rate Committed Advances. Each Borrower shall pay to each Lender, so long as such Lender is required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Committed Advance of such Lender to such Borrower, from the date of such Committed Advance until such principal amount is paid in full, at an interest rate per annum for each Interest Period equal to the remainder obtained by subtracting (i) the Eurodollar Rate for such Interest Period for such Committed Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Committed Advance. Such additional interest shall be determined by such Lender and notified to the relevant Borrowers through the Agent.

2.10 Eurodollar Interest Rate Determination.

(a) Methods to Determine Eurodollar Rate. The Agent shall determine the Eurodollar Rate for each Eurodollar Rate Advance by using the methods described in the definition of the term “Eurodollar Rate,” and shall give prompt notice to the relevant Borrowers and the Lenders of each such Eurodollar Rate.

(b) Role of Reference Banks. In the event the Eurodollar Rate cannot be determined by the first method described in the definition of “Eurodollar Rate,” each Reference Bank shall furnish to the Agent timely information for the purpose of determining the Eurodollar Rate in accordance with the second method described therein. If any one or more of the Reference Banks does not furnish such timely information to the Agent for the purpose of determining a Eurodollar Rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. In the event the rate cannot be determined by either of the methods described in the definition of “Eurodollar Rate,” then:

(i) the Agent shall forthwith notify the Borrowers and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,

(ii) each such Advance, if a Committed Advance, will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if the Borrower was attempting to Convert a Base Rate Advance into a Eurodollar Rate Committed Advance, such Advance will continue as a Base Rate Advance), and

(iii) the obligation of the Lenders to make Eurodollar Rate Bid Advances, or to make, or to Convert Base Rate Advances into, Eurodollar Rate Committed Advances shall be suspended until the Agent notifies the Borrowers and the Lenders that the circumstances causing such suspension no longer exist.

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(c) Inadequate Eurodollar Rate. If, with respect to any Eurodollar Rate Committed Advances, the Majority Lenders notify the Agent that the Eurodollar Rate for any Interest Period for such Committed Advances will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Committed Advances for such Interest Period, the Agent shall forthwith so notify the relevant Borrowers and the Lenders, whereupon

(i) each such Eurodollar Rate Committed Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and

(ii) the obligation of the Lenders to make, or to Convert Base Rate Advances into, Eurodollar Rate Committed Advances shall be suspended until the Agent notifies the Borrowers and the Lenders that the circumstances causing such suspension no longer exist.

(d) Absence of an Interest Period on a Eurodollar Rate Committed Advance. If a Borrower fails to select the duration of an Interest Period for a Eurodollar Rate Committed Advance in accordance with the provisions contained in the definition of “Interest Period” in Section 1.1, the Agent will forthwith so notify the Borrower and the Lenders and such Committed Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.

2.11 Voluntary Conversion of Committed Advances. Subject to the provisions of Sections 2.10 and 2.15, any Borrower may Convert all such Borrower’s Committed Advances of one Type constituting the same Committed Borrowing into Advances of the other Type on any Business Day, upon notice given to the Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed Conversion; provided, however, that the Conversion of a Eurodollar Rate Committed Advance into a Base Rate Advance may be made on, and only on, the last day of an Interest Period for such Eurodollar Rate Committed Advance. Each such notice of a Conversion shall, within the restrictions specified above, specify

(i) the date of such Conversion,

(ii) the Committed Advances to be Converted, and

(iii) if such Conversion is into Eurodollar Rate Committed Advances, the duration of the Interest Period for each such Committed Advance.

2.12 Prepayments. Any Borrower shall have the right at any time and from time to time, upon prior written notice from such Borrower to the Agent, to prepay its outstanding principal obligations with respect to its Committed Advances in whole or ratably in part (except as provided in Section 2.15 or 2.19), provided that every notice of prepayment given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that prepayment. Such prepaying Borrower may be obligated to make certain prepayments of obligations with respect to one or more Committed Advances subject to and in accordance with this Section 2.12.

(a) Base Rate Borrowings Prepayments. With respect to Base Rate Borrowings, such prepayment shall be without premium or penalty, upon notice given to the Agent, and shall be made not later than 11:00 a.m. (New York City time) on the date of such prepayment. The Borrower shall designate in such notice the amount and date of such prepayment. Accrued interest on the amount so prepaid shall be payable on the first Business Day of the calendar quarter next

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following the prepayment. The minimum amount of Base Rate Borrowings which may be prepaid on any occasion shall be $10,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the total amount of Base Rate Advances then outstanding for that Borrower.

(b) Eurodollar Rate Committed Borrowings Prepayments. With respect to Eurodollar Rate Committed Borrowings, such prepayment shall be made on at least 3 Business Days’ prior written notice to the Agent not later than 11:00 a.m. (New York City time), and if such notice is given the applicable Borrower shall prepay the outstanding principal amount of the Committed Advances constituting part of the same Committed Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid. The minimum amount of Eurodollar Rate Committed Borrowings which may be prepaid on any occasion shall be $10,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the total amount of Eurodollar Rate Committed Advances then outstanding for that Borrower.

(c) Additional Prepayment Payments. The prepaying Borrower shall, on the date of the prepayment of any Eurodollar Rate Committed Advances, pay to the Agent for the account of each Lender interest accrued to such date of prepayment on the principal amount prepaid plus, in the case only of a prepayment on any date which is not the last day of an applicable Eurodollar Interest Period, any amounts which may be required to compensate such Lender for any losses or out-of-pocket costs or expenses (including any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds, but excluding loss of anticipated profits) incurred by such Lender as a result of such prepayment, provided that such Lender shall exercise reasonable efforts to minimize any such losses, costs and expenses.

(d) Eurodollar Rate Committed Advance Prepayment Expense. If, due to the acceleration of any of the Committed Advances pursuant to Section 6.2(b), an assignment, repayment or prepayment under Section 2.19 or 2.20 or otherwise, any Lender receives payment of its portion of, or is subject to any Conversion from, any Eurodollar Rate Committed Advance on any day other than the last day of an Interest Period with respect to such Committed Advance, the relevant Borrowers shall pay to the Agent for the account of such Lender any amounts which may be payable to such Lender by such Borrower by reason of payment on such day as provided in Section 2.12(c).

2.13 Increases in Costs.

(a) Costs from Law or Authorities. If, due to either

(1) the introduction of, or any change (other than, in the case of Eurodollar Rate Borrowings, a change by way of imposition or an increase of reserve requirements described in Section 2.9) in, or new interpretation of, any law or regulation effective at any time and from time to time on or after the date hereof, or

(2) the compliance with any guideline or the request from or by any central bank or other governmental authority (whether or not having the force of law),

there is an increase in the cost incurred by a Lender in agreeing to make or making, funding or maintaining any Eurodollar Rate Committed Advance or Eurodollar Rate Bid Advance then or at any time thereafter outstanding (excluding for purposes of this Section 2.13 any such increased costs resulting from (i) Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office (or any political subdivision thereof), then TBC shall from time to time, upon demand of such Lender (with a copy of such demand to the Agent), pay to the

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Agent for the account of such Lender such amounts as are required to compensate such Lender for such increased cost, provided that such Lender shall exercise reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize any such increased cost and provided further that the Borrowers shall not be required to pay any such compensation with respect to any period prior to the 90th day before the date of any such demand, unless such introduction, change, compliance or request shall have retroactive effect to a date prior to such 90^th day. A certificate as to the amount of such increase in cost, submitted to the relevant Borrowers and the Agent by such Lender, shall be conclusive and binding for all purposes under this Section 2.13(a), absent manifest error.

(b) Increased Capital Requirements. If any Lender determines that compliance with any law or regulation or any guidelines or request from any central bank or other governmental authority (whether or not having the force of law) which is enacted, adopted or issued at any time and from time to time after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Lender (or any corporation controlling such Lender) and that the amount of such capital is increased by or based upon the existence of such Lender’s Commitment and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrowers shall immediately pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s Commitment, provided that such Lender shall exercise reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize any such compensation payable by the Borrowers hereunder and provided further that the Borrowers shall not be required to pay any such compensation with respect to any period prior to the 90th day before the date of any such demand, unless such introduction, change, compliance or request shall have retroactive effect to a date prior to such 90^th day. A certificate as to such amounts submitted to the relevant Borrowers and the Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.

(c) Borrower Rights Upon Cost Increases. Upon receipt of notice from any Lender claiming compensation pursuant to this Section 2.13 or Section 2.14 and as long as no Default has occurred and is continuing, TBC shall have the right, on or before the 30th day after the date of receipt of any such notice,

(i) to arrange for one or more Lenders or other commercial banks to assume the Commitment of such Lender; subject, however, to payment to the Agent by the assignor or the assignee of a processing and recording fee of $3,500, in the event the assuming lender is not a Lender; or

(ii) to arrange for the Commitment of such Lender to be terminated and all Committed Advances owed to such Lender to be prepaid;

and, in either case, subject to payment in full of all principal, accrued and unpaid interest, fees and other amounts payable under this Agreement and then owing to such Lender immediately prior to the assignment or termination of the Commitment of such Lender.

2.14 Taxes.

(a) Exclusion and Inclusion of Taxes. Any and all payments by each Borrower hereunder or with respect to any Advances or under any Notes shall be made, in accordance with Section 2.16, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case

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of each Lender and the Agent, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes that are imposed on its overall net income ( and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender’s Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or with respect to any Advances or under any Notes, hereinafter referred to as “Taxes”). If any Borrower shall be required by law to deduct any Taxes from or in respect to any sum payable hereunder or with respect to any Advances or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) Payment of Other Taxes. In addition, each Borrower shall pay any present or future stamp, documentary, excise, property or similar taxes, charges, or levies that arise from any payment made hereunder or with respect to any Advances and under any Notes or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or any Notes ( “Other Taxes”).

(c) Indemnification as to Taxes. Each Borrower shall indemnify each Lender and the Agent for and hold it harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.14, imposed on or paid by such Lender or the Agent (as the case may be) and any liability ( including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor.

(d) Evidence of or Exemption from Taxes. Within 30 days after the date of any payment of Taxes, the Borrower which paid such Taxes shall furnish to the Agent, at its address referred to in Section 8.2, the original or a certified copy of a receipt evidencing such payment. In the case of any payment hereunder or with respect to the Advances or under any Notes by or on behalf of any Borrower through an account or branch outside the United States or by or on behalf of any Borrower by a payor that is not a United States person, if the Borrower determines that no taxes are payable in respect thereof, such Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at such address, an opinion of counsel acceptable to the Agent stating that such payment is exempt from Taxes. For purposes of this subsection (d) and subsection (e), the terms “United States” and “United States person” have the meanings specified in Section 7701 of the Internal Revenue Code.

(e) Non-U.S. Lenders. Each Lender organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement (in the case of each Lender listed in Schedule I), and from the date on which any other Lender becomes a party hereto (in the case of each other Lender), and from time to time thereafter as requested in writing by TBC (but only so long thereafter as such Lender remains lawfully able to do so), provide each of the Agent and TBC with two original Internal Revenue Service forms W-8BEN or W-8EC1, as appropriate, or any successor form prescribed by the Internal Revenue Service, to establish that such Lender is not subject to, or is entitled to a reduced rate of, United States withholding tax on payments pursuant to this Agreement or with respect to any Advances or any Notes. If the forms provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a

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United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate form certifying that a lower rate applies, whereupon withholding tax at such lower rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that, if at the date on which a Lender becomes a party to this Agreement, the Lender assignor was entitled to payments under subsection 2.14(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender assignee on such date. If any form or document referred to in this subsection 2.14(e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8BEN or W-8EC1, that the Lender reasonably considers to be confidential, the Lender shall give notice thereof to the relevant Borrowers and shall not be obligated to include in such form or document confidential information.

(f) Lender Failure to Provide IRS Forms. For any period with respect to which any Lender has failed to provide TBC with the appropriate form described in subsection 2.14(e) (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under subsection 2.14(e)), such Lender shall not be entitled to indemnification under subsection (a) or (c) with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, TBC shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes.

2.15 Illegality. If any Lender shall notify the Agent that either

(a) there is any introduction of, or change in or in the interpretation of, any law or regulation that in the opinion of counsel for such Lender in the relevant jurisdiction makes it unlawful, or

(b) any central bank or other governmental authority asserts that it is unlawful

for such Lender to continue to fund or maintain any Eurodollar Rate Advances or to perform its obligations hereunder with respect to Eurodollar Rate Advances hereunder, then, upon the issuance of such opinion of counsel or such assertion by a central bank or other governmental authority, the Agent shall give notice of such opinion or assertion to the Borrowers (accompanied by such opinion, if applicable). The Borrowers shall forthwith either

(i) prepay in full all Eurodollar Rate Committed Advances and all Eurodollar Rate Bid Advances made by such Lender, with accrued interest thereon or

(ii) Convert each such Eurodollar Rate Committed Advance made by such Lender into a Base Rate Advance.

Upon such prepayment or Conversion, the obligation of such Lender to make Eurodollar Rate Committed Advances or Eurodollar Rate Bid Advances, or to Convert Committed Advances into Eurodollar Rate Committed Advances, shall be suspended until the Agent shall notify the Borrowers that the circumstances causing such suspension no longer exists.

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2.16 Payments and Computations.

(a) Time and Distribution of Payments. The Borrowers shall make each payment hereunder and with respect to any Advances or under any Notes, without counterclaim or setoff, not later than 11:00 a.m. (New York City time) on the day when due in U.S. dollars to the Agent at the Agent’s Account in same day funds. The Agent shall promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or fees ratably (other than amounts payable pursuant to Section 2.5, 2.9, 2.13, 2.14, 2.15 or 2.19) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. From and after the effective date of an assignment pursuant to Section 2.20, the Agent shall make all payments hereunder and with respect to any Advances or under any Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such assignment shall make all appropriate adjustments in such payments for the periods prior to such effective date directly between themselves.

(b) Computation of Interest and Fees. All computations of interest based on the Base Rate and utilization fees shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of Facility Fees shall be made by the Agent, and all computations of interest pursuant to Section 2.9 shall be made by a Lender, on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Agent (or, in the case of Section 2.9, by a Lender) of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c) Payment Due Dates. Whenever any payment hereunder or with respect to any Advances or under any Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fee, as the case may be, but not later than the Termination Date or, if the Term Loan Conversion Option has been exercised, the Maturity Date; provided, however, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the immediately preceding Business Day.

(d) Presumption of Borrower Payment. Unless the Agent receives notice from a Borrower prior to the date on which any payment is due to any Lenders hereunder that such Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each such Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that such Borrower has not made such payment in full to the Agent, each such Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate.

2.17 Sharing of Payments, Etc. If any Lender obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Committed Advances made by it (other than pursuant to Sections 2.9, 2.13, 2.14, 2.15 or 2.19), in excess of its ratable share of payments on account of the Committed Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Committed Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each

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other Lender shall be rescinded and each such other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section 2.17 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were a creditor of the Borrowers in the amount of such participation.

2.18 Evidence of Debt.

(a) Lender Records; If Notes Required. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Committed Advance owing to such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder in respect of Committed Advances. Each Borrower shall, upon notice by any Lender to such Borrower (with a copy of such notice to the Agent) to the effect that a Committed Note is required or appropriate in order for such Lender to evidence (whether for purposes of pledge, enforcement or otherwise) the Committed Advances owing to, or to be made by, such Lender, such Borrower shall promptly execute and deliver to such Lender a Committed Note payable to the order of such Lender in a principal amount up to the Commitment of such Lender.

(b) Record of Borrowings, Payables and Payments. The Register maintained by the Agent pursuant to Section 2.20(d) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded

(i) the date and amount of each Borrowing made hereunder to each Borrower, the Type of Advances constituting such Borrowing and, if appropriate, the Interest Period applicable thereto,

(ii) the terms of each assignment pursuant to Section 2.20,

(iii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder, and

(iv) the amount of any sum received by the Agent from a Borrower hereunder and each Lender’s share thereof.

(c) Evidence of Payment Obligations. Entries made in good faith by the Agent in the Register pursuant to subsection (b) above, and by each Lender in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from a Borrower to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement, absent manifest error; provided, however, that the failure of the Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement.

2.19 Alteration of Commitments and Addition of Lenders.

(a) Alter Lender Commitment. By a written agreement executed only by TBC, the Agent and the affected Lender and any non-party lender involved,

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(i) the Commitment of such affected Lender may be increased to the amount set forth in such agreement;

(ii) such non-party lender may be added as a Lender with a Commitment as set forth in such agreement, provided that such lender agrees to be bound by all the terms and provisions of this Agreement; and

(iii) the unused portion of the Commitment of such affected Lender may be reduced or terminated and the Committed Advances owing to such Lender may be prepaid in whole or in part, all as set forth in such agreement.

(b) Conditions to Alteration. The Agent may execute any such agreement without the prior consent of any Lender other than the Lender affected, provided, however, that if at the time the Agent proposes to execute such agreement either (A) TBC’s long-term senior unsecured debt is rated by any two of S&P, Moody’s and Fitch, lower than BBB+ by S&P, lower than Baa1 by Moody’s or lower than BBB+ by Fitch or (B) a Default has occurred and is continuing, then the Agent shall not execute any such agreement unless it has first obtained the prior written consent of the Majority Lenders, and provided further that the Agent shall not execute any such agreement without the prior written consent of the Majority Lenders if such agreement would increase the total of the Commitments to an amount in excess of $1,500,000,000 or, pursuant to Section 2.19(c), $2,500,000,000.

(c) Increase Total Commitment. The Company has the right, twice prior to the initial Termination Date (and, if the Termination Date is extended pursuant to Section 2.21, twice following such extension), to increase the total of the Commitments through a Request for Alteration, in minimum increments of $25,000,000, up to a maximum aggregate of Commitments of $2,500,000,000, provided that, in addition to the requirements specified in Section 2.19(b), at the time of and after giving effect to an increase, TBC’s long-term senior unsecured non-credit-enhanced debt ratings from Moody’s and S&P are better than or equal to Baa1 and BBB+, respectively. The Company may offer the increases to

(i) the Lenders, and each Lender shall have the right, but no obligation, to increase its Commitment, by giving notice thereof to the Agent, to all or a portion of the proposed increase (the “Proposed Increased Commitment”), allocations to be at the sole discretion of the Company, and

(ii) third party financial institutions reasonably acceptable to the Agent and the Company, provided that the minimum commitment of each such institution equals or exceeds $25,000,000.

(d) Request for Alteration. The Agent shall give each Lender prompt notice of any such agreement becoming effective. All requests for Lender consent under the provisions of this Section 2.19 shall specify the date upon which any such increase, addition, reduction, termination, or prepayment shall become effective (the “Effective Date”) and shall be made by means of a Request for Alteration substantially in the form as set forth in Exhibit C. On the Effective Date on which the Commitment of any Lender is increased, decreased, terminated or created or on which prepayment is made, all as described in such Request for Alteration, the Borrowers or such Lender, as the case may be, shall make available to the Agent not later than 12:30 p.m. (New York City time) on such date, in same day funds, the amount, if any, which may be required (and the Agent shall distribute such funds received by it to the Borrowers or to such Lenders, as the case may be) so that at the close of business on such date the sum of the Committed Advances of each Lender then outstanding shall be in the same proportion to the total of the Committed Advances of all the Lenders then outstanding as the Commitment of such Lender is to the total of the Commitments. The Agent shall give each Lender notice of the amount to be made available by, or to be distributed to, such Lender at least 3 Business Days before such payment is made.

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2.20 Assignments; Sales of Participations and Other Interests in Advances.

(a) Assignment of Lender Obligations. From time to time each Lender may, with the prior written consent of TBC (so long as no Event of Default has occurred and is continuing) and subject to the qualifications set forth below, assign to one or more Lenders or an Eligible Assignee all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Committed Advances owing to it and the Committed Note, if any, held by it) and will, at any time, if arranged by the Company pursuant to clause (i)(A) below upon at least 30 days’ notice to such Lender and the Agent, assign to one or more Eligible Assignees all of its rights and obligations under this Agreement (including without limitation, all of its Commitment, the Committed Advances owing to it and the Committed Note, if any, held by it); subject to the following:

(i) If such Lender notifies TBC and the Agent of its intent to request the consent of TBC to an assignment, TBC shall have the right, for 30 days after receipt of such notice and so long as no Event of Default has occurred and is continuing, in its sole discretion either (A) to arrange for one or more Eligible Assignees to accept such assignment (a “Required Assignment”) or (B) to arrange for the rights and obligations of such Lender (including, without limitation, such Lender’s Commitment), and the total Commitments, to be reduced by an amount equal to the amount of such Lender’s Commitment proposed to be assigned and, in connection with such reduction, to prepay that portion of the Committed Advances owing to such Lender which it proposes to assign;

(ii) If TBC fails to notify such Lender within 30 days of TBC’s receipt of such Lender’s request for consent to assignment, the Borrowers shall be deemed to consent to the proposed assignment;

(iii) Any such assignment shall not require any Borrower to file a registration statement with the Securities and Exchange Commission or apply to qualify the interests in the Committed Advances under the blue sky laws of any state and the assigning Lender shall otherwise comply with all federal and state securities laws applicable to such assignment;

(iv) Unless TBC consents, the amount of the Commitment of the assigning Lender being assigned pursuant to any such assignment (determined as of the date of the assignment) shall either (A) equal 50% of all such rights and obligations (or 100% in the case of a Required Assignment) or (B) not be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof;

(v) Unless TBC consents, the aggregate amount of the Commitment assigned pursuant to all such assignments of such Lender (after giving effect to such assignment) shall in no event exceed 50% (except in the case of a Required Assignment) of all such Lender’s Commitment (as set forth in Schedule I, in the case of each Lender that is a party hereto as of November 18, 2005, or as set forth in the Register as the aggregate Commitment assigned to such Lender pursuant to one or more assignments, in the case of any assignee); and

(vi) No Lender shall be obligated to make a Required Assignment unless such Lender has received payments in an aggregate amount at least equal to the outstanding principal amount of all Committed Advances being assigned, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to

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such Lender under this Agreement (including without limitation Section 2.12(c), provided that such Lender shall receive its pro rata share of the Facility Fee on the next date on which the Facility Fee is payable).

(b) Effect of Lender Assignment. From and after the effective date of any assignment pursuant to Section 2.20(a), (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such assignment, it shall have the rights and obligations of a Lender hereunder and (ii) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment, relinquish its rights (other than its rights under Section 2.13, 2.14, 2.19 or 8.3 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

(c) Security Interest; Assignment to Lender Affiliate. Notwithstanding any other provision in this Agreement, any Lender may, upon prior or contemporaneous notice to TBC and the Agent, at any time (i) create a security interest in all or any portion of its rights under this Agreement (including without limitation, the Advances owing to it and the Notes held by it, if any) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System, and (ii) assign all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Committed Advances owing to it and the Committed Note held by it, if any) to an Affiliate of such Lender unless the result of such an assignment would be to increase the cost to any Borrowers of requesting, borrowing, continuing, maintaining, paying or converting any Advances.

(d) Agent’s Register. The Agent shall maintain at its address referred to in Section 8.2 a copy of each assignment delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Committed Advances of each Borrower owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agent and the Lenders may treat each entity whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice. Upon receipt by the Agent from the assigning Lender of an assignment in form and substance satisfactory to the Agent executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with evidence of each Committed Advance subject to such assignment, and a processing and recording fee of $3,500 (payable by either the assignor or the assignee), the Agent shall, if such assignment is a Required Assignment or has been consented to by TBC to the extent required by Section 2.20(a) or has been effected pursuant to Section 2.21(c), (i) accept such assignment, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to TBC.

(e) Lender Sale of Participations. Each Lender may sell participations in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Notes held by it, if any) to one or more Affiliates of such Lender or to one or more other commercial banks; provided, however, that

(i) any such participation shall not require any Borrowers to file a registration statement with the Securities and Exchange Commission or apply to qualify any interests in the Advances or any Notes under the blue sky laws of any state and the Lender selling or granting such participation shall otherwise comply with all federal and state securities laws applicable to such transaction,

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(ii) no purchaser of such a participation shall be considered to be a “Lender” for any purpose under the Agreement,

(iii) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrowers) shall remain unchanged,

(iv) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations,

(v) such Lender shall remain the holder of any Notes issued with respect to its Advances for all purposes of this Agreement,

(vi) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and

(vii) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by any Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation.

(f) Confidential Borrower Information. Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 2.20, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrowers furnished to such Lender by or on behalf of the Borrowers; provided, however, that, prior to any such disclosure of Confidential Information, such Lender shall obtain the written consent of the Borrowers, and the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any such Confidential Information received by it from such Lender except as disclosure may be required or appropriate to governmental authorities, pursuant to legal process, or by law or governmental regulation or authority.

2.21 Extension of Termination Date.

(a) Extension Request. TBC may, on behalf of itself and the Subsidiary Borrowers, by written notice to the Agent in the form of Exhibit E (each such notice being an “Extension Request”) given no earlier than 60 days and no later than 45 days prior to the then applicable Termination Date, request that the then applicable Termination Date be extended to a date 364 days after the then applicable Termination Date; provided, however, that TBC shall not have exercised the Term Loan Conversion Option for Committed Advances outstanding on such Termination Date prior to such time. Such extension shall be effective with respect to each Lender which, by a written notice in the form of Exhibit F (a “Continuation Notice”) to TBC and the Agent given no earlier than 45 days and no later than 28 days prior to the then applicable Termination Date, consents, in its sole discretion, to such extension (each Lender giving a Continuation Notice being referred to sometimes as a “Continuing Lender” and each Lender other than a Continuing Lender being a “Non-Extending Lender”), provided, however, that such extension shall be effective only if the aggregate Commitments of the Continuing Lenders, together with the Commitments of the Replacement Lenders, are not less than 51% of the aggregate Commitments of the Lenders on the date of the Extension Request. No Lender shall have any obligation to consent to any such extension of the Termination Date. The Agent shall notify each Lender of the receipt of an

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Extension Request within three (3) Business Days after receipt thereof. The Agent shall notify the Company and the Lenders no later than 15 days prior to the then applicable Termination Date whether the Agent has received Continuation Notices from Lenders holding at least 51% of the aggregate Commitments on the date of the Extension Request.

(b) Non-Extending Lenders. The Commitment of each Non-Extending Lender shall terminate at the close of business on the Termination Date in effect prior to the delivery of such Extension Request without giving any effect to such proposed extension, and on such Termination Date TBC shall take one of the following three actions:

(i) Replace the Non-Extending Lenders pursuant to Section 2.21(c); or

(ii) Pay or cause to be paid to the Agent, for the account of the Non-Extending Lenders, an amount equal to the Non-Extending Lenders’ Committed Advances, together with accrued but unpaid interest and fees thereon and all other amounts then payable hereunder to the Non-Extending Lenders; or

(iii) By giving notice to the Agent no later than three days prior to the Termination Date in effect prior to the delivery of such Extension Request, elect not to extend the Termination Date beyond the then applicable Termination Date, and in this event the Borrowers may in their sole discretion repay any amount of the Committed Advances then outstanding or exercise the Term Loan Conversion Option with respect to the Committed Advances outstanding on the Termination Date in accordance with Section 2.3.

(c) Replacement Lenders. A Non-Extending Lender shall be obligated, at the request of TBC, to assign at any time prior to the close of business on the Termination Date applicable to such Non-Extending Lender all of its rights (other than rights that would survive the termination of the Agreement pursuant to Section 8.3) and obligations hereunder to one or more Lenders or other commercial banks nominated by TBC and willing to become Lenders in place of such Non-Extending Lender (the “Replacement Lenders”). In order to qualify as a Replacement Lender, a Lender or lender must satisfy all of the requirements of this Agreement (including without limitation the terms of Section 2.20 relating to Required Assignments). Such obligation of each Non-Extending Lenders is subject to such Non-Extending Lender’s receiving (i) payment in full from the Replacement Lenders of the principal amount of all Advances owing to such Non-Extending Lender immediately prior to an assignment to the Replacement Lenders and (ii) payment in full from the relevant Borrowers of all accrued interest and fees and other amounts payable hereunder and then owing to such Non-Extending Lender immediately prior to the assignment to the Replacement Lenders. Upon such assignment, the Non-Extending Lender shall no longer be a Lender, such Replacement Lender shall become a Continuing Lender, and the Agent shall make appropriate entries in the Register to reflect the foregoing.

2.22 Subsidiary Borrowers.

(a) Subsidiary Borrower Designation. TBC may at any time, and from time to time, by delivery to the Agent of a Borrower Subsidiary Letter substantially in the form of Exhibit D, duly executed by TBC and the respective Subsidiary, designate such Subsidiary as a “Subsidiary Borrower” for purposes of this Agreement, and such Subsidiary shall thereupon become a “Subsidiary Borrower” for purposes of this Agreement and, as such, shall have all of the rights and obligations of a Borrower hereunder; provided that any designation of a Subsidiary that is organized under the laws of a jurisdiction outside of the United States of America shall be made only upon 30 days prior notice to the Agent. The Agent shall promptly notify each Lender of each such designation by TBC and the identity of the designated Subsidiary. As soon as possible and in any event within 10 Business Days after notice of the designation of a Subsidiary

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Borrower that is organized under the laws of a jurisdiction outside of the United States of America, any Lender that may not legally lend to such Subsidiary Borrower (a “Protesting Lender”) shall so notify TBC and the Agent in writing. With respect to each Protesting Lender, TBC shall, effective on or before the date that such Subsidiary Borrower shall have the right to borrower hereunder, either:

(i) arrange for one or more Lenders or other commercial banks to assume the Commitment of such Protesting Lender; subject, however, to payment to the Agent by the assignor or the assignee of a processing and recording fee of $3,500, in the event the assuming lender is not a Lender; or

(ii) arrange for the Commitment of such Protesting Lender to be terminated and all Committed Advances owed to such Lender to be prepaid;

subject, in either case, to payment in full of all principal, accrued and unpaid interest, fees, commissions and other amounts payable under this Agreement and then owing to such Lender immediately prior to the assignment or termination of the Commitment of such Lender.

(b) TBC Consent to Subsidiary Borrower Borrowings and Notices. No Advances shall be made to a Subsidiary Borrower, and no Conversion of any Advances at the request of a Subsidiary Borrower shall be effective, without, in each and every instance, the prior consent of TBC, in its sole discretion, which shall be evidenced by the countersignature of TBC to the relevant Notice of Borrowing or notice of Conversion. In addition, no notices which are to be delivered by a Borrower hereunder shall be effective, with respect to any Subsidiary Borrower, unless the notice is countersigned by TBC.

(c) Subsidiary Borrower Termination Event. The occurrence of any of the following events with respect to any Subsidiary Borrower shall constitute a “Subsidiary Borrower Termination Event” with respect to such Subsidiary Borrower:

(i) such Subsidiary Borrower ceases to be a Subsidiary;

(ii) such Subsidiary Borrower is liquidated or dissolved;

(iii) such Subsidiary Borrower fails to preserve and maintain its existence;

(iv) such Subsidiary Borrower merges or consolidates with or into another Person, or conveys, transfers, leases, or otherwise disposes of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person (except that a Subsidiary Borrower may merge into or dispose of assets to another Borrower);

(v) any of the “Events of Default” described in Section 6.1(a) through (f) occurs to or with respect to such Subsidiary Borrower as if such Subsidiary Borrower were “TBC”; or

(vi) the Guaranty with respect to such Subsidiary Borrower ceases, for any reason, to be valid and binding on TBC or TBC so states in writing.

(d) Terminated Subsidiary Borrower. Upon the occurrence of a Subsidiary Borrower Termination Event with respect to any Subsidiary Borrower, such Subsidiary Borrower (a “Terminated Subsidiary Borrower”) shall cease to be a Borrower for purposes of this Agreement and shall no longer be entitled to request or borrow Advances hereunder. All outstanding Advances of a Terminated Subsidiary Borrower shall be automatically due and payable as of the date on which

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the Subsidiary Borrower Termination Event of such Terminated Subsidiary Borrower occurred, together with accrued interest thereon and any other amounts then due and payable by that Borrower hereunder, unless, in the case of a Subsidiary Borrower Termination Event described in paragraph (iv) of Section 2.22(c), the other Person party to the transaction is a Borrower and such other Borrower has assumed in writing all of the outstanding Advances and other obligations under this Agreement and under the Notes, if any, of the Terminated Subsidiary Borrower.

(e) TBC as Subsidiary Borrowers’ Agent. Each of the Subsidiary Borrowers hereby appoints and authorizes TBC to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to TBC by the terms hereof, together with such powers as are reasonably incidental thereto.

(f) Subsidiaries’ Several Liabilities. Notwithstanding anything in this Agreement to the contrary, each of the Subsidiary Borrowers shall be severally liable for the liabilities and obligations of such Subsidiary Borrower under this Agreement and its Borrowings, and Notes, if any. No Subsidiary Borrower shall be liable for the obligations of any other Borrower under this Agreement or any Borrowings of any other Borrower or any other Borrower’s Notes, if any. Each Subsidiary Borrower shall be severally liable for all payments of the principal of and interest on Advances to such Subsidiary Borrower, and any other amounts due hereunder that are specifically allocable to such Subsidiary Borrower or the Advances to such Subsidiary Borrower. With respect to any amounts due hereunder, including fees, that are not specifically allocable to a particular Borrower, each Borrower shall be liable for such amount pro rata in the same proportion as such Borrower’s outstanding Advances bear to the total of then-outstanding Advances to all Borrowers.

ARTICLE 3

Representations and Warranties

3.1 Representations and Warranties by the Borrowers. Each of the Borrowers represents and warrants as follows:

(a) Corporate Standing. TBC is a duly organized corporation existing in good standing under the laws of the State of Delaware. Each Subsidiary Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and each of TBC and each Subsidiary Borrower is qualified to do business in every jurisdiction where such qualification is required, except where the failure to so qualify would not have a material adverse effect on the financial condition of TBC and the Subsidiary Borrowers as a whole.

(b) Corporate Powers; Governmental Approvals. The execution and delivery and the performance of the terms of this Agreement are, and the execution and delivery and the performance of the terms of any Notes and of each Guaranty will be, within the corporate powers of each Borrower party thereto, have been or will have been (as appropriate) duly authorized by all necessary corporate action, have, or will have, received (as appropriate) all necessary governmental approval, if any (which approval, if any, remains in full force and effect), and do not contravene any provision of the Certificate of Incorporation or By-Laws of any Borrower party thereto, or do not contravene any law or any contractual restriction binding on any Borrower party thereto, except where such contravention would not have a material adverse effect on the financial condition of TBC and its Subsidiaries, taken as a whole.

(c) Enforceability. This Agreement and the Notes, if any, when duly executed and delivered by each Borrower party thereto, will constitute legal, valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms, and each Guaranty,

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when duly executed and delivered by TBC, will constitute a legal, valid and binding obligation of TBC, enforceable against TBC in accordance with its terms, subject to general equitable principles and except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditors’ rights.

(d) No Material Pending or Threatened Actions. In TBC’s opinion, there are no pending or threatened actions or proceedings before any court or administrative agency (i) other than as disclosed in TBC’s filings with the Securities and Exchange Commission, that are reasonably likely to have a material adverse affect on the financial condition or operations of the Company which is likely to materially impair the ability of the Company to repay the Advances or (ii) which would affect the legality, validity or enforceability of this Agreement or the Advances.

(e) Consolidated Statements. The Consolidated statement of financial position as of December 31, 2004 and the related Consolidated statement of earnings and retained earnings for the year then ended (copies of which have been furnished to each Lender) correctly set forth the Consolidated financial condition of TBC and its Subsidiaries as of such date and the result of the Consolidated operations for such year. The Consolidated statement of financial position as of September 30, 2005 and the related Consolidated statement of earnings and retained earnings for the nine month period then ended (copies of which have been furnished to each Lender) correctly set forth, subject to year-end audit adjustments, the Consolidated financial condition of TBC and its Subsidiaries as of such date and the result of the Consolidated operations for such nine month period.

(f) Regulation U. No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System, and no proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of any Borrower only or of each Borrower and its subsidiaries on a Consolidated basis) subject to the provisions of Section 4.2(a) or subject to any restriction contained in any agreement or instrument between any Borrower and any Lender or any Affiliate of a Lender relating to Debt within the scope of Section 6.1(d) will be margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System).

(g) Investment Company Act. No Borrower is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Advances, nor the application of the proceeds or repayment thereof by any Borrower, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.

(h) No Material Adverse Change. Except as disclosed in filings with the Securities and Exchange Commission prior to the date hereof, there has been no material adverse change in the Company’s financial condition or results of operations since December 31, 2004 that is likely to impair the ability of the Company to repay the Advances.

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ARTICLE 4

Covenants of TBC

4.1 Affirmative Covenants of TBC. From the date of this Agreement and so long as any amount is payable by a Borrower to any Lender hereunder or any Commitment is outstanding, TBC will:

(a) Periodic Reports. Furnish to the Lenders:

(1) within 60 days after the close of each of the first three quarters of each of TBC’s fiscal years, a Consolidated statement of financial position of TBC and the Subsidiaries as of the end of such quarter and a Consolidated comparative statement of earnings and retained earnings of TBC and the Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, each certified by an authorized officer of TBC,

(2) within 120 days after the close of each of TBC’s fiscal years, and with respect to any quarter thereof, if requested in writing by the Majority Lenders (with a copy to the Agent), within 60 days after the later of (x) the close of any of the first three quarters thereof subject of such request and (y) such request, a statement certified by an authorized officer of TBC showing in detail the computations required by the provisions of Sections 4.2(a) and 4.2(b), based on the figures which appear on the books of account of TBC and the Subsidiaries at the close of such quarters,

(3) within 120 days after the close of each of TBC’s fiscal years, a copy of the annual audit report of TBC, certified by independent public accountants of nationally recognized standing, together with financial statements consisting of a Consolidated statement of financial position of TBC and the Subsidiaries as of the end of such fiscal year and a Consolidated statement of earnings and retained earnings of TBC and the Subsidiaries for such fiscal year,

(4) within 120 days after the close of each of TBC’s fiscal years, a statement certified by the independent public accountants who shall have prepared the corresponding audit report furnished to the Lenders pursuant to the provisions of clause (3) of this subsection (a), to the effect that, in the course of preparing such audit report, such accountants had obtained no knowledge, except as specifically stated, that TBC had been in violation of the provisions of any one of Sections 4.2(a), 4.2(b), 4.2(c) and 4.2(d), at any time during such fiscal year,

(5) promptly upon their becoming available, all financial statements, reports and proxy statements which TBC sends to its stockholders,

(6) promptly upon their becoming available, all regular and periodic financial reports which TBC or any Subsidiary files with the Securities and Exchange Commission or any national securities exchange,

(7) within 3 Business Days after the discovery of the occurrence of any event which constitutes a Default, notice of such occurrence together with a detailed statement by a responsible officer of TBC of the steps being taken by TBC or the appropriate Subsidiary to cure the effect of such event, and

(8) such other information respecting the financial condition and operations of TBC or the Subsidiaries as the Agent may from time to time reasonably request.

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TBC shall be deemed to have furnished the information specified in clauses (1), (3), (5) and (6) above on the date that such information is posted at the Company’s website on the Internet at www.boeing.com, at www.sec.gov or at such other website as notified to the Agent and the Lenders.

(b) Payment of Taxes, Etc. Duly pay and discharge, and cause each Subsidiary duly to pay and discharge, all material taxes, assessments and governmental charges upon it or against its properties prior to a date which is 5 Business Days after the date on which penalties are attached thereto, except and to the extent only that the same shall be contested in good faith and by appropriate proceedings by TBC or the appropriate Subsidiary.

(c) Insurance. Maintain, and cause each Subsidiary to maintain, with financially sound and reputable insurance companies or associations, insurance of the kinds, covering the risks and in the relative proportionate amounts usually carried by companies engaged in businesses similar to that of TBC or such Subsidiary, except, to the extent consistent with good business practices, such insurance may be provided by TBC through its program of self insurance.

(d) Corporate Existence. Preserve and maintain its corporate existence.

(e) Material Compliance With Laws. Comply, and cause each Subsidiary to comply, in all material respects with all applicable laws (including ERISA and applicable environmental laws), except to the extent that failure to so comply would not have a material adverse effect on the financial condition or operations of the Company.

4.2 General Negative Covenants of TBC. From the date of this Agreement and so long as any amount shall be payable by TBC or any other Borrower to any Lender hereunder or any Commitment shall be outstanding, TBC will not:

(a) Mortgages, Liens, Etc. Create, incur, assume or suffer to exist any mortgage, pledge, lien, security interest or other charge or encumbrance (including the lien or retained security title of a conditional vendor) upon or with respect to any of its Property, Plant and Equipment, or upon or with respect to the Property, Plant and Equipment of any Subsidiary, or assign or otherwise convey, or permit any Subsidiary to assign or otherwise convey, any right to receive income from or with respect to its Property, Plant and Equipment, except

(1) liens in connection with workmen’s compensation, unemployment insurance or other social security obligations;

(2) liens securing the performance of bids, tenders, contracts (other than for the repayment of borrowed money), leases, statutory obligations, surety and appeal bonds, liens to secure progress or partial payments made to TBC or such Subsidiary and other liens of like nature made in the ordinary course of business;

(3) mechanics’, workmen’s, materialmen’s or other like liens arising in the ordinary course of business in respect of obligations which are not due or which are being contested in good faith;

(4) liens for taxes not yet due or being contested in good faith and by appropriate proceedings by TBC or the affected Subsidiary;

(5) liens which arise in connection with the leasing of equipment in the ordinary course of business;

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(6) liens on Property, Plant and Equipment owned by TBC or any Subsidiary of TBC existing on the date of this Agreement;

(7) liens on assets of a Person existing at the time such Person is merged into or consolidated with TBC or a Subsidiary of TBC or at the time of purchase, lease, or acquisition of the property or Voting Stock of such Person as an entirety or substantially as an entirety by TBC or a Subsidiary of TBC, whether or not any Debt secured by such liens is assumed by TBC or such Subsidiary, provided that such liens are not created in anticipation of such purchase, lease, acquisition or merger;

(8) liens securing Debt of a Subsidiary of TBC owing to TBC or to another Subsidiary;

(9) liens on assets existing at the time of acquisition of such property by TBC or a Subsidiary of TBC or purchase money liens to secure the payment of all or part of the purchase price of property upon acquisition of such assets by TBC or such Subsidiary or to secure any Debt incurred or guaranteed by TBC or a Subsidiary prior to, at the time of, or within one year after the later of the acquisition, completion or construction (including any improvements on existing property), or commencement of full operation, of such property, which Debt is incurred or guaranteed solely for the purpose of financing all or any part of the purchase price thereof or construction or improvements thereon; provided, however, that in the case of any such acquisition, construction or improvement, the lien shall not apply to any property theretofore owned by TBC or such Subsidiary other than, in the case of such construction or improvement, any theretofore unimproved real property on which the property so constructed or the improvement made is located;

(10) liens securing obligations of TBC or a Subsidiary incurred in conjunction with industrial revenue bonds or other instruments utilized in connection with incentive structures for tax purposes issued for the benefit of TBC or a Subsidiary in connection with any Property, Plant and Equipment used by TBC or a Subsidiary;

(11) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part of any lien referred to in the foregoing; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement and that such extension, renewal or replacement shall be limited to all or any part of the property that secured the lien so extended, renewed or replace (plus improvements and construction on such property); and

(12) other liens, charges and encumbrances, so long as the aggregate amount of the Consolidated Debt for which all such liens, charges and encumbrances serve as security does not exceed 15% of Consolidated Net Tangible Assets.

(b) Consolidated Debt. Permit Consolidated Debt (subject to Section 4.3) to be at any time more than 60% of Total Capital, where “Total Capital” means the sum of Shareholders’ Equity and Consolidated Debt.

(c) Payment in Violation of an Agreement. Make any payment, or permit any Subsidiary to make any payment, of principal or interest, on any Debt which payment would constitute a violation of the terms of this Agreement or of the terms of any indenture or agreement binding on such corporation or to which such corporation is a party except, in the case of any payment made by a Subsidiary, to the extent such payment is not likely to impair the ability of TBC to repay the Advances.

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(d) Merger or Consolidation. Merge or consolidate with or into, or convey, transfer, lease, or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person except that TBC may merge or consolidate with any Person so long as TBC is the surviving corporation and no Default has occurred and is continuing or would result therefrom, and except that any direct or indirect Subsidiary of TBC may merge or consolidate with or into, or dispose of assets to, TBC or any other direct or indirect Subsidiary of TBC, provided, in each case, that no Event of Default has occurred and is continuing at the time of such proposed transaction or would result therefrom.

4.3 Financial Statement Terms. For purposes of Section 4.2(b), all capitalized terms not defined in this Agreement shall have the respective meanings used in TBC’s published Consolidated financial statements and calculated under the generally accepted accounting principles and practices applied by TBC on the date hereof in the preparation of such financial statements. However, notwithstanding the foregoing, (a) such terms shall exclude amounts attributable to Boeing Capital Services Corporation and its Subsidiaries and Boeing Financial Corporation, a Delaware corporation; and (b) Total Capital shall exclude the effects of (i) any merger-related accounting adjustments which are attributable to the merger with or acquisition of McDonnell Douglas Corporation by TBC and (ii) any repurchase by TBC of its common stock.

4.4 Waivers of Covenants. The departure by TBC or any Subsidiary from the requirements of any of the provisions of this Article 4 shall be permitted only if such departure has been consented to in advance in a writing signed by the Majority Lenders, and such writing shall be effective as a consent only to the specific departure described in such writing. Such departure by TBC or any Subsidiary when properly consented to by the Majority Lenders shall not constitute an Event of Default under Section 6.1(c).

ARTICLE 5

Conditions Precedent to Borrowings

5.1 Conditions Precedent to the Initial Borrowing of TBC. The obligation of each Lender to make its initial Advance to TBC is subject to receipt by the Agent on or before the day of the initial Borrowing of all of the following, each dated as of the day hereof, in form and substance satisfactory to the Agent and its counsel:

(a) Documentation. Copies of all documents, certified by an officer of TBC, evidencing necessary corporate action by TBC and governmental approvals, if any, with respect to this Agreement, to the Notes, if any, and to Guaranties to be delivered by TBC pursuant to Section 5.4(e);

(b) Officer’s Certificate. A certificate of the Secretary or an Assistant Secretary of TBC which certifies the names of the officers of TBC authorized to sign the Notes, if any, and the other documents to be delivered hereunder, together with true specimen signatures of such officers and facsimile signatures of officers authorized to sign by facsimile signature (on which certificate each Lender may conclusively rely until it receives a further certificate of the Secretary or an Assistant Secretary of TBC canceling or amending the prior certificate and submitting specimen signatures of the officers named in such further certificate);

(c) Opinion of Company Counsel. A favorable opinion of in-house counsel for TBC substantially in the form of Exhibit G and as to such other matters as the Agent may reasonably request, which opinion TBC hereby expressly instructs such counsel to prepare and deliver;

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(d) Opinion of Agent’s Counsel. A favorable opinion of Shearman & Sterling LLP, counsel for the Agent, substantially in the form of Exhibit H;

(e) Termination of 2004 Credit Agreement. TBC shall have terminated in whole the commitments of the banks parties to the 2004 Credit Agreement; and

(f) Satisfaction of 2004 Credit Agreement Obligations. TBC and its Subsidiaries shall have satisfied all of their respective obligations under the 2004 Credit Agreement including, without limitation, the payment of all fees under such agreement.

5.2 Conditions Precedent to Each Committed Borrowing of TBC. The obligation of each Lender to make a Committed Advance on the occasion of each Committed Borrowing (including the initial Borrowing) is subject to the further conditions precedent that on the date of the request for a Committed Borrowing and on the date of such Borrowing, the following statements shall be true, and both the giving of the applicable Notice of Committed Borrowing and the acceptance by TBC of the proceeds of such Committed Borrowing shall be a representation by TBC that:

(a) the representations and warranties contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date); and

(b) as of each such date no event has occurred and is continuing, or would result from the proposed Committed Borrowing, which constitutes a Default.

5.3 Conditions Precedent to Each Bid Borrowing of TBC. The obligation of any Lender to make a Bid Advance on the occasion of a Bid Borrowing (including the initial Borrowing) is subject to the further conditions precedent that:

(a) Notice of Bid Borrowing. The Agent shall have received the written confirmatory Notice of Bid Borrowing with respect thereto;

(b) Bid Notes. On or before the date of such Bid Borrowing, but prior to such Bid Borrowing, the Agent shall have received a Bid Note payable to the order of such Lender for each of the one or more Bid Advances to be made by such Lender as part of such Bid Borrowing, in a principal amount equal to the principal amount of the Bid Advance to be evidenced thereby and otherwise on such terms as were agreed to for such Bid Advance in accordance with Section 2.5;

(c) Periodic Reports. Each Lender intending to make a Bid Advance shall have received the statements provided (or deemed provided) by TBC pursuant to Section 4.1(a)(1), (2) and (3); and

(d) Representations. On the date of such request and the date of such Borrowing, the following statements shall be true, and each of the giving of the applicable Notice of Borrowing and the acceptance by TBC of the proceeds of such Bid Borrowing shall be a representation by TBC that:

(i) the representations and warranties contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date);

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(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Bid Borrowing, which constitutes a Default; and

(iii) no event has occurred and no circumstance exists as a result of which any information concerning TBC that has been provided by TBC to the Agent or the Lenders in connection with such Bid Borrowing would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

5.4 Conditions Precedent to the Initial Borrowing of a Subsidiary Borrower. The obligation of each Lender to make its initial Advance to any particular Subsidiary Borrower is subject to the receipt by the Agent, on or before the day of the initial Borrowing by such Subsidiary Borrower, of all of the following, each dated on or prior to the day of the initial Borrowing, in form and substance satisfactory to the Agent and its counsel:

(a) Borrower Subsidiary Letter. A Borrower Subsidiary Letter, substantially in the form of Exhibit D, executed by such Subsidiary Borrower and TBC;

(b) Documentation. Copies of all documents, certified by an officer of the Subsidiary Borrower, evidencing necessary corporate action by the Subsidiary Borrower and governmental approvals, if any, with respect to this Agreement and any Notes;

(c) Officer’s Certificate. A certificate of the Secretary or an Assistant Secretary of TBC or the Subsidiary Borrower which certifies the names of the officers of the Subsidiary Borrower authorized to sign the Notes and the other documents to be delivered hereunder, together with true specimen signatures of such officers and facsimile signatures of officers authorized to sign by facsimile signature (on which certificate each Lender may conclusively rely until it receives a further certificate of the Secretary or an Assistant Secretary of TBC or the Subsidiary Borrower canceling or amending the prior certificate and submitting signatures of the officers named in such further certificate);

(d) Opinion of Subsidiary Counsel. A favorable opinion of in-house counsel to the Subsidiary Borrower, substantially in the form of Exhibit I and as to such other matters as the Agent may reasonably request; and

(e) TBC Guaranty. A Guaranty of TBC that unconditionally guarantees the payment of all obligations of such Subsidiary Borrower hereunder and under the Notes of such Subsidiary Borrower, substantially in the form of Exhibit J, executed and delivered by TBC to the Agent; and

(f) Opinion of TBC Counsel. A favorable opinion of in-house counsel to TBC, substantially in the form of Exhibit K and as to such other matters as the Agent may reasonably request.

5.5 Conditions Precedent to Each Committed Borrowing of a Subsidiary Borrower. The obligation of each Lender to make a Committed Advance to a Subsidiary Borrower on the occasion of each Committed Borrowing (including the initial Borrowing) is subject to the further conditions precedent that on the date of the request for such Committed Borrowing and the date of such Borrowing, the following statements shall be true, and each of the giving of the applicable Notice of Committed Borrowing and the acceptance by such Subsidiary Borrower of the proceeds of such Committed Borrowing shall be (a) a representation by such Subsidiary Borrower that:

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(i) the representations and warranties of that Subsidiary Borrower contained (A) in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and (B) in its Borrower Subsidiary Letter are true and correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing; and

(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Committed Borrowing, which constitutes a Default;

and (b) a representation by TBC that the representations and warranties of TBC contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and that, as of each such date, no event has occurred and is continuing, or would result from the proposed Committed Borrowing, which constitutes a Default.

5.6 Conditions Precedent to Each Bid Borrowing of a Subsidiary Borrower. The obligation of any Lender to make a Bid Advance to any particular Subsidiary Borrower on the occasion of each Bid Borrowing (including the initial Borrowing) is subject to the further conditions precedent that:

(a) Notice of Bid Borrowing. The Agent shall have received the written confirmatory Notice of Bid Borrowing with respect thereto;

(b) Bid Notes. On or before the date of such Bid Borrowing, but prior to such Bid Borrowing, the Agent shall have received a Bid Note payable to the order of such Lender for each of the one or more Bid Advances to be made by such Lender as part of such Bid Borrowing, in a principal amount equal to the principal amount of the Bid Advance to be evidenced thereby and otherwise on such terms as were agreed to for such Bid Advance in accordance with Section 2.5;

(c) Periodic Reports. Each Lender intending to make a Bid Advance shall have received the statements provided (or deemed provided) by TBC pursuant to Section 4.1(a)(1), (2) and (3); and

(d) Subsidiary Representations. On the date of such request and the date of such Borrowing, the following statements shall be true, and each of the giving of the applicable Notice of Bid Borrowing and the acceptance by the Subsidiary of the proceeds of such Bid Borrowing shall be (a) a representation by such Subsidiary Borrower that:

(i) the representations and warranties contained (A) in subsections (a) through (g) of Section 3.1 hereof with respect to such Subsidiary Borrower are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and (B) in its Borrower Subsidiary Letter are true and correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing;

(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Bid Borrowing which constitutes a Default; and

(iii) no event has occurred and no circumstance exists as a result of which any information concerning TBC or the Subsidiary Borrower that has been provided

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by TBC or the Subsidiary Borrower to the Agent or the Lenders in connection with such Bid Borrowing would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; and

(e) TBC Representation. A representation by TBC that the representations and warranties of TBC contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and that, as of each such date, no event has occurred and is continuing, or would result from the proposed Committed Borrowing which constitutes a Default.

ARTICLE 6

Events of Default

6.1 Events of Default. Each of the following shall constitute an Event of Default:

(a) Failure by TBC to make when due any payment of principal of or interest on any Advance or under a Guaranty when the same becomes due and payable and such failure is not remedied within 5 Business Days thereafter;

(b) Any representation or warranty made by TBC in connection with the execution and delivery of this Agreement, the Borrowings or any Guaranty, or otherwise furnished pursuant hereto proves to have been incorrect when made in any material respect;

(c) Failure by TBC to perform any other term, covenant or agreement contained in this Agreement, and such failure is not remedied within 30 days after written notice thereof has been given to TBC by the Agent, at the request, or with the consent, of the Majority Lenders;

(d) Failure by TBC to pay when due (i) any obligation for the payment of borrowed money on any regularly scheduled payment date or following acceleration thereof or (ii) any other monetary obligation if, in the case of either of clauses (i) or (ii), the aggregate unpaid principal amount of the obligations with respect to which such failure to pay or acceleration occurred equals or exceeds $150,000,000 and such failure is not remedied within 5 Business Days after TBC receives notice thereof from the Agent or the creditor on such obligation;

(e) TBC or any of its Subsidiaries

(1) incurs liability with respect to any employee pension benefit plan in excess of $150,000,000 in the aggregate under

(A) Sections 4062, 4063, 4064 or 4201 of ERISA; or

(B) otherwise under Title IV of ERISA as a result of any reportable event within the meaning of ERISA (other than a reportable event as to which the provision of 30 days’ notice is waived under applicable regulations);

(2) has a lien imposed on its property and rights to property under Section 4068 of ERISA on account of a liability in excess of $150,000,000 in the aggregate; or

(3) incurs liability under Title IV of ERISA

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(A) in excess of $150,000,000 in the aggregate as a result of the Company or any Subsidiary or any Person that is a member of the “controlled group” (as defined in Section 4001(a)(14) of ERISA) of the Company or any Subsidiary having filed a notice of intent to terminate any employee pension benefit plan under the “distress termination” provision of Section 4041 of ERISA, or

(B) in excess of $150,000,000 in the aggregate as a result of the Pension Benefit Guaranty Corporation having instituted proceedings to terminate, or to have a trustee appointed to administer, any such plan;

(f) The happening of any of the following events, provided such event has not then been cured or stayed:

(1) the cessation by TBC of the payment of its Debts as they mature,

(2) the making of an assignment for the benefit of the creditors of TBC,

(3) the appointment of a trustee or receiver or liquidator for TBC or for a substantial part of its property, or

(4) the institution of bankruptcy, reorganization, arrangement, insolvency or similar proceedings by or against TBC under the laws of any jurisdiction in which TBC is organized or has material business, operations or assets and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property and assets) shall occur; or

(g) So long as any Subsidiary is a Borrower hereunder, the Guaranty with respect to such Subsidiary Borrower for any reason ceases to be valid and binding on TBC or TBC so states in writing.

6.2 Lenders’ Rights upon Borrower Default. If an Event of Default occurs or is continuing, then the Agent shall at the request, or may with the consent, of the Majority Lenders, by notice to TBC,

(a) declare the obligation of each Lender to make further Advances to be terminated, whereupon the same shall forthwith terminate, and

(b) declare the Advances, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest, and all such other amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrowers, provided, however, that in the event of an actual entry or, in the case of the institution by the Borrower of a proceeding described in Section 6.1(f)(4), a deemed entry, of an order for relief with respect to any Borrower under the Federal Bankruptcy Code (whether in connection with a voluntary or an involuntary case), (i) the obligation of each Lender to make Advances shall automatically be terminated and (ii) the payment obligations of the Borrowers with respect to Advances, all such interest, and all such amounts shall automatically become and be due and payable, without presentment, demand, protest, or any notice of any kind, all of which are hereby expressly waived by the Borrowers.

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ARTICLE 7

The Agent

7.1 Authorization and Action. Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including without limitation, enforcement or collection of any Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders or as otherwise required by Section 8.1(b) and such instructions shall be binding upon all Lenders and all holders of interests in Advances; provided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrowers pursuant to the terms of this Agreement.

7.2 Agent’s Reliance, Etc. Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Agent:

(a) may treat the Lender that made any Advance as the payee thereof until the Agent receives and accepts an assignment entered into by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided in Section 2.20;

(b) may consult with legal counsel (including counsel for the Borrowers), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or other experts;

(c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement;

(d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of any Borrower or to inspect the property (including the books and records) of any Borrower;

(e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and

(f) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

7.3 Citibank, N.A. and its Affiliates. With respect to its Commitment, the Advances made by it, and any Notes issued to it, Citibank, N.A. shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent hereunder; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Citibank, N.A., in its individual capacity. Citibank, N.A. and its Affiliates may accept deposits from, lend money to, accept drafts drawn by, act as trustee under indentures of, and

43

generally engage in any kind of business with, the Company, any of its Subsidiaries and any person or entity who may do business with or own securities of the Company or any Subsidiary, all as if Citibank, N.A. were not the Agent hereunder and without any duty to account therefor to the other Lenders.

7.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 3.1(e) and the representations and warranties contained in Sections 3.1 and 3.2 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

7.5 Indemnification. The Lenders agree to indemnify the Agent (to the extent not reimbursed by TBC or any other Borrower), ratably according to the respective principal amounts of the Committed Advances then outstanding made by each of them (or if no Committed Advances are at the time outstanding or if interests in any Committed Advances are held by Persons which are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent under this Agreement (collectively, the “Indemnified Costs”), provided that no Lender shall be liable for any portion of the Indemnified Costs resulting from the Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement to the extent that the Agent is not reimbursed for such expenses by TBC or any other Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.5 applies whether any such investigation, litigation or proceeding is brought by the Agent, any Lender or a third party.

7.6 Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and TBC and may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right, with the consent of TBC (if no Event of Default has occurred and is continuing), which shall not be unreasonably withheld, to appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any state thereof and having a combined capital and surplus of at least $50,000,000. If no successor Agent has been so appointed by the Majority Lenders, and has accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the removal of the retiring Agent as provided herein, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which meets the requirements set out in the previous sentence. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Article 7 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

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7.7 Certain Obligations May Be Performed by Affiliates. The Agent may appoint any of its Affiliates to perform its obligations hereunder other than any obligation requiring the Agent to receive, pay, or otherwise handle funds or Notes, and provided that the Agent shall continue to be responsible to the Borrowers and the Lenders for the due performance of the Agent’s obligations under this Agreement.

7.8 Other Agents. Each Lender hereby acknowledges that neither the documentation agent, syndication agent nor any other Lender designated as any “Agent” (other than the Agent) on the signature pages hereof has any liability hereunder other than in its capacity as a Lender.

ARTICLE 8

Miscellaneous

8.1 Modification, Consents and Waivers.

(a) Waiver. No failure or delay on the part of any Lender in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power hereunder. No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances.

(b) Amendment. No amendment or waiver of any provision of this Agreement or of any Committed Notes, nor consent to any departure by the Borrowers therefrom, shall in any event be effective unless such amendment, waiver or consent is in writing and signed by the Company and the Majority Lenders, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following:

(i) waive any of the conditions specified in Section 5.1 or 5.4,

(ii) except as provided in Section 2.19 or Section 2.21, increase the Commitments of the Lenders or subject the Lenders to any additional obligations,

(iii) reduce the principal of, or interest on, the Committed Advances or any fees or other amounts payable hereunder,

(iv) except as provided in Section 2.21, postpone any date fixed for any payment of principal of, or interest on, the Committed Advances or any fees or other amounts payable hereunder,

(v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Committed Advances or the number of Lenders required for the Lenders or any of them to take any action hereunder,

(vi) amend this Section 8.1, or

(vii) release TBC from any of its obligations under any Guaranty or limit the liability of TBC as guarantor thereunder;

45

and provided further that no amendment, waiver, or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent under this Agreement or any Note.

(c) Majority Lenders. Notwithstanding the foregoing, this Section 8.1 shall not affect the provisions of Section 4.4, “Waivers of Covenants”, or Article 6, “Events of Default”.

8.2 Notices.

(a) Addresses. All communications and notices provided for hereunder shall be in writing and mailed, telecopied, telexed or delivered and,

if to the Agent,

Citibank, N.A.

Two Penns Way, Suite 200

New Castle, Delaware 19720

Attention: Bank Loans Syndications Department

facsimile number (212) 994 0961;

if to any Borrower,

care of The Boeing Company

100 N. Riverside

Mail Code: 5003 3648

Chicago, Illinois

Attention: Assistant Treasurer, Corporate Finance and Banking

facsimile number (312) 544-2399

if to any Lender, to its office at the address given on the signature pages of this Agreement; or,

as to each party, at such other address as designated by such party in a written notice to each other party referring specifically to this Agreement.

(b) Effectiveness of Notices. All communications and notices shall, when mailed, telecopied, or telexed, be effective when deposited in the mail, telecopied, or confirmed by telex answerback, respectively. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or any Notes or of any Exhibit to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.

(c) Electronic Mail. Electronic mail may be used to distribute routine communications, such as financial statements and other information, and documents to be signed by the parties hereto; provided, however, that no Notice of Borrowing, signature, or other notice or document intended to be legally binding shall be effective if sent by electronic mail.

(d) Internet Distributions.

(1) So long as Citibank or any of its Affiliates is the Agent, such materials as may be agreed between the Borrowers and the Agent may be delivered to the Agent in an electronic medium in a format acceptable to the Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com. The Borrowers agree that the Agent may make such materials, as well as any other written information, documents, instruments and other

46

material relating to the Company, any of its Subsidiaries or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the “Communications”) available to the Lenders by posting such notices on Intralinks or a substantially similar electronic system (the “Platform”). The Borrowers acknowledge that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in connection with the Platform.

(2) Each Lender agrees that notice to it (as provided in the next sentence) (a “Notice”) specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender for purposes of this Agreement; provided that if requested by any Lender the Agent shall deliver a copy of the Communications to such Lender by email or telecopier. Each Lender agrees (i) to notify the Agent in writing of such Lender’s e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.

8.3 Costs, Expenses and Taxes.

(a) TBC shall pay upon written request all reasonable costs and expenses in connection with the preparation, execution, delivery, modification and amendment requested by any of the Borrowers of this Agreement, any Notes and the Guaranties (including, without limitation, printing costs and the reasonable fees and out-of-pocket expenses of counsel for the Agent) and costs and expenses, if any, in connection with the enforcement of this Agreement, any Notes and the Guaranties (whether through negotiations, legal proceedings or otherwise and including, without limitation, the reasonable fees and out-of-pocket expenses of counsel), as well as any and all stamp and other taxes, and to save the Lenders and other holders of interests in the Advances or any Notes harmless from any and all liabilities with respect to or resulting from any delay by or omission of the Borrowers to pay such taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of this Agreement, any Notes and the Guaranties.

(b) TBC agrees to indemnify the Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) the Advances, this Agreement, the Notes, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances, except to the extent such claim, damage, loss, liability or expense resulted from such Indemnified Party’s gross negligence or willful misconduct and except that no Indemnified Party shall have the right to be indemnified hereunder to the extent such indemnification relates to relationships of, between or among each of, or any of, the Agent, the Lenders, any assignee of a Lender or any participant. In the case of any investigation, litigation or other proceeding to which

47

this Section 8.3 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by TBC, its directors, shareholders or creditors or an Indemnified Party or any other Person or an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. The Borrowers also agree not to assert any claim on any theory of liability for special, indirect, consequential or punitive damages against the Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, arising out of or otherwise relating to the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of Advances.

(c) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in Sections 2.13, 2.14 and 8.3 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes for a period of seven years.

8.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Borrowers, the Lenders and the Agent, and their respective successors and assigns, except that the Borrowers may not assign or transfer their rights hereunder without the prior written consent of the Lenders.

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

8.6 Governing Law. This Agreement, any Notes, the Guaranties and each Borrower Subsidiary Letter shall be deemed to be contracts under the laws of the State of New York and for all purposes shall be construed in accordance with the laws of such State.

8.7 Headings. The Table of Contents and Article and Section headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

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

8.9 Right of Set-Off. Each Lender and each of its Affiliates that is or was at one time a Lender hereunder is authorized at any time and from time to time, upon

(i) the occurrence and during the continuance of any Event of Default and

(ii) the making of the request or the granting of the consent specified by Section 6.2 to authorize the Agent to declare any Advances due and payable pursuant to the provisions of Section 6.2,

to the fullest extent permitted by law, without notice to any Borrower (any such notice being expressly waived by each Borrower), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of any Borrower against any and all of the obligations to such Lender or such Affiliate of such Borrower now or hereafter existing under this Agreement and any Notes held by such Lender, whether or not such Lender

48

has made a demand under this Agreement or such Notes and although such obligations may be unmatured. Each Lender shall promptly notify any Borrower after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Lender and its Affiliates may have.

8.10 Confidentiality. Neither the Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of a Borrower, other than

(a) to the Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 2.20(f), to actual or prospective assignees and participants, and then only on a confidential basis,

(b) as required by any law, rule or regulation or judicial process, and

(c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking or other financial institutions.

8.11 Agreement in Effect. This Agreement shall become effective upon its execution and delivery, respectively, to the Agent and TBC by TBC and the Agent, and when the Agent shall have been notified by each Lender listed on Schedule I that such Lender has executed it.

8.12 Patriot Act Notice. Each Lender and the Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of Section 326 of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) and the promulgated regulations thereto (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender or the Agent, as applicable, to identify such Borrower in accordance with the Patriot Act. Each Borrower shall provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Agent or any Lenders in order to assist the Agent and the Lenders in maintaining compliance with the Patriot Act.

8.13 Jurisdiction, Etc.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Borrower hereby further irrevocably consents to the service of process in any action or proceeding in such courts by the mailing thereof by any parties hereto by registered or certified mail, postage prepaid, to the Borrower at its address specified pursuant to Section 8.2. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any jurisdiction.

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

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

THE BOEING COMPANY
By	/s/    RUUD ROGGEKAMP
Name:	Ruud Roggekamp
Title:	Assistant Treasurer
CITIBANK, N.A., Individually and as Agent
By	/s/    CAROLYN KEE
Name:	Carolyn Kee
Title:	Vice President
Syndication Agent
JPMORGAN CHASE BANK, N.A.
By	/s/    MATTHEW H. MASSIE
Name:	Matthew H. Massie
Title:	Managing Director
Documentation Agents
BANK OF AMERICA, N.A.
By	/s/    KENNETH J. BECK
Name:	Kenneth J. Beck
Title:	Senior Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD. SEATTLE BRANCH
By	/s/    TSUNETO KODAMA
Name:	Tsuneto Kodama
Title:	General Manager
SUMITOMO MITSUI BANKING CORPORATION
By	/s/    YOSHIHIRO HYAKUTOME
Name:	Yoshihiro Hyakutome
Title:	Joint General Manager
WACHOVIA BANK, NATIONAL ASSOCIATION
By	/s/    JAMES TRAVAGLINE
Name:	James Travagline
Title:	Vice President

364-Day Credit Agreement

Lenders
MIZUHO CORPORATE BANK, LTD.
By	/s/    BERTRAM TANG
Name:	Bertram Tang
Title:	Senior Vice President & Team Leader
DEUTSCHE BANK AG NEW YORK BRANCH
By	/s/    FREDERICK W. LAIRD
Name:	Frederick W. Laird
Title:	Managing Director
By	/s/    MING K. CHU
Name:	Ming K. Chu
Title:	Vice President
BARCLAYS BANK PLC
By	/s/    NICHOLAS A. BELL
Name:	Nicholas A. Bell
Title:	Director
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By	/s/    KARL STUDER        /s/    YVONNE GUNTLIN
Name:	Karl Studer                        Yvonne Guntlin
Title:	Director                    Assistant Vice President
MERRILL LYNCH BANK USA
By	/s/    LOUIS ADLER
Name:	Louis Adler
Title:	Director
MORGAN STANLEY BANK
By	/s/    DANIEL TWENGE
Name:	Daniel Twenge
Title:	Vice President
WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street Commitment Corporation)
By	/s/    MARK WALTON
Name:	Mark Walton
Title:	Assistant Vice President

364-Day Credit Agreement 2

UBS LOAN FINANCE LLC
By	/s/    DORIS MESA
Name:	Doris Mesa
Title:	Associate Director Banking Products Services, US
By	/s/    MARIE A. HADDAD
Name:	Marie A. Haddad
Title:	Associate Director Banking Products Services, US
BNP PARIBAS
By	/s/    RICK PACE
Name:	Rick Pace
Title:	Managing Director
By	/s/    ANGELA BENTLEY ARNOLD
Name:	Angela Bentley Arnold
Title:	Vice President
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH
By	/s/    CATHERINE SCHILLING
Name:	Catherine Schilling
Title:	Vice President
By	/s/    NORMAN MCCLAVE
Name:	Norman McClave
Title:	First Vice President
THE ROYAL BANK OF SCOTLAND PLC
By	/s/    ANDREW WADDINGTON
Name:	Andrew Waddington
Title:	Vice President
PNC BANK, NATIONAL ASSOCIATION
By	/s/    PHILIP K. LIEBSCHER
Name:	Philip K. Liebscher
Title:	Vice President
CALYON NEW YORK BRANCH
By	/s/    PHILIP SCHUBERT
Name:	Philip Schubert
Title:	Director
By	/s/    YURI MUZICHENKO
Name:	Yuri Muzichenko
Title:	Vice President

364-Day Credit Agreement 3

STATE STREET BANK AND TRUST COMPANY
By	/s/    M. CAREY
Name:	M. Carey
Title:	Vice President
STANDARD CHARTERED BANK
By	/s/    FRED YOULIOS
Name:	Fred Youlios
Title:	Vice President
By	/s/    ROBERT K. REDDINGTON
Name:	Robert K. Reddington
Title:	AVP/Credit Documentation Credit Risk Control
HSBC BANK USA, NATIONAL ASSOCIATION
By	/s/    CHRIS WARNER
Name:	Chris Warner
Title:	Head, Transport, Services and Infrastructure
ING CAPITAL LLC
By	/s/    KEN BRAVO
Name:	Ken Bravo
Title:	Managing Director
LLOYDS TSB BANK PLC
By	/s/    ANDREW ROBERTS
Name:	Andrew Roberts
Title:	Vice President, Corporate Banking
By	/s/    JAMES RUDD
Name:	James Rudd
Title:	Vice President, Financial Institutions
THE NORTHERN TRUST COMPANY
By	/s/    PREETI SULLIVAN
Name:	Preeti Sullivan
Title:	Vice President
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
By	/s/    JOHN MARTINI            /s/    JAY LOVI
Name:	John Martini                                    Jay Lovi
Title:	Vice President                            Vice President
WESTPAC BANKING CORPORATION
By	/s/    BRADLEY SCAMMELL
Name:	Bradley Scammell
Title:	Vice President

364-Day Credit Agreement 4

		THE BANK OF NEW YORK
		By	/s/    MARK O’CONNOR
		Name:	Mark O’Connor
		Title:	Vice President
		AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
		By	/s/    JOHN W. WADE
		Name:	John W. Wade
		Title:	Director
ABN AMRO BANK N.V.		ABN AMRO BANK N.V.
By	/s/    TERRANCE J. WARD	By	/s/    IGNACIO PINEROS
Name:	Terrance J. Ward	Name:	Ignacio Pineros
Title:	Senior Vice President	Title:	Vice President
		SOCIETE GENERALE
		By	/s/    ELIZABETH S. HALFIN
		Name:	Elizabeth S. Halfin
		Title:	Director
		U.S. BANK, NATIONAL ASSOCIATION
		By	/s/    JOHN FRANCHESI
		Name:	John Franchesi
		Title:	Vice President
		KEYBANK NATIONAL ASSOCIATION
		By	/s/    FRANK J. JANCAR
		Name:	Frank J. Jancar
		Title:	Vice President
		HARRIS NESBITT FINANCING, INC.
		By	/s/    JOSEPH W. LINDER
		Name:	Joseph W. Linder
		Title:	Vice President
		KBC BANK, N.V.
		By	/s/    JEAN-PIERRE DIELS        /s/    WILLIAM CAVANAUGH
		Name:	Jean-Pierre Diels                William Cavanaugh
		Title:	First Vice President                Vice President

364-Day Credit Agreement 5

SAN PAOLO IMI S.P.A.
By	/s/    RENATO CARDUCCI
Name:	Renato Carducci
Title:	General Manager
By	/s/    ROBERT WURSTER
Name:	Robert Wurster
Title:	Senior Vice President

364-Day Credit Agreement 6

SCHEDULE I

APPLICABLE LENDING OFFICES

Name of Initial Lender	Commitment		Domestic Lending Office	Eurodollar Lending Office
ABN Amro Bank N.V.	$	10,000,000	540 West Madison Street Suite 2100 Chicago, IL 60661 Attn: Loan Administration T: 312 992-5152 F: 312 992-5157	540 West Madison Street Suite 2100 Chicago, IL 60661 Attn: Loan Administration T: 312 992-5152 F: 312 992-5157
Australia and New Zealand Banking Group Limited	$	20,000,000	1177 Avenue of the Americas New York, NY 10036 Attn: Venkatesan Srinivasan T: 212 801-9880 F: 212 536-9247	1177 Avenue of the Americas New York, NY 10036 Attn: Venkatesan Srinivasan T: 212 801-9880 F: 212 536-9247
Banco Bilbao Vizcaya Argentaria	$	20,000,000	1345 Avenue of the Americas 45th Floor New York, NY 10105 Attn: Santiago Hernandez T: 212 728-1677 F: 212 333-2904	1345 Avenue of the Americas 45th Floor New York, NY 10105 Attn: Santiago Hernandez T: 212 728-1677 F: 212 333-2904
Bank of America, N.A.	$	70,000,000	1850 Gateway Blvd. CA4-707-05-11 Concord, CA 94520 Attn: Vilma Tang T: 925 675-7336 F: 925 969-2865	1850 Gateway Blvd. CA4-707-05-11 Concord, CA 94520 Attn: Vilma Tang T: 925 675-7336 F: 925 969-2865
The Bank of New York	$	10,000,000	One Wall Street New York, NY 10286 Attn: Kathy D’Elena T: 212 635-6691 F: 212 635-7923	One Wall Street New York, NY 10286 Attn: Kathy D’Elena T: 212 635-6691 F: 212 635-7923
The Bank of Tokyo-Mitsubishi, Ltd., Seattle Branch	$	70,000,000	900 Fourth Avenue Suite 4000 Seattle, WA 98164 Attn: Ellen Yuson T: 213 488-3796 F: 213 613-1136	900 Fourth Avenue Suite 4000 Seattle, WA 98164 Attn: Ellen Yuson T: 213 488-3796 F: 213 613-1136
Barclays Bank PLC	$	65,000,000	200 Park Avenue New York, NY 10166 Attn: Nicholas A. Bell T: 212 412 4029 F: 212 412 7600	200 Park Avenue New York, NY 10166 Attn: Nicholas A. Bell T: 212 412 4029 F: 212 412 7600

364-Day Credit Agreement

Bayerische Landesbank, Cayman Island Branch	$	50,000,000	560 Lexington Avenue New York, NY 10022 Attn: James Fox T: 212 310-9986 F: 212 310-9868	560 Lexington Avenue New York, NY 10022 Attn: James Fox T: 212 310-9986 F: 212 310-9868
BNP Paribas	$	50,000,000	209 South LaSalle Suite 500 Chicago, IL 60604 Attn: Catherine Lui T: 312 977-2200 F: 312 977-1380	209 South LaSalle Suite 500 Chicago, IL 60604 Attn: Catherine Lui T: 312 977-2200 F: 312 977-1380
Calyon New York Branch	$	50,000,000	1301 Avenue of the Americas New York, NY 10019 Attn: Bertrand Cousin T: 212 261-7363 F: 212 261-7368	1301 Avenue of the Americas New York, NY 10019 Attn: Bertrand Cousin T: 212 261-7363 F: 212 261-7368
Citibank, N.A.	$	80,000,000	388 Greenwich Street New York, NY 10013 Attn: Philippa Portnoy T: 212 559-5812 F: 212 793-1246	388 Greenwich Street New York, NY 10013 Attn: Philippa Portnoy T: 212 559-5812 F: 212 793-1246
Credit Suisse, Cayman Islands Branch	$	65,000,000	11 Madison Avenue New York, NY 10010 Attn: Robert Finney T: 212 325-9038 F: 212 325-8319	11 Madison Avenue New York, NY 10010 Attn: Robert Finney T: 212 325-9038 F: 212 325-8319
Deutsche Bank AG New York Branch	$	50,000,000	60 Wall Street New York, NY 10005 Attn: Mary Zadroga T: 201-593-2360 F: 201-593-2313	60 Wall Street New York, NY 10005 Attn: Mary Zadroga T: 201-593-2360 F: 201-593-2313
Harris Nesbitt Financing, Inc.	$	10,000,000	115 S. LaSalle Street, 12W Chicago, IL 60603 Attn: Ellen Dancer T: 312 750-3453 F: 312 750-6061	115 S. LaSalle Street, 12W Chicago, IL 60603 Attn: Ellen Dancer T: 312 750-3453 F: 312 750-6061
HSBC Bank USA, National Association	$	25,000,000	One HSBC Center, 26th Floor Buffalo, NY 14203 Attn: Donna Riley T: 716 841-4178 F: 716 841-0269	One HSBC Center, 26th Floor Buffalo, NY 14203 Attn: Donna Riley T: 716 841-4178 F: 716 841-0269
ING Capital LLC	$	25,000,000	1325 Avenue of the Americas New York, NY 10019 Attn: Ermelinda Young T: 646-424-8240 F: 646-424-8251	1325 Avenue of the Americas New York, NY 10019 Attn: Ermelinda Young T: 646-424-8240 F: 646-424-8251

364-Day Credit Agreement 2

JPMorgan Chase Bank, N.A.	$	80,000,000	270 Park Avenue New York, NY 10017 Attn: Matt Massie T: 212 270-5432 F: 212 270-5100	270 Park Avenue New York, NY 10017 Attn: Matt Massie T: 212 270-5432 F: 212 270-5100
KBC Bank, N.V.	$	10,000,000	125 West 55th Street 10th Floor New York, NY 10019 Attn: Robert Pacifici T: 212 541-0671 F: 212 956-5581	125 West 55th Street 10th Floor New York, NY 10019 Attn: Robert Pacifici T: 212 541-0671 F: 212 956-5581
KeyBank National Association	$	10,000,000	127 Public Square Cleveland, OH 44114 Attn: Diane Cox T: 216 689-4450 F: 216 689-4981	127 Public Square Cleveland, OH 44114 Attn: Diane Cox T: 216 689-4450 F: 216 689-4981
Lloyds TSB Bank Plc	$	30,000,000	1251 Avenue of the Americas 39th Floor New York, NY 10020 Attn: Patricia Kilian T: 212 930-8914 F: 212 930-5098	1251 Avenue of the Americas 39th Floor New York, NY 10020 Attn: Patricia Kilian T: 212 930-8914 F: 212 930-5098
Merrill Lynch Bank USA	$	65,000,000	15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attn: Derek Befus T: 801 526-8324 F: 801 531-7470	15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attn: Derek Befus T: 801 526-8324 F: 801 531-7470
Mizuho Corporate Bank, Ltd.	$	70,000,000	Harborside Financial Center 1800 Plaza Ten, 16th Floor Jersey City, NJ 07311 Attn: Nate Spivey T: 201 626-9161 F: 201 626-9944	Harborside Financial Center 1800 Plaza Ten, 16th Floor Jersey City, NJ 07311 Attn: Nate Spivey T: 201 626-9161 F: 201 626-9944
Morgan Stanley Bank	$	65,000,000	750 Seventh Avenue 11th Floor New York, NY 10020 Attn: Joseph DiTomaso T: 212 762-2320 F: 212 762-0346	750 Seventh Avenue 11th Floor New York, NY 10020 Attn: Joseph DiTomaso T: 212 762-2320 F: 212 762-0346
The Northern Trust Company	$	30,000,000	801 S. Canal Street Chicago, IL 60607 Attn: Linda Honda T: 312 444-3532 F: 312 630-1566	801 S. Canal Street Chicago, IL 60607 Attn: Linda Honda T: 312 444-3532 F: 312 630-1566

364-Day Credit Agreement 3

PNC Bank, National Association	$	50,000,000	One PNC Plaza 249 Fifth Avenue, 2nd Floor Mailstop P1-POPP-2-3 Pittsburgh, PA 15222 Attn: Philip K. Liebscher T: (412) 762-3202 F: (412) 762-6484	One PNC Plaza 249 Fifth Avenue, 2nd Floor Mailstop P1-POPP-2-3 Pittsburgh, PA 15222 Attn: Philip K. Liebscher T: (412) 762-3202 F: (412) 762-6484
The Royal Bank of Scotland plc	$	50,000,000	101 Park Avenue New York, NY 10178 Attn: Li Yao Li T: 212.401.1335 F: 212.401.1494	101 Park Avenue New York, NY 10178 Attn: Li Yao Li T: 212.401.1335 F: 212.401.1494
SANPAOLO IMI S.p.a.	$	10,000,000	245 Park Avenue New York, NY 10167 Attn: Manuela Insana T: 212 692-3128 F: 212 692-3178	245 Park Avenue New York, NY 10167 Attn: Manuela Insana T: 212 692-3128 F: 212 692-3178
Societe Generale	$	10,000,000	2001 Ross Avenue Dallas, TX 75201 Attn: Deborah McNealey T: 214 979-2762 F: 214 754-0171	2001 Ross Avenue Dallas, TX 75201 Attn: Deborah McNealey T: 214 979-2762 F: 214 754-0171
Standard Chartered Bank	$	30,000,000	One Evertrust Plaza Jersey City, NJ 07302 Attn: Victoria Faltine T: 201 633-3454 F: 201 536-04478	One Evertrust Plaza Jersey City, NJ 07302 Attn: Victoria Faltine T: 201 633-3454 F: 201 536-04478
State Street Bank and Trust Company	$	25,000,000	225 Franklin Street, MAO11 Boston, MA 02110 Attn: Nicole Bertone T: 617 664-3833 F: 617 664-3941	225 Franklin Street, MAO11 Boston, MA 02110 Attn: Nicole Bertone T: 617 664-3833 F: 617 664-3941
Sumitomo Mitsui Banking Corporation	$	70,000,000	277 Park Avenue New York, NY 10172 Attn: Noel Swift T: 212 224-4328 F: 212 224-5197	277 Park Avenue New York, NY 10172 Attn: Noel Swift T: 212 224-4328 F: 212 224-5197
UBS Loan Finance LLC	$	60,000,000	677 Washington Blvd. Stamford, Connecticut 06901 Attn: Marie Haddad Banking Product Services T: 203 719-5609 F: 203 719-3888	677 Washington Blvd. Stamford, Connecticut 06901 Attn: Marie Haddad Banking Product Services T: 203 719-5609 F: 203 719-3888
U.S. Bank, National Association	$	10,000,000	1420 Fifth Avenue, 11th Floor Seattle, WA 98101 Attn: James Farmer T: 206 587-5237 F: 206 344-3654	1420 Fifth Avenue, 11th Floor Seattle, WA 98101 Attn: James Farmer T: 206 587-5237 F: 206 344-3654

364-Day Credit Agreement 4

Wachovia Bank, National Association	$	70,000,000	191 Peachtree Street NE Atlanta, GA 30303 Attn: Joe Baschuite T: 404 332-5178 F: 404 332-4136	191 Peachtree Street NE Atlanta, GA 30303 Attn: Joe Baschuite T: 404 332-5178 F: 404 332-4136
Westpac Banking Corporation	$	20,000,000	GMO Nightshift Operations 255 Elizabeth Street, 3rd Floor Sydney, Australia 2000 Attn: London Operations T: 61 29 284-8241 F: 011 44 207 621-7608	GMO Nightshift Operations 255 Elizabeth Street, 3rd Floor Sydney, Australia 2000 Attn: London Operations T: 61 29 284-8241 F: 011 44 207 621-7608
William Street Commitment Corporation	$	65,000,000	85 Broad Street, 6th Floor New York, NY 10004 Attn: Pedro Ramirez T: 212 343-8319 F: 212 357-6240	85 Broad Street, 6th Floor New York, NY 10004 Attn: Pedro Ramirez T: 212 343-8319 F: 212 357-6240
Total of Commitments:	$	1,500,000,000

364-Day Credit Agreement 5

EX-10.2

EXHIBIT 10.2

EXECUTION COPY

THE BOEING COMPANY

FIVE-YEAR

CREDIT AGREEMENT

among

THE BOEING COMPANY

for itself and on behalf of its Subsidiaries,

as a Borrower

THE LENDERS PARTY HERETO

CITIBANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.

as Syndication Agent

and

CITIGROUP GLOBAL MARKETS INC.

and

J.P.MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Book Managers

dated as of November 18, 2005

TABLE OF CONTENTS

Article and Section			Page
ARTICLE 1 DEFINITIONS
	1.1	Definitions	1
	1.2	Use of Defined Terms; References	12
	1.3	Accounting Terms	12
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
	2.1	Committed Advances	13
	2.2	Making Committed Advances	13
	2.3	Issuance of and Drawings and Reimbursement Under Letters of Credit	14
	2.4	Repayment	17
	2.5	Interest Rate on Committed Advances	18
	2.6	Bid Advances	18
	2.7	Lender Assignment or Sale	22
	2.8	Fees and Commissions	22
	2.9	Reduction of the Commitments	23
	2.10	Additional Interest on Eurodollar Rate Committed Advances	23
	2.11	Eurodollar Interest Rate Determination	23
	2.12	Voluntary Conversion of Committed Advances	24
	2.13	Prepayments	24
	2.14	Increases in Costs	25
	2.15	Taxes	27
	2.16	Illegality	28
	2.17	Payments and Computations	29
	2.18	Sharing of Payments, Etc.	30
	2.19	Evidence of Debt	30
	2.20	Alteration of Commitments and Addition of Lenders	31
	2.21	Assignments; Sales of Participations and Other Interests in Advances	32
	2.22	Extension of Termination Date	35
	2.23	Subsidiary Borrowers	36
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
	3.1	Representations and Warranties by the Borrowers	38
ARTICLE 4 COVENANTS OF TBC
	4.1	Affirmative Covenants of TBC	39
	4.2	General Negative Covenants of TBC	41

i

	4.3	Financial Statement Terms	43
	4.4	Waivers of Covenants	43
ARTICLE 5 CONDITIONS PRECEDENT TO BORROWINGS AND ISSUANCES
	5.1	Conditions Precedent to the Initial Borrowing or Initial Issuance of TBC	43
	5.2	Conditions Precedent to Each Committed Borrowing and Each Issuance of TBC	44
	5.3	Conditions Precedent to Each Bid Borrowing of TBC	44
	5.4	Conditions Precedent to the Initial Borrowing and Issuance of a Subsidiary Borrower	45
	5.5	Conditions Precedent to Each Committed Borrowing or Issuance of a Subsidiary Borrower	45
	5.6	Conditions Precedent to Each Bid Borrowing of a Subsidiary Borrower	46
ARTICLE 6 EVENTS OF DEFAULT
	6.1	Events of Default	47
	6.2	Lenders’ Rights upon Borrower Default	48
	6.3	Actions in Respect of the Letters of Credit upon Borrower Default	49
ARTICLE 7 THE AGENT
	7.1	Authorization and Action	50
	7.2	Agent’s Reliance, Etc.	50
	7.3	Citibank, N.A. and its Affiliates	51
	7.4	Lender Credit Decision	51
	7.5	Indemnification	51
	7.6	Successor Agent	52
	7.7	Certain Obligations May Be Performed by Affiliates	52
	7.8	Other Agents	52
ARTICLE 8 MISCELLANEOUS
	8.1	Modification, Consents and Waivers	52
	8.2	Notices	54
	8.3	Costs, Expenses and Taxes	55
	8.4	Binding Effect	56
	8.5	Severability	56
	8.6	Governing Law	56
	8.7	Headings	56
	8.8	Execution in Counterparts	56
	8.9	Right of Set-Off	56
	8.10	Confidentiality	57
	8.11	Agreement in Effect	57
	8.12	No Liability of the Issuing Banks	57
	8.13	Patriot Act Notice	57
	8.14	Jurisdiction, Etc.	58

ii

Exhibit A-1	-	Committed Note
Exhibit A-2	-	Bid Note
Exhibit B-1	-	Notice of Committed Borrowing
Exhibit B-2	-	Notice of Bid Borrowing
Exhibit C	-	Request for Alteration
Exhibit D	-	Borrower Subsidiary Letter
Exhibit E	-	Extension Request
Exhibit F	-	Continuation Notice
Exhibit G	-	Opinion of Counsel of the Company
Exhibit H	-	Opinion of Counsel for Agent
Exhibit I	-	Opinion of in-house counsel to Subsidiary Borrower
Exhibit J	-	Guaranty of TBC
Exhibit K	-	Opinion of Counsel to TBC
Schedule I	-	Commitments

iii

CREDIT AGREEMENT

Dated as of November 18, 2005

THE BOEING COMPANY, a Delaware corporation (“TBC” or the “Company”), for itself and on behalf of the other BORROWERS (as defined below), the LENDERS (as defined below), CITIGROUP GLOBAL MARKETS INC. and J.P.MORGAN SECURITIES INC., as joint lead arrangers and joint book managers, JPMORGAN CHASE BANK, N.A., as syndication agent, and CITIBANK, N.A., in its capacity as administrative agent for the Lenders (in such capacity, the “Agent”), agree as follows:

ARTICLE 1

Definitions

1.1 Definitions. As used in this Agreement, the following terms have the respective meanings set out below:

“2003 Credit Agreement” means the Five-Year Credit Agreement, dated as of November 21, 2003, by and among TBC, Citibank, N.A., as administrative agent, and certain other banks as lenders.

“Advance” means a Committed Advance or a Bid Advance.

“Agent” means Citibank, N.A. acting in its capacity as administrative agent for the Lenders, or any successor administrative agent appointed pursuant to Section 7.6.

“Agent’s Account” means the account of the Agent maintained by the Agent with Citibank, N.A., at its office at 388 Greenwich Street, New York, New York 10013, Account 36852248, Attention: Bank Loan Syndications.

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

“Agreement” means this agreement, as it may be amended or otherwise modified from time to time, and any written additions or supplements hereto.

“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office, in the case of a Base Rate Advance, and such Lender’s Eurodollar Lending Office, in the case of a Eurodollar Rate Advance, and, in the case of a Bid Advance, the office of such Lender specified by such Lender in a notice to the Agent as its Applicable Lending Office with respect to such Bid Advance.

Five-Year Credit Agreement

“Applicable Letter of Credit Commissions” means, for any date, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Letter of Credit Commission
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.125	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.165	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.255	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.335	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.465	%
Level VI	less than Level V	0.600	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Letter of Credit Commission will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Letter of Credit Commission will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Letter of Credit Commission will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Letter of Credit Commission will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Letter of Credit Commission for each period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Letter of Credit Commission in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Letter of Credit Commission thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Letter of Credit Commission in effect immediately prior to such cessation or (b) otherwise, the Applicable Letter of Credit Commission as set forth under Level VI above.

Five-Year Credit Agreement 2

“Applicable Margin” means,

(i) with respect to Base Rate Advances, 0% per annum; and

(ii) with respect to Eurodollar Rate Advances for any date, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Margin
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.050	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.090	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.180	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.260	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.390	%
Level VI	less than Level V	0.450	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Margin will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Margin will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Margin will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Margin will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Margin for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Margin in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Margin thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Margin in effect immediately prior to such cessation or (b) otherwise, the Applicable Margin as set forth under Level VI above.

Five-Year Credit Agreement 3

“Applicable Percentage” means, for any date, a fluctuating per annum rate equal to the then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Percentage
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.050	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.060	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.070	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.090	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.110	%
Level VI	less than Level V	0.150	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Percentage will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Percentage will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Percentage will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Percentage will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Percentage for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Percentage in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Percentage thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Percentage in effect immediately prior to such cessation or (b) otherwise, the Applicable Percentage as set forth under Level VI above.

“Applicable Utilization Fee” means, for any date that the aggregate principal amount of outstanding Advances exceed 50% of the aggregate Commitments, a fluctuating per annum rate equal to the

Five-Year Credit Agreement 4

then-applicable rate set forth in the pricing grid below, depending upon the rating of the long-term senior unsecured debt of TBC then in effect:

Level	Public Debt Rating: S&P, Moody’s and Fitch	Applicable Utilization Fee
Level I	AA- by S&P, Aa3 by Moody’s or AA- by Fitch or above	0.050	%
Level II	less than Level I but at least A+ by S&P, A1 by Moody’s or A+ by Fitch or above	0.050	%
Level III	less than Level II but at least A by S&P, A2 by Moody’s or A by Fitch	0.050	%
Level IV	less than Level III but at least A- by S&P, A3 by Moody’s or A- by Fitch	0.050	%
Level V	less than Level IV but at least BBB+ by S&P, Baa1 by Moody’s or BBB+ by Fitch	0.050	%
Level VI	less than Level V	0.150	%

provided, however, that if the ratings from S&P, Moody’s and Fitch fall within different levels, (i) two of the ratings are at the same level and the other rating is one level higher or one level lower than the two same ratings, the Applicable Utilization Fee will be based on the two ratings at the same level, (ii) two of the ratings are at the same level and the other rating is two or more levels above the two same ratings, the Applicable Utilization Fee will be based on the rating that is one level above the two same ratings, (iii) two of the ratings are at the same level and the other rating is two or more levels below the two same ratings, the Applicable Utilization Fee will be based on the rating that is one level below the two same ratings and (iv) each of the three ratings fall within different levels, then the Applicable Utilization Fee will be determined based on the rating level that is in between the highest and the lowest ratings, and

provided further that if, at any time, no rating is available from S&P, Moody’s and Fitch or any other nationally recognized statistical rating organization designated by TBC and approved in writing by the Majority Lenders, the Applicable Utilization Fee for each Interest Period or each other period commencing during the thirty days following such ratings becoming unavailable shall be the Applicable Utilization Fee in effect immediately prior to such ratings becoming unavailable. Thereafter, the rating to be used until ratings from S&P, Moody’s and Fitch become available shall be as agreed between TBC and the Majority Lenders, and TBC and the Majority Lenders shall use good faith efforts to reach such agreement within such thirty-day period, provided, however, that if no such agreement is reached within such thirty-day period the Applicable Utilization Fee thereafter, until such agreement is reached, shall be (a) if any such rating has become unavailable as a result of S&P, Moody’s or Fitch ceasing its business as a rating agency, the Applicable Utilization Fee in effect immediately prior to such cessation or (b) otherwise, the Applicable Utilization Fee as set forth under Level VI above.

“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

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“Available Commitments” means, as of any date of determination, (a) the aggregate Commitments of the Lenders, as such amount may be reduced, changed or terminated in accordance with the terms of this Agreement, reduced by (b) the aggregate Advances outstanding on such date of determination.

“Base Rate” means the higher of (a) the rate of interest announced publicly by Citibank, N.A., in New York City, from time to time, as Citibank’s “base” rate and (b) the Federal Funds Rate plus 0.50% per annum.

“Base Rate Advance” means a Committed Advance which bears interest at the Base Rate.

“Bid Advance” means an advance by a Lender to a Borrower as part of a Bid Borrowing resulting from the auction bidding procedure described in Section 2.6, and refers to a Fixed Rate Advance or a Eurodollar Rate Bid Advance, each of which shall be a “Type” of Bid Advance.

“Bid Borrowing” means a borrowing consisting of simultaneous Bid Advances from each of the Lenders whose offers to make one or more Bid Advances as part of such borrowing has been accepted by a Borrower under the auction bidding procedure described in Section 2.6.

“Bid Note” means a promissory note of a Borrower payable to the order of a Lender, in substantially the form of Exhibit A-2, evidencing the indebtedness of that Borrower to such Lender resulting from a Bid Advance made by such Lender to such Borrower.

“Borrower” means, individually and collectively, as the context requires, TBC and each Subsidiary Borrower (unless and until it becomes a “Terminated Subsidiary Borrower” pursuant to Section 2.22).

“Borrower Subsidiary Letter” means, with respect to any Subsidiary Borrower, a letter in the form of Exhibit D, signed by such Subsidiary Borrower and TBC.

“Borrowing” means a Committed Borrowing or a Bid Borrowing.

“Business Day” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advance, on which dealings are carried on in the London interbank market.

“Commitment” means, for each Lender, the full amount set forth opposite the name of such Lender in Schedule I or, if such Lender is a Replacement Lender or a Lender that has entered into one or more assignments pursuant to Section 2.21 or 2.22, the amount set forth for such Lender in the Register maintained by the Agent pursuant to Section 2.21(d), as such amount may be reduced pursuant to Section 2.4, Section 2.9 or Section 2.20 or increased pursuant to Section 2.20.

“Committed Advance” means an advance made by a Lender to a Borrower as part of a Committed Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Committed Advance, each of which is a “Type” of Committed Advance.

“Committed Borrowing” means a borrowing consisting of simultaneous Committed Advances of the same Type made by each of the Lenders pursuant to Section 2.1 or Section 2.3.

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“Committed Note” means a promissory note of a Borrower payable to the order of any Lender, in substantially the form of Exhibit A-1, evidencing the indebtedness of that Borrower to such Lender resulting from the Committed Advances made by such Lender to that Borrower.

“Company” means The Boeing Company, a Delaware corporation.

“Confidential Information” means information that a Borrower furnishes to the Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Lender from a source other than a Borrower.

“Consolidated” refers to the consolidation of accounts in accordance with generally accepted accounting principles.

“Consolidated Net Tangible Assets” means the total amount of assets (less applicable reserves and other properly deductible items) after, deducting therefrom (i) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (ii) all good will, trade names, trademarks, patents, unamortized debt discount and expenses and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated Subsidiaries and computed in accordance with generally accepted accounting principles.

“Continuing Lender” has the meaning specified in Section 2.22(a).

“Convert”, “Conversion” and “Converted” each means a conversion of Committed Advances of one Type into Committed Advances of another Type pursuant to Section 2.11, 2.12 or 2.16.

“Debt” of a Person means

(i) indebtedness for borrowed money or for the deferred purchase price of property or services;

(ii) financial obligations evidenced by bonds, debentures, notes or other similar instruments,

(iii) financial obligations as lessee under leases which have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; and

(iv) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or financial obligations of others of the kind referred to in clauses (i) through (iii) above.

“Default” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“Domestic Lending Office” means with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” opposite its name on Schedule I, or in the assignment or other agreement pursuant to which it became a Lender or such other office of such Lender as such Lender may from time to time specify to TBC and the Agent.

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“Effective Date” has the meaning specified in Section 2.20(d).

“Eligible Assignee” means

(i) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus in excess of $3,000,000,000;

(ii) a commercial bank organized under the laws of any other country which is a member of the OECD, or a political subdivision of any such country, and having a combined capital and surplus in excess of $3,000,000,000, provided that such bank is acting through a branch or agency located in either (a) the country in which it is organized or (b) another country which is also a member of the OECD or the Cayman Islands;

(iii) the central bank of any country which is a member of the OECD;

(iv) any Lender;

(v) an Affiliate of any Lender; or

(vi) any other Person approved in writing, so long as no Event of Default has occurred and is continuing, by TBC, which approval has been communicated in writing to the Agent, and approved by each Issuing Bank, provided that neither TBC nor an Affiliate of TBC shall qualify as an Eligible Assignee.

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

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Lending Office” means, with respect to any Lender, (a) the office of such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I (or, if no such office is specified, its Domestic Lending Office) or in the assignment or other agreement pursuant to which it became a Lender or (b) such other office of such Lender as such Lender may from time to time specify to TBC and the Agent.

“Eurodollar Rate” means, for an Interest Period for a Eurodollar Rate Committed Advance constituting part of a Committed Borrowing, and for the relevant period specified in the applicable Notice of Bid Borrowing for a Eurodollar Rate Bid Advance, an interest rate per annum equal to either

(a) the offered rate (rounded to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) for deposits in U.S. dollars for a period substantially equal to such Interest Period (if a Committed Advance) or such relevant period specified in the applicable Notice of Bid Borrowing (if a Bid Advance), appearing on Telerate Markets Page 3750 (or any successor page or, if unavailable for any reason by Telerate, then by reference to Reuters Screen) as of 11:00 a.m. (London time) two business days before the first day of such Interest Period or the first day of the relevant period specified in such Notice of Bid Borrowing; or

(b) if the foregoing rate is unavailable from Telerate or the Reuters Screen for any reason, the average (rounded to the nearest whole multiple of 1/16 of 1% per annum, if such average

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is not such a multiple) of the rates per annum are offered by the principal office of each of the Reference Banks to prime banks in the London interbank market at 11:00 a.m. (London time) on deposits in U.S. dollars two Business Days before the first day of such Interest Period or the first day of such relevant period specified in the Notice of Bid Borrowing

(i) for such Eurodollar Committed Advance, on an amount substantially equal to such Reference Bank’s Eurodollar Rate Advance constituting part of such Committed Borrowing and for a period equal to such Interest Period, or

(ii) for such Eurodollar Rate Bid Advance, on an amount substantially equal to the amount of the Eurodollar Rate Bid Borrowing which includes such Bid Advance multiplied by a fraction equal to such Reference Bank’s Ratable Share of the Commitments and for a period equal to the relevant period specified in such Notice of Bid Borrowing.

The Eurodollar Rate for any Interest Period for each Eurodollar Rate Committed Advance constituting part of the same Borrowing and for the relevant period specified in a Notice of Bid Borrowing for each Eurodollar Rate Bid Advance shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period or period, as the case may be, subject, however, to the provisions of Section 2.11.

“Eurodollar Rate Advance” means a Committed Advance (a “Eurodollar Rate Committed Advance”) or a Bid Advance (a “Eurodollar Rate Bid Advance”) which bears interest at a rate of interest quoted as a margin (which shall be the Applicable Margin in the case of a Committed Advance or as offered by a Lender and accepted by a Borrower in the case of a Bid Advance) over the Eurodollar Rate.

“Eurodollar Rate Bid Borrowing” has the meaning specified in Section 2.6(b).

“Eurodollar Rate Reserve Percentage” means the reserve percentage applicable to a Lender for any Interest Period for a Eurodollar Rate Advance during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“Event of Default” means any of the events described in Section 6.1.

“Extension Request” has the meaning specified in Section 2.22.

“Facility Fee” has the meaning specified in Section 2.8.

“Federal Funds Rate” means, for each day during a period, an interest rate per annum equal to the weighted average of the fluctuating rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or,

Five-Year Credit Agreement 9

if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

“Fitch” means Fitch, Inc.

“Fixed Rate Advance” means an Advance made by a Lender to a Borrower as part of a Fixed Rate Borrowing.

“Fixed Rate Borrowing” has the meaning specified in Section 2.6(b).

“Guaranty” means each Guaranty Agreement executed by TBC in favor of the Agent and the Lenders, unconditionally guaranteeing the payment of all obligations of a Subsidiary Borrower hereunder and under any Notes executed or to be executed by it.

“Indemnified Costs” has the meaning specified in Section 7.5.

“Indemnified Party has the meaning specified in Section 8.3(b).

“Interest Period” means, for each Eurodollar Rate Committed Advance constituting part of the same Borrowing, the period commencing on the date of such Committed Advance or the date of the Conversion of a Base Rate Advance into such a Eurodollar Rate Committed Advance and ending on the last day of the period selected by the applicable Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by such Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three, or six months (or nine months, with the consent of all Lenders funding those particular Advances), as the applicable Borrower may, upon notice received by the Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the first day of such Interest Period, select, provided, however, that:

(i) no Interest Period shall end on a date later than the Termination Date;

(ii) Interest Periods commencing on the same date for Committed Advances constituting part of the same Committed Borrowing shall be of the same duration; and

(iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of the Interest Period shall occur on the immediately preceding Business Day.

“Issuing Bank” means any Lender that has issued a Letter of Credit pursuant to Section 2.3.

“L/C Cash Deposit Account” means a cash deposit account to be established and maintained by the Agent, over which the Agent shall have sole dominion and control, upon terms as may be satisfactory to the Agent.

“L/C Related Documents” has the meaning specified in Section 2.4(b)(i).

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“Lender”, subject to Section 2.21, means any of the institutions that is a signatory hereto or that, pursuant to Section 2.14, 2.20, 2.21 or 2.22, becomes a “Lender” hereunder.

“Letter of Credit” has the meaning specified in Section 2.3(a).

“Letter of Credit Agreement” has the meaning specified in Section 2.3(d).

“Letter of Credit Facility” means, at any time, an amount equal to the lesser of (a) $500,000,000 and (b) the aggregate amount of the Commitments, as such amount may be reduced pursuant to Section 2.4, Section 2.9 or Section 2.20 or increased pursuant to Section 2.20.

“Loan Document” means this Agreement, the Notes and the other L/C Related Documents.

“Majority Lenders” means Lenders having greater than 50% of the total Commitments or, if the Commitments have been terminated in full, Lenders holding greater than 50% of the then aggregate unpaid principal amount of the Advances.

“Moody’s” means Moody’s Investor Services, Inc.

“Non-Extending Lender” has the meaning specified in Section 2.22(a).

“Note” means a Committed Note or a Bid Note.

“Notice of Bid Borrowing” has the meaning specified in Section 2.6(b).

“Notice of Borrowing” means a Notice of Committed Borrowing or a Notice of Bid Borrowing.

“Notice of Committed Borrowing” has the meaning specified in Section 2.2(a).

“Notice of Issuance” has the meaning specified in Section 2.3(d).

“OECD” means the Organization for Economic Cooperation and Development.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Property, Plant and Equipment” means any item of real property, or any interest therein, buildings, improvements and machinery.

“Proposed Increased Commitment” has the meaning specified in Section 2.20(c).

“Ratable Share” of any amount means, with respect to any Lender at any time, the product of (a) a fraction the numerator of which is the amount of such Lender’s Commitment at such time and the denominator of which is the aggregate Commitments at such time and (b) such amount.

“Reference Banks” means JPMorgan Chase Bank, N.A., Citibank, N.A., [Bank of America, N.A., and Deutsche Bank AG].

“Register” has the meaning specified in Section 2.21(d).

“Replacement Lenders” has the meaning specified in Section 2.22(c).

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“Request for Alteration” means a document substantially in the form of Exhibit C, duly executed by TBC, pursuant to Section 2.20.

“Required Assignment” has the meaning specified in Section 2.21(a).

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

“Subsidiary” means any Person in which more than 50% of the Voting Stock or the interest in the capital or profits is owned by TBC, by TBC and any one or more other Subsidiaries, or by any one or more other Subsidiaries.

“Subsidiary Borrower” means, individually and collectively, as the context requires, each Subsidiary that is or becomes a “Borrower” in accordance with Section 2.23; in each case, unless and until it becomes a “Terminated Subsidiary Borrower”.

“TBC” means The Boeing Company, a Delaware corporation.

“Terminated Subsidiary Borrower” means, individually and collectively, as the context requires, a Subsidiary Borrower that has ceased to be a “Borrower” in accordance with Section 2.23.

“Termination Date” means the earlier to occur of (i) November 18, 2010, as such date may be extended from time to time pursuant to Section 2.22, and (ii) the date of termination in whole of the Commitments pursuant to Section 2.9 or Section 6.2.

“Total Capital” has the meaning specified in Section 4.2(b).

“Type”, as to Committed Borrowings, means either Base Rate Advances or Eurodollar Rate Committed Advances and, as to Bid Borrowings, means either Fixed Rate Advances or Eurodollar Rate Bid Advances.

“Unused Commitment” means, with respect to each Lender at any time, (a) the amount of such Lender’s Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Committed Advances made by such Lender (in its capacity as a Lender) and outstanding at such time, plus (ii) such Lender’s Ratable Share of the aggregate principal amount of all Bid Advances outstanding at such time plus (iii) such Lender’s Ratable Share of the aggregate Available Amount of all the Letters of Credit outstanding at such time.

“Voting Stock” means, as to a corporation, all the issued and outstanding capital stock of such corporation having general voting power, under ordinary circumstances, to elect a majority of the Board of Directors of such corporation (irrespective of whether or not any capital stock of any other class or classes shall or might have voting power upon the occurrence of any contingency).

1.2 Use of Defined Terms; References. Any defined term used in the plural preceded by the definite article encompasses all members of the relevant class. Any defined term used in the singular preceded by “a”, “an” or “any” indicates any number of the members of the relevant class. All references in this Agreement to a Section, Article, Schedule or Exhibit are to a Section, Article, Schedule or Exhibit of or to this Agreement, unless otherwise indicated.

1.3 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistently applied.

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ARTICLE 2

Amounts and Terms of the Advances and Letters of Credit

2.1 Committed Advances.

(a) Obligation to Make Committed Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Committed Advances to the Borrowers from time to time on any Business Day during the period from the date hereof until the Termination Date of such Lender in a principal amount not to exceed such Lender’s Unused Commitment.

(b) Amount of Committed Advances. Each Committed Borrowing shall be in an aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

(c) Type of Committed Advances. Each Committed Borrowing shall consist of Committed Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender’s Commitment, the Borrowers may from time to time borrow, prepay pursuant to Section 2.13, and reborrow under this Section 2.1 and Section 2.2.

2.2 Making Committed Advances.

(a) Notice of Committed Borrowing. Each Committed Borrowing shall be made on notice, given by a Borrower to the Agent not later than 11:00 a.m. (New York City time) on the day of the proposed Committed Borrowing in the case of a Base Rate Borrowing and on the third Business Day prior to the date of the proposed Committed Borrowing in the case of a Eurodollar Rate Borrowing (a “Notice of Committed Borrowing”). Each such Notice of Committed Borrowing shall be in substantially the form of Exhibit B-l, specifying the requested

(i) date of such Committed Borrowing,

(ii) Type of Committed Advances constituting such Committed Borrowing,

(iii) aggregate amount of such Committed Borrowing, and

(iv) in the case of a Committed Borrowing composed of Eurodollar Rate Advances, the initial Interest Period for each such Committed Advance, which Interest Period may be 1, 2, 3 or 6 months, at the option of the Borrower, or, if acceptable to all the Lenders, 9 months.

Every Notice of Committed Borrowing given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that proposed Committed Borrowing. Upon receipt of a Notice of Committed Borrowing, the Agent shall promptly give notice to each Lender thereof.

(b) Funding Committed Advances. Each Lender shall, before 1:00 p.m. (New York City time) on the date of such Committed Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent’s Account, in same day funds, such Lender’s ratable portion of such Committed Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article 5, the Agent will make such funds available to the relevant Borrower at an account specified by such Borrower.

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(c) Irrevocable Notice. Each Notice of Committed Borrowing shall be irrevocable and binding. In the case of any Committed Borrowing that the related Notice of Committed Borrowing specifies is to be composed of Eurodollar Rate Advances, the Borrower requesting such Committed Borrowing shall indemnify each Lender against any loss, cost or expense incurred by such Lender on account of any failure to fulfill on or before the date specified for such Committed Borrowing in such Notice of Committed Borrowing the applicable conditions set forth in Article 5, including, without limitation, any loss (but excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Committed Advance to be made by such Lender as part of such Committed Borrowing when such Committed Advance, as a result of such failure, is not made on such date.

(d) Lender’s Ratable Portion. Unless the Agent has received notice from a Lender prior to 1:00 p.m. (New York City time) on the day of any Committed Borrowing that such Lender will not make available to the Agent such Lender’s ratable portion of such Committed Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Committed Borrowing in accordance with subsection (b) of this Section 2.2 and the Agent may, in reliance upon such assumption, make available to the requesting Borrower on such date a corresponding amount. If and to the extent that a Lender has not so made such ratable portion available to the Agent, such Lender and such Borrower shall severally repay to the Agent forthwith on demand an amount that in the aggregate equals such corresponding amount together with interest thereon for each day from the date such amount is made available by the Agent to such Borrower until the date such amount is repaid to the Agent, at

(i) in the case of such Borrower, the interest rate applicable at the time to Committed Advances constituting such Committed Borrowing, and

(ii) in the case of such Lender, the Federal Funds Rate.

If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Committed Advance as part of such Committed Borrowing for purposes of this Agreement.

(e) Independent Lender Obligations. The failure of any Lender to make the Committed Advance to be made by it as part of any Committed Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Committed Advance on the date of such Committed Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Committed Advance to be made by such other Lender on the date of any Committed Borrowing.

2.3 Issuance of and Drawings and Reimbursement Under Letters of Credit.

(a) Request for Issuance. Any Borrower may request any Lender to issue, and any Lender may, if in its sole discretion it elects to do so, on the terms and conditions hereinafter set forth, issue letters of credit (each, a “Letter of Credit”) for the account of the Borrowers from time to time on any Business Day during the period from the date hereof until 30 days before the Termination Date

(i) in an aggregate Available Amount for all Letters of Credit issued by all Issuing Banks not to exceed at any time the Letter of Credit Facility at such time, and

(ii) in an amount for each such Letter of Credit not to exceed an amount equal to the Unused Commitments of the Lenders at such time.

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(b) Amount of Letters of Credit. Each Letter of Credit shall be in an amount of $1,000,000 or more.

(c) Duration of Letters of Credit. No Letter of Credit shall have an expiration date (including all rights of the applicable Borrower or the beneficiary to require renewal) later than 30 days prior to the Termination Date, provided that if the Termination Date shall have been extended pursuant to Section 2.22 with respect to some but not all of the Lenders, the Available Amount of Letters of Credit with expiry dates after any Termination Date applicable to any Non-Extending Lenders will not exceed the portion of the Commitments attributable to the Lenders with respect to which the Termination Date shall have been extended. Within the limits referred to above, the Borrowers may request the issuance of Letters of Credit under this Section 2.3, repay any Advances resulting from drawings thereunder pursuant to Section 2.3(f) and request the issuance of additional Letters of Credit under this Section 2.3. The terms “issue”, “issued”, “issuance” and all similar terms, when applied to a Letter of Credit, shall include any renewal, extension or amendment thereof.

(d) Notice of Issuance. Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed issuance of such Letter of Credit (or on such shorter notice as the applicable Issuing Bank may agree), by any Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent, prompt notice thereof by facsimile. Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be by telephone, confirmed immediately in writing, or facsimile, specifying therein the requested

(i) date of such issuance (which shall be a Business Day),

(ii) Available Amount of such Letter of Credit,

(iii) expiration date of such Letter of Credit (which shall not be later than 30 days prior to the Termination Date),

(iv) name and address of the beneficiary of such Letter of Credit and

(v) form of such Letter of Credit, and shall be accompanied by such customary application and agreement for letter of credit as such Issuing Bank may specify to the Borrower requesting such issuance for use in connection with such requested Letter of Credit (a “Letter of Credit Agreement”).

Every Notice of Issuance given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that proposed Letter of Credit.

If the requested form of such Letter of Credit is acceptable to such Issuing Bank in its sole discretion, such Issuing Bank may, upon fulfillment of the applicable conditions set forth in Article 5, make such Letter of Credit available to the Borrower requesting such issuance at its office referred to in Section 8.2 or as otherwise agreed with such Borrower in connection with such issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

(e) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender, and each Lender hereby

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acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Ratable Share of the Available Amount of such Letter of Credit. Each Borrower hereby agrees to each such participation. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for the account of such Issuing Bank, such Lender’s Ratable Share of each drawing made under a Letter of Credit funded by such Issuing Bank and not reimbursed by the applicable Borrower on the date made, or of any reimbursement payment required to be refunded to any Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender further acknowledges and agrees that its participation in each Letter of Credit will be automatically adjusted to reflect such Lender’s Ratable Share of the Available Amount of such Letter of Credit at each time such Lender’s Commitment may be reduced pursuant to Section 2.4, Section 2.9 or Section 2.20 or increased pursuant to Section 2.20 or otherwise amended pursuant to this Agreement.

(f) Drawing and Reimbursement. The payment by an Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by any such Issuing Bank of a Committed Advance, which shall be a Base Rate Advance in the amount of such draft . Each Issuing Bank shall give prompt notice (and such Issuing Bank will use its commercially reasonable efforts to deliver such notice within one Business Day) of each drawing under any Letter of Credit issued by it to the Company, the applicable Borrower (if not the Company) and the Agent. Upon written demand by such Issuing Bank made to the Agent, with a copy of such demand to the Company, and the Agent’s prompt notice thereof to each Lender, each Lender shall pay to the Agent such Lender’s Ratable Share of such outstanding Committed Advance, by making available for the account of its Applicable Lending Office to the Agent for the account of such Issuing Bank, by deposit to the Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Advance to be funded by such Lender. Each Lender acknowledges and agrees that its obligation to make Committed Advances pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Promptly after receipt thereof, the Agent shall transfer such funds to such Issuing Bank. Each Lender agrees to fund its Ratable Share of an outstanding Committed Advance on

(i) the Business Day on which demand therefor is made by such Issuing Bank, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day, or

(ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.

If and to the extent that any Lender shall not have so made the amount of such Committed Advance available to the Agent, such Lender agrees to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by any such Issuing Bank until the date such amount is paid to the Agent, at the Federal Funds Rate for its account or the account of such Issuing Bank, as applicable. If such Lender shall pay to the Agent

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such amount for the account of any such Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Committed Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Committed Advance made by such Issuing Bank shall be reduced by such amount on such Business Day.

(g) Letter of Credit Reports. Each Issuing Bank shall furnish

(i) to the Agent (with a copy to the Company) on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit during the preceding month and drawings during such month under all Letters of Credit and

(ii) to the Agent (with a copy to the Company) on the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit.

(h) Failure to Make Advances. The failure of any Lender to make the Committed Advance to be made by it on the date specified in Section 2.3(e) shall not relieve any other Lender of its obligation hereunder to make its Committed Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Committed Advance to be made by such other Lender on such date.

2.4 Repayment.

(a) Committed Advances. The Borrowers shall repay to the Agent for the ratable accounts of the Lenders on the Termination Date the unpaid principal amount of the Committed Advances then outstanding.

(b) Letter of Credit Reimbursements. The obligation of any Borrower under this Agreement, any Letter of Credit Agreement and any other agreement or instrument, in each case, to repay any Committed Advance that results from payment of a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances (it being understood that any such payment by a Borrower is without prejudice to, and does not constitute a waiver of, any rights such Borrower might have or might acquire as a result of the payment by any Lender of any draft or the reimbursement by the Borrower thereof):

(i) any lack of validity or enforceability of this Agreement, any Note, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”);

(ii) any change in the time, manner or place of payment of any Letter of Credit;

(iii) the existence of any claim, defense or other right that any Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank, the Agent, any Lender or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

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(iv) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of such Letter of Credit;

(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of any Borrower in respect of the L/C Related Documents; or

(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing that might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.

2.5 Interest Rate on Committed Advances. Each Borrower shall pay interest on the unpaid principal amount of each of its Committed Advances from the date of such Committed Advance until such principal amount is paid in full, at the following rates per annum:

(i) during each period in which such Committed Advance is a Base Rate Advance, at a rate per annum equal at all times to the Base Rate in effect from time to time plus the Applicable Margin plus the Applicable Utilization Fee, if any, payable quarterly in arrears on the first day of each January, April, July and October and on the Termination Date, and

(ii) during each period in which such Committed Advance is a Eurodollar Rate Advance, at a rate per annum equal at all times during each relevant Interest Period for such Committed Advance to the Eurodollar Rate for such Interest Period plus the Applicable Margin plus the Applicable Utilization Fee, if any, payable on the last day of each such Interest Period, and if such Interest Period has a duration of more than three months, quarterly on each day during such Interest Period that is three months from either (A) the first day of such Interest Period or (B) the last such interest payment date and on the date such Committed Advance is Converted or paid in full;

provided that in the event and during the continuance of an Event of Default (x) the Applicable Margin shall immediately increase by 1.0% above the Applicable Margin then in effect, and, in the case of a Eurodollar Rate Advance, such Advance shall automatically convert to a Base Rate Advance at the end of the Interest Period then in effect for such Eurodollar Rate Advance and (y) to the fullest extent permitted by law, the Borrower shall pay interest on the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 1% above the Base Rate.

2.6 Bid Advances.

(a) Bid Advances Impact on Commitments. The Borrowers may make Bid Borrowings from time to time on any Business Day during the period from the date hereof until the Termination Date in the manner set forth below, provided that, following the making of each Bid Borrowing, the aggregate amount of the Advances then outstanding plus the Available Amount of the Letters of Credit then outstanding shall not exceed the aggregate amount of the Commitments of the

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Lenders. As provided in the definition of “Unused Commitment”, the aggregate amount of the Commitments of the Lenders shall be deemed used from time to time to the extent of the aggregate amount of the Bid Advances then outstanding, and such deemed use of the aggregate amount of the Commitments shall be applied to the Lenders ratably according to their respective Commitments; provided, however, that any Lender’s Bid Advances shall not otherwise reduce that Lender’s obligation to lend its pro rata share of the remaining Available Commitments.

(b) Notice of Bid Borrowing. Any Borrower may request a Bid Borrowing by delivering to the Agent a notice of a Bid Borrowing (a “Notice of Bid Borrowing”), in substantially the form of Exhibit B-2, specifying the following:

(i) the date and aggregate amount of the proposed Bid Borrowing,

(ii) the maturity date for repayment of each Bid Advance to be made as part of such Bid Borrowing, which maturity date

(A) may not be later than 5 Business Days prior to the Termination Date, but may otherwise be 7 days or more from the date of such requested Bid Advance if the Borrower specifies in the Notice of Bid Borrowing that the rates of interest to be offered by the Lenders will be fixed rates per annum (a “Fixed Rate Borrowing”), and

(B) shall be either 1, 2, 3, 6 or 9 months from the date of such Bid Borrowing if the Borrower specifies in the Notice of Bid Borrowing that such Bid Borrowing is to consist of Eurodollar Rate Bid Advances (a “Eurodollar Rate Bid Borrowing”),

(iii) the interest payment date or dates relating thereto, and

(iv) any other terms to be applicable to such Bid Borrowing.

A Borrower requesting a Bid Borrowing shall deliver a Notice of Bid Borrowing to the Agent not later than 11:00 a.m. (New York City time) (A) at least one Business Day prior to the date of the proposed Bid Borrowing if the proposed Bid Borrowing is to be a Fixed Rate Borrowing, and (B) at least four Business Days prior to the date of the proposed Bid Borrowing, if the proposed Bid Borrowing is to be a Eurodollar Rate Bid Borrowing. Every Notice of Bid Borrowing given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that proposed Bid Borrowing. The Agent shall in turn promptly notify each Lender of each request for a Bid Borrowing by sending such Lender a copy of the related Notice of Bid Borrowing.

(c) Discretion as to Bid Advances. Each Lender may, in its sole discretion, elect to irrevocably offer to make one or more Bid Advances to the applicable Borrower as part of such proposed Bid Borrowing at a rate or rates of interest specified by such Lender in its sole discretion (each such rate of interest to be a fixed rate if the Borrower requested Fixed Rate Advances or a margin over the Eurodollar Rate if the Borrower requested Eurodollar Rate Bid Advances), by notifying the Agent (which shall give prompt notice thereof to the Company and such Borrower), before 10:00 a.m. (New York City time) (A) on the date of such proposed Bid Borrowing, if the proposed Bid Borrowing is to be a Fixed Rate Borrowing and (B) three Business Days before the date of such proposed Bid Borrowing, in the case of a Notice of Bid Borrowing is to be a Eurodollar Rate Bid Borrowing. In such notice the Lender shall specify the following:

(i) the minimum amount and maximum amount of each Bid Advance which such Lender would be willing to make as part of such proposed Bid Borrowing (which amounts may, subject to the first proviso in this Section 2.6(a), exceed such Lender’s Commitment),

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(ii) the rate or rates of interest therefor (specified as stated in this paragraph (c)), and

(iii) such Lender’s Applicable Lending Office with respect to such Bid Advance;

provided that if the Agent in its capacity as a Lender, in its sole discretion, elects to make any such offer, it shall notify such Borrower and the Company of such offer before 9:30 a.m. (New York City time) on the date on which notice of such election is to be given to the Agent by the other Lenders. If, by 10:00 a.m. (New York City time) on the date on which notice of a Lender’s election under this Section 2.6(c) is to be made, the Agent fails to receive, at its address specified in Section 8.2, a notice from a Lender provided for in this Section 2.6(c), the Agent may conclusively presume that such Lender has elected not to offer to make any Bid Advances to such Borrower with respect to the related Notice of Bid Borrowing.

(d) Borrower Selection of Lender Bids. The Borrower proposing the Bid Borrowing shall, in turn, (A) before 11:00 a.m. (New York City time) on the date of such proposed Bid Borrowing, in the case of a proposed Bid Borrowing to be a Fixed Rate Borrowing, and (B) before 12:00 noon (New York City time) three Business Days before the date of such proposed Bid Borrowing, in the case of a proposed Bid Borrowing to be a Eurodollar Rate Bid Borrowing, either:

(i) cancel such Bid Borrowing by giving the Agent notice to that effect, or

(ii) accept, in its sole discretion, one or more of the offers made by a Lender or Lenders pursuant to Section 2.6(c), by giving notice to the Agent of the amount of each Bid Advance (which amount shall be equal to or greater than the minimum amount and equal to or less than the maximum amount, notified to such Borrower by the Agent on behalf of such Lender for such Bid Advance pursuant to Section 2.6(c)) to be made by each Lender as part of such Bid Borrowing, and reject any remaining offers made by Lenders pursuant to Section 2.6(c) by giving the Agent notice to that effect; provided that offers will be accepted, if at all, in order of lowest to highest interest rates, and, if two or more Lenders bid at the same rate, the Bid Borrowing with respect to such rate will be allocated among such Lenders in proportion to the amount bid by each such Lender.

If the Borrower proposing the Bid Borrowing notifies the Agent that such Bid Borrowing is canceled pursuant to Section 2.6(d)(i), the Agent shall give prompt notice thereof to the Lenders and such Bid Borrowing shall not be made.

(e) Bid Borrowing. If the Borrower proposing the Bid Borrowing accepts one or more of the offers made by a Lender or Lenders pursuant to Section 2.6(d)(ii), the Agent shall in turn promptly

(i) notify each Lender that has made an offer as described in Section 2.6(c), of the date and aggregate amount of such Bid Borrowing and whether or not any offer or offers made by such Lender pursuant to Section 2.6(c) have been accepted by such Borrower,

(ii) notify each Lender that is to make a Bid Advance, as part of such Bid Borrowing, of the amount of each Bid Advance to be made by such Lender as part of such Bid Borrowing, and

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(iii) upon satisfaction of the conditions set forth in 5.3 or 5.6, as applicable, notify each Lender that is to make a Bid Advance as part of such Bid Borrowing that the applicable conditions set forth in Article 5 appear to have been satisfied.

When each Lender that is to make a Bid Advance as part of such Bid Borrowing has received notice from the Agent pursuant to clause (iii) of the preceding sentence, such Lender shall, before 1:00 p.m. (New York City time) on the date of such Bid Borrowing specified in the notice received from the Agent pursuant to clause (i) of the preceding sentence, make available for the account of its Applicable Lending Office to the Agent at the Agent’s Account such Lender’s portion of such Bid Borrowing, in same day funds. Upon fulfillment of the applicable conditions set forth in Article 5 and after receipt by the Agent of such funds, the Agent will make such funds available to the relevant Borrower at an account specified by such Borrower. Promptly after each Bid Borrowing the Agent shall notify each Lender of the amount and tenor of the Bid Borrowing.

(f) If the Borrower proposing such Bid Borrowing notifies the Agent pursuant to Section 2.6(d)(ii) above that it accepts one or more of the offers made by any Lender or Lenders, such notice of acceptance shall be irrevocable and binding on such Borrower. Such Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in the related Notice of Bid Borrowing for such Bid Borrowing the applicable conditions set forth in Article 5, including, without limitation, any loss (but excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Bid Advance to be made by such Lender as part of such Bid Borrowing when such Bid Advance, as a result of such failure, is not made on such date.

(g) Amount of Bid Borrowings. Each Notice of Bid Borrowing shall request an aggregate amount of Bid Advances not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, provided that a Borrower may accept offers aggregating less than $10,000,000 and offers which are not an integral multiple of $1,000,000, and provided further that, as provided in Section 2.6(a), following the making of each Bid Borrowing, the aggregate amount of the Advances then outstanding plus the Available Amount of the Letters of Credit then outstanding shall not exceed the aggregate amount of the Commitments of the Lenders. Within the limits and on the conditions set forth in this Section 2.6, the Borrowers may from time to time borrow under this Section 2.6, repay pursuant to Section 2.6(g), and reborrow under this Section 2.6, provided that a Bid Borrowing shall not be made within three Business Days of the date of any other Bid Borrowing.

(h) Repayment of Bid Advances. On the maturity date of each Bid Advance specified by the relevant Borrower for repayment of such Bid Advance in the related Notice of Bid Borrowing, the Borrower shall repay to the Agent for the account of the Lender which has made such Bid Advance the then unpaid principal amount of such Bid Advance. The Borrowers shall have no right to prepay any principal amount of any Bid Advance without the consent of the Lender which extended such Bid Advance.

(i) Interest on Bid Advances; Bid Notes. The relevant Borrower shall pay interest on the unpaid principal amount of each Bid Advance, from the date of such Bid Advance to the date the principal amount of such Bid Advance is repaid in full, at the fixed rate of interest specified by the Lender making such Fixed Rate Advance in its notice with respect thereto delivered pursuant to Section 2.6(c) or, in the case of a Eurodollar Rate Bid Advance, the margin specified by the Lender making such Bid Advance in its notice with respect thereto plus the Eurodollar Rate determined with respect to such Bid Borrowing pursuant to Section 2.11, payable on the interest

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payment date or dates specified by the Borrower for such Bid Advance in the related Notice of Bid Borrowing. Upon the occurrence and during the continuance of an Event of Default, the applicable Borrower shall pay interest on the amount of unpaid principal of and interest on each Bid Advance owing to a Lender, payable in arrears on the date or dates interest is payable thereon, at a rate per annum equal at all times to 1% per annum above the rate per annum required to be paid on such Bid Advance under the terms of the Bid Note evidencing such Bid Advance unless otherwise agreed in such Bid Note. The indebtedness of the applicable Borrower resulting from each Bid Advance made to the Borrower as part of a Bid Borrowing shall be evidenced by a separate Bid Note of such Borrower payable to the order of the Lender making such Bid Advance, which Bid Note shall be returned to the Borrower upon payment in full of such Bid Advance.

2.7 Lender Assignment or Sale. Any Lender may, without the prior written consent of the Borrowers, sell or assign all or any part of such Lender’s rights in any or all of the Bid Advances made by such Lender or in the Bid Notes in connection with such Bid Advances as a participation, provided, however, that

(i) any such sale or assignment shall not require any Borrower to file a registration statement with the Securities and Exchange Commission or apply to qualify the Advances or the Notes under the blue sky laws of any state, and the selling or assigning Lender shall otherwise comply with all federal and state securities laws applicable to such transaction,

(ii) no purchaser or assignee in such a transaction shall thereby become a “Lender” for any purpose under this Agreement,

(iii) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrowers) shall remain unchanged,

(iv) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and

(v) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

2.8 Fees and Commissions.

(a) Facility Fees. TBC agrees to pay to the Agent for the account of each Lender a facility fee (“Facility Fee”) on such Lender’s Commitment, without regard to usage. The Facility Fee shall be payable for the periods from the date hereof in the case of each Lender named in Schedule I, and from the effective date on which any other Lender becomes party hereto, until the Termination Date (or such earlier date on which such Lender ceases to be a party hereto) at the rate per annum equal to the Applicable Percentage in effect from time to time. Facility Fees shall be payable in arrears on each January 1, April 1, July 1 and October 1 during the term of this Agreement and on the Termination Date. The amount of the Facility Fee payable on January 1, 2006 and on the Termination Date shall be prorated based on the actual number of days elapsed either since the date hereof (in the case of the January 1, 2006 payment) or since the date on which the last payment in respect of the Facility Fee was made (in the case of the payment made on the Termination Date).

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(b) Letter of Credit Commissions.

(i) Each Borrower shall pay to the Agent for the account of each Lender a commission on such Lender’s Ratable Share of the average daily aggregate Available Amount of all Letters of Credit issued at the request of such Borrower and outstanding from time to time at a rate per annum equal to the Applicable Letter of Credit Commission in effect from time to time during such calendar quarter, payable in arrears quarterly each January 1, April 1, July 1 and October 1 during the term of this Agreement, and on and after the Termination Date, payable upon demand.

(ii) Each Borrower shall pay to each Issuing Bank for its own account such reasonable fees as may from time to time be agreed in writing between TBC and such Issuing Bank.

2.9 Reduction of the Commitments. TBC shall have the right, upon at least 3 Business Days’ notice to the Agent, to permanently terminate in whole or permanently reduce ratably in part the Unused Commitments, provided that each partial reduction shall be in a minimum amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

2.10 Additional Interest on Eurodollar Rate Committed Advances. Each Borrower shall pay to each Lender, so long as such Lender is required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Committed Advance of such Lender to such Borrower, from the date of such Committed Advance until such principal amount is paid in full, at an interest rate per annum for each Interest Period equal to the remainder obtained by subtracting (i) the Eurodollar Rate for such Interest Period for such Committed Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Committed Advance. Such additional interest shall be determined by such Lender and notified to the relevant Borrowers through the Agent.

2.11 Eurodollar Interest Rate Determination.

(a) Methods to Determine Eurodollar Rate. The Agent shall determine the Eurodollar Rate for each Eurodollar Rate Advance by using the methods described in the definition of the term “Eurodollar Rate,” and shall give prompt notice to the relevant Borrowers and the Lenders of each such Eurodollar Rate.

(b) Role of Reference Banks. In the event the Eurodollar Rate cannot be determined by the first method described in the definition of “Eurodollar Rate,” each Reference Bank shall furnish to the Agent timely information for the purpose of determining the Eurodollar Rate in accordance with the second method described therein. If any one or more of the Reference Banks does not furnish such timely information to the Agent for the purpose of determining a Eurodollar Rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. In the event the rate cannot be determined by either of the methods described in the definition of “Eurodollar Rate,” then:

(i) the Agent shall forthwith notify the Borrowers and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,

(ii) each such Advance, if a Committed Advance, will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if the Borrower was attempting to Convert a Base Rate Advance into a Eurodollar Rate Committed Advance, such Advance will continue as a Base Rate Advance), and

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(iii) the obligation of the Lenders to make Eurodollar Rate Bid Advances, or to make, or to Convert Base Rate Advances into, Eurodollar Rate Committed Advances shall be suspended until the Agent notifies the Borrowers and the Lenders that the circumstances causing such suspension no longer exist.

(c) Inadequate Eurodollar Rate. If, with respect to any Eurodollar Rate Committed Advances, the Majority Lenders notify the Agent that the Eurodollar Rate for any Interest Period for such Committed Advances will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Committed Advances for such Interest Period, the Agent shall forthwith so notify the relevant Borrowers and the Lenders, whereupon

(i) each such Eurodollar Rate Committed Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and

(ii) the obligation of the Lenders to make, or to Convert Base Rate Advances into, Eurodollar Rate Committed Advances shall be suspended until the Agent notifies the Borrowers and the Lenders that the circumstances causing such suspension no longer exist.

(d) Absence of an Interest Period on a Eurodollar Rate Committed Advance. If a Borrower fails to select the duration of an Interest Period for a Eurodollar Rate Committed Advance in accordance with the provisions contained in the definition of “Interest Period” in Section 1.1, the Agent will forthwith so notify the Borrower and the Lenders and such Committed Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.

2.12 Voluntary Conversion of Committed Advances. Subject to the provisions of Sections 2.11 and 2.16, any Borrower may Convert all such Borrower’s Committed Advances of one Type constituting the same Committed Borrowing into Advances of the other Type on any Business Day, upon notice given to the Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed Conversion; provided, however, that the Conversion of a Eurodollar Rate Committed Advance into a Base Rate Advance may be made on, and only on, the last day of an Interest Period for such Eurodollar Rate Committed Advance. Each such notice of a Conversion shall, within the restrictions specified above, specify

(i) the date of such Conversion,

(ii) the Committed Advances to be Converted, and

(iii) if such Conversion is into Eurodollar Rate Committed Advances, the duration of the Interest Period for each such Committed Advance.

2.13 Prepayments. Any Borrower shall have the right at any time and from time to time, upon prior written notice from such Borrower to the Agent, to prepay its outstanding principal obligations with respect to its Committed Advances in whole or ratably in part (except as provided in Section 2.16 or 2.20), provided that every notice of prepayment given by a Subsidiary Borrower must be countersigned by an authorized representative of TBC, in order to evidence the consent of TBC, in its sole discretion, to that prepayment. Such prepaying Borrower may be obligated to make certain prepayments of obligations with respect to one or more Committed Advances subject to and in accordance with this Section 2.13.

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(a) Base Rate Borrowings Prepayments. With respect to Base Rate Borrowings, such prepayment shall be without premium or penalty, upon notice given to the Agent, and shall be made not later than 11:00 a.m. (New York City time) on the date of such prepayment. The Borrower shall designate in such notice the amount and date of such prepayment. Accrued interest on the amount so prepaid shall be payable on the first Business Day of the calendar quarter next following the prepayment. The minimum amount of Base Rate Borrowings which may be prepaid on any occasion shall be $10,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the total amount of Base Rate Advances then outstanding for that Borrower.

(b) Eurodollar Rate Committed Borrowings Prepayments. With respect to Eurodollar Rate Committed Borrowings, such prepayment shall be made on at least 3 Business Days’ prior written notice to the Agent not later than 11:00 a.m. (New York City time), and if such notice is given the applicable Borrower shall prepay the outstanding principal amount of the Committed Advances constituting part of the same Committed Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid. The minimum amount of Eurodollar Rate Committed Borrowings which may be prepaid on any occasion shall be $10,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the total amount of Eurodollar Rate Committed Advances then outstanding for that Borrower.

(c) Additional Prepayment Payments. The prepaying Borrower shall, on the date of the prepayment of any Eurodollar Rate Committed Advances, pay to the Agent for the account of each Lender interest accrued to such date of prepayment on the principal amount prepaid plus, in the case only of a prepayment on any date which is not the last day of an applicable Eurodollar Interest Period, any amounts which may be required to compensate such Lender for any losses or out-of-pocket costs or expenses (including any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds, but excluding loss of anticipated profits) incurred by such Lender as a result of such prepayment, provided that such Lender shall exercise reasonable efforts to minimize any such losses, costs and expenses.

(d) Eurodollar Rate Committed Advance Prepayment Expense. If, due to the acceleration of any of the Committed Advances pursuant to Section 6.2(b), an assignment, repayment or prepayment under Section 2.20, 2.21 or 2.22 or otherwise, any Lender receives payment of its portion of, or is subject to any Conversion from, any Eurodollar Rate Committed Advance on any day other than the last day of an Interest Period with respect to such Committed Advance, the relevant Borrowers shall pay to the Agent for the account of such Lender any amounts which may be payable to such Lender by such Borrower by reason of payment on such day as provided in Section 2.13(c).

2.14 Increases in Costs.

(a) Costs from Law or Authorities. If, due to either

(1) the introduction of, or any change (other than, in the case of Eurodollar Rate Borrowings, a change by way of imposition or an increase of reserve requirements described in Section 2.10) in, or new interpretation of, any law or regulation effective at any time and from time to time on or after the date hereof, or

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(2) the compliance with any guideline or the request from or by any central bank or other governmental authority (whether or not having the force of law),

there is an increase in the cost incurred by a Lender in agreeing to make or making, funding or maintaining any Eurodollar Rate Committed Advance or Eurodollar Rate Bid Advance then or at any time thereafter outstanding or agreeing to issue or of issuing or maintaining or participating in Letters of Credit (excluding for purposes of this Section 2.14 any such increased costs resulting from (i) Taxes or Other Taxes (as to which Section 2.15 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office (or any political subdivision thereof), then TBC shall from time to time, upon demand of such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender such amounts as are required to compensate such Lender for such increased cost, provided that such Lender shall exercise reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize any such increased cost and provided further that the Borrowers shall not be required to pay any such compensation with respect to any period prior to the 90th day before the date of any such demand, unless such introduction, change, compliance or request shall have retroactive effect to a date prior to such 90^th day. A certificate as to the amount of such increase in cost, submitted to the relevant Borrowers and the Agent by such Lender, shall be conclusive and binding for all purposes under this Section 2.14(a), absent manifest error.

(b) Increased Capital Requirements. If any Lender determines that compliance with any law or regulation or any guidelines or request from any central bank or other governmental authority (whether or not having the force of law) which is enacted, adopted or issued at any time and from time to time after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Lender (or any corporation controlling such Lender) and that the amount of such capital is increased by or based upon the existence of such Lender’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the issuance or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrowers shall immediately pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit, provided that such Lender shall exercise reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize any such compensation payable by the Borrowers hereunder and provided further that the Borrowers shall not be required to pay any such compensation with respect to any period prior to the 90th day before the date of any such demand, unless such introduction, change, compliance or request shall have retroactive effect to a date prior to such 90^th day. A certificate as to such amounts submitted to the relevant Borrowers and the Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.

(c) Borrower Rights Upon Cost Increases. Upon receipt of notice from any Lender claiming compensation pursuant to this Section 2.14 or Section 2.15 and as long as no Default has occurred and is continuing, TBC shall have the right, on or before the 30th day after the date of receipt of any such notice,

(i) to arrange for one or more Lenders or other commercial banks to assume the Commitment of such Lender; subject, however, to payment to the Agent by the assignor or the assignee of a processing and recording fee of $3,500, in the event the assuming lender is not a Lender; or

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(ii) to arrange for the Commitment of such Lender to be terminated and all Committed Advances owed to such Lender to be prepaid;

and, in either case, subject to payment in full of all principal, accrued and unpaid interest, fees, commissions and other amounts payable under this Agreement and then owing to such Lender immediately prior to the assignment or termination of the Commitment of such Lender.

2.15 Taxes.

(a) Exclusion and Inclusion of Taxes. Any and all payments by each Borrower hereunder or with respect to any Advances or under any Notes shall be made, in accordance with Section 2.17, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes that are imposed on its overall net income ( and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender’s Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or with respect to any Advances or under any Notes, hereinafter referred to as “Taxes”). If any Borrower shall be required by law to deduct any Taxes from or in respect to any sum payable hereunder or with respect to any Advances or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.15) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) Payment of Other Taxes. In addition, each Borrower shall pay any present or future stamp, documentary, excise, property or similar taxes, charges, or levies that arise from any payment made hereunder or with respect to any Advances and under any Notes or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or any Notes ( “Other Taxes”).

(c) Indemnification as to Taxes. Each Borrower shall indemnify each Lender and the Agent for and hold it harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.15, imposed on or paid by such Lender or the Agent (as the case may be) and any liability ( including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor.

(d) Evidence of or Exemption from Taxes. Within 30 days after the date of any payment of Taxes, the Borrower which paid such Taxes shall furnish to the Agent, at its address referred to in

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Section 8.2, the original or a certified copy of a receipt evidencing such payment. In the case of any payment hereunder or with respect to the Advances or under any Notes by or on behalf of any Borrower through an account or branch outside the United States or by or on behalf of any Borrower by a payor that is not a United States person, if the Borrower determines that no taxes are payable in respect thereof, such Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at such address, an opinion of counsel acceptable to the Agent stating that such payment is exempt from Taxes. For purposes of this subsection (d) and subsection (e), the terms “United States” and “United States person” have the meanings specified in Section 7701 of the Internal Revenue Code.

(e) Non-U.S. Lenders. Each Lender organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement (in the case of each Lender listed in Schedule I), and from the date on which any other Lender becomes a party hereto (in the case of each other Lender), and from time to time thereafter as requested in writing by TBC (but only so long thereafter as such Lender remains lawfully able to do so), provide each of the Agent and TBC with two original Internal Revenue Service forms W-8BEN or W-8EC1, as appropriate, or any successor form prescribed by the Internal Revenue Service, to establish that such Lender is not subject to, or is entitled to a reduced rate of, United States withholding tax on payments pursuant to this Agreement or with respect to any Advances or any Notes. If the forms provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate form certifying that a lower rate applies, whereupon withholding tax at such lower rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that, if at the date on which a Lender becomes a party to this Agreement, the Lender assignor was entitled to payments under subsection 2.15(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender assignee on such date. If any form or document referred to in this subsection 2.15(e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8BEN or W-8EC1, that the Lender reasonably considers to be confidential, the Lender shall give notice thereof to the relevant Borrowers and shall not be obligated to include in such form or document confidential information.

(f) Lender Failure to Provide IRS Forms. For any period with respect to which any Lender has failed to provide TBC with the appropriate form described in subsection 2.15(e) (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under subsection 2.15(e)), such Lender shall not be entitled to indemnification under subsection (a) or (c) with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, TBC shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes.

2.16 Illegality. If any Lender shall notify the Agent that either

(a) there is any introduction of, or change in or in the interpretation of, any law or regulation that in the opinion of counsel for such Lender in the relevant jurisdiction makes it unlawful, or

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(b) any central bank or other governmental authority asserts that it is unlawful

for such Lender to continue to fund or maintain any Eurodollar Rate Advances or to perform its obligations hereunder with respect to Eurodollar Rate Advances hereunder, then, upon the issuance of such opinion of counsel or such assertion by a central bank or other governmental authority, the Agent shall give notice of such opinion or assertion to the Borrowers (accompanied by such opinion, if applicable). The Borrowers shall forthwith either

(i) prepay in full all Eurodollar Rate Committed Advances and all Eurodollar Rate Bid Advances made by such Lender, with accrued interest thereon or

(ii) Convert each such Eurodollar Rate Committed Advance made by such Lender into a Base Rate Advance.

Upon such prepayment or Conversion, the obligation of such Lender to make Eurodollar Rate Committed Advances or Eurodollar Rate Bid Advances, or to Convert Committed Advances into Eurodollar Rate Committed Advances, shall be suspended until the Agent shall notify the Borrowers that the circumstances causing such suspension no longer exists.

2.17 Payments and Computations.

(a) Time and Distribution of Payments. The Borrowers shall make each payment hereunder and with respect to any Advances or under any Notes, without counterclaim or setoff, not later than 11:00 a.m. (New York City time) on the day when due in U.S. dollars to the Agent at the Agent’s Account in same day funds. The Agent shall promptly thereafter cause to be distributed like funds relating to the payment of principal or interest, fees or commissions ratably (other than amounts payable pursuant to Section 2.6, 2.10, 2.14, 2.15, 2.16 or 2.20) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. From and after the effective date of an assignment pursuant to Section 2.21, the Agent shall make all payments hereunder and with respect to any Advances or under any Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such assignment shall make all appropriate adjustments in such payments for the periods prior to such effective date directly between themselves.

(b) Computation of Interest, Fees and Commissions. All computations of interest based on the Base Rate and utilization fees shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be. All computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of Facility Fees and Letter of Credit commissions shall be made by the Agent, and all computations of interest pursuant to Section 2.10 shall be made by a Lender, on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable. Each determination by the Agent (or, in the case of Section 2.10, by a Lender) of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c) Payment Due Dates. Whenever any payment hereunder or with respect to any Advances or under any Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fee, as the case may be, but not later than the Termination Date; provided, however, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the immediately preceding Business Day.

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(d) Presumption of Borrower Payment. Unless the Agent receives notice from a Borrower prior to the date on which any payment is due to any Lenders hereunder that such Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each such Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that such Borrower has not made such payment in full to the Agent, each such Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate.

2.18 Sharing of Payments, Etc. If any Lender obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Committed Advances made by it (other than pursuant to Sections 2.10, 2.14, 2.15, 2.16 or 2.20), in excess of its ratable share of payments on account of the Committed Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Committed Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each other Lender shall be rescinded and each such other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section 2.18 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were a creditor of the Borrowers in the amount of such participation.

2.19 Evidence of Debt.

(a) Lender Records; If Notes Required. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Committed Advance owing to such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder in respect of Committed Advances. Each Borrower shall, upon notice by any Lender to such Borrower (with a copy of such notice to the Agent) to the effect that a Committed Note is required or appropriate in order for such Lender to evidence (whether for purposes of pledge, enforcement or otherwise) the Committed Advances owing to, or to be made by, such Lender, such Borrower shall promptly execute and deliver to such Lender a Committed Note payable to the order of such Lender in a principal amount up to the Commitment of such Lender.

(b) Record of Borrowings, Payables and Payments. The Register maintained by the Agent pursuant to Section 2.21(d) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded

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(i) the date and amount of each Borrowing made hereunder to each Borrower, the Type of Advances constituting such Borrowing and, if appropriate, the Interest Period applicable thereto,

(ii) the terms of each assignment pursuant to Section 2.21,

(iii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder, and

(iv) the amount of any sum received by the Agent from a Borrower hereunder and each Lender’s share thereof.

(c) Evidence of Payment Obligations. Entries made in good faith by the Agent in the Register pursuant to subsection (b) above, and by each Lender in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from a Borrower to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement, absent manifest error; provided, however, that the failure of the Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement.

2.20 Alteration of Commitments and Addition of Lenders.

(a) Alter Lender Commitment. By a written agreement executed only by TBC, the Agent, each Issuing Bank and the affected Lender and any non-party lender involved,

(i) the Commitment of such affected Lender may be increased to the amount set forth in such agreement;

(ii) such non-party lender may be added as a Lender with a Commitment as set forth in such agreement, provided that such lender agrees to be bound by all the terms and provisions of this Agreement; and

(iii) the unused portion of the Commitment of such affected Lender may be reduced or terminated and the Committed Advances owing to such Lender may be prepaid in whole or in part, all as set forth in such agreement.

(b) Conditions to Alteration. The Agent may execute any such agreement without the prior consent of any Lender other than the Lender affected, provided, however, that if at the time the Agent proposes to execute such agreement either (A) TBC’s long-term senior unsecured debt is rated by any two of S&P, Moody’s and Fitch, lower than BBB+ by S&P, lower than Baa1 by Moody’s or lower than BBB+ by Fitch or (B) a Default has occurred and is continuing, then the Agent shall not execute any such agreement unless it has first obtained the prior written consent of the Majority Lenders, and provided further that the Agent shall not execute any such agreement without the prior written consent of the Majority Lenders if such agreement would increase the total of the Commitments to an amount in excess of $1,500,000,000 or, pursuant to Section 2.20(c), $2,500,000,000.

(c) Increase Total Commitment. The Company has the right, twice a year, to increase the total of the Commitments through a Request for Alteration, in minimum increments of $25,000,000, up to a maximum aggregate of Commitments of $2,500,000,000, provided that, in addition to the

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requirements specified in Section 2.20(b), at the time of and after giving effect to an increase, TBC’s long-term senior unsecured non-credit-enhanced debt ratings from Moody’s and S&P are better than or equal to Baa1 and BBB+, respectively. The Company may offer the increases to

(i) the Lenders, and each Lender shall have the right, but no obligation, to increase its Commitment, by giving notice thereof to the Agent, to all or a portion of the proposed increase (the “Proposed Increased Commitment”), allocations to be at the sole discretion of the Company, and

(ii) third party financial institutions reasonably acceptable to the Agent, the Company and each Issuing Bank, provided that the minimum commitment of each such institution equals or exceeds $25,000,000.

(d) Request for Alteration. The Agent shall give each Lender prompt notice of any such agreement becoming effective. All requests for Lender consent under the provisions of this Section 2.20 shall specify the date upon which any such increase, addition, reduction, termination, or prepayment shall become effective (the “Effective Date”) and shall be made by means of a Request for Alteration substantially in the form as set forth in Exhibit C. On the Effective Date on which the Commitment of any Lender is increased, decreased, terminated or created or on which prepayment is made, all as described in such Request for Alteration, the Borrowers or such Lender, as the case may be, shall make available to the Agent not later than 12:30 p.m. (New York City time) on such date, in same day funds, the amount, if any, which may be required (and the Agent shall distribute such funds received by it to the Borrowers or to such Lenders, as the case may be) so that at the close of business on such date the sum of the Committed Advances of each Lender then outstanding shall be in the same proportion to the total of the Committed Advances of all the Lenders then outstanding as the Commitment of such Lender is to the total of the Commitments. The Agent shall give each Lender notice of the amount to be made available by, or to be distributed to, such Lender at least 3 Business Days before such payment is made.

2.21 Assignments; Sales of Participations and Other Interests in Advances.

(a) Assignment of Lender Obligations. From time to time each Lender may, with the prior written consent of TBC (so long as no Event of Default has occurred and is continuing) and subject to the qualifications set forth below, assign to one or more Lenders or an Eligible Assignee all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Committed Advances owing to it, its participations in Letters of Credit and the Committed Note, if any, held by it) and will, at any time, if arranged by the Company pursuant to clause (i)(A) below upon at least 30 days’ notice to such Lender and the Agent, assign to one or more Eligible Assignees all of its rights and obligations under this Agreement (including without limitation, all of its Commitment, the Committed Advances owing to it, its participations in Letters of Credit and the Committed Note, if any, held by it); subject to the following:

(i) If such Lender notifies TBC and the Agent of its intent to request the consent of TBC to an assignment, TBC shall have the right, for 30 days after receipt of such notice and so long as no Event of Default has occurred and is continuing, in its sole discretion either (A) to arrange for one or more Eligible Assignees to accept such assignment (a “Required Assignment”) or (B) to arrange for the rights and obligations of such Lender (including, without limitation, such Lender’s Commitment), and the total Commitments, to be reduced by an amount equal to the amount of such Lender’s Commitment proposed to be assigned and, in connection with such reduction, to prepay that portion of the Committed Advances owing to such Lender which it proposes to assign;

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(ii) If TBC fails to notify such Lender within 30 days of TBC’s receipt of such Lender’s request for consent to assignment, the Borrowers shall be deemed to consent to the proposed assignment;

(iii) Any such assignment shall not require any Borrower to file a registration statement with the Securities and Exchange Commission or apply to qualify the interests in the Committed Advances under the blue sky laws of any state and the assigning Lender shall otherwise comply with all federal and state securities laws applicable to such assignment;

(iv) Unless TBC consents, the amount of the Commitment of the assigning Lender being assigned pursuant to any such assignment (determined as of the date of the assignment) shall either (A) equal 50% of all such rights and obligations (or 100% in the case of a Required Assignment) or (B) not be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof;

(v) Unless TBC consents, the aggregate amount of the Commitment assigned pursuant to all such assignments of such Lender (after giving effect to such assignment) shall in no event exceed 50% (except in the case of a Required Assignment) of all such Lender’s Commitment (as set forth in Schedule I, in the case of each Lender that is a party hereto as of November 18, 2005, or as set forth in the Register as the aggregate Commitment assigned to such Lender pursuant to one or more assignments, in the case of any assignee); and

(vi) No Lender shall be obligated to make a Required Assignment unless such Lender has received payments in an aggregate amount at least equal to the outstanding principal amount of all Committed Advances being assigned, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement (including without limitation Section 2.13(c), provided that such Lender shall receive its pro rata share of the Facility Fee on the next date on which the Facility Fee is payable).

(b) Effect of Lender Assignment. From and after the effective date of any assignment pursuant to Section 2.21(a), (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such assignment, it shall have the rights and obligations of a Lender hereunder and (ii) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment, relinquish its rights (other than its rights under Section 2.14, 2.15, 2.20 or 8.3 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

(c) Security Interest; Assignment to Lender Affiliate. Notwithstanding any other provision in this Agreement, any Lender may, upon prior or contemporaneous notice to TBC and the Agent, at any time (i) create a security interest in all or any portion of its rights under this Agreement (including without limitation, the Advances owing to it and the Notes held by it, if any) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System, and (ii) assign all or any portion of its rights and obligations under this

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Agreement (including, without limitation, all or a portion of its Commitment, the Committed Advances owing to it, its participations in Letters of Credit and the Committed Note held by it, if any) to an Affiliate of such Lender unless the result of such an assignment would be to increase the cost to any Borrowers of requesting, borrowing, continuing, maintaining, paying or converting any Advances.

(d) Agent’s Register. The Agent shall maintain at its address referred to in Section 8.2 a copy of each assignment delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Committed Advances of each Borrower owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agent and the Lenders may treat each entity whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice. Upon receipt by the Agent from the assigning Lender of an assignment in form and substance satisfactory to the Agent executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with evidence of each Committed Advance subject to such assignment, and a processing and recording fee of $3,500 (payable by either the assignor or the assignee), the Agent shall, if such assignment is a Required Assignment or has been consented to by TBC to the extent required by Section 2.21(a) or has been effected pursuant to Section 2.22(c), (i) accept such assignment, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to TBC.

(e) Lender Sale of Participations. Each Lender may sell participations in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it, its participations in Letters of Credit and the Notes held by it, if any) to one or more Affiliates of such Lender or to one or more other commercial banks; provided, however, that

(i) any such participation shall not require any Borrowers to file a registration statement with the Securities and Exchange Commission or apply to qualify any interests in the Advances or any Notes under the blue sky laws of any state and the Lender selling or granting such participation shall otherwise comply with all federal and state securities laws applicable to such transaction,

(ii) no purchaser of such a participation shall be considered to be a “Lender” for any purpose under the Agreement,

(iii) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrowers) shall remain unchanged,

(iv) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations,

(v) such Lender shall remain the holder of any Notes issued with respect to its Advances for all purposes of this Agreement,

(vi) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and

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(vii) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by any Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation.

(f) Confidential Borrower Information. Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 2.21, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrowers furnished to such Lender by or on behalf of the Borrowers; provided, however, that, prior to any such disclosure of Confidential Information, such Lender shall obtain the written consent of the Borrowers, and the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any such Confidential Information received by it from such Lender except as disclosure may be required or appropriate to governmental authorities, pursuant to legal process, or by law or governmental regulation or authority.

2.22 Extension of Termination Date.

(a) Extension Request. TBC may, on behalf of itself and the Subsidiary Borrowers, by written notice to the Agent in the form of Exhibit E (each such notice being an “Extension Request”) given no earlier than 60 days and no later than 45 days prior to any one or more anniversaries of the date hereof, request that the then applicable Termination Date be extended to a date one year after the then applicable Termination Date. Such extension shall be effective with respect to each Lender which, by a written notice in the form of Exhibit F (a “Continuation Notice”) to TBC and the Agent given no earlier than 45 days and no later than 28 days prior to such anniversary, consents, in its sole discretion, to such extension (each Lender giving a Continuation Notice being referred to sometimes as a “Continuing Lender” and each Lender other than a Continuing Lender being a “Non-Extending Lender”), provided, however, that such extension shall be effective only if the aggregate Commitments of the Continuing Lenders, together with the Commitments of the Replacement Lenders, are not less than 51% of the aggregate Commitments of the Lenders on the date of the Extension Request. No Lender shall have any obligation to consent to any such extension of the Termination Date. The Agent shall notify each Lender of the receipt of an Extension Request within three (3) Business Days after receipt thereof. The Agent shall notify the Company and the Lenders no later than 15 days prior to the then applicable Termination Date whether the Agent has received Continuation Notices from Lenders holding at least 51% of the aggregate Commitments on the date of the Extension Request.

(b) Non-Extending Lenders. The Commitment of each Non-Extending Lender shall terminate at the close of business on the Termination Date in effect prior to the delivery of such Extension Request without giving any effect to such proposed extension, provided that on the applicable anniversary date TBC may replace the Non-Extending Lenders pursuant to Section 2.22(c). On the Termination Date in effect prior to the delivery of such Extension Request without giving any effect to such proposed extension TBC shall pay or cause to be paid to the Agent, for the account of the Non-Extending Lenders, an amount equal to the Non-Extending Lenders’ Committed Advances, together with accrued but unpaid interest and fees thereon and all other amounts then payable hereunder to the Non-Extending Lenders.

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(c) Replacement Lenders. A Non-Extending Lender shall be obligated, at the request of TBC, to assign at any time prior to the close of business on the applicable anniversary of the date hereof all of its rights (other than rights that would survive the termination of the Agreement pursuant to Section 8.3) and obligations hereunder to one or more Lenders or other commercial banks nominated by TBC and willing to become Lenders in place of such Non-Extending Lender (the “Replacement Lenders”). In order to qualify as a Replacement Lender, a Lender or lender must satisfy all of the requirements of this Agreement (including without limitation the terms of Section 2.21 relating to Required Assignments). Such obligation of each Non-Extending Lenders is subject to such Non-Extending Lender’s receiving (i) payment in full from the Replacement Lenders of the principal amount of all Advances owing to such Non-Extending Lender immediately prior to an assignment to the Replacement Lenders and (ii) payment in full from the relevant Borrowers of all accrued interest and fees and other amounts payable hereunder and then owing to such Non-Extending Lender immediately prior to the assignment to the Replacement Lenders. Upon such assignment, the Non-Extending Lender shall no longer be a Lender, such Replacement Lender shall become a Continuing Lender, and the Agent shall make appropriate entries in the Register to reflect the foregoing.

2.23 Subsidiary Borrowers.

(a) Subsidiary Borrower Designation. TBC may at any time, and from time to time, by delivery to the Agent of a Borrower Subsidiary Letter substantially in the form of Exhibit D, duly executed by TBC and the respective Subsidiary, designate such Subsidiary as a “Subsidiary Borrower” for purposes of this Agreement, and such Subsidiary shall thereupon become a “Subsidiary Borrower” for purposes of this Agreement and, as such, shall have all of the rights and obligations of a Borrower hereunder; provided that any designation of a Subsidiary that is organized under the laws of a jurisdiction outside of the United States of America shall be made only upon 30 days prior notice to the Agent. The Agent shall promptly notify each Lender of each such designation by TBC and the identity of the designated Subsidiary. As soon as possible and in any event within 10 Business Days after notice of the designation of a Subsidiary Borrower that is organized under the laws of a jurisdiction outside of the United States of America, any Lender that may not legally lend to such Subsidiary Borrower (a “Protesting Lender”) shall so notify TBC and the Agent in writing. With respect to each Protesting Lender, TBC shall, effective on or before the date that such Subsidiary Borrower shall have the right to borrower hereunder, either:

(i) arrange for one or more Lenders or other commercial banks to assume the Commitment of such Protesting Lender; subject, however, to payment to the Agent by the assignor or the assignee of a processing and recording fee of $3,500, in the event the assuming lender is not a Lender; or

(ii) arrange for the Commitment of such Protesting Lender to be terminated and all Committed Advances owed to such Lender to be prepaid;

subject, in either case, to payment in full of all principal, accrued and unpaid interest, fees, commissions and other amounts payable under this Agreement and then owing to such Lender immediately prior to the assignment or termination of the Commitment of such Lender.

(b) TBC Consent to Subsidiary Borrower Borrowings and Notices. No Advances shall be made to a Subsidiary Borrower, and no Conversion of any Advances at the request of a Subsidiary Borrower shall be effective, without, in each and every instance, the prior consent of TBC, in its sole discretion, which shall be evidenced by the countersignature of TBC to the relevant Notice of

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Borrowing or notice of Conversion. In addition, no notices which are to be delivered by a Borrower hereunder shall be effective, with respect to any Subsidiary Borrower, unless the notice is countersigned by TBC.

(c) Subsidiary Borrower Termination Event. The occurrence of any of the following events with respect to any Subsidiary Borrower shall constitute a “Subsidiary Borrower Termination Event” with respect to such Subsidiary Borrower:

(i) such Subsidiary Borrower ceases to be a Subsidiary;

(ii) such Subsidiary Borrower is liquidated or dissolved;

(iii) such Subsidiary Borrower fails to preserve and maintain its existence;

(iv) such Subsidiary Borrower merges or consolidates with or into another Person, or conveys, transfers, leases, or otherwise disposes of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person (except that a Subsidiary Borrower may merge into or dispose of assets to another Borrower);

(v) any of the “Events of Default” described in Section 6.1(a) through (f) occurs to or with respect to such Subsidiary Borrower as if such Subsidiary Borrower were “TBC”; or

(vi) the Guaranty with respect to such Subsidiary Borrower ceases, for any reason, to be valid and binding on TBC or TBC so states in writing.

(d) Terminated Subsidiary Borrower. Upon the occurrence of a Subsidiary Borrower Termination Event with respect to any Subsidiary Borrower, such Subsidiary Borrower (a “Terminated Subsidiary Borrower”) shall cease to be a Borrower for purposes of this Agreement and shall no longer be entitled to request or borrow Advances hereunder. All outstanding Advances of a Terminated Subsidiary Borrower shall be automatically due and payable as of the date on which the Subsidiary Borrower Termination Event of such Terminated Subsidiary Borrower occurred, together with accrued interest thereon and any other amounts then due and payable by that Borrower hereunder, unless, in the case of a Subsidiary Borrower Termination Event described in paragraph (iv) of Section 2.22(c), the other Person party to the transaction is a Borrower and such other Borrower has assumed in writing all of the outstanding Advances and other obligations under this Agreement and under any other Loan Document, of the Terminated Subsidiary Borrower.

(e) TBC as Subsidiary Borrowers’ Agent. Each of the Subsidiary Borrowers hereby appoints and authorizes TBC to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to TBC by the terms hereof, together with such powers as are reasonably incidental thereto.

(f) Subsidiaries’ Several Liabilities. Notwithstanding anything in this Agreement to the contrary, each of the Subsidiary Borrowers shall be severally liable for the liabilities and obligations of such Subsidiary Borrower under this Agreement and its Borrowings, and other Loan Documents, if any. No Subsidiary Borrower shall be liable for the obligations of any other Borrower under this Agreement or any Borrowings of any other Borrower or any other Borrower’s Notes, if any. Each Subsidiary Borrower shall be severally liable for all payments of the principal of and interest on Advances to such Subsidiary Borrower, and any other amounts due hereunder that are

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specifically allocable to such Subsidiary Borrower or the Advances to such Subsidiary Borrower. With respect to any amounts due hereunder, including fees and commissions, that are not specifically allocable to a particular Borrower, each Borrower shall be liable for such amount pro rata in the same proportion as such Borrower’s outstanding Advances bear to the total of then-outstanding Advances to all Borrowers.

ARTICLE 3

Representations and Warranties

3.1 Representations and Warranties by the Borrowers. Each of the Borrowers represents and warrants as follows:

(a) Corporate Standing. TBC is a duly organized corporation existing in good standing under the laws of the State of Delaware. Each Subsidiary Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and each of TBC and each Subsidiary Borrower is qualified to do business in every jurisdiction where such qualification is required, except where the failure to so qualify would not have a material adverse effect on the financial condition of TBC and the Subsidiary Borrowers as a whole.

(b) Corporate Powers; Governmental Approvals. The execution and delivery and the performance of the terms of this Agreement are, and the execution and delivery and the performance of the terms of any other Loan Documents and of each Guaranty will be, within the corporate powers of each Borrower party thereto, have been or will have been (as appropriate) duly authorized by all necessary corporate action, have, or will have, received (as appropriate) all necessary governmental approval, if any (which approval, if any, remains in full force and effect), and do not contravene any provision of the Certificate of Incorporation or By-Laws of any Borrower party thereto, or do not contravene any law or any contractual restriction binding on any Borrower party thereto, except where such contravention would not have a material adverse effect on the financial condition of TBC and its Subsidiaries, taken as a whole.

(c) Enforceability. This Agreement and the other Loan Documents, if any, when duly executed and delivered by each Borrower party thereto, will constitute legal, valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms, and each Guaranty, when duly executed and delivered by TBC, will constitute a legal, valid and binding obligation of TBC, enforceable against TBC in accordance with its terms, subject to general equitable principles and except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditors’ rights.

(d) No Material Pending or Threatened Actions. In TBC’s opinion, there are no pending or threatened actions or proceedings before any court or administrative agency (i) other than as disclosed in TBC’s filings with the Securities and Exchange Commission, that are reasonably likely to have a material adverse affect on the financial condition or operations of the Company which is likely to materially impair the ability of the Company to repay the Advances or (ii) which would affect the legality, validity or enforceability of this Agreement or the Advances.

(e) Consolidated Statements. The Consolidated statement of financial position as of December 31, 2004 and the related Consolidated statement of earnings and retained earnings for the year then ended (copies of which have been furnished to each Lender) correctly set forth the Consolidated

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financial condition of TBC and its Subsidiaries as of such date and the result of the Consolidated operations for such year. The Consolidated statement of financial position as of September 30, 2005 and the related Consolidated statement of earnings and retained earnings for the nine month period then ended (copies of which have been furnished to each Lender) correctly set forth, subject to year-end audit adjustments, the Consolidated financial condition of TBC and its Subsidiaries as of such date and the result of the Consolidated operations for such nine month period.

(f) Regulation U. No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System, and no proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of any Borrower only or of each Borrower and its subsidiaries on a Consolidated basis) subject to the provisions of Section 4.2(a) or subject to any restriction contained in any agreement or instrument between any Borrower and any Lender or any Affiliate of a Lender relating to Debt within the scope of Section 6.1(d) will be margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System).

(g) Investment Company Act. No Borrower is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Advances, nor the application of the proceeds or repayment thereof by any Borrower, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.

(h) No Material Adverse Change. Except as disclosed in filings with the Securities and Exchange Commission prior to the date hereof, there has been no material adverse change in the Company’s financial condition or results of operations since December 31, 2004 that is likely to impair the ability of the Company to repay the Advances.

ARTICLE 4

Covenants of TBC

4.1 Affirmative Covenants of TBC. From the date of this Agreement and so long as any amount is payable by a Borrower to any Lender hereunder or any Commitment is outstanding, TBC will:

(a) Periodic Reports. Furnish to the Lenders:

(1) within 60 days after the close of each of the first three quarters of each of TBC’s fiscal years, a Consolidated statement of financial position of TBC and the Subsidiaries as of the end of such quarter and a Consolidated comparative statement of earnings and retained earnings of TBC and the Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, each certified by an authorized officer of TBC,

(2) within 120 days after the close of each of TBC’s fiscal years, and with respect to any quarter thereof, if requested in writing by the Majority Lenders (with a copy to the

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Agent), within 60 days after the later of (x) the close of any of the first three quarters thereof subject of such request and (y) such request, a statement certified by an authorized officer of TBC showing in detail the computations required by the provisions of Sections 4.2(a) and 4.2(b), based on the figures which appear on the books of account of TBC and the Subsidiaries at the close of such quarters,

(3) within 120 days after the close of each of TBC’s fiscal years, a copy of the annual audit report of TBC, certified by independent public accountants of nationally recognized standing, together with financial statements consisting of a Consolidated statement of financial position of TBC and the Subsidiaries as of the end of such fiscal year and a Consolidated statement of earnings and retained earnings of TBC and the Subsidiaries for such fiscal year,

(4) within 120 days after the close of each of TBC’s fiscal years, a statement certified by the independent public accountants who shall have prepared the corresponding audit report furnished to the Lenders pursuant to the provisions of clause (3) of this subsection (a), to the effect that, in the course of preparing such audit report, such accountants had obtained no knowledge, except as specifically stated, that TBC had been in violation of the provisions of any one of Sections 4.2(a), 4.2(b), 4.2(c) and 4.2(d), at any time during such fiscal year,

(5) promptly upon their becoming available, all financial statements, reports and proxy statements which TBC sends to its stockholders,

(6) promptly upon their becoming available, all regular and periodic financial reports which TBC or any Subsidiary files with the Securities and Exchange Commission or any national securities exchange,

(7) within 3 Business Days after the discovery of the occurrence of any event which constitutes a Default, notice of such occurrence together with a detailed statement by a responsible officer of TBC of the steps being taken by TBC or the appropriate Subsidiary to cure the effect of such event, and

(8) such other information respecting the financial condition and operations of TBC or the Subsidiaries as the Agent may from time to time reasonably request.

TBC shall be deemed to have furnished the information specified in clauses (1), (3), (5) and (6) above on the date that such information is posted at the Company’s website on the Internet at www.boeing.com, at www.sec.gov or at such other website as notified to the Agent and the Lenders.

(b) Payment of Taxes, Etc. Duly pay and discharge, and cause each Subsidiary duly to pay and discharge, all material taxes, assessments and governmental charges upon it or against its properties prior to a date which is 5 Business Days after the date on which penalties are attached thereto, except and to the extent only that the same shall be contested in good faith and by appropriate proceedings by TBC or the appropriate Subsidiary.

(c) Insurance. Maintain, and cause each Subsidiary to maintain, with financially sound and reputable insurance companies or associations, insurance of the kinds, covering the risks and in the relative proportionate amounts usually carried by companies engaged in businesses similar to that of TBC or such Subsidiary, except, to the extent consistent with good business practices, such insurance may be provided by TBC through its program of self insurance.

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(d) Corporate Existence. Preserve and maintain its corporate existence.

(e) Material Compliance With Laws. Comply, and cause each Subsidiary to comply, in all material respects with all applicable laws (including ERISA and applicable environmental laws), except to the extent that failure to so comply would not have a material adverse effect on the financial condition or operations of the Company.

4.2 General Negative Covenants of TBC. From the date of this Agreement and so long as any amount shall be payable by TBC or any other Borrower to any Lender hereunder or any Commitment shall be outstanding, TBC will not:

(a) Mortgages, Liens, Etc. Create, incur, assume or suffer to exist any mortgage, pledge, lien, security interest or other charge or encumbrance (including the lien or retained security title of a conditional vendor) upon or with respect to any of its Property, Plant and Equipment, or upon or with respect to the Property, Plant and Equipment of any Subsidiary, or assign or otherwise convey, or permit any Subsidiary to assign or otherwise convey, any right to receive income from or with respect to its Property, Plant and Equipment, except

(1) liens in connection with workmen’s compensation, unemployment insurance or other social security obligations;

(2) liens securing the performance of bids, tenders, contracts (other than for the repayment of borrowed money), leases, statutory obligations, surety and appeal bonds, liens to secure progress or partial payments made to TBC or such Subsidiary and other liens of like nature made in the ordinary course of business;

(3) mechanics’, workmen’s, materialmen’s or other like liens arising in the ordinary course of business in respect of obligations which are not due or which are being contested in good faith;

(4) liens for taxes not yet due or being contested in good faith and by appropriate proceedings by TBC or the affected Subsidiary;

(5) liens which arise in connection with the leasing of equipment in the ordinary course of business;

(6) liens on Property, Plant and Equipment owned by TBC or any Subsidiary of TBC existing on the date of this Agreement;

(7) liens on assets of a Person existing at the time such Person is merged into or consolidated with TBC or a Subsidiary of TBC or at the time of purchase, lease, or acquisition of the property or Voting Stock of such Person as an entirety or substantially as an entirety by TBC or a Subsidiary of TBC, whether or not any Debt secured by such liens is assumed by TBC or such Subsidiary, provided that such liens are not created in anticipation of such purchase, lease, acquisition or merger;

(8) liens securing Debt of a Subsidiary of TBC owing to TBC or to another Subsidiary;

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(9) liens on assets existing at the time of acquisition of such property by TBC or a Subsidiary of TBC or purchase money liens to secure the payment of all or part of the purchase price of property upon acquisition of such assets by TBC or such Subsidiary or to secure any Debt incurred or guaranteed by TBC or a Subsidiary prior to, at the time of, or within one year after the later of the acquisition, completion or construction (including any improvements on existing property), or commencement of full operation, of such property, which Debt is incurred or guaranteed solely for the purpose of financing all or any part of the purchase price thereof or construction or improvements thereon; provided, however, that in the case of any such acquisition, construction or improvement, the lien shall not apply to any property theretofore owned by TBC or such Subsidiary other than, in the case of such construction or improvement, any theretofore unimproved real property on which the property so constructed or the improvement made is located;

(10) liens securing obligations of TBC or a Subsidiary incurred in conjunction with industrial revenue bonds or other instruments utilized in connection with incentive structures for tax purposes issued for the benefit of TBC or a Subsidiary in connection with any Property, Plant and Equipment used by TBC or a Subsidiary;

(11) any extension, renewal or replacement (or successive extensions, renewals or replacements in whole or in part of any lien referred to in the foregoing; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement and that such extension, renewal or replacement shall be limited to all or any part of the property that secured the lien so extended, renewed or replace (plus improvements and construction on such property); and

(12) other liens, charges and encumbrances, so long as the aggregate amount of the Consolidated Debt for which all such liens, charges and encumbrances serve as security does not exceed 15% of Consolidated Net Tangible Assets.

(b) Consolidated Debt. Permit Consolidated Debt (subject to Section 4.3) to be at any time more than 60% of Total Capital, where “Total Capital” means the sum of Shareholders’ Equity and Consolidated Debt.

(c) Payment in Violation of an Agreement. Make any payment, or permit any Subsidiary to make any payment, of principal or interest, on any Debt which payment would constitute a violation of the terms of this Agreement or of the terms of any indenture or agreement binding on such corporation or to which such corporation is a party except, in the case of any payment made by a Subsidiary, to the extent such payment is not likely to impair the ability of TBC to repay the Advances.

(d) Merger or Consolidation. Merge or consolidate with or into, or convey, transfer, lease, or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person except that TBC may merge or consolidate with any Person so long as TBC is the surviving corporation and no Default has occurred and is continuing or would result therefrom, and except that any direct or indirect Subsidiary of TBC may merge or consolidate with or into, or dispose of assets to, TBC or any other direct or indirect Subsidiary of TBC, provided, in each case, that no Event of Default has occurred and is continuing at the time of such proposed transaction or would result therefrom.

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4.3 Financial Statement Terms. For purposes of Section 4.2(b), all capitalized terms not defined in this Agreement shall have the respective meanings used in TBC’s published Consolidated financial statements and calculated under the generally accepted accounting principles and practices applied by TBC on the date hereof in the preparation of such financial statements. However, notwithstanding the foregoing, (a) such terms shall exclude amounts attributable to Boeing Capital Services Corporation and its Subsidiaries and Boeing Financial Corporation, a Delaware corporation; and (b) Total Capital shall exclude the effects of (i) any merger-related accounting adjustments which are attributable to the merger with or acquisition of McDonnell Douglas Corporation by TBC and (ii) any repurchase by TBC of its common stock.

4.4 Waivers of Covenants. The departure by TBC or any Subsidiary from the requirements of any of the provisions of this Article 4 shall be permitted only if such departure has been consented to in advance in a writing signed by the Majority Lenders, and such writing shall be effective as a consent only to the specific departure described in such writing. Such departure by TBC or any Subsidiary when properly consented to by the Majority Lenders shall not constitute an Event of Default under Section 6.1(c).

ARTICLE 5

Conditions Precedent to Borrowings and Issuances

5.1 Conditions Precedent to the Initial Borrowing or Initial Issuance of TBC. The obligation of each Lender to make its initial Advance to TBC and of each Issuing Bank to issue a Letter of Credit for the account of TBC are subject to receipt by the Agent on or before the day of the initial Borrowing or initial issuance of all of the following, each dated as of the day hereof, in form and substance satisfactory to the Agent and its counsel:

(a) Documentation. Copies of all documents, certified by an officer of TBC, evidencing necessary corporate action by TBC and governmental approvals, if any, with respect to this Agreement, to the other Loan Documents, if any, and to Guaranties to be delivered by TBC pursuant to Section 5.4(e);

(b) Officer’s Certificate. A certificate of the Secretary or an Assistant Secretary of TBC which certifies the names of the officers of TBC authorized to sign the Notes, if any, and the other documents to be delivered hereunder, together with true specimen signatures of such officers and facsimile signatures of officers authorized to sign by facsimile signature (on which certificate each Lender may conclusively rely until it receives a further certificate of the Secretary or an Assistant Secretary of TBC canceling or amending the prior certificate and submitting specimen signatures of the officers named in such further certificate);

(c) Opinion of Company Counsel. A favorable opinion of in-house counsel for TBC substantially in the form of Exhibit G and as to such other matters as the Agent may reasonably request, which opinion TBC hereby expressly instructs such counsel to prepare and deliver;

(d) Opinion of Agent’s Counsel. A favorable opinion of Shearman & Sterling LLP, counsel for the Agent, substantially in the form of Exhibit H;

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(e) Termination of 2003 Agreement. TBC shall have terminated in whole the commitments of the banks parties to the 2003 Credit Agreement; and

(f) Satisfaction of 2003 Agreement Obligations. TBC and its Subsidiaries shall have satisfied all of their respective obligations under the 2003 Credit Agreement including, without limitation, the payment of all fees under such agreement.

5.2 Conditions Precedent to Each Committed Borrowing and Each Issuance of TBC. The obligation of each Lender to make a Committed Advance on the occasion of each Committed Borrowing (including the initial Borrowing) and the obligation of each Issuing Bank to issue a Letter of Credit (including the initial issuance) are subject to the further conditions precedent that on the date of the request for a Committed Borrowing, date of the requested issuance and on the date of such Borrowing or issuance, the following statements shall be true, and both the giving of the applicable Notice of Committed Borrowing, Notice of Issuance and the acceptance by TBC of the proceeds of such Committed Borrowing or such Letter of Credit shall be a representation by TBC that:

(a) the representations and warranties contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date); and

(b) as of each such date no event has occurred and is continuing, or would result from the proposed Committed Borrowing or issuance, which constitutes a Default.

5.3 Conditions Precedent to Each Bid Borrowing of TBC. The obligation of any Lender to make a Bid Advance on the occasion of a Bid Borrowing (including the initial Borrowing) is subject to the further conditions precedent that:

(a) Notice of Bid Borrowing. The Agent shall have received the written confirmatory Notice of Bid Borrowing with respect thereto;

(b) Bid Notes. On or before the date of such Bid Borrowing, but prior to such Bid Borrowing, the Agent shall have received a Bid Note payable to the order of such Lender for each of the one or more Bid Advances to be made by such Lender as part of such Bid Borrowing, in a principal amount equal to the principal amount of the Bid Advance to be evidenced thereby and otherwise on such terms as were agreed to for such Bid Advance in accordance with Section 2.6;

(c) Periodic Reports. Each Lender intending to make a Bid Advance shall have received the statements provided (or deemed provided) by TBC pursuant to Section 4.1(a)(1), (2) and (3); and

(d) Representations. On the date of such request and the date of such Borrowing, the following statements shall be true, and each of the giving of the applicable Notice of Borrowing and the acceptance by TBC of the proceeds of such Bid Borrowing shall be a representation by TBC that:

(i) the representations and warranties contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date);

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(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Bid Borrowing, which constitutes a Default; and

(iii) no event has occurred and no circumstance exists as a result of which any information concerning TBC that has been provided by TBC to the Agent or the Lenders in connection with such Bid Borrowing would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

5.4 Conditions Precedent to the Initial Borrowing and Issuance of a Subsidiary Borrower. The obligation of each Lender to make its initial Advance to any particular Subsidiary Borrower and of each Issuing Bank to issue a Letter of Credit for the account of such Subsidiary Borrower are subject to the receipt by the Agent, on or before the day of the initial Borrowing or initial issuance by such Subsidiary Borrower, of all of the following, each dated on or prior to the day of the initial Borrowing or issuance, in form and substance satisfactory to the Agent and its counsel:

(a) Borrower Subsidiary Letter. A Borrower Subsidiary Letter, substantially in the form of Exhibit D, executed by such Subsidiary Borrower and TBC;

(b) Documentation. Copies of all documents, certified by an officer of the Subsidiary Borrower, evidencing necessary corporate action by the Subsidiary Borrower and governmental approvals, if any, with respect to this Agreement and any other Loan Documents;

(c) Officer’s Certificate. A certificate of the Secretary or an Assistant Secretary of TBC or the Subsidiary Borrower which certifies the names of the officers of the Subsidiary Borrower authorized to sign the Notes and the other documents to be delivered hereunder, together with true specimen signatures of such officers and facsimile signatures of officers authorized to sign by facsimile signature (on which certificate each Lender may conclusively rely until it receives a further certificate of the Secretary or an Assistant Secretary of TBC or the Subsidiary Borrower canceling or amending the prior certificate and submitting signatures of the officers named in such further certificate);

(d) Opinion of Subsidiary Counsel. A favorable opinion of in-house counsel to the Subsidiary Borrower, substantially in the form of Exhibit I and as to such other matters as the Agent may reasonably request;

(e) TBC Guaranty. A Guaranty of TBC that unconditionally guarantees the payment of all obligations of such Subsidiary Borrower hereunder and under the Notes of such Subsidiary Borrower, substantially in the form of Exhibit J, executed and delivered by TBC to the Agent; and

(f) Opinion of TBC Counsel. A favorable opinion of in-house counsel to TBC, substantially in the form of Exhibit K and as to such other matters as the Agent may reasonably request.

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5.5 Conditions Precedent to Each Committed Borrowing or Issuance of a Subsidiary Borrower. The obligation of each Lender to make a Committed Advance to a Subsidiary Borrower on the occasion of each Committed Borrowing (including the initial Borrowing) and the obligation of each Issuing Bank to issue a Letter of Credit for the account of such Subsidiary Borrower (including the initial issuance) are subject to the further conditions precedent that on the date of the request for such Committed Borrowing, date of the requested issuance and the date of such Borrowing or issuance, the following statements shall be true, and each of the giving of the applicable Notice of Committed Borrowing, Notice of Issuance and the acceptance by such Subsidiary Borrower of the proceeds of such Committed Borrowing or such Letter of Credit shall be (a) a representation by such Subsidiary Borrower that:

(i) the representations and warranties of that Subsidiary Borrower contained (A) in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and (B) in its Borrower Subsidiary Letter are true and correct on and as of the date of such Borrowing or issuance, before and after giving effect to such Borrowing or issuance; and

(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Committed Borrowing or issuance, which constitutes a Default;

and (b) a representation by TBC that the representations and warranties of TBC contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and that, as of each such date, no event has occurred and is continuing, or would result from the proposed Committed Borrowing or issuance, which constitutes a Default.

5.6 Conditions Precedent to Each Bid Borrowing of a Subsidiary Borrower. The obligation of any Lender to make a Bid Advance to any particular Subsidiary Borrower on the occasion of each Bid Borrowing (including the initial Borrowing) is subject to the further conditions precedent that:

(a) Notice of Bid Borrowing. The Agent shall have received the written confirmatory Notice of Bid Borrowing with respect thereto;

(b) Bid Notes. On or before the date of such Bid Borrowing, but prior to such Bid Borrowing, the Agent shall have received a Bid Note payable to the order of such Lender for each of the one or more Bid Advances to be made by such Lender as part of such Bid Borrowing, in a principal amount equal to the principal amount of the Bid Advance to be evidenced thereby and otherwise on such terms as were agreed to for such Bid Advance in accordance with Section 2.6;

(c) Periodic Reports. Each Lender intending to make a Bid Advance shall have received the statements provided (or deemed provided) by TBC pursuant to Section 4.1(a)(1), (2) and (3); and

(d) Subsidiary Representations. On the date of such request and the date of such Borrowing, the following statements shall be true, and each of the giving of the applicable Notice of Bid Borrowing and the acceptance by the Subsidiary of the proceeds of such Bid Borrowing shall be (a) a representation by such Subsidiary Borrower that:

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(i) the representations and warranties contained (A) in subsections (a) through (g) of Section 3.1 hereof with respect to such Subsidiary Borrower are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and (B) in its Borrower Subsidiary Letter are true and correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing;

(ii) as of each such date no event has occurred and is continuing, or would result from the proposed Bid Borrowing which constitutes a Default; and

(iii) no event has occurred and no circumstance exists as a result of which any information concerning TBC or the Subsidiary Borrower that has been provided by TBC or the Subsidiary Borrower to the Agent or the Lenders in connection with such Bid Borrowing would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; and

(e) TBC Representation. A representation by TBC that the representations and warranties of TBC contained in subsections (a) through (g) of Section 3.1 are true and accurate on and as of each such date as though made on and as of each such date (except to the extent that such representations and warranties relate solely to an earlier date), and that, as of each such date, no event has occurred and is continuing, or would result from the proposed Committed Borrowing which constitutes a Default.

ARTICLE 6

Events of Default

6.1 Events of Default. Each of the following shall constitute an Event of Default:

(a) Failure by TBC to make when due any payment of principal of or interest on any Advance or under a Guaranty when the same becomes due and payable and such failure is not remedied within 5 Business Days thereafter;

(b) Any representation or warranty made by TBC in connection with the execution and delivery of this Agreement, the Borrowings or any Guaranty, or otherwise furnished pursuant hereto proves to have been incorrect when made in any material respect;

(c) Failure by TBC to perform any other term, covenant or agreement contained in this Agreement, and such failure is not remedied within 30 days after written notice thereof has been given to TBC by the Agent, at the request, or with the consent, of the Majority Lenders;

(d) Failure by TBC to pay when due (i) any obligation for the payment of borrowed money on any regularly scheduled payment date or following acceleration thereof or (ii) any other monetary obligation if, in the case of either of clauses (i) or (ii), the aggregate unpaid principal amount of the obligations with respect to which such failure to pay or acceleration occurred equals or exceeds $150,000,000 and such failure is not remedied within 5 Business Days after TBC receives notice thereof from the Agent or the creditor on such obligation;

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(e) TBC or any of its Subsidiaries

(1) incurs liability with respect to any employee pension benefit plan in excess of $150,000,000 in the aggregate under

(A) Sections 4062, 4063, 4064 or 4201 of ERISA; or

(B) otherwise under Title IV of ERISA as a result of any reportable event within the meaning of ERISA (other than a reportable event as to which the provision of 30 days’ notice is waived under applicable regulations);

(2) has a lien imposed on its property and rights to property under Section 4068 of ERISA on account of a liability in excess of $150,000,000 in the aggregate; or

(3) incurs liability under Title IV of ERISA

(A) in excess of $150,000,000 in the aggregate as a result of the Company or any Subsidiary or any Person that is a member of the “controlled group” (as defined in Section 4001(a)(14) of ERISA) of the Company or any Subsidiary having filed a notice of intent to terminate any employee pension benefit plan under the “distress termination” provision of Section 4041 of ERISA, or

(B) in excess of $150,000,000 in the aggregate as a result of the Pension Benefit Guaranty Corporation having instituted proceedings to terminate, or to have a trustee appointed to administer, any such plan;

(f) The happening of any of the following events, provided such event has not then been cured or stayed:

(1) the cessation by TBC of the payment of its Debts as they mature,

(2) the making of an assignment for the benefit of the creditors of TBC,

(3) the appointment of a trustee or receiver or liquidator for TBC or for a substantial part of its property, or

(4) the institution of bankruptcy, reorganization, arrangement, insolvency or similar proceedings by or against TBC under the laws of any jurisdiction in which TBC is organized or has material business, operations or assets and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property and assets) shall occur; or

(g) So long as any Subsidiary is a Borrower hereunder, the Guaranty with respect to such Subsidiary Borrower for any reason ceases to be valid and binding on TBC or TBC so states in writing.

6.2 Lenders’ Rights upon Borrower Default. If an Event of Default occurs or is continuing, then the Agent shall at the request, or may with the consent, of the Majority Lenders, by notice to TBC,

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(a) declare the obligation of each Lender to make further Advances (other than Advances by an Issuing Bank or a Lender pursuant to Section 2.3(f)) and of the Issuing Banks to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and

(b) declare the Advances, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest, and all such other amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrowers, provided, however, that in the event of an actual entry or, in the case of the institution by the Borrower of a proceeding described in Section 6.1(f)(4), a deemed entry, of an order for relief with respect to any Borrower under the Federal Bankruptcy Code (whether in connection with a voluntary or an involuntary case), (i) the obligation of each Lender to make Advances (other than Advances by an Issuing Bank or a Lender pursuant to Section 2.3(f)) and of the Issuing Banks to issue Letters of Credit shall automatically be terminated and (ii) the payment obligations of the Borrowers with respect to Advances, all such interest, and all such amounts shall automatically become and be due and payable, without presentment, demand, protest, or any notice of any kind, all of which are hereby expressly waived by the Borrowers.

6.3 Actions in Respect of the Letters of Credit upon Borrower Default. If any Event of Default shall have occurred and be continuing, the Agent may with the consent, or shall at the request, of the Majority Lenders, irrespective of whether it is taking any of the actions described in Section 6.2 or otherwise, make demand upon TBC to, and forthwith upon such demand TBC will

(a) pay to the Agent on behalf of the Lenders in same day funds at the Agent’s office designated in such demand, for deposit in the L/C Cash Deposit Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding or

(b) make such other reasonable arrangements in respect of the outstanding Letters of Credit as shall be acceptable to the Required Lenders, provided, however, that in the event of an actual or deemed entry of an order for relief with respect to any Borrower under the Federal Bankruptcy Code (whether in connection with a voluntary or an involuntary case), the obligation of TBC to pay to the Agent on behalf of the Lenders in same day funds, for deposit in the L/C Cash Deposit Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding shall automatically become and be due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrowers. If at any time the Agent reasonably determines that any funds held in the L/C Cash Deposit Account are subject to any right or interest of any Person other than the Agent and the Lenders or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Borrowers will, forthwith upon demand by the Agent, pay to the Agent, as additional funds to be deposited and held in the L/C Cash Deposit Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Deposit Account that are free and clear of any such right and interest. Upon the drawing of any Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit Account, such funds shall be applied to reimburse the Issuing Banks to the extent permitted by applicable law, and if so applied, then such reimbursement shall be deemed a repayment of the corresponding Advance in respect of such Letter of Credit. After all such Letters of Credit shall have expired or been fully drawn upon and all other obligations of the Borrowers hereunder and under the Notes shall have been paid in full, the balance, if any, in such L/C Cash Deposit Account shall be promptly returned to TBC.

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ARTICLE 7

The Agent

7.1 Authorization and Action. Each Lender (in its capacities as a Lender and Issuing Bank, as applicable) hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including without limitation, enforcement or collection of any Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders or as otherwise required by Section 8.1(b) and such instructions shall be binding upon all Lenders and all holders of interests in Advances; provided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrowers pursuant to the terms of this Agreement.

7.2 Agent’s Reliance, Etc. Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Agent:

(a) may treat the Lender that made any Advance as the payee thereof until the Agent receives and accepts an assignment entered into by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided in Section 2.21;

(b) may consult with legal counsel (including counsel for the Borrowers), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or other experts;

(c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement;

(d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of any Borrower or to inspect the property (including the books and records) of any Borrower;

(e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, this Agreement or any other instrument or document furnished pursuant hereto; and

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(f) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

7.3 Citibank, N.A. and its Affiliates. With respect to its Commitment, the Advances made by it, and any Notes issued to it, Citibank, N.A. shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent hereunder; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Citibank, N.A., in its individual capacity. Citibank, N.A. and its Affiliates may accept deposits from, lend money to, accept drafts drawn by, act as trustee under indentures of, and generally engage in any kind of business with, the Company, any of its Subsidiaries and any person or entity who may do business with or own securities of the Company or any Subsidiary, all as if Citibank, N.A. were not the Agent hereunder and without any duty to account therefor to the other Lenders.

7.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 3.1(e) and the representations and warranties contained in Sections 3.1 and 3.2 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

7.5 Indemnification.

(a) Each Lender agrees to indemnify the Agent (to the extent not reimbursed by TBC or any other Borrower), from and against its Ratable Share of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent under this Agreement (collectively, the “Indemnified Costs”), provided that no Lender shall be liable for any portion of the Indemnified Costs resulting from the Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its Ratable Share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement to the extent that the Agent is not reimbursed for such expenses by TBC or any other Borrower.

(b) Each Lender severally agrees to indemnify the Issuing Banks (to the extent not promptly reimbursed by TBC) from and against such Lender’s Ratable Share of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against any Issuing Bank in any way relating to or arising out of this Agreement or any action taken or omitted by such Issuing Bank hereunder or in connection herewith; provided, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Issuing Bank’s gross negligence or willful

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misconduct. Without limitation of the foregoing, each Lender agrees to reimburse any such Issuing Bank promptly upon demand for its Ratable Share of any out-of-pocket expenses (including counsel fees) payable by TBC under Section 8.3, to the extent that such Issuing Bank is not promptly reimbursed for such costs and expenses by TBC.

(c) The failure of any Lender to reimburse the Agent or any Issuing Bank promptly upon demand for its Ratable Share of any amount required to be paid by the Lenders to the Agent as provided herein shall not relieve any other Lender of its obligation hereunder to reimburse the Agent or any Issuing Bank for its Ratable Share of such amount, but no Lender shall be responsible for the failure of any other Lender to reimburse the Agent or any Issuing Bank for such other Lender’s Ratable Share of such amount. Without prejudice to the survival of any other agreement of any Lender hereunder, the agreement and obligations of each Lender contained in this Section 7.5 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes. Each of the Agent and each Issuing Bank agrees to return to the Lenders their respective Ratable Shares of any amounts paid under this Section 7.5 that are subsequently reimbursed by TBC or any Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.5 applies whether any such investigation, litigation or proceeding is brought by the Agent, any Lender or a third party.

7.6 Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and TBC and may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right, with the consent of TBC (if no Event of Default has occurred and is continuing), which shall not be unreasonably withheld, to appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any state thereof and having a combined capital and surplus of at least $50,000,000. If no successor Agent has been so appointed by the Majority Lenders, and has accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the removal of the retiring Agent as provided herein, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which meets the requirements set out in the previous sentence. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Article 7 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

7.7 Certain Obligations May Be Performed by Affiliates. The Agent may appoint any of its Affiliates to perform its obligations hereunder other than any obligation requiring the Agent to receive, pay, or otherwise handle funds or Notes, and provided that the Agent shall continue to be responsible to the Borrowers and the Lenders for the due performance of the Agent’s obligations under this Agreement.

7.8 Other Agents. Each Lender hereby acknowledges that neither the documentation agent, syndication agent nor any other Lender designated as any “Agent” (other than the Agent) on the signature pages hereof has any liability hereunder other than in its capacity as a Lender.

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ARTICLE 8

Miscellaneous

8.1 Modification, Consents and Waivers.

(a) Waiver. No failure or delay on the part of any Lender in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power hereunder. No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances.

(b) Amendment. No amendment or waiver of any provision of this Agreement or of any Committed Notes, nor consent to any departure by the Borrowers therefrom, shall in any event be effective unless such amendment, waiver or consent is in writing and signed by the Company and the Majority Lenders, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following:

(i) waive any of the conditions specified in Section 5.1 or 5.4,

(ii) except as provided in Section 2.20 or Section 2.22, increase the Commitments of the Lenders or subject the Lenders to any additional obligations,

(iii) reduce the principal of, or interest on, the Committed Advances or any fees, commissions or other amounts payable hereunder,

(iv) except as provided in Section 2.22, postpone any date fixed for any payment of principal of, or interest on, the Committed Advances or any fees, commissions or other amounts payable hereunder,

(v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Committed Advances or the number of Lenders required for the Lenders or any of them to take any action hereunder,

(vi) amend this Section 8.1, or

(vii) release TBC from any of its obligations under any Guaranty or limit the liability of TBC as guarantor thereunder;

and provided further that no amendment, waiver, or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent under this Agreement or any Note and no amendment, waiver or consent shall, unless in writing and signed by the Issuing Banks in addition to the Lenders required above to take such action, adversely affect the rights or obligations of the Issuing Banks in their capacities as such under this Agreement.

(c) Majority Lenders. Notwithstanding the foregoing, this Section 8.1 shall not affect the provisions of Section 4.4, “Waivers of Covenants”, or Article 6, “Events of Default”.

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8.2 Notices.

(a) Addresses. All communications and notices provided for hereunder shall be in writing and mailed, telecopied, telexed or delivered and,

if to the Agent,

Citibank, N.A.

Two Penns Way, Suite 200

New Castle, Delaware 19720

Attention: Bank Loans Syndications Department

facsimile number (212) 994 0961;

if to any Borrower,

care of The Boeing Company

100 N. Riverside

Mail Code: 5003 3648

Chicago, Illinois

Attention: Assistant Treasurer, Corporate Finance and Banking

facsimile number (312) 544-2399

if to any Lender, to its office at the address given on the signature pages of this Agreement; or,

as to each party, at such other address as designated by such party in a written notice to each other party referring specifically to this Agreement.

(b) Effectiveness of Notices. All communications and notices shall, when mailed, telecopied, or telexed, be effective when deposited in the mail, telecopied, or confirmed by telex answerback, respectively. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or any Notes or of any Exhibit to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.

(c) Electronic Mail. Electronic mail may be used to distribute routine communications, such as financial statements and other information, and documents to be signed by the parties hereto; provided, however, that no Notice of Borrowing, signature, or other notice or document intended to be legally binding shall be effective if sent by electronic mail.

(d) Internet Distributions.

(1) So long as Citibank or any of its Affiliates is the Agent, such materials as may be agreed between the Borrowers and the Agent may be delivered to the Agent in an electronic medium in a format acceptable to the Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com. The Borrowers agree that the Agent may make such materials, as well as any other written information, documents, instruments and other material relating to the Company, any of its Subsidiaries or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the “Communications”) available to the Lenders by posting such notices on Intralinks or a substantially similar electronic system (the “Platform”). The Borrowers acknowledge that (i) the distribution of material through an electronic medium is not

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necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in connection with the Platform.

(2) Each Lender agrees that notice to it (as provided in the next sentence) (a “Notice”) specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender for purposes of this Agreement; provided that if requested by any Lender the Agent shall deliver a copy of the Communications to such Lender by email or telecopier. Each Lender agrees (i) to notify the Agent in writing of such Lender’s e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.

8.3 Costs, Expenses and Taxes.

(a) TBC shall pay upon written request all reasonable costs and expenses in connection with the preparation, execution, delivery, modification and amendment requested by any of the Borrowers of this Agreement, any Notes and the Guaranties (including, without limitation, printing costs and the reasonable fees and out-of-pocket expenses of counsel for the Agent) and costs and expenses, if any, in connection with the enforcement of this Agreement, any Notes and the Guaranties (whether through negotiations, legal proceedings or otherwise and including, without limitation, the reasonable fees and out-of-pocket expenses of counsel), as well as any and all stamp and other taxes, and to save the Lenders and other holders of interests in the Advances or any Notes harmless from any and all liabilities with respect to or resulting from any delay by or omission of the Borrowers to pay such taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of this Agreement, any Notes and the Guaranties.

(b) TBC agrees to indemnify the Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) the Advances, this Agreement, the Notes, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances, except to the extent such claim, damage, loss, liability or expense resulted from such Indemnified Party’s gross negligence or willful misconduct and except that no Indemnified Party shall have the right to be indemnified hereunder to the extent such indemnification relates to relationships of, between or among each of, or any of, the Agent, the Lenders, any assignee of a Lender or any participant. In the case of any investigation, litigation or other proceeding to which this Section 8.3 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by TBC, its directors, shareholders or creditors or an Indemnified Party or any other Person or an Indemnified Party is otherwise a party thereto and

Five-Year Credit Agreement 55

whether or not the transactions contemplated hereby are consummated. The Borrowers also agree not to assert any claim on any theory of liability for special, indirect, consequential or punitive damages against the Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, arising out of or otherwise relating to the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of Advances.

(c) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in Sections 2.14, 2.15 and 8.3 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes for a period of seven years.

(d)

8.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Borrowers, the Lenders and the Agent, and their respective successors and assigns, except that the Borrowers may not assign or transfer their rights hereunder without the prior written consent of the Lenders.

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

8.6 Governing Law. This Agreement, any Notes, the Guaranties and each Borrower Subsidiary Letter shall be deemed to be contracts under the laws of the State of New York and for all purposes shall be construed in accordance with the laws of such State.

8.7 Headings. The Table of Contents and Article and Section headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

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

8.9 Right of Set-Off. Each Lender and each of its Affiliates that is or was at one time a Lender hereunder is authorized at any time and from time to time, upon

(i) the occurrence and during the continuance of any Event of Default and

(ii) the making of the request or the granting of the consent specified by Section 6.2 to authorize the Agent to declare any Advances due and payable pursuant to the provisions of Section 6.2,

to the fullest extent permitted by law, without notice to any Borrower (any such notice being expressly waived by each Borrower), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of any Borrower against any and all of the obligations to such Lender or such Affiliate of such Borrower now or hereafter

Five-Year Credit Agreement 56

existing under this Agreement and any Notes held by such Lender, whether or not such Lender has made a demand under this Agreement or such Notes and although such obligations may be unmatured. Each Lender shall promptly notify any Borrower after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Lender and its Affiliates may have.

8.10 Confidentiality. Neither the Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of a Borrower, other than

(a) to the Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 2.21(f), to actual or prospective assignees and participants, and then only on a confidential basis,

(b) as required by any law, rule or regulation or judicial process, and

(c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking or other financial institutions.

8.11 Agreement in Effect. This Agreement shall become effective upon its execution and delivery, respectively, to the Agent and TBC by TBC and the Agent, and when the Agent shall have been notified by each Lender listed on Schedule I that such Lender has executed it.

8.12 No Liability of the Issuing Banks. None of the Agent, the Lenders nor any Issuing Bank, nor any of their Affiliates, or the respective directors, officers, employees, agents and advisors of such Person or such Affiliate, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the applicable Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by such Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof or any failure to honor a Letter of Credit where such Issuing Bank is, under applicable law, required to honor it. The parties hereto expressly agree that, as long as the Issuing Bank has not acted with gross negligence or willful misconduct, such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

8.13 Patriot Act Notice. Each Lender and the Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of Section 326 of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) and the promulgated

Five-Year Credit Agreement 57

regulations thereto (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender or the Agent, as applicable, to identify such Borrower in accordance with the Patriot Act. Each Borrower shall provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Agent or any Lenders in order to assist the Agent and the Lenders in maintaining compliance with the Patriot Act.

8.14 Jurisdiction, Etc.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Borrower hereby further irrevocably consents to the service of process in any action or proceeding in such courts by the mailing thereof by any parties hereto by registered or certified mail, postage prepaid, to the Borrower at its address specified pursuant to Section 8.2. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any jurisdiction.

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

Five-Year Credit Agreement 58

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

THE BOEING COMPANY
By	/s/    RUUD ROGGEKAMP
Name:	Ruud Roggekamp
Title:	Assistant Treasurer
CITIBANK, N.A., Individually and
as Agent
By	/s/    CAROLYN KEE
Name:	Carolyn Kee
Title:	Vice President
Syndication Agent
JPMORGAN CHASE BANK, N.A.
By	/s/    MATTHEW H. MASSIE
Name:	Matthew H. Massie
Title:	Managing Director
Documentation Agents
BANK OF AMERICA, N.A.
By	/s/    KENNETH J. BECK
Name:	Kenneth J. Beck
Title:	Senior Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD. SEATTLE BRANCH
By	/s/    TSUNETO KODAMA
Name:	Tsuneto Kodama
Title:	General Manager
SUMITOMO MITSUI BANKING CORPORATION
By	/s/    YOSHIHIRO HYAKUTOME
Name:	Yoshihiro Hyakutome
Title:	Joint General Manager
WACHOVIA BANK, NATIONAL ASSOCIATION
By	/s/    JAMES TRAVAGLINE
Name:	James Travagline
Title:	Vice President

Five-Year Credit Agreement

Lenders
MIZUHO CORPORATE BANK, LTD.
By	/s/    BERTRAM TANG
Name:	Bertram Tang
Title:	Senior Vice President & Team Leader
DEUTSCHE BANK AG NEW YORK BRANCH
By	/s/    FREDERICK W. LAIRD
Name:	Frederick W. Laird
Title:	Managing Director
By	/s/    MING K. CHU
Name:	Ming K. Chu
Title:	Vice President
BARCLAYS BANK PLC
By	/s/    NICHOLAS A. BELL
Name:	Nicholas A. Bell
Title:	Director
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By	/s/    KARL STUDER            /s/    YVONNE GUNTLIN
Name:	Karl Studer                            Yvonne Guntlin
Title:	Director                        Assistant Vice President
MERRILL LYNCH BANK USA
By	/s/    LOUIS ADLER
Name:	Louis Adler
Title:	Director
MORGAN STANLEY BANK
By	/s/    DANIEL TWENGE
Name:	Daniel Twenge
Title:	Vice President
WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street Commitment Corporation)
By	/s/    MARK WALTON
Name:	Mark Walton
Title:	Assistant Vice President

Five-Year Credit Agreement 2

UBS LOAN FINANCE LLC
By	/s/    DORIS MESA
Name:	Doris Mesa
Title:	Associate Director Banking Products Services, US
By	/s/    MARIE A. HADDAD
Name:	Marie A. Haddad
Title:	Associate Director Banking Products Services, US
BNP PARIBAS
By	/s/    RICK PACE
Name:	Rick Pace
Title:	Managing Director
By	/s/    ANGELA BENTLEY ARNOLD
Name:	Angela Bentley Arnold
Title:	Vice President
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH
By	/s/    CATHERINE SCHILLING
Name:	Catherine Schilling
Title:	Vice President
By	/s/    NORMAN MCCLAVE
Name:	Norman McClave
Title:	First Vice President
THE ROYAL BANK OF SCOTLAND PLC
By	/s/    ANDREW WADDINGTON
Name:	Andrew Waddington
Title:	Vice President
PNC BANK, NATIONAL ASSOCIATION
By	/s/    PHILIP K. LIEBSCHER
Name:	Philip K. Liebscher
Title:	Vice President
CALYON NEW YORK BRANCH
By	/s/    PHILIP SCHUBERT
Name:	Philip Schubert
Title:	Director
By	/s/    YURI MUZICHENKO
Name:	Yuri Muzichenko
Title:	Vice President

Five-Year Credit Agreement 3

STATE STREET BANK AND TRUST COMPANY
By	/s/    M. CAREY
Name:	M. Carey
Title:	Vice President
STANDARD CHARTERED BANK
By	/s/    FRED YOULIOS
Name:	Fred Youlios
Title:	Vice President
By	/s/  ROBERT K. REDDINGTON
Name:	Robert K. Reddington
Title:	AVP/Credit Documentation Credit Risk Control
HSBC BANK USA, NATIONAL ASSOCIATION
By	/s/    CHRIS WARNER
Name:	Chris Warner
Title:	Head, Transport, Services and Infrastructure
ING CAPITAL LLC
By	/s/    KEN BRAVO
Name:	Ken Bravo
Title:	Managing Director
LLOYDS TSB BANK PLC
By	/s/    ANDREW ROBERTS
Name:	Andrew Roberts
Title:	Vice President, Corporate Banking
By	/s/    JAMES RUDD
Name:	James Rudd
Title:	Vice President, Financial Institutions
THE NORTHERN TRUST COMPANY
By	/s/    PREETI SULLIVAN
Name:	Preeti Sullivan
Title:	Vice President
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
By	/s/    JOHN MARTINI            /s/    JAY LOVI
Name:	John Martini                                Jay Lovi
Title:	Vice President                        Vice President
WESTPAC BANKING CORPORATION
By	/s/    BRADLEY SCAMMELL
Name:	Bradley Scammell
Title:	Vice President

Five-Year Credit Agreement 4

		THE BANK OF NEW YORK
		By	/s/    MARK O’CONNOR
		Name:	Mark O’Connor
		Title:	Vice President
		AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
		By	/s/    JOHN W. WADE
		Name:	John W. Wade
		Title:	Director
ABN AMRO BANK N.V.		ABN AMRO BANK N.V.
By	/s/    TERRANCE J. WARD	By	/s/    IGNACIO PINEROS
Name:	Terrance J. Ward	Name:	Ignacio Pineros
Title:	Senior Vice President	Title:	Vice President
		SOCIETE GENERALE
		By	/s/    ELIZABETH S. HALFIN
		Name:	Elizabeth S. Halfin
		Title:	Director
		U.S. BANK, NATIONAL ASSOCIATION
		By	/s/    JOHN FRANCHESI
		Name:	John Franchesi
		Title:	Vice President
		KEYBANK NATIONAL ASSOCIATION
		By	/s/    FRANK J. JANCAR
		Name:	Frank J. Jancar
		Title:	Vice President
		HARRIS NESBITT FINANCING, INC.
		By	/s/    JOSEPH W. LINDER
		Name:	Joseph W. Linder
		Title:	Vice President
		KBC BANK, N.V.
		By	/s/    JEAN-PIERRE DIELS        /s/    WILLIAM CAVANAUGH
		Name:	Jean-Pierre Diels                        William Cavanaugh
		Title:	First Vice President                        Vice President

Five-Year Credit Agreement 5

SAN PAOLO IMI S.P.A.
By	/s/    RENATO CARDUCCI
Name:	Renato Carducci
Title:	General Manager
By	/s/    ROBERT WURSTER
Name:	Robert Wurster
Title:	Senior Vice President

Five-Year Credit Agreement 6

SCHEDULE I

APPLICABLE LENDING OFFICES

Name of Initial Lender	Commitment		Domestic Lending Office	Eurodollar Lending Office
ABN Amro Bank N.V.	$	18,750,000	540 West Madison Street Suite 2100 Chicago, IL 60661 Attn: Loan Administration T: 312 992-5152 F: 312 992-5157	540 West Madison Street Suite 2100 Chicago, IL 60661 Attn: Loan Administration T: 312 992-5152 F: 312 992-5157
Australia and New Zealand Banking Group Limited	$	13,125,000	1177 Avenue of the Americas New York, NY 10036 Attn: Venkatesan Srinivasan T: 212 801-9880 F: 212 536-9247	1177 Avenue of the Americas New York, NY 10036 Attn: Venkatesan Srinivasan T: 212 801-9880 F: 212 536-9247
Banco Bilbao Vizcaya Argentaria	$	18,750,000	1345 Avenue of the Americas 45th Floor New York, NY 10105 Attn: Santiago Hernandez T: 212 728-1677 F: 212 333-2904	1345 Avenue of the Americas 45th Floor New York, NY 10105 Attn: Santiago Hernandez T: 212 728-1677 F: 212 333-2904
Bank of America, N.A.	$	82,500,000	1850 Gateway Blvd. CA4-707-05-11 Concord, CA 94520 Attn: Vilma Tang T: 925 675-7336 F: 925 969-2865	1850 Gateway Blvd. CA4-707-05-11 Concord, CA 94520 Attn: Vilma Tang T: 925 675-7336 F: 925 969-2865
The Bank of New York	$	25,000,000	One Wall Street New York, NY 10286 Attn: Kathy D’Elena T: 212 635-6691 F: 212 635-7923	One Wall Street New York, NY 10286 Attn: Kathy D’Elena T: 212 635-6691 F: 212 635-7923
The Bank of Tokyo-Mitsubishi, Ltd., Seattle Branch	$	75,000,000	900 Fourth Avenue Suite 4000 Seattle, WA 98164 Attn: Ellen Yuson T: 213 488-3796 F: 213 613-1136	900 Fourth Avenue Suite 4000 Seattle, WA 98164 Attn: Ellen Yuson T: 213 488-3796 F: 213 613-1136
Barclays Bank PLC	$	56,250,000	200 Park Avenue New York, NY 10166 Attn: Nicholas A. Bell T: 212 412 4029 F: 212 412 7600	200 Park Avenue New York, NY 10166 Attn: Nicholas A. Bell T: 212 412 4029 F: 212 412 7600

Five-Year Credit Agreement

Bayerische Landesbank, Cayman Island Branch	$	37,500,000	560 Lexington Avenue New York, NY 10022 Attn: James Fox T: 212 310-9986 F: 212 310-9868	560 Lexington Avenue New York, NY 10022 Attn: James Fox T: 212 310-9986 F: 212 310-9868
BNP Paribas	$	46,875,000	209 South LaSalle Suite 500 Chicago, IL 60604 Attn: Catherine Lui T: 312 977-2200 F: 312 977-1380	209 South LaSalle Suite 500 Chicago, IL 60604 Attn: Catherine Lui T: 312 977-2200 F: 312 977-1380
Calyon New York Branch	$	46,875,000	1301 Avenue of the Americas New York, NY 10019 Attn: Bertrand Cousin T: 212 261-7363 F: 212 261-7368	1301 Avenue of the Americas New York, NY 10019 Attn: Bertrand Cousin T: 212 261-7363 F: 212 261-7368
Citibank, N.A.	$	95,000,000	388 Greenwich Street New York, NY 10013 Attn: Philippa Portnoy T: 212 559-5812 F: 212 793-1246	388 Greenwich Street New York, NY 10013 Attn: Philippa Portnoy T: 212 559-5812 F: 212 793-1246
Credit Suisse, Cayman Islands Branch	$	56,250,000	11 Madison Avenue New York, NY 10010 Attn: Robert Finney T: 212 325-9038 F: 212 325-8319	11 Madison Avenue New York, NY 10010 Attn: Robert Finney T: 212 325-9038 F: 212 325-8319
Deutsche Bank AG New York Branch	$	75,000,000	60 Wall Street New York, NY 10005 Attn: Mary Zadroga T: 201-593-2360 F: 201-593-2313	60 Wall Street New York, NY 10005 Attn: Mary Zadroga T: 201-593-2360 F: 201-593-2313
Harris Nesbitt Financing, Inc.	$	9,375,000	115 S. LaSalle Street, 12W Chicago, IL 60603 Attn: Ellen Dancer T: 312 750-3453 F: 312 750-6061	115 S. LaSalle Street, 12W Chicago, IL 60603 Attn: Ellen Dancer T: 312 750-3453 F: 312 750-6061
HSBC Bank USA, National Association	$	25,000,000	One HSBC Center, 26th Floor Buffalo, NY 14203 Attn: Donna Riley T: 716 841-4178 F: 716 841-0269	One HSBC Center, 26th Floor Buffalo, NY 14203 Attn: Donna Riley T: 716 841-4178 F: 716 841-0269
ING Capital LLC	$	25,000,000	1325 Avenue of the Americas New York, NY 10019 Attn: Ermelinda Young T: 646-424-8240 F: 646-424-8251	1325 Avenue of the Americas New York, NY 10019 Attn: Ermelinda Young T: 646-424-8240 F: 646-424-8251

Five-Year Credit Agreement 2

JPMorgan Chase Bank, N.A.	$	95,000,000	270 Park Avenue New York, NY 10017 Attn: Matt Massie T: 212 270-5432 F: 212 270-5100	270 Park Avenue New York, NY 10017 Attn: Matt Massie T: 212 270-5432 F: 212 270-5100
KBC Bank, N.V.	$	9,375,000	125 West 55th Street 10th Floor New York, NY 10019 Attn: Robert Pacifici T: 212 541-0671 F: 212 956-5581	125 West 55th Street 10th Floor New York, NY 10019 Attn: Robert Pacifici T: 212 541-0671 F: 212 956-5581
KeyBank National Association	$	13,125,000	127 Public Square Cleveland, OH 44114 Attn: Diane Cox T: 216 689-4450 F: 216 689-4981	127 Public Square Cleveland, OH 44114 Attn: Diane Cox T: 216 689-4450 F: 216 689-4981
Lloyds TSB Bank Plc	$	18,750,000	1251 Avenue of the Americas 39th Floor New York, NY 10020 Attn: Patricia Kilian T: 212 930-8914 F: 212 930-5098	1251 Avenue of the Americas 39th Floor New York, NY 10020 Attn: Patricia Kilian T: 212 930-8914 F: 212 930-5098
Merrill Lynch Bank USA	$	56,250,000	15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attn: Derek Befus T: 801 526-8324 F: 801 531-7470	15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attn: Derek Befus T: 801 526-8324 F: 801 531-7470
Mizuho Corporate Bank, Ltd.	$	75,000,000	Harborside Financial Center 1800 Plaza Ten, 16th Floor Jersey City, NJ 07311 Attn: Nate Spivey T: 201 626-9161 F: 201 626-9944	Harborside Financial Center 1800 Plaza Ten, 16th Floor Jersey City, NJ 07311 Attn: Nate Spivey T: 201 626-9161 F: 201 626-9944
Morgan Stanley Bank	$	56,250,000	750 Seventh Avenue 11th Floor New York, NY 10020 Attn: Joseph DiTomaso T: 212 762-2320 F: 212 762-0346	750 Seventh Avenue 11th Floor New York, NY 10020 Attn: Joseph DiTomaso T: 212 762-2320 F: 212 762-0346
The Northern Trust Company	$	18,750,000	801 S. Canal Street Chicago, IL 60607 Attn: Linda Honda T: 312 444-3532 F: 312 630-1566	801 S. Canal Street Chicago, IL 60607 Attn: Linda Honda T: 312 444-3532 F: 312 630-1566

Five-Year Credit Agreement 3

PNC Bank, National Association	$	31,875,000	One PNC Plaza 249 Fifth Avenue, 2nd Floor Mailstop P1-POPP-2-3 Pittsburgh, PA 15222 Attn: Philip K. Liebscher T: (412) 762-3202 F: (412) 762-6484	One PNC Plaza 249 Fifth Avenue, 2nd Floor Mailstop P1-POPP-2-3 Pittsburgh, PA 15222 Attn: Philip K. Liebscher T: (412) 762-3202 F: (412) 762-6484
The Royal Bank of Scotland plc	$	37,500,000	101 Park Avenue New York, NY 10178 Attn: Li Yao Li T: 212.401.1335 F: 212.401.1494	101 Park Avenue New York, NY 10178 Attn: Li Yao Li T: 212.401.1335 F: 212.401.1494
SANPAOLO IMI S.p.a.	$	9,375,000	245 Park Avenue New York, NY 10167 Attn: Manuela Insana T: 212 692-3128 F: 212 692-3178	245 Park Avenue New York, NY 10167 Attn: Manuela Insana T: 212 692-3128 F: 212 692-3178
Societe Generale	$	18,750,000	2001 Ross Avenue Dallas, TX 75201 Attn: Deborah McNealey T: 214 979-2762 F: 214 754-0171	2001 Ross Avenue Dallas, TX 75201 Attn: Deborah McNealey T: 214 979-2762 F: 214 754-0171
Standard Chartered Bank	$	22,500,000	One Evertrust Plaza Jersey City, NJ 07302 Attn: Victoria Faltine T: 201 633-3454 F: 201 536-04478	One Evertrust Plaza Jersey City, NJ 07302 Attn: Victoria Faltine T: 201 633-3454 F: 201 536-04478
State Street Bank and Trust Company	$	50,000,000	225 Franklin Street, MAO11 Boston, MA 02110 Attn: Nicole Bertone T: 617 664-3833 F: 617 664-3941	225 Franklin Street, MAO11 Boston, MA 02110 Attn: Nicole Bertone T: 617 664-3833 F: 617 664-3941
Sumitomo Mitsui Banking Corporation	$	75,000,000	277 Park Avenue New York, NY 10172 Attn: Noel Swift T: 212 224-4328 F: 212 224-5197	277 Park Avenue New York, NY 10172 Attn: Noel Swift T: 212 224-4328 F: 212 224-5197
UBS Loan Finance LLC	$	37,500,000	677 Washington Blvd. Stamford, Connecticut 06901 Attn: Marie Haddad Banking Product Services T: 203 719-5609 F: 203 719-3888	677 Washington Blvd. Stamford, Connecticut 06901 Attn: Marie Haddad Banking Product Services T: 203 719-5609 F: 203 719-3888
U.S. Bank, National Association	$	18,750,000	1420 Fifth Avenue, 11th Floor Seattle, WA 98101 Attn: James Farmer T: 206 587-5237 F: 206 344-3654	1420 Fifth Avenue, 11th Floor Seattle, WA 98101 Attn: James Farmer T: 206 587-5237 F: 206 344-3654

Five-Year Credit Agreement 4

Wachovia Bank, National Association	$	75,000,000	191 Peachtree Street NE Atlanta, GA 30303 Attn: Joe Baschuite T: 404 332-5178 F: 404 332-4136	191 Peachtree Street NE Atlanta, GA 30303 Attn: Joe Baschuite T: 404 332-5178 F: 404 332-4136
Westpac Banking Corporation	$	18,750,000	GMO Nightshift Operations 255 Elizabeth Street, 3rd Floor Sydney, Australia 2000 Attn: London Operations T: 61 29 284-8241 F: 011 44 207 621-7608	GMO Nightshift Operations 255 Elizabeth Street, 3rd Floor Sydney, Australia 2000 Attn: London Operations T: 61 29 284-8241 F: 011 44 207 621-7608
William Street Commitment Corporation	$	56,250,000	85 Broad Street, 6th Floor New York, NY 10004 Attn: Pedro Ramirez T: 212 343-8319 F: 212 357-6240	85 Broad Street, 6th Floor New York, NY 10004 Attn: Pedro Ramirez T: 212 343-8319 F: 212 357-6240
Total of Commitments:	$	1,500,000,000

Five-Year Credit Agreement 5

EX-10.3

EXHIBIT 10.3

November 18, 2005

Boeing Capital Corporation

500 Naches Avenue SW

3^rd Floor

Renton, WA 98055

Ladies and Gentlemen:

Reference is hereby made to:

1) The Boeing Company 364-Day Credit Agreement dated as of November 18, 2005 among The Boeing Company (“TBC”), the lenders named therein, JPMorgan Chase Bank, N.A. as syndication agent, Citigroup Global Markets, Inc. and J.P. Morgan Securities, Inc., as joint lead arrangers and joint book managers, and Citibank, N.A. as administrative agent for such lenders (as amended or modified from time to time, the “364-day Credit Agreement”), and

2) The Boeing Company Five-Year Credit Agreement dated as of November 18, 2005 among The Boeing Company (“TBC”), the lenders named therein, JP Morgan Chase Bank, N.A. as syndication agent, Citigroup Global Markets, Inc. and J.P. Morgan Securities, Inc., as joint lead arrangers and joint book managers, and Citibank, N.A. as administrative agent for such lenders (as amended or modified from time to time, the “5-year Credit Agreement”). Capitalized terms used in this letter agreement that are not defined herein have the respective meanings specified in the 364-day Credit Agreement or the 5-year Credit Agreement.

This letter agreement (the “Letter Agreement”) sets forth terms and conditions whereby TBC and Boeing Capital Corporation (“BCC”) agree to designate BCC as a Subsidiary Borrower under the 364-day Credit Agreement and the 5-year Credit Agreement (collectively, the “Credit Agreements”).

1. BCC shall have the irrevocable right to borrow up to $750,000,000 (the “364-day Maximum Amount”) under the terms and conditions of the 364-day Credit Agreement, and BCC shall have the irrevocable right to borrow up to $750,000,000 (the “5-year Maximum Amount,” and together with the 364-day Maximum Amount, the “Maximum Amounts”) under the terms and conditions of the 5-year Credit Agreement.

2. TBC shall not terminate any of the Credit Agreements or take any other action that would impair BCC’s ability to borrow the 364-day Maximum Amount or the 5-year Maximum Amount under the Credit Agreements.

3. Notwithstanding the foregoing, TBC may take actions with regard to the Credit Agreements (e.g., amendment, restatement, cancellation and replacement) so long as the resulting credit support available to BCC up to the Maximum Amounts is acceptable to the nationally recognized rating agencies providing credit ratings for BCC.

4. TBC agrees in advance to approve all BCC actions pursuant to its right as a Subsidiary Borrower under the Credit Agreements that would require TBC’s consent. No written TBC approvals to BCC actions under the Credit Agreements will be required except those written consents explicitly required by the terms of the Credit Agreements (e.g., notice of borrowing, guaranty, and legal opinions).

5. TBC agrees to guaranty unconditionally BCC borrowings up to the Maximum Amounts and other obligations of BCC as a Subsidiary Borrower on terms consistent with Exhibit J to the 364-day Credit Agreement and Exhibit H to the 5-year Credit Agreement, respectively, including BCC’s Notes thereunder.

6. TBC and BCC will promptly and duly execute and deliver such further documents and assurances and take such further actions as may from time to time be necessary to carry out the intent and purpose of this Letter Agreement.

7. So that BCC may make a representation in the Borrower Subsidiary Letter relating to each Credit Agreement, TBC certifies to BCC that TBC’s Consolidated statement of financial position as of December 31, 2004 and the related Consolidated statement of earnings and retained earnings for the year then ended (copies of which have been furnished to each Lender) correctly set forth the Consolidated financial condition of TBC and its Subsidiaries as of such date and the result of the Consolidated operations for such year, and since such date there has been no material adverse change in such condition or operations that is likely to impair the ability of TBC to repay the Advances.

8. This Letter Agreement sets forth in full the terms of our understanding with respect to the subject matter described herein and supercedes in its entirety the Letter Agreement, dated November 19, 2004 entered into between TBC and BCC.

[SIGNATURES FOLLOW]

Please acknowledge your agreement to the foregoing by signing in the space indicated below.

Sincerely,

The Boeing Company
By:	/s/ Ruud P. Roggekamp
	Ruud P. Roggekamp
	Assistant Treasurer
Acknowledged and Agreed:
Boeing Capital Corporation
By:	/s/ Ingrid Sarapuu
	Ingrid Sarapuu
	Vice President

EX-12

EXHIBIT 12

Boeing Capital Corporation and Subsidiaries

Computation of Ratio of Income to Fixed Charges

	Years Ended December 31,
(Dollars in millions)	2005		2004		2003		2002		2001
Income:
Income from continuing operations before provision for income tax	$	232	$	183	$	91	$	35	$	178
Fixed charges		359		350		358		322		250
Income from continuing operations before provision for income tax and fixed charges	$	591	$	533	$	449	$	357	$	428
Fixed charges:
Interest expense	$	359	$	350	$	358	$	319	$	244
Preferred stock dividend requirement (1)		–		–		–		3		6
	$	359	$	350	$	358	$	322	$	250
Ratio of income from continuing operations before provision for income tax and fixed charges to fixed charges		1.6		1.5		1.3		1.1		1.7

⁽¹⁾ Reflects a pre-tax basis.

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statements No. 333-55846 and 333-83208 on Form S-3 of our report dated February 24, 2006, relating to the financial statements of Boeing Capital Corporation, appearing in this Annual Report on Form 10-K of Boeing Capital Corporation for the year ended December 31, 2005.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

February 24, 2006

EX-31.1

EXHIBIT 31.1

CERTIFICATION

(pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934, as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002)

I, Walter E. Skowronski, certify that:

1. I have reviewed this Annual Report on Form 10-K of Boeing Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) (omitted pursuant to SEC Release No. 33-8238);

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 27, 2006	/s/ WALTER E. SKOWRONSKI
	Walter E. Skowronski
	President and Director

EX-31.2

EXHIBIT 31.2

CERTIFICATION

(pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934, as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002)

I, Russell A. Evans, certify that:

1. I have reviewed this Annual Report on Form 10-K of Boeing Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) (omitted pursuant to SEC Release No. 33-8238);

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 27, 2006	/s/ RUSSELL A. EVANS
	Russell A. Evans
	Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2005 of Boeing Capital Corporation (the “Company”) as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Walter E. Skowronski, President and Director of the Company, certify that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 27, 2006	/s/ WALTER E. SKOWRONSKI
	Walter E. Skowronski
	President and Director

EX-32.2

EXHIBIT 32.2

CERTIFICATION

(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2005 of Boeing Capital Corporation (the “Company”) as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Russell A. Evans, Vice President and Chief Financial Officer of the Company, certify that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 27, 2006	/s/ RUSSELL A. EVANS
	Russell A. Evans
	Vice President and Chief Financial Officer