--------------------------------------------------------------------------------

 
EXHIBIT 10.1(b)
 

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SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT
 

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Among
 
DELTA AIR LINES, INC.,
 
as Borrower,
 

 
and
 
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
 
as Guarantors
 

 
and
 
THE LENDERS PARTY HERETO,
 

 
and
 
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and Collateral Agent
 
BARCLAYS CAPITAL,
as Syndication Agent
 
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Co-Lead Arranger and Joint Bookrunner
 
MERRILL LYNCH COMMERCIAL FINANCE CORP.,
as Co-Lead Arranger and Joint Bookrunner
 
BARCLAYS CAPITAL,
as Joint Bookrunner
 
CREDIT SUISSE SECURITIES (USA) LLC,
as Co-Documentation Agent
 
C.I.T. LEASING CORPORATION
as Co-Documentation Agent
 

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Dated as of April 30, 2007

 
 

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Table of Contents
 
Page
 
SECTION 1.  DEFINITIONS
 
2
     
SECTION 1.01.
Defined Terms.
2
SECTION 1.02.
Terms Generally
37
SECTION 1.03.
Accounting Terms; GAAP
38
     
SECTION 2.  AMOUNT AND TERMS OF CREDIT
38
     
SECTION 2.01.
Commitments of the Lenders.
38
SECTION 2.02.
Requests for Borrowings.
39
SECTION 2.03.
Funding of Borrowings
39
SECTION 2.04.
Interest Elections
40
SECTION 2.05.
Limitation on Eurodollar Tranches
41
SECTION 2.06.
Interest on Loans.
41
SECTION 2.07.
Default Interest
41
SECTION 2.08.
Alternate Rate of Interest
42
SECTION 2.09.
Amortization of Second Lien Term Loan; Repayment of Loans; Evidence of Debt.
42
SECTION 2.10.
Mandatory Prepayment; Commitment Termination.
43
SECTION 2.11.
Optional Prepayment of Loans.
45
SECTION 2.12.
Increased Costs
45
SECTION 2.13.
Break Funding Payments
47
SECTION 2.14.
Taxes
47
SECTION 2.15.
Payments Generally; Pro Rata Treatment.
48
SECTION 2.16.
Mitigation Obligations; Replacement of Lenders
49
SECTION 2.17.
Certain Fees
50
SECTION 2.18.
Nature of Fees
50
SECTION 2.19.
Right of Set-Off
50
SECTION 2.20.
Payment of Obligations
51
SECTION 2.21.
Defaulting Lenders
51
     
SECTION 3.  REPRESENTATIONS AND WARRANTIES
51
     
SECTION 3.01.
Organization and Authority
52
SECTION 3.02.
Air Carrier Status
52
SECTION 3.03.
Due Execution
52
SECTION 3.04.
Statements Made
53
SECTION 3.05.
Financial Statements; Material Adverse Change.
53
SECTION 3.06.
Ownership
54
SECTION 3.07.
Liens
54
SECTION 3.08.
Use of Proceeds
54
SECTION 3.09.
Litigation and Environmental Matters
54
SECTION 3.10.
FAA Slot Utilization
54
SECTION 3.11.
Primary Foreign Slot Utilization
55
SECTION 3.12.
Primary Route Utilization
55
SECTION 3.13.
Margin Regulations; Investment Company Act.
55
SECTION 3.14.
ERISA
55
SECTION 3.15.
Properties.
56
SECTION 3.16.
Perfected Security Interests
56
SECTION 3.17.
Payment of Taxes
57
SECTION 3.18.
Section 1110
57

 
 
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SECTION 4.  CONDITIONS OF LENDING
57
     
SECTION 4.01.
Conditions Precedent to Initial Loans
57
     
SECTION 5.  AFFIRMATIVE COVENANTS
63
     
SECTION 5.01.
Financial Statements, Reports, etc.
64
SECTION 5.02.
Existence
67
SECTION 5.03.
Insurance.
67
SECTION 5.04.
Maintenance of Properties
69
SECTION 5.05.
Obligations and Taxes
69
SECTION 5.06.
Notice of Event of Default, etc.
69
SECTION 5.07.
Access to Books and Records
69
SECTION 5.08.
Compliance with Laws.
70
SECTION 5.09.
Appraisal Reports and Field Audits
71
SECTION 5.10.
FAA and DOT Matters; Citizenship
71
SECTION 5.11.
FAA Slot Utilization.
72
SECTION 5.12.
Primary Foreign Slot Utilization.
72
SECTION 5.13.
Primary Route Utilization.
72
SECTION 5.14.
Additional Subsidiaries
72
SECTION 5.15.
[Reserved]
73
SECTION 5.16.
Additional Collateral; Additional Grantors
73
SECTION 5.17.
Pledged Spare Parts
74
SECTION 5.18.
Further Assurances
74
SECTION 5.19.
Post Closing Items.
74
     
SECTION 6.  NEGATIVE COVENANTS
75
     
SECTION 6.01.
Liens
75
SECTION 6.02.
Merger, etc.
78
SECTION 6.03.
Indebtedness
78
SECTION 6.04.
Fixed Charge Coverage
81
SECTION 6.05.
Unrestricted Cash Reserve
81
SECTION 6.06.
Coverage Ratio
81
SECTION 6.07.
Dividends; Capital Stock
82
SECTION 6.08.
Transactions with Affiliates
83
SECTION 6.09.
Investments, Loans and Advances
83
SECTION 6.10.
Disposition of Assets
86
SECTION 6.11.
Nature of Business
86
SECTION 6.12.
Fiscal Year
86

 
 
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SECTION 7.  EVENTS OF DEFAULT
86
     
SECTION 7.01.
Events of Default
86
     
SECTION 8.  THE AGENTS
90
     
SECTION 8.01.
Administration by Agents
90
SECTION 8.02.
Rights of Administrative Agent and Collateral Agent
90
SECTION 8.03.
Liability of Agents.
90
SECTION 8.04.
Reimbursement and Indemnification
91
SECTION 8.05.
Successor Agents
92
SECTION 8.06.
Independent Lenders
92
SECTION 8.07.
Advances and Payments.
92
SECTION 8.08.
Sharing of Setoffs
93
SECTION 8.09.
Other Agents
93
     
SECTION 9.  GUARANTY
94
     
SECTION 9.01.
Guaranty.
94
SECTION 9.02.
No Impairment of Guaranty
95
SECTION 9.03.
Continuation and Reinstatement, etc.
95
SECTION 9.04.
Subrogation
95
     
SECTION 10.  MISCELLANEOUS
 
96
     
SECTION 10.01.
Notices
96
SECTION 10.02.
Successors and Assigns
96
SECTION 10.03.
Confidentiality
100
SECTION 10.04.
Expenses; Indemnity; Damage Waiver
100
SECTION 10.05.
Governing Law; Jurisdiction; Consent to Service of Process
102
SECTION 10.06.
No Waiver
102
SECTION 10.07.
Extension of Maturity
102
SECTION 10.08.
Amendments, etc.
102
SECTION 10.09.
Severability
104
SECTION 10.10.
Headings
104
SECTION 10.11.
Survival
104
SECTION 10.12.
Execution in Counterparts; Integration; Effectiveness
104
SECTION 10.13.
USA Patriot Act
104
SECTION 10.14.
Registrations with International Registry
105
SECTION 10.15.
WAIVER OF JURY TRIAL
105
SECTION 10.16.
Intercreditor Arrangements.
105

 
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ANNEX A
-
Commitment Amounts
EXHIBIT A
-
Form of Second Lien Real Estate Mortgage
EXHIBIT B
-
Form of Second Lien Security Agreement
EXHIBIT C
-
Form of Second Lien Pledge Agreement
EXHIBIT D
-
Form of Second Lien Slot, Gate and Route Security and Pledge Agreement
EXHIBIT E
-
Form of Second Lien Aircraft Mortgage
EXHIBIT F-1
-
Form of Second Lien Trademark Security Agreement
EXHIBIT F-2
-
Form of Second Lien Patent Security Agreement
EXHIBIT F-3
-
Form of Second Lien Copyright Security Agreement
EXHIBIT G-1
-
Form of Opinion of Davis Polk & Wardwell
EXHIBIT G-2
-
Form of Opinion of Kilpatrick Stockton LLP
EXHIBIT G-3
-
Form of Opinion of Keating Muething & Klekamp PLL
EXHIBIT G-4
-
Form of Opinion of Akerman Senterfitt
EXHIBIT G-5
-
Form of Opinion of Morris, Nichols, Arsht & Tunnell LLP
EXHIBIT G-6
-
Form of Opinion of Daugherty, Fowler, Peregrin, Haught & Jenson 
EXHIBIT H
-
Form of Instrument of Assumption and Joinder
EXHIBIT I
-
Form of Intercreditor Agreement
EXHIBIT J
-
Form of Assignment and Acceptance
EXHIBIT K
-
Form of Eligible Accounts Receivable Calculation Certificate

     
SCHEDULE 1.01(a)
-
Excluded Flight Simulators
SCHEDULE1.01(b)
-
Immaterial Subsidiaries
SCHEDULE1.01(c)
-
Restricted Accounts
SCHEDULE1.01(d)
-
Restructuring Aircraft
SCHEDULE 3.06
-
Subsidiaries
SCHEDULE 3.07
-
Existing Liens
SCHEDULE 3.09
-
Litigation
SCHEDULE 3.14
-
ERISA
SCHEDULE 3.15(a)
-
Real Property Interests
SCHEDULE 3.17
-
Taxes
SCHEDULE 3.18
-
Pre 10/22/94 Section 1110 Collateral
SCHEDULE 5.16
-
737-800 Aircraft Agreements
SCHEDULE 6.03
-
Indebtedness
SCHEDULE 6.08
-
Transactions with Affiliates
SCHEDULE 6.09
-
Existing Investments

 
 
 
iv

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SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT
 
Dated as of April 30, 2007
 
SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT, dated as of April 30, 2007, among
DELTA AIR LINES, INC., a Delaware corporation (the “Borrower”), the direct and
indirect domestic subsidiaries of the Borrower (other than Excluded Subsidiaries
and, at the option of the Borrower, Immaterial Subsidiaries) signatory hereto
(each a “Guarantor” and collectively the “Guarantors”), the several banks and
other financial institutions or entities from time to time party hereto (the
“Lenders”), GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as administrative agent
(in such capacity, the “Administrative Agent”), and as collateral agent for the
Lenders (in such capacity, the “Collateral Agent”), GSCP and MERRILL LYNCH
COMMERCIAL FINANCE CORP. (“Merrill Lynch”), as co-lead arrangers and joint
bookrunners, BARCLAYS CAPITAL (“Barclays Capital”), the investment banking
division of BARCLAYS BANK PLC, as syndication agent (in such capacity, the
“Syndication Agent”) and as joint bookrunner, and CREDIT SUISSE SECURITIES (USA)
LLC and C.I.T. LEASING CORPORATION, as co-documentation agents (in such
capacity, the “Co-Documentation Agents”).
 
INTRODUCTORY STATEMENT
 
The Borrower has applied to the Lenders for a term loan facility in an aggregate
principal amount not to exceed $900,000,000 as set forth herein. All of the
Borrower’s obligations under such facility are to be guaranteed by the
Guarantors.
 
The proceeds of the Loans, as well as the proceeds of the First Lien Loans and
cash on hand, will be used to repay in full all of the obligations of the
Borrower and the Guarantors under and in connection with the Existing DIP
Facilities, for working capital and other general corporate purposes of the
Borrower and its Subsidiaries and for the other purposes described in Section
3.08.
 
To provide guarantees and security for the repayment of the Loans, and the
payment of the other obligations of the Borrower and the Guarantors hereunder
and under the other Loan Documents, the Borrower and the Guarantors will, among
other things, provide to the Administrative Agent, the Collateral Agent and the
Lenders the following (each as more fully described herein):
 
(a)  a guaranty from each of the Guarantors of the due and punctual payment and
performance of the Second Priority Obligations of the Borrower pursuant to
Section 9 hereof; and
 
(b)  a security interest in or mortgages (or comparable Liens) with respect to
the Collateral from the Borrower and each of the Guarantors pursuant to the
Collateral Documents.
 
Accordingly, the parties hereto hereby agree as follows:
 
 
 

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SECTION 1.
 
DEFINITIONS
SECTION 1.01.  Defined Terms.
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Account” shall mean all “accounts” as defined in the UCC, and all rights to
payment for interest (other than with respect to debt and credit card
receivables).
 
“Account Debtor” shall mean the Person obligated on an Account.
 
“Administrative Agent” shall have the meaning set forth in the first paragraph
of this Agreement.
 
“Affiliate” shall mean, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, a Person (a “Controlled Person”)
shall be deemed to be “controlled by” another Person (a “Controlling Person”) if
the Controlling Person possesses, directly or indirectly, power to direct or
cause the direction of the management and policies of the Controlled Person
whether by contract or otherwise; provided, that the PBGC shall not be an
Affiliate of the Borrower or any Guarantor.
 
“Agents” shall mean the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Co-Documentation Agents, the Joint Bookrunners and the
Joint Lead Arrangers.
 
“Agreement” shall mean this Second Lien Term Loan and Guaranty Agreement, as the
same may be amended, restated, modified, supplemented, extended or amended and
restated from time to time.
 
“Aggregate Exposure” shall mean, with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender’s Second Lien Term Loan Commitments at such time and (b) thereafter, the
aggregate then unpaid principal amount of such Lender’s Second Lien Term Loans.
 
“Aggregate Exposure Percentage” shall mean, with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
 
“Air Transportation Stabilization Act and Regulations” shall mean the Air
Transportation Safety and System Stabilization Act, P.L. 107-42, as the same may
be amended from time to time, and the regulations promulgated thereunder (14
C.F.R. Part 1310) and related OMB Regulations, 14 C.F.R. Part 1300.
 
 
2

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“Aircraft” shall have the meaning set forth in the Second Lien Aircraft
Mortgage.
 
“Airframe” shall have the meaning set forth in the Second Lien Aircraft
Mortgage.
 
“Airport Authority” shall mean any city or any public or private board or other
body or organization chartered or otherwise established for the purpose of
administering, operating or managing airports or related facilities, which in
each case is an owner, administrator, operator or manager of one or more
airports or related facilities.
 
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the sum of the
Federal Funds Effective Rate in effect on such day plus½ of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
 
“ALPA Notes” shall mean the senior unsecured notes in an aggregate principal
amount not to exceed $650,000,000 to be issued by the Borrower for the benefit
of the Air Line Pilots Association in accordance with the Plan of Reorganization
and the Bankruptcy Restructuring Agreement referred to therein.
 
“Amex” shall mean American Express Travel Related Services Company, Inc.
 
“Applicable Margin” shall mean a rate per annum equal to (i) 2.25% in the case
of ABR Loans and (ii) 3.25% in the case of Eurodollar Loans.
 
“Appraisal Report” shall mean an appraisal in form and substance reasonably
satisfactory to the Administrative Agent and prepared by the Appraisers or the
Real Estate Appraiser, as applicable, which certifies, at the time of
determination, the Appraised Value of the applicable Appraised Collateral.
 
“Appraised Collateral” shall mean Collateral that is Mortgaged Collateral,
Primary Routes, Appraised FAA Slots, Flight Simulators, Tooling, Ground Support
Equipment, Real Property Assets or any other individual asset that, in each case
is included in an Appraisal Report.
 
“Appraised FAA Slots” shall mean FAA Slots that are included in an Appraisal
Report.
 
“Appraised Value” shall mean (a) in the case of Appraised Collateral, the fair
market value thereof as reflected in the most recent Appraisal Report obtained
in respect of such Collateral or assets in accordance with this Agreement;
provided that, with respect to Mortgaged Collateral, “Appraised Value” shall
mean the average of the Appraised Value (as otherwise calculated pursuant to
this definition) reflected in the Appraisal Reports obtained from three separate
Appraisers with respect to such Collateral and (b) in the case of Eligible
Accounts Receivable, Eligible Accounts Receivable, as reflected in the most
recent Officer’s Certificate delivered pursuant to Section 5.01(n), each such
value referred to in this definition to be (A) determined in a manner reasonably
satisfactory to the Administrative Agent and (B) subject to reserves and other
criteria established by the Administrative Agent in its commercially reasonable
discretion.
 
 
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“Appraisers” shall mean (a) Simat, Helliesen & Eichner, Inc., as to the FAA
Slots, Primary Routes, Primary Foreign Slots, Ground Support Equipment, Tooling
and Flight Simulators, (b) Simat, Helliesen & Eichner, AVITAS, Inc. and BK
Associates, Inc., as to Mortgaged Collateral and (c) such other appraisal firm
or firms as may be retained by the Administrative Agent, in consultation with
the Borrower, from time to time.
 
“Approved Fund” shall have the meaning given such term in Section 10.02(b).
 
“ARB Indebtedness” shall mean, with respect to the Borrower or any of its
Subsidiaries, without duplication, all Indebtedness or obligations of the
Borrower or such Subsidiary created or arising with respect to any limited
recourse revenue bonds issued for the purpose of financing or refinancing
improvements to, or the construction or acquisition of, airport and other
related facilities and equipment, the use or construction of which qualifies and
renders interest on such bonds exempt from certain federal or state taxes.
 
“Asset Sale” shall mean any sale of Collateral or series of related sales of
Collateral (excluding any Permitted Disposition other than any sale of Eligible
Collateral) that yields Net Cash Proceeds to the Borrower or any of its
Subsidiaries in excess of $1,000,000.
 
“Assignment” shall have the meaning given in the Cape Town Convention.
 
“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.02), and accepted by the Administrative Agent,
substantially in the form of Exhibit J.
 
“Associated Rights” shall have the meaning given in the Cape Town Convention.
 
“Bankruptcy Code” shall mean The Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
 
“Bankruptcy Court” shall mean the United States Bankruptcy Court for the
Southern District of New York.
 
“Barclays” shall mean Barclays Bank PLC.
 
“Barclays Capital” shall have the meaning set forth in the first paragraph of
this Agreement.
 
“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.
 
“Borrower” shall have the meaning set forth in the first paragraph of this
Agreement.
 
 
4

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“Borrowing” shall mean the incurrence, conversion or continuation of Loans of a
single Type made from the Lenders on a single date and having, in the case of
Eurodollar Loans, a single Interest Period.
 
“Borrowing Request” shall mean a request by the Borrower for a Borrowing in
accordance with Section 2.02.
 
“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are required or authorized to remain
closed; provided, however, that when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits on the London interbank market.
 
“Cape Town Convention” shall mean the official English language texts of the
Convention on International Interests in Mobile Equipment and the Protocol to
the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment which were signed in Cape Town, South Africa, as
in effect in any applicable jurisdiction, as the same may be amended from time
to time.
 
“Capitalized Lease” shall mean, as applied to any Person, any lease of property
by such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP. The amount of obligations of such
Person under a Capitalized Lease shall be the capitalized amount thereof
determined in accordance with GAAP.
 
“Cases” shall mean the voluntary petitions for relief filed by the Borrower and
each of the Guarantors with the Bankruptcy Court pursuant to chapter 11 of the
Bankruptcy Code.
 
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as heretofore and hereafter amended.
 
“Change in Law” shall mean, after the date hereof, (a) the adoption of any law,
rule or regulation after the date of this Agreement, (b) any change in any law
(including pursuant to any treaty or, for purposes of Section 5.09, any other
agreement governing the right to fly international routes), rule or regulation
or in the interpretation or application thereof by any Governmental Authority,
Airport Authority, or Foreign Aviation Authorities after the date of this
Agreement applicable to the Borrower or any of the Guarantors or (c) compliance
by any Lender (or, for purposes of Section 2.12(b), by any lending office of
such Lender or by such Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
“Change of Control” shall mean (a) the acquisition after the Closing Date (other
than pursuant to a Permitted Change of Control Transaction) of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof), of Equity Interests
representing more than 40% of the aggregate ordinary voting power represented by
the issued and outstanding Equity Interests of the Borrower; or (b) during any
period of twelve consecutive months, a majority of the board of directors
(excluding vacant seats) of the Borrower shall cease to consist of Continuing
Directors.
 
 
5

--------------------------------------------------------------------------------

 
 
“Closing Date” shall mean the date on which this Agreement has been executed and
the conditions precedent to the making of the initial Loans set forth in Section
4.01 have been satisfied or waived.
 
“Co-Documentation Agents” shall have the meaning set forth in the first
paragraph of this Agreement.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
 
“Collateral” shall mean all of the “Collateral” referred to in the Collateral
Documents, which shall not include (a) the Excluded Accounts or (b) other items
as set forth in the Collateral Documents.
 
“Collateral Agent” shall have the meaning set forth in the first paragraph of
this Agreement.
 
“Collateral Documents” shall mean, collectively, the Second Lien Security
Agreement, the Second Lien Pledge Agreement, the Second Lien Aircraft Mortgage
(including, without limitation, any Mortgage Supplement), the Second Lien Real
Estate Mortgages, the Second Lien SGR Security Agreement, the Second Lien
Trademark Security Agreement, the Second Lien Patent Security Agreement, the
Second Lien Copyright Security Agreement, any Control Agreements and other
agreements, instruments or documents that create or purport to create a Lien in
favor of the Collateral Agent for the benefit of the Second Priority Secured
Parties.
 
“Collateral Event” shall mean, with respect to an item of Appraised Collateral,
any of the events described below:
 
(a)    with respect to any and all Appraised FAA Slots affected thereby, the
occurrence of any event, including the Borrower’s or any applicable Guarantor’s
abandonment or failure to comply with any applicable Use or Lose Rule, that
would allow the FAA or other Governmental Authority or Foreign Aviation
Authority to withdraw, cancel, suspend or terminate the Borrower’s or such
Guarantor’s authority to hold or use 15% or more of the Appraised FAA Slots at
any one airport (with the resulting appraisal under Section 5.09 being of the
Appraised FAA Slots at such airport); or
 
(b)    with respect to any Primary Route, abandonment by the Borrower or any
applicable Guarantor thereof or the occurrence of any event that would allow the
DOT, any Governmental Authority, or any Foreign Aviation Authority to withdraw,
cancel, suspend or terminate the authority granted to the Borrower or any
applicable Guarantor that authorizes the Borrower or any applicable Guarantor to
operate scheduled foreign air transportation of persons, property and mail over
such Primary Route or to use any associated Primary Foreign Slot(s) other than
(i) in cases where such Primary Route or Primary Foreign Slot(s) has been
transferred or otherwise disposed of as permitted in this Agreement or the
Second Lien SGR Security Agreement or (ii) in the case of any suspension or loss
of a Primary Foreign Slot(s), such suspension or loss could not reasonably be
expected to have a material adverse effect on the value of the relevant Primary
Route taken as a whole; or
 
 
6

--------------------------------------------------------------------------------

 
 
(c)    the failure of any material assumption contained in any Appraisal Report
to be true, except to the extent such failure could not reasonably be expected
to affect in a materially adverse manner the Appraised Value of the applicable
Appraised Collateral.
 
“Comair” shall mean Comair, Inc., an Ohio corporation.
 
“Confirmation Order” shall mean the order of the Bankruptcy Court confirming the
Plan of Reorganization pursuant to Section 1129 of the Bankruptcy Code, together
with all schedules and exhibits thereto.
 
“Connection Carrier” shall mean any regional carrier that operates flights using
the “DL” designation code pursuant to contractual arrangements with the
Borrower.
 
“Consummation of the Plan of Reorganization” shall mean the occurrence of the
Effective Date (as defined in the Plan of Reorganization) and the substantial
consummation of the Plan of Reorganization within the meaning of Section 1101(2)
of the Bankruptcy Code.
 
“Continuing Directors” shall mean the directors of the Borrower on the Closing
Date, after giving effect to the Plan of Reorganization and the other
transactions contemplated hereby, and each other director, if, in each case,
such other director’s nomination for election to the board of directors of the
Borrower is recommended by at least a majority of the then Continuing Directors.
 
“Control Agreements” shall mean the Shifting Control Deposit Account Agreements,
the Full Control Deposit Account Agreements, the Shifting Control Securities
Account Agreements and the Full Control Securities Account Agreements.
 
“Cure Collateral” shall mean (a) cash collateral and Qualified Permitted
Investments pledged to the Collateral Agent (and held in segregated accounts at
the Administrative Agent or the First Lien Administrative Agent subject to Full
Control Deposit Account Agreements and/or Full Control Securities Account
Agreements, as the case may be), (b) amounts deemed to have been received by the
Borrower and designated as Cure Collateral pursuant to Section 6.06(b) and (c)
other assets (including aircraft, airframes, engines, spare parts, Group Support
Equipment and Flight Simulators) of the Borrower or any Guarantor which shall be
reasonably satisfactory to the Collateral Agent, and all of which assets shall
(i) (other than Cure Collateral of the type described in clause (a) and (b)
above) be valued by a new Appraisal Report or Field Audit, as the case may be,
at the time the Borrower designates such assets as Cure Collateral and (ii) be
subject to a perfected second priority (subject to Specified Permitted
Collateral Liens) Lien and/or mortgage (or comparable Lien) in favor of the
Collateral Agent and otherwise subject only to Permitted Collateral Liens.
 
“CVG Notes” shall mean the unsecured notes in an aggregate principal amount not
to exceed $85,000,000 to be issued by the Borrower to the trustee under the
Trust Indenture dated as of February 1, 1992 between Kenton County Airport Board
and UMB Bank N.A., as trustee (the “CVG Bond Indenture”), on behalf of the
holders of bonds issued under the CVG Bond Indenture in accordance with the Plan
of Reorganization and the CVG Settlement Agreement referred to therein.
 
 
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“Defaulting Lender” shall mean any Lender that (a) has failed to fund any
portion of the Loans required to be funded hereunder within one (1) Business Day
of the date required to be funded by it hereunder, unless the subject of a good
faith dispute or subsequently cured, (b) has otherwise failed to pay over to the
Administrative Agent or any Lender (or its banking Affiliates) any other amount
required to be paid by it hereunder within one (1) Business Day of the date when
due, unless the subject of a good faith dispute or subsequently cured, or (c)
has been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.
 
“Designated Cash Management Obligations” means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person in respect
of any treasury, depository and cash management services and automated clearing
house transfers of funds services provided by a First Lien Lender or any of its
banking Affiliates, as permitted by Section 6.03(h), including obligations for
the payment of fees, interest, charges, expenses, attorneys’ fees and
disbursements in connection therewith, in each case as designated by the
Borrower from time to time by notice to the Administrative Agent as constituting
“Designated Cash Management Obligations”.
 
“Designated Hedging Agreement” means any Hedging Agreement to the extent that
the Indebtedness related thereto is owing to a First Lien Lender or any of its
Affiliates and is permitted by Section 6.03(f) or (g), designated by the
Borrower from time to time by notice to the Administrative Agent as a
“Designated Hedging Agreement”.
 
“Disposition” shall mean, with respect to any property, any sale, lease, sale
and leaseback, conveyance, transfer or other disposition thereof. The terms
“Dispose” and “Disposed of” shall have correlative meanings.
 
“Dollars” and “$” shall mean lawful money of the United States of America.
 
“DOT” shall mean the United States Department of Transportation and any
successor thereto.
 
“Earned Revenue Percentage” shall mean, a percentage, representing the estimated
portion of credit card revenue which has been earned by performance at any point
in time, based on a rolling twelve-month analysis of ticket sales versus
“booking curve” (i.e., tickets used for actual flights) experienced by the
Borrower during the most recent Rolling Twelve Month period for which such
information is available at the time of such determination. The Earned Revenue
Percentage shall be subject to re-determination by the Administrative Agent
based upon information contained in each Officer’s Certificate delivered by the
Borrower to the Administrative Agent pursuant to Section 5.01(n), as updated
from time to time in the reasonable discretion of the Administrative Agent, by
the most recent Field Audit.
 
“EBITDAR” shall mean, for any period, all as determined in accordance with GAAP,
without duplication, an amount equal to (a) the consolidated net income (or net
loss) of the Borrower and its Subsidiaries for such period, plus (b) the sum of
(i) any provision for income taxes, (ii) Interest Expense for such period, (iii)
extraordinary, non-recurring or unusual losses for such period, (iv)
depreciation and amortization for such period, (v) amortized debt discount for
such period, (vi) the amount of any deduction to consolidated net income as the
result of any grant to any employee of the Borrower or its Subsidiaries of any
Equity Interests, (vii) depreciation, amortization and aircraft rent expense for
such period, in each case to the extent included in the calculation of
consolidated net income of the Borrower and its Subsidiaries for such period in
accordance with GAAP, (viii) any aggregate net loss during such period arising
from a Capital Asset Sale (as defined below), (ix) all other non-cash charges
for such period, (x) costs and expenses, including fees, incurred directly in
connection with the consummation of the transactions contemplated under the Loan
Documents to the extent included in the calculation of consolidated net income,
(xi) expenses incurred with respect to the Chapter 11 reorganization as set
forth on the Borrower’s consolidated statement of income for such period,
including (A) professional and other fees, (B) key employee retention program
payments, (C) financing fees, (D) severance costs and (E) any litigation
expenses incurred during or in connection with the Cases and (xii) any charges
arising from Fresh Start Reporting adjustments that do not impact the cash flows
of the Borrower and its Subsidiaries to the extent included in the calculation
of consolidated net income of the Borrower and its Subsidiaries for such period
in accordance with GAAP, minus (c) the sum of (i) income tax credits, (ii)
interest income, (iii) extraordinary, non-recurring or unusual gains for such
period, (iv) any aggregate net gain during such period arising from the sale,
exchange or other disposition of capital assets by the Borrower or its
Subsidiaries (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities) (a “Capital Asset Sale”), (v) any gains arising from Fresh Start
Reporting adjustments that do not impact the cash flows of the Borrower and its
Subsidiaries and (vi) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of the Borrower and its Subsidiaries for
such period in accordance with GAAP. For purposes of this definition, the
following items shall be excluded in determining consolidated net income of the
Borrower and its Subsidiaries: (1) the income (or deficit) of any other Person
accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into, the Borrower or and of its Subsidiaries; (2) the income (or
deficit) of any other Person (other than a Subsidiary) in which the Borrower or
any of its Subsidiaries has an ownership interest, except to the extent any such
income has actually been received by the Borrower or such Subsidiary, as
applicable, in the form of cash dividends or distributions; (3) any restoration
to income of any contingency reserve, except to the extent that provision for
such reserve was made out of income accrued during such period; (4) any write-up
of any asset; (5) any net gain from the collection of the proceeds of life
insurance policies; (6) any net gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of any Indebtedness, of the
Borrower or any of its Subsidiaries; (7) in the case of a successor to the
Borrower by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (8) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition of such Subsidiary over the cost to the
Borrower or any of its Subsidiaries of the investment in such Subsidiary.
 
 
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“Eligible Accounts” shall mean, at the time of any determination thereof, all of
the Accounts owned by the Borrower and the Guarantors and reflected in the most
recent Officer’s Certificate (substantially in the form of Exhibit K) delivered
by the Borrower to the Administrative Agent pursuant to Section 5.01(n).
Criteria and eligibility standards used in determining Eligible Accounts may be
fixed and revised from time to time by the Administrative Agent, in its
reasonable discretion, and in the Administrative Agent’s reasonable exclusive
judgment, with any changes in such criteria to be effective upon the date of the
next Field Audit to be conducted pursuant to the terms herein. Unless otherwise
approved from time to time in writing by the Administrative Agent, no Account
shall be an Eligible Account if, without duplication:
 
(a)    the Borrower or a Guarantor does not have sole lawful and absolute title
to such Account; or
 
(b)    it is not subject to a valid and perfected second priority Lien in favor
of the Collateral Agent for the benefit of the Second Priority Secured Parties,
subject to no other Liens other than Liens permitted by this Agreement; or
 
(c)    (i) it is unpaid more than 90 days from the original date of invoice or
60 days from the original due date or (ii) it has been written off the books of
the Borrower or a Guarantor or has been otherwise designated on such books as
uncollectible; or
 
(d)    the Account Debtor is the subject of any bankruptcy case or insolvency
proceeding of any kind (other than postpetition accounts payable of an Account
Debtor that is a debtor in possession under the Bankruptcy Code and reasonably
acceptable to the Administrative Agent); or
 
(e)    the Account is not payable in Dollars or the Account Debtor is either not
organized under the laws of the United States of America, any state of the
United States of America or the District of Columbia or is located outside or
has its principal place of business or substantially all of its assets outside
the United States; provided the restrictions in this clause (e) shall not apply
to any Account if the Account Debtor related thereto is a travel agency that is
a member of Bank Settlement Plan so long as the method used for converting such
Account payables into Dollars for purposes of valuation is reasonably acceptable
to the Administrative Agent; or
 
(f)    the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless the relevant Borrower duly assigns its
rights to payment of such Account to the Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended, which assignment and related
documents and filings shall be in form and substance reasonably satisfactory to
the Administrative Agent; or
 
(g)    the associated revenue from such Account has not been earned by the
Borrower or the Guarantor (it being understood that Accounts arising from Travel
Agency Cash Transactions shall be deemed earned at the time such receivable is
recorded); or
 
(h)    to the extent the Account has been classified as a note receivable by the
Borrower or a Guarantor; or
 
(i)    the Account is a non-trade Account (other than any interest with respect
to deposit accounts or Permitted Investments); or 
 
 
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(j)     it arises out of a sale made by the Borrower or a Guarantor to an
employee, officer, agent, director, stockholder, Subsidiary or Affiliate of the
Borrower or a Guarantor; or
 
(k)    such Account was not paid in full, and the Borrower or a Guarantor
created a new receivable for the unpaid portion of the Account, and other
Accounts constituting chargebacks, debit memos and other adjustments for
unauthorized deductions; or
 
(l)    such Account is subject to any counterclaim, deduction, defense, setoff
or dispute, but only to the extent of the amount of such counterclaim,
deduction, defense, setoff or dispute, unless the Administrative Agent, in its
sole discretion, has established an appropriate reserve and determines to
include such Account as an Eligible Account; or
 
(m)    as to any Account, to the extent that a check, promissory note, draft,
trade acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason (other than bank
error prior to the correction thereof); or
 
(n)    such Account is a clearinghouse interline Account.
 
“Eligible Accounts Receivable” shall mean, at the time of determination thereof,
the sum of Eligible Accounts plus the Estimated Credit Card Receivables
Component.
 
“Eligible Assignee” shall mean (a) a commercial bank having total assets in
excess of $1,000,000,000, (b) a finance company, insurance company or other
financial institution or fund, in each case reasonably acceptable to the
Administrative Agent, which in the ordinary course of business extends credit of
the type contemplated herein or invests therein and has total assets in excess
of $200,000,000 and whose becoming an assignee would not constitute a prohibited
transaction under Section 4975 of the Code or Section 406 of ERISA, (c) an
Affiliate of the assignor Lender, (d) an Approved Fund and (e) any other
financial institution reasonably satisfactory to the Administrative Agent.
 
“Eligible Collateral” shall mean (a) all Mortgaged Collateral, Ground Support
Equipment, Tooling, Flight Simulators, Primary Routes, FAA Slots, Eligible
Accounts Receivable and Real Property Assets, in each case to the extent owned
or held by the Borrower or a Guarantor and on which the Collateral Agent shall
have a valid and perfected second priority (subject to Specified Permitted
Collateral Liens) Lien and/or mortgage (or comparable Lien), and which is
otherwise subject only to Permitted Collateral Liens, provided that if an
Aircraft is Parked for more than thirty (30) days, such Aircraft shall be
excluded from Eligible Collateral in its entirety unless three new Appraisal
Reports establishing the current Appraised Value of such Aircraft in its Parked
condition are delivered to the Administrative Agent, (b) cash collateral and
Permitted Investments in an aggregate amount not to exceed $750,000,000 pledged
to the Collateral Agent and held in accounts subject to Control Agreements, (c)
cash collateral and Permitted Investments maintained in accounts with the
Administrative Agent pursuant to Section 2.10(a) and (d) any Cure Collateral
designated (or deemed designated pursuant to Section 6.06(b)) by the Borrower at
its discretion. 
 
 
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“Engine” shall have the meaning set forth in the Second Lien Aircraft Mortgage.
 
“Entry Point Filing Forms” shall mean each of the FAA form AC 8050-135 forms to
be filed with the FAA on the Closing Date.
 
“Environmental Laws” shall mean all laws (including common law), statutes,
rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions
or legally binding requirements or agreements issued, promulgated or entered
into by or with any Governmental Authority, relating to the environment,
preservation or reclamation of natural resources, the handling, treatment,
storage, disposal, Release or threatened Release of, or the exposure of any
Person (including employees) to, any pollutants, contaminants or any toxic,
radioactive or otherwise hazardous materials.
 
“Environmental Liability” shall mean any liability, contingent or otherwise,
(including any liability for damages, natural resource damage, costs of
environmental investigation, remediation or monitoring, administrative
oversight, costs, fines or penalties) resulting from or based upon (a) violation
of any Environmental Law or requirement of any Airport Authority relating to
environmental matters, (b) the generation, use, handling, transportation,
storage, treatment, disposal or the arrangement for disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials into the environment or (e) any
contract, agreement, lease or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing. 
 
“Environmental Permits” shall mean any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization issued
pursuant to or required under any Environmental Law or by any Airport Authority
with respect to environmental matters.
 
“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person (whether direct or
indirect), and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any such equity interest.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
 
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as (i) a single employer under
Section 414(b) or (c) of the Code, or (ii) solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code, or that is under common control with the Borrower within the
meaning of Section 4001 of ERISA.
 
“Escrow Accounts” shall mean (1) accounts of the Borrower or any Subsidiary,
solely to the extent any such accounts hold funds set aside by the Borrower or
any Subsidiary to manage the collection and payment of amounts collected,
withheld or incurred by the Borrower or such Subsidiary for the benefit of third
parties relating to: (a) federal income tax withholding and backup withholding
tax, employment taxes, transportation excise taxes and security related charges,
(b) any and all state and local income tax withholding, employment taxes and
related charges and fees and similar taxes, charges and fees, including, but not
limited to, state and local payroll withholding taxes, unemployment and
supplemental unemployment taxes, disability taxes, workman’s or workers’
compensation charges and related charges and fees, (c) state and local taxes
imposed on overall gross receipts, sales and use taxes, fuel excise taxes and
hotel occupancy taxes, (d) passenger facility fees and charges collected on
behalf of and owed to various administrators, institutions, authorities,
agencies and entities, (e) other similar federal, state or local taxes, charges
and fees (including without limitation any amount required to be withheld or
collected under applicable law) and (f) other funds held in trust for an
identified beneficiary in an aggregate amount pursuant to this clause (f) not to
exceed $150,000,000; in each case, held in escrow accounts, trust funds or other
segregated accounts, plus accrued interest; or (2) accounts, capitalized
interest accounts, debt service reserve accounts, escrow accounts and other
similar accounts or funds established in connection with the ARB Indebtedness.
 
 
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“Estimated Credit Card Receivables Component” shall mean an amount representing
the estimated portion (determined in accordance with the other provisions of
this definition) of receivables owing to the Borrower in connection with ticket
purchases from and other goods and services provided by the Borrower on major
credit cards (including, without limitation, Visa, MasterCard, American Express,
Diners Club, Discover and Carte Blanche) which have been earned by performance
by the Borrower but not yet paid to the Borrower by the credit card issuer or by
the Borrower’s credit card processing bank, as applicable, as determined monthly
in accordance with the following formula and set forth in the most recent
Officer’s Certificate delivered to the Administrative Agent pursuant to Section
5.01(n). Such amount shall be equal to (i) the average number of days the
relevant credit card receivables remained outstanding in the most recent fiscal
month multiplied by (ii) the average daily credit card sales earned for the most
recent fiscal month. The average daily credit card sales earned for the most
recent fiscal month shall be equal to (a) the gross retail credit card sales for
the most recent fiscal month available at the time of determination (it being
understood that such number shall only include the Specified Dollar Receivables
(as defined below) if the circumstances described in clause (2) below shall
exist) multiplied by (b) the Applicable Earned Percentage divided by (c) the
number of days in such month. For all purposes hereof, except as set forth in
the last sentence of this definition, “Applicable Earned Percentage” shall be
equal to the Earned Revenue Percentage. The Estimated Credit Card Receivables
Component shall be subject to such adjustments as may be deemed appropriate by
the Administrative Agent based upon the results of each Field Audit of the
Borrower conducted after the Closing Date. Notwithstanding the foregoing, (1)
until the occurrence of a Visa/MasterCard Dollar Trigger Event that results in a
reserve held by the credit card processing bank (the “Applicable Reserve”) that
is less than 100% of the value of airline tickets and other goods and services
sold on Visa or MasterCard but not yet flown or used or otherwise earned by
performance by the Borrower (the “Unearned Value”), or that is not calculated
based on the Unearned Value, retail credit card receivables due from the credit
card processing bank for Visa or MasterCard that are denominated in Dollars (the
“Specified Dollar Receivables”) shall not be subject to the formula set forth
above and the Applicable Earned Percentage to be applied to such receivables
shall be equal to 100%, (2) after the occurrence of a Visa/MasterCard Dollar
Trigger Event that results in an Applicable Reserve that is equal to 0% of the
Unearned Value, or that is not calculated based upon the Unearned Value, the
Specified Dollar Receivables shall be subject to the formula set forth above
(i.e., the Applicable Earned Percentage to be applied to such receivables shall
be equal to the Earned Revenue Percentage), and (3) after the occurrence of a
Visa/MasterCard Dollar Trigger Event that results in an Applicable Reserve that
is greater than 0% but less than 100% of the Unearned Value, the Applicable
Earned Percentage to be applied to the Specified Dollar Receivables shall be
determined on a straight line basis between the percentages set forth in clauses
(1) and (2) above (it being understood that the Applicable Earned Percentage to
be applied to such Specified Dollar Receivables shall be equal to 100% minus the
product of (A) the Applicable Reserve and (B) the excess, if any, of (I) 100%
over (II) the Earned Revenue Percentage).
 
 
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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the LIBO Rate.
 
“Eurodollar Tranche” shall mean the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
 
“Event of Default” shall have the meaning given such term in Section 7.
 
“Event of Loss” shall have the meaning given such term in the Second Lien
Aircraft Mortgage.
 
“Excluded Accounts” shall mean (i) the Escrow Accounts, (ii) the Payroll
Accounts, (iii) the Petty Cash Accounts, (iv) the Restricted Accounts and (v)
any other deposit accounts or securities accounts subject to Permitted Liens of
the type described in clauses (c) or (e) of the definition thereof or liens
permitted under clauses (a), (d), (j), (p), (v), (w), (bb), (dd), (ee) or (s)
(to the extent relating to any of the foregoing clauses) of Section 6.01.
 
“Excluded Subsidiaries” shall mean Aero Assurance, Ltd. and its subsidiaries.
 
“Excluded Taxes” shall mean, with respect to the Administrative Agent,
Collateral Agent, any Lender or any other recipient of any payment to be made by
or on account of any Obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender, any withholding tax that is imposed by any jurisdiction
other than the United States of America or any state thereof or is imposed by
the United States of America on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section 2.14(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.14(a).
 
 
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“Existing Amex DIP Facility” shall mean the Second Amended and Restated Advance
Payment Supplements to Delta’s Co-Branded Credit Card Program Agreement and
Membership Rewards Agreement (as amended, restated, amended and restated,
supplemented, extended or otherwise modified to the date hereof), dated as of
March 27, 2006, among the Borrower, the direct and indirect subsidiaries of the
Borrower party thereto, Amex and American Express Bank, F.S.B.
 
“Existing DIP Facilities” shall mean the Existing GE DIP Facility and the
Existing Amex DIP Facility.
 
“Existing DIP Facility Letter of Credit” shall mean each letter of credit that
was issued under the Existing GE DIP Facility and remains outstanding as of the
Closing Date.
 
“Existing GE DIP Facility” shall mean that certain Amended and Restated Secured
Super-Priority Debtor in Possession Credit Agreement (as amended, restated,
amended and restated, supplemented, extended or otherwise modified to the date
hereof), dated as of March 27, 2006, among the Borrower, the direct and indirect
subsidiaries of the Borrower party thereto, the lenders from time to time party
thereto, and General Electric Capital Corporation, as administrative agent and
collateral agent.
 
“FAA” shall mean the Federal Aviation Administration of the United States of
America and any successor thereto.
 
“FAA Slots” shall mean all “slots” as defined in 14 CFR § 93.213(a)(2), as that
section may be amended or re-codified from time to time, or, in the case of
slots at New York LaGuardia, as defined in the Final Order, Operating
Limitations at New York LaGuardia Airport, Docket No. FAA 2006-25755-82 dated
December 13, 2006, as such order may be amended or re-codified from time to
time, and in any subsequent order issued by the FAA related to New York’s
LaGuardia Airport, as such order may be amended or re-codified from time to
time, in each case of the Borrower and, if applicable, any other Guarantor, now
held or hereafter acquired (other than “slots” which have been permanently
allocated to another air carrier and in which the Borrower and, if applicable,
any Guarantor holds temporary use rights).
 
“Federal Funds Effective Rate” shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
 
“Fees” shall collectively mean the fees referred to in Section 2.17.
 
“Field Audit” shall mean a field examination conducted by a Field Auditor of the
Borrower’s and the Guarantors’ accounts receivable and books and records related
thereto, and the results of such field examination shall be reasonably
satisfactory to the Administrative Agent in all respects.
 
 
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“Field Auditor” shall mean the Administrative Agent or its Affiliates,
appraisers or other advisors who may be retained by the Administrative Agent to
conduct a Field Audit.
 
“Fifth-Freedom Rights” shall mean the operational right to enplane passenger
traffic and cargo in a foreign country and deplane it in another foreign
country.
 
“First Lien Administrative Agent” shall mean the “Administrative Agent” under
and as defined in the First Lien Credit Agreement.
 
“First Lien Collateral Agent” shall mean the “Collateral Agent” under and as
defined in the First Lien Credit Agreement.
 
“First Lien Credit Agreement” shall mean that certain First Lien Revolving
Credit and Guaranty Agreement (as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time), dated as of
April 30, 2007, among the Borrower, the Guarantors, the lenders party thereto,
JPMCB, as administrative agent and collateral agent, and the other parties
thereto.
 
“First Lien LC Exposure” shall mean the “LC Exposure” as such term is defined in
the First Lien Credit Agreement.
 
“First Lien Lender” shall mean the “Lenders” as such term is defined in the
First Lien Credit Agreement.
 
“First Lien Loan Documents” shall mean the “Loan Documents” as such term is
defined in the First Lien Credit Agreement.
 
“First Lien Loans” shall mean the “Loans” as such term is defined in the First
Lien Credit Agreement.
 
“First Lien Obligations” shall mean the sum of (i) the aggregate outstanding
principal amount of the First Lien Loans plus (ii) the First Lien LC Exposure
(other than LC Exposure which has been Cash Collateralized (as defined in the
First Lien Credit Agreement)) plus (iii) the Swap Termination Value of all
Designated Hedging Agreements to the extent secured as permitted by Section
6.01(f).
 
“First Priority Obligations” shall have the meaning set forth in the
Intercreditor Agreement.
 
“Fixed Charge Coverage Ratio” shall mean, at any date for which such ratio is to
be determined, the ratio of EBITDAR for the Rolling Twelve Month period ended on
such date to the sum of the following for such period: (a) Interest Expense,
plus (b) the aggregate cash aircraft rental expense of the Borrower and its
Subsidiaries on a consolidated basis for such period payable in cash in respect
of any aircraft leases (other than Capitalized Leases), all as determined in
accordance with GAAP.
 
“Flight Simulators” shall mean the flight simulators and flight training devices
of the Borrower or any applicable Guarantor (including, without limitation, any
such simulators or training devices located on a Real Property Asset) other than
the flight simulators listed on Schedule 1.01(a) (as such Schedule may be
amended from time to time with the consent of the Administrative Agent).
 
 
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“Foreign Aviation Authorities” shall mean any foreign governmental,
quasi-governmental, regulatory or other agencies, public corporations or private
entities that exercise jurisdiction over the authorization (a) to serve any
foreign point on each of the Routes and/or to conduct operations related to the
Routes and Supporting Route Facilities and/or (b) to hold and operate any
Foreign Slots.
 
“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“Foreign Slot” shall mean all of the rights and operational authority, now held
or hereafter acquired, of the Borrower and, if applicable, a Guarantor, to
conduct one landing or takeoff at a specific time or in a specific time period
on a specific day of the week at each non-U.S. airport served in conjunction
with the Borrower’s, or, if applicable, a Guarantor’s operations over a Route,
other than “slots” which have been permanently allocated to another air carrier
and in which the Borrower and, if applicable, any Guarantor, hold temporary use
rights.
 
“Fresh Start Reporting” shall mean the preparation of consolidated financial
statements of the Borrower in accordance with American Institute of Certified
Public Accountants Statement of Position (90-7), which reflects the consummation
of the transactions contemplated by the Plan of Reorganization on a presumed
effective date of April 30, 2007.
 
“Full Control Agreement” shall mean any Full Control Deposit Account Agreement
or any Full Control Securities Account Agreement.
 
“Full Control Deposit Account Agreement” shall mean an agreement in writing in
form and substance reasonably satisfactory to the Collateral Agent, by and among
the Borrower or any Guarantor, as the case may be, the Collateral Agent or the
First Lien Collateral Agent, and any bank at which the relevant deposit account
of the Borrower or any Guarantor, as the case may be, is at any time maintained.
 
“Full Control Securities Account Agreement” shall mean an agreement in writing
in form and substance reasonably satisfactory to the Collateral Agent, by and
among the Borrower or any Guarantor, as the case may be, the Collateral Agent or
the First Lien Collateral Agent and any securities intermediary in respect of
the relevant securities account.
 
“GAAP” shall mean generally accepted accounting principles applied in accordance
with Section 1.03.
 
“Gate Interests” shall mean all of the right, title, privilege, interest, and
authority now or hereafter acquired or held by the Borrower or, if applicable, a
Guarantor in connection with the right to use or occupy holdroom and passenger
boarding and deplaning space in any airport terminal located in the United
States at which the Borrower conducts scheduled operations.
 
 
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“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank organization, or other entity exercising executive, legislative,
judicial, taxing or regulatory powers or functions of or pertaining to
government. Governmental Authority shall not include any Person in its capacity
as an Airport Authority.
 
“Ground Support Equipment” shall mean the equipment owned by the Borrower or, if
applicable, a Guarantor for crew and passenger ground transportation, cargo,
mail and luggage handling, catering, fuel/oil servicing, de-icing, cleaning,
aircraft maintenance and servicing, dispatching, security and motor vehicles.
 
“GSCP” shall have the meaning set forth in the first paragraph of this
Agreement.
 
“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include (i) endorsements
for collection or deposits or (ii) customary contractual indemnities in
commercial agreements, in each case in the ordinary course of business and
consistent with past practice. The amount of any obligation relating to a
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made (or,
if less, the maximum reasonably anticipated liability for which such Person may
be liable pursuant to the terms of the instrument evidencing such Guarantee) or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform) as determined by
the guarantor in good faith.
 
“Guarantor” shall have the meaning set forth in the first paragraph of this
Agreement.
 
“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature that are regulated pursuant to,
or could reasonably be expected to give rise to liability under, any
Environmental Law.
 
 
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“Hedging Agreement” shall mean any agreement with respect to any swap, forward,
future, fuel hedging or other derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
fuel or other commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions.
 
“Immaterial Subsidiaries” shall mean one or more Subsidiaries of the Borrower,
for which, (a) the assets of all such designated Subsidiaries constitute, in the
aggregate, no more than 2½% of the total assets of the Borrower and its
Subsidiaries on a consolidated basis (determined as of the last day of the most
recent fiscal quarter of the Borrower for which financial statements have been
delivered pursuant to Section 5.01), and (b) the revenues of such Subsidiaries
account for no more than 2½% of the total revenues of the Borrower and its
Subsidiaries on a consolidated basis for the twelve-month period ending on the
last day of the most recent fiscal quarter of the Borrower for which financial
statements have been delivered pursuant to Section 5.01. The domestic Immaterial
Subsidiaries as of the Closing Date that are not Guarantors on the Closing Date
shall be listed on Schedule 1.01(b).
 
“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money (including in connection with
deposits or advances), (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accrued
expenses incurred and current accounts payable, in each case in the ordinary
course of business), (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (f) all Guarantees by
such Person of Indebtedness of others, (g) all obligations of such Person in
respect of Capitalized Leases, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (j) all obligations of such person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, and (k) all obligations in
respect of Hedging Agreements valued at the amount equal to what would be
payable by such Person to its counterparty to such Hedging Agreements if such
Hedging Agreement was terminated early on such date of determination. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
 
“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.
 
“Indemnitee” shall have the meaning given such term in Section 10.04(b).
 
 
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“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated
the date hereof among the Administrative Agent, the Collateral Agent, JPMCB, as
administrative agent and collateral agent under the First Lien Credit Agreement,
the Borrower and the Guarantors party thereto in substantially the form attached
as Exhibit I.
 
“Interest Election Request” shall mean a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.
 
“Interest Expense” shall mean, for any period, the gross cash interest expense
(including the interest component of Capitalized Leases), of the Borrower and
its Subsidiaries on a consolidated basis for such period, all as determined in
accordance with GAAP.
 
“Interest Payment Date” shall mean (a) as to any Eurodollar Loan having an
Interest Period of one, two or three months (or any other Interest Period
shorter than three months), the last day of such Interest Period, (b) as to any
Eurodollar Loan having an Interest Period of more than three months, each day
that is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (c) with respect to
ABR Loans, the last Business Day of each March, June, September and December.
 
“Interest Period” shall mean, as to any Borrowing of Eurodollar Loans, the
period commencing on the date of such Borrowing (including as a result of a
conversion from ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is
one, two, three or six months thereafter (or the appropriate date thereafter for
any other Interest Period available to all the Lenders), as the Borrower may
elect in the related notice delivered pursuant to Sections 2.02 or 2.04;
provided, that (i) if any Interest Period would end on a day which shall not be
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (ii) no Interest Period shall end later than the
Termination Date.
 
“International Interest” shall mean “International Interest” as defined in the
Cape Town Convention.
 
“International Registry” shall mean “International Registry” as defined in the
Cape Town Convention.
 
“Investments” shall mean any stock, evidence of indebtedness or other security
of any Person, any loan, advance, contribution of capital, extension of credit
or commitment therefor (including, without limitation, the Guarantee of loans
made to others, but excluding current trade and customer accounts receivable
arising in the ordinary course of business and payable in accordance with
customary trading terms in the ordinary course of business), and any purchase or
acquisition of (a) any security of another Person or (b) a line of business, or
all or substantially all of the assets, of any Person.
 
“Jet Fuel Assets” shall mean (a) the existing jet fuel inventory of the
Borrower’s or its Subsidiaries’, or any Connection Carrier’s or SkyTeam
Partner’s, operations in or pipelines in transit to Atlanta, Cincinnati and New
York that is to be sold to the Jet Fuel Counterparty pursuant to the Jet Fuel
Inventory Supply Agreement, or other jet fuel subject to the Jet Fuel Inventory
Supply Agreement, (b) the Borrower’s or its Subsidiaries’ rights in certain
existing supply and third-party sale agreements to be assigned or assumed by the
Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement, (c)
the Borrower’s or its Subsidiaries’ rights in certain existing infrastructure
agreements to be transferred to the Jet Fuel Counterparty pursuant to the Jet
Fuel Inventory Supply Agreement and (d) proceeds of the foregoing.
 
 
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“Jet Fuel Counterparty” shall mean J. Aron & Company, a New York general
partnership, or any of its Affiliates, or any other Person that becomes a party
to the Jet Fuel Inventory Supply Agreement.
 
“Jet Fuel Inventory Supply Agreement” shall mean the Jet Fuel Inventory Supply
Agreement among the Borrower, the Jet Fuel Counterparty and Epsilon Trading,
Inc., dated as of August 31, 2006, as amended, renewed or replaced from time to
time.
 
“Joint Bookrunners” shall mean GSCP, Merrill Lynch and Barclays Capital, in
their capacities as joint bookrunners.
 
“Joint Lead Arrangers” shall mean GSCP and Merrill Lynch, in their capacities as
co-lead arrangers.
 
“JPMCB” shall mean JPMorgan Chase Bank, N.A.
 
“JPMSI” shall mean J.P. Morgan Securities Inc.
 
“LBI” shall mean Lehman Brothers Inc.
 
“LCPI” shall mean Lehman Commercial Paper Inc.
 
“Lenders” shall have the meaning set forth in the first paragraph of this
Agreement.
 
“LIBO Rate” shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum appearing on Reuters Screen
LIBOR01 Page (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
 
 
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“Lien” shall mean (a) any mortgage, deed of trust, pledge, deed to secure debt,
hypothecation, security interest, easement (including, without limitation,
reciprocal easement agreements and utility agreements), rights-of-ways,
reservations, encroachments, zoning and other land use restrictions, claim or
any other title defect, lease, encumbrance, restriction, lien or charge of any
kind whatsoever and (b) the interest of a vendor or a lessor under any
conditional sale, capital lease or other title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing).
 
“Loans” shall mean the Second Lien Term Loans.
 
“Loan Documents” shall mean this Agreement, the Collateral Documents, the
Intercreditor Agreement and any other instrument or agreement (which is
designated as a Loan Document therein) executed and delivered by the Borrower or
a Guarantor to the Administrative Agent, the Collateral Agent or any Lender, in
each case, as the same may be amended, restated, modified, supplemented,
extended or amended and restated from time to time.
 
“Margin Stock” shall have the meaning set forth in Section 3.13(a).
 
“Material Adverse Change” shall mean any event, development or circumstance that
has had or could reasonably be expected to have a Material Adverse Effect.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole, (b) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Agents and the Lenders
thereunder, or (c) the ability of the Borrower or any Guarantor to pay its
respective obligations under the Loan Documents.
 
“Material Indebtedness” shall mean Indebtedness (other than the Obligations), of
any one or more of the Borrower and the Guarantors in an aggregate principal
amount exceeding $57,500,000.
 
“Maturity Date” shall mean April 30, 2014.
 
“Merrill Lynch” shall have the meaning set forth in the first paragraph of this
Agreement.
 
“Moody’s” shall mean Moody’s Investors Service, Inc.
 
“Mortgaged Collateral” shall mean all of the “Collateral” as defined in the
Second Lien Aircraft Mortgage (including any Mortgage Supplement).
 
“Mortgage Supplement” shall have the meaning set forth in the Second Lien
Aircraft Mortgage.
 
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there
is an obligation to contribute of) the Borrower or a Subsidiary of the Borrower
or an ERISA Affiliate, and each such plan for the five-year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
 
“Multiple Employer Plan” shall mean a Single Employer Plan, which (a) is
maintained for employees of the Borrower or an ERISA Affiliate and at least one
person (as defined in Section 3(9) of ERISA) other than the Borrower and its
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower
or an ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA
in the event such Plan has been or were to be terminated.
 
 
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“Net Cash Proceeds” shall mean, in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Permitted
Investments (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received), net of
(i)attorneys’ fees, accountants’ fees, investment banking fees and brokerage
fees, (ii) amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event or otherwise required to be repaid upon
such sale (other than any Lien pursuant to a Collateral Document), (iii)
proceeds of insurance or condemnation awards maintained for the benefit of any
third party applied to restore assets as required by the terms of any agreement
with such third party, (iv) other customary fees and expenses actually incurred
in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements) and (v) reserves provided, to
the extent required by GAAP, against any liabilities that are directly
attributed to such Asset Sale; provided that any such unutilized reserves shall
constitute Net Cash Proceeds at any time and to the extent that the maintenance
of such reserves is no longer required by GAAP and, provided further, that, in
the case of any Asset Sale of fuel that has been pre-ordered in the ordinary
course of business occurring substantially concurrently with the purchase of
such fuel subject to such Asset Sale, “Net Cash Proceeds” shall be deemed net of
the purchase price of such fuel. 
 
“Obligations” shall mean the unpaid principal of and interest on (including
interest, reasonable fees and reasonable out-of-pocket costs accruing after the
maturity of the Loans and interest, reasonable fees and reasonable out-of-pocket
costs accruing after the filing of any petition of bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest,
fees or costs is allowed in such proceeding) the Loans and all other obligations
and liabilities of the Borrower to any Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, reasonable fees, indemnities, reasonable
out-of-pocket costs, reasonable out-of-pocket expenses (including all reasonable
fees, charges and disbursements of counsel to any Agent or any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
 
“Officer’s Certificate” shall mean, as applied to the Borrower or any Guarantor,
a certificate executed by a Responsible Officer of such Person in his/her
capacity as such.
 
 
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“Other Taxes” shall mean any and all present or future stamp, mortgage,
intangible or documentary taxes or any other excise or property taxes, charges
or similar levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
 
“Parked” shall mean, as to any Aircraft, that such Aircraft has been removed
from service, other than Aircraft temporarily grounded for maintenance being
actively conducted.
 
“Participant” shall have the meaning given such term in Section 10.02(d).
 
“Patriot Act” shall mean the USA Patriot Act, Title III of Pub. L. 107-56,
signed into law on October 26, 2001 or any subsequent legislation that amends,
supplements or supersedes such Act.
 
“Payroll Accounts” shall mean depository accounts used only for payroll.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
 
“Pension Act” shall mean the Pension Protection Act of 2006, as it presently
exists or as it may be amended from time to time.
 
“Permitted Acquisition” shall mean any acquisition, whether by purchase, merger,
consolidation or otherwise, by the Borrower or any Guarantor of all or
substantially all the assets of, or all the Equity Interests (or, so long as the
acquired Person becomes a Guarantor pursuant to Section 5.14 hereof, Equity
Interests sufficient to cause the acquired Person to become a Subsidiary) in, a
Person or a division, line of business or other business unit of a Person but
only so long as:
 
(a)    (i) no Event of Default shall have occurred and be continuing immediately
prior or immediately after giving effect to such Permitted Acquisition and (ii)
all transactions related thereto shall have been consummated in all material
respects in accordance with applicable laws;
 
(b)    with respect to any acquisition in excess of $25,000,000, the Borrower
shall have delivered to the Administrative Agent an Officer’s Certificate to the
effect set forth in clause (a) above, together with the relevant financial
information for the Person or assets to be acquired, promptly after consummation
of such acquisition; and
 
(c)    with respect to any acquisition in excess of $25,000,000, the Borrower
shall have provided the Administrative Agent with written notice and with copies
of the material acquisition documents promptly after consummation of such
acquisition.
 
“Permitted Change of Control Transaction” shall mean any transaction, whether by
purchase, merger, consolidation or otherwise, pursuant to which a Permitted
Holder acquires all or substantially all the assets of, or all the Equity
Interests in, the Borrower but only so long as:
 
 
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(a)    (i) no Event of Default shall have occurred and be continuing immediately
prior or immediately after giving effect to such Permitted Change of Control
Transaction and (ii) all transactions related thereto shall have been
consummated in all material respects in accordance with applicable laws;
 
(b)    the Borrower shall have delivered to the Administrative Agent an
Officer’s Certificate to the effect set forth in clause (a) above, together with
the relevant financial information for the Permitted Holder, promptly after
consummation of such transaction;
 
(c)    the Borrower shall have provided the Administrative Agent with written
notice and with copies of the material acquisition documents promptly after
consummation of such transaction; and
 
(d)    the operations of the Borrower are not merged with the operations of any
other major U.S. airline owned by such Permitted Holder.
 
“Permitted Collateral Liens” shall mean those Liens permitted pursuant to
clauses (b), (e), (f), (g), (i) (solely with respect to interests of airport
operators in the assets located at the applicable facilities), (k) (solely to
the extent relating to the underlying credit card receivables and related
assets), (l), (m), (n), (q), (r), (u), (cc)(i) (solely to the extent relating to
the applicable underlying accounts or amounts or other assets deposited therein,
in each case arising in the ordinary course of business) or (s) (to the extent
relating to any of the foregoing clauses) of Section 6.01.
 
“Permitted Disposition” shall mean any of the following:
 
(a)    (i) the sale of inventory in the ordinary course of business, (ii) the
sale of Spare Parts in the ordinary course of business, and (iii) swaps,
exchanges, interchange or pooling of assets or, in the case of Mortgaged
Collateral, other transfers of possession (subject to the limitations set forth
in the Collateral Documents) in the ordinary course of business;
 
(b)    the sale or other disposition of Permitted Investments for cash or in
exchange for Permitted Investments;
 
(c)    sales or dispositions of surplus, obsolete, negligible or uneconomical
assets (other than Mortgaged Collateral that are not Parts (as defined in the
Second Lien Aircraft Mortgage)) no longer used in the business of Borrower and
the Guarantors;
 
(d)    sales or dispositions of assets among the Borrower and the Guarantors;
provided that, with respect to any such asset that constitutes Collateral, such
asset remains subject to a Lien in favor of the Collateral Agent for the benefit
of the Second Priority Secured Parties following such sale or disposition (it
being understood that the Borrower and the Guarantors shall execute any
documents and take any actions reasonably required to create, grant, establish,
preserve or perfect such Lien in accordance with the other provisions of this
Agreement or the other Collateral Documents dealing with the creation, granting,
establishment, preservation or perfection of Liens);
 
 
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(e)    (i) abandonment of Intellectual Property; provided, that such abandonment
is (A) in the ordinary course of business consistent with past practices and (B)
with respect to Intellectual Property that is not material to the business of
Borrower and it Subsidiaries and (ii) licensing or sublicensing of Intellectual
Property in the ordinary course of business consistent with past practices;
 
(f)    the sale or discount of Accounts to a collection agency in connection
with collections of delinquent receivables;
 
(g)    (i) abandonment of FAA Slots, Gate Interests, Routes or Supporting Route
Facilities; provided, that such abandonment is (A) in connection with the
downsizing of any hub or other facility located in Cincinnati as reflected in
the budgets provided pursuant to Section 5.01(e), (B) in connection with the
downsizing of any other hub or facility as reflected in the budgets provided
pursuant to Section 5.01(e), which does not materially and adversely affect the
business of Borrower and its Subsidiaries, taken as a whole, or (C) in the
ordinary course of business consistent with past practices and does not
materially and adversely affect the business of Borrower and its Subsidiaries,
taken as a whole, (ii) transfer or other disposition in the ordinary course of
business of FAA Slots, Foreign Slots, Gate Interests, Routes or Supporting Route
Facilities, in each case, to the extent not constituting Eligible Collateral or
utilized in connection therewith, (iii) exchange of FAA Slots in the ordinary
course of business that in the Borrower’s reasonable judgment are of reasonably
equivalent value, and (iv) assignments of leases or granting of leases of (A)
Aircraft or Engines to the extent permitted pursuant to the Second Lien Aircraft
Mortgage and (B) other aircraft or engines (that do not constitute Collateral),
in each case, in the ordinary course of business;
 
(h)    the sale or other disposition of any 737-800 aircraft substantially
concurrently with the consummation of the purchase of such aircraft to the
extent such purchase occurs pursuant to a purchase agreement to which the
Borrower or a Subsidiary was a party as of the Closing Date;
 
(i)    to the extent not prohibited by any of the Collateral Documents, the
disposition of leasehold or similar interests in real property that is not Real
Property Assets, including through assignment, sublease or lease termination or
rejection, in whole or in part, or the return, surrender, exchange or
abandonment of any property subject thereto;
 
(j)     any sale of Margin Stock for fair value as determined in good faith by
Borrower;
 
(k)    (i) any loss of or damage to property of the Borrower or any Guarantor,
(ii) any taking of property of the Borrower or any Guarantor, or (iii) an Event
of Loss;
 
(l)    the sale, assignment and/or other transfer of the Jet Fuel Assets to the
Jet Fuel Counterparty, in each case pursuant to the Jet Fuel Inventory Supply
Agreement;
 
(m)    Permitted Liens of the type described in clause (d) of the definition
thereof; and
 
 
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(n)    the lease or sublease of assets and properties in the ordinary course of
business.
 
“Permitted Holder” shall mean any corporation or limited liability company
organized under the laws of the United States of America or any state thereof
organized for the purpose of consummating any Permitted Change of Control
Transaction so long as such entity is a holding company which has (or
simultaneously with such Change of Control Transaction will acquire) as its
other principal investment another major U.S. airline.
 
“Permitted Investments” shall mean:
 
(a)    direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
 
(b)    direct obligations of state and local government entities in each case
maturing within one year from the date of acquisition thereof, which have a
rating of at least A- (or the equivalent thereof) from S&P or A3 (or the
equivalent thereof) from Moody’s;
 
(c)    obligations of domestic or foreign companies and their subsidiaries
(including, without limitation, agencies, sponsored enterprises or
instrumentalities chartered by an Act of Congress, which are not backed by the
full faith and credit of the United States of America), including, without
limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in
each case maturing within one year from the date of acquisition thereof and
which have a rating of at least A- (or the equivalent thereof) from S&P or A-3
(or the equivalent thereof) from Moody’s;
 
(d)    investments in commercial paper maturing within 365 days from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent
thereof) from Moody’s;
 
(e)    investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $250,000,000 and which has a long term unsecured debt rating of at
least A from S&P and A2 from Moody’s (or is the principal banking Subsidiary of
a bank holding company that has such ratings);
 
(f)    fully collateralized repurchase agreements with a term of not more than
six (6) months for underlying securities that would otherwise be eligible for
investment; 
 
(g)    Investments of money in an investment company organized under the
Investment Company Act of 1940, as amended, or in pooled accounts or funds
offered through mutual funds, investment advisors, banks and brokerage houses
which invest its assets in obligations of the type described in (a) through (f)
above. This could include, but not be limited to, money market funds or
short-term and intermediate bonds funds; and
 
 
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(h)    money market funds that (i) comply with the criteria set forth in SEC
Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA (or the
equivalent thereof) by S&P and Aaa (or the equivalent thereof) by Moody’s and
(iii) have portfolio assets of at least $5,000,000,000; and
 
(i)    investments, in accordance with investment policies approved by the board
of directors of the Borrower, in the ordinary course of business.
 
“Permitted Liens” shall mean: (a) Liens imposed by law (other than Liens imposed
under Environmental Laws and any Lien imposed under ERISA) for taxes,
assessments, levies or charges of any Governmental Authority for claims not yet
delinquent or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; (b) Liens of landlords, carriers,
warehousemen, consignors, mechanics, materialmen and other Liens (other than
Liens imposed under Environmental Laws and any Lien imposed under ERISA) in
existence on the Closing Date (which, in the case of Real Property Assets, are
specified in the applicable Second Lien Real Estate Mortgage) or imposed by law
and created in the ordinary course of business and securing obligations that are
not overdue or are being contested in compliance with Section 5.05; (c) (i)
Liens (other than any Lien imposed under ERISA) incurred or (ii) deposits made
(including, without limitation, surety bonds and appeal bonds), in each case, in
connection with workers’ compensation, unemployment insurance and other types of
social security benefits (or benefits arising under other public liability laws
or similar legislation) or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts; (d) leases, subleases, licenses, use agreements,
usufructs, easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, reservations,
encroachments, land use restrictions or encumbrances, which, in the case of Real
Property Assets, (i) do not interfere materially with the ordinary conduct of
the business of the Borrower or any Guarantor, as the case may be, (ii) do not
materially detract from the value of the property to which they attach or
materially impair the use thereof to the Borrower or any Guarantor, as the case
may be and (iii) do not materially adversely affect the marketability of the
applicable property; (e) letters of credit or deposits in the ordinary course to
secure leases; (f) Liens imposed by applicable law on the assets of the Borrower
or any Guarantor located at an airport for the benefit of any nation or
government or national or governmental authority of any nation, state, province
or other political subdivision thereof, and any agency, department, regulator,
airport authority, air navigation authority or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government in respect of the regulation of commercial aviation or
the registration, airworthiness or operation of civil aircraft and having
jurisdiction over the Borrower or such Guarantor including, without limitation,
the FAA or DOT, (g) Liens in favor of depositary banks arising as a matter of
law encumbering deposits (including the right of setoff) and that are within the
general parameters customary in the banking industry, (h) in the case of Real
Property Assets, those Liens specified in the applicable Second Lien Real Estate
Mortgage; (i) in the case of any Mortgaged Collateral, those Liens specified in
the applicable Second Lien Aircraft Mortgage; and (j) extensions, renewals or
replacements of any Lien referred to in paragraphs (a) through (g) above,
provided, that the principal amount of the obligation secured thereby is not
increased and that any such extension, renewal or replacement is limited to the
property originally encumbered thereby.
 
 
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“Person” shall mean any natural person, corporation, division of a corporation,
partnership, limited liability company, trust, joint venture, association,
company, estate, unincorporated organization, Airport Authority or Governmental
Authority or any agency or political subdivision thereof.
 
“Petty Cash Accounts” shall mean domestic or foreign deposit or securities
accounts of the Borrower and Guarantors holding aggregate balances in an amount
not to exceed $50,000,000 with respect to domestic accounts and $150,000,000
with respect to foreign accounts at any one time.
 
“Plan” shall mean a Single Employer Plan or a Multiple Employer Plan that is a
pension plan subject to the provisions of Title IV of ERISA, Section 412 of the
Code or Section 302 of ERISA.
 
“Plan of Reorganization” shall mean the Debtors’ Joint Plan of Reorganization
pursuant to Chapter 11 of the United States Bankruptcy Code together with all
schedules and exhibits thereto, as confirmed by the Confirmation Order, together
with any amendments, supplements or modifications thereto that have been
approved or authorized by the Bankruptcy Court prior to the Closing Date.
 
“Pledged Spare Parts” shall mean Spare Parts which are maintained by or on
behalf of the Borrower or any Guarantor at a Spare Parts Location.
 
“Post-Petition Aircraft Agreement” shall have the meaning set forth in the Plan
of Reorganization.
 
“Primary Foreign Slots” shall mean the Foreign Slots set forth on Schedule 4(f)
to the Second Lien SGR Security Agreement, as such Schedule may be amended from
time to time pursuant to the Second Lien SGR Security Agreement.
 
“Primary Routes” shall mean the Routes set forth on Schedule 4(h) to the Second
Lien SGR Security Agreement, as such Schedule may be amended from time to time
pursuant to the Second Lien SGR Security Agreement.
 
“Primary Supporting Route Facilities” shall mean the Supporting Route Facilities
of the Borrower and, if applicable, a Guarantor, at the airports listed on
Schedule 4(i) to the Second Lien SGR Security Agreement.
 
“Prime Rate” shall mean the rate of interest per annum publicly announced from
time to time by GSCP as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
 
 
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“Prospective Assignment” shall have the meaning given in the Cape Town
Convention.
 
“Prospective International Interest” shall have the meaning given in the Cape
Town Convention.
 
“Prospective Sale” shall have the meaning given in the Cape Town Convention.
 
“Protocol” shall mean the Protocol referred to in the defined term “Cape Town
Convention.”
 
“Qualified Judgment” shall mean any judgment arising from the resolution of
disputed pre-petition claims, so long as, and to the extent that, a reserve has
been established therefor (including a reserve of Equity Interests of the
Borrower to satisfy certain pre-petition claims pursuant to the Plan of
Reorganization).
 
“Qualified Permitted Investments” shall mean Permitted Investments of the type
described in clause (e) of the definition thereof issued, guaranteed or placed
with the Administrative Agent and other Permitted Investments of the type from
time to time generally permitted in money market deposit accounts at JPMCB or
GSCP.
 
“Qualified Restructuring Indebtedness” shall mean any Indebtedness of the
Borrower or any of its Subsidiaries with respect to any Restructuring Aircraft
other than any such Indebtedness (i) created by any Post-Petition Aircraft
Agreement that has been entered into relating to such Restructuring Aircraft or
(ii) arising out of the assumption without modification of pre-petition
agreements related to such Restructuring Aircraft.
 
“Real Estate Appraiser” shall mean, in the case of the Real Property Assets, (a)
American Appraisal Associates with respect to those certain parcels of real
property described in Schedule 3.15(a) or (b) such other appraisal firms as may
be retained by the Administrative Agent, in consultation with the Borrower, from
time to time.
 
“Real Property Assets” shall mean those certain parcels of real property owned
in fee by the Borrower and described in Schedule 3.15(a) and together with, in
each case, all buildings, improvements, facilities, appurtenant fixtures and
equipment, easements and other property and rights incidental or appurtenant to
the ownership of such parcel of real property (as each such real property is
more particularly described in the applicable Second Lien Real Estate Mortgage)
(including, without limitation, all Collateral described in the applicable
Second Lien Real Estate Mortgage), and, from time to time, all Collateral
identified in a Second Lien Real Estate Mortgage granted pursuant to Section
5.14, Section 5.16 or any other provision of this Agreement (including in
connection with the designation of such real property or related asset as Cure
Collateral).
 
“Recovery Event” shall mean any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any Collateral or any Event of Loss. 
 
 
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“Redeemable Stock” shall mean any class or series of Equity Interests of any
Person that by its terms or otherwise (a) is required to be redeemed prior to
the Maturity Date, (b) may be required to be redeemed at the option of the
holder of such class or series of Equity Interests at any time prior to the
Maturity Date or (c) is convertible into or exchangeable for (i) Equity
Interests referred to in clause (a) or (b) above or (ii) Indebtedness.
 
“Register” shall have the meaning set forth in Section 10.02(b)(iv).
 
“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.
 
“Release” shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping, or
disposing into the indoor or outdoor environment (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
hazardous substance or pollutant or contaminant).
 
“Replacement Airframe” shall have the meaning given to such term in the Second
Lien Aircraft Mortgage.
 
“Replacement Engine” shall have the meaning given to such term in the Second
Lien Aircraft Mortgage.
 
“Required Lenders” shall mean, at any time, Lenders holding more than 50% of (a)
until the Closing Date, the Second Lien Term Loan Commitments then in effect and
(b) thereafter, the aggregate unpaid principal amount of the Second Lien Term
Loans then outstanding.
 
“Responsible Officer” shall mean the chief executive officer, president, chief
financial officer, treasurer, vice president, controller, chief accounting
officer, secretary or assistant secretary of the Borrower or any Guarantor, as
applicable, but in any event, with respect to financial matters, the chief
financial officer, treasurer, controller or chief accounting officer of the
Borrower or any Guarantor, as applicable.
 
“Restricted Accounts” shall mean the accounts identified as Restricted Accounts
on Schedule 1.01(c);
 
“Restricted Captive Insurance Company Subsidiary” shall mean a Subsidiary that
is a captive insurance company and is prohibited from becoming a Guarantor
hereunder pursuant to applicable rules and regulations.
 
“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in the
Borrower or any Guarantor, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interests in the Borrower.
 
 
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“Restructuring Aircraft” shall mean each of the aircraft listed on Schedule
1.01(d). 
 
“Rolling Twelve Months” shall mean, with respect to any date of determination,
the month most recently ended and the eleven (11) immediately preceding months
for which, in each case, financial statements are available considered as a
single period.
 
“Routes” shall mean the routes for which the Borrower or, if applicable, a
Guarantor, holds or hereafter acquires the requisite authority to operate
foreign air transportation pursuant to Title 49 including, without limitation,
applicable frequencies, exemption and certificate authorities, Fifth-Freedom
Rights and “behind/beyond rights”.
 
“Sale” shall have the meaning given in the Cape Town Convention.
 
“S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.
 
“SEC” shall mean the United States Securities and Exchange Commission.
 
“Second Lien Aircraft Mortgage” shall mean that “Second Lien Aircraft Mortgage”
as defined in Section 4.01(e), as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time.
 
“Second Lien Copyright Security Agreement” shall mean that certain Second Lien
Copyright Security Agreement as defined in Section 4.01(f), as the same may be
amended, restated, modified, supplemented, extended or amended and restated from
time to time.
 
“Second Lien Patent Security Agreement” shall mean that certain Second Lien
Patent Security Agreement as defined in Section 4.01(f), as the same may be
amended, restated, modified, supplemented, extended or amended and restated from
time to time.
 
“Second Lien Pledge Agreement” shall mean that certain Pledge Agreement as
defined in Section 4.01(c), as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time.
 
“Second Lien Real Estate Mortgages” shall mean, collectively, (a) that certain
Real Estate Deed to Secure Debt, Assignment of Leases and Rents, Security
Agreement, dated the date hereof, by the Borrower to the Collateral Agent, in
substantially the form of Exhibit A and (b) each other mortgage granted pursuant
to the terms hereof, as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time.
 
“Second Lien Security Agreement” shall mean that certain Security Agreement as
defined in Section 4.01(c), as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time.
 
“Second Lien SGR Security Agreement” shall mean that certain Slot, Gate and
Route Security and Pledge Agreement as defined in Section 4.01(d), as the same
may be amended, restated, modified, supplemented, extended or amended and
restated from time to time.
 
 
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“Second Lien Term Loan” shall have the meaning set forth in Section 2.01(a).
 
“Second Lien Term Loan Commitment” shall mean the commitment of each Lender to
make a Second Lien Term Loan hereunder in a principal amount not to exceed the
amount set forth under the heading “Second Lien Term Loan Commitment” opposite
its name in Annex A hereto. The original aggregate amount of the Second Lien
Term Loan Commitments is $900,000,000.
 
“Second Lien Term Loan Commitment Percentage” shall mean, at any time, with
respect to each Lender at any time, the percentage which such Lender’s Second
Lien Term Loan Commitment then constitutes of the aggregate Second Lien Term
Loan Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender’s Second Lien Term Loans then
outstanding constitutes of the aggregate principal amount of the Second Lien
Term Loans of all Lenders then outstanding).
 
“Second Lien Trademark Security Agreement” shall mean that certain Second Lien
Trademark Security Agreement as defined in Section 5.19(a), as the same may be
amended, restated, modified, supplemented, extended or amended and restated from
time to time.
 
“Second Priority Obligations” shall have the meaning set forth in the
Intercreditor Agreement.
 
“Second Priority Obligations Payment Date” shall have the meaning set forth in
the Intercreditor Agreement.
 
“Second Priority Secured Parties” shall have the meaning set forth in the
Intercreditor Agreement.
 
“Shifting Control Agreement” shall mean any Shifting Control Deposit Account
Agreement or any Shifting Control Securities Account Agreement.
 
“Shifting Control Deposit Account Agreement” shall mean an agreement in writing
in form and substance reasonably satisfactory to the Collateral Agent, by and
among the Borrower or any Guarantor, as the case may be, the First Lien
Collateral Agent or the Collateral Agent, and the relevant bank at which the
relevant deposit account of the Borrower or any Guarantor, as the case may be,
is at any time maintained.
 
“Shifting Control Securities Account Agreement” shall mean an agreement in
writing in form and substance reasonably satisfactory to the Collateral Agent,
by and among the Borrower or any Guarantor, as the case may be, the First Lien
Collateral Agent or the Collateral Agent and any securities intermediary in
respect of the relevant securities account.
 
“Single Employer Plan” shall mean a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or an
ERISA Affiliate or (b) was so maintained and in respect of which the Borrower
could reasonably be expected to have liability under Title IV of ERISA in the
event such Plan has been or were to be terminated.
 
 
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“SkyTeam Partner” shall mean any airline that is a member of the SkyTeam
international airline alliance.
 
“Spare Engine” shall have the meaning set forth in the Second Lien Aircraft
Mortgage.
 
“Spare Parts” shall have the meaning set forth in the Second Lien Aircraft
Mortgage.
 
“Spare Parts Locations” shall have the meaning set forth in the Second Lien
Aircraft Mortgage.
 
“Specified Jet Fuel Action” shall mean, if the transactions effected pursuant to
the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness
owed by the Borrower, any action by the Jet Fuel Counterparty, as secured party,
to the extent such action seeks to foreclose (or obtain a lien) on the Jet Fuel
Assets.
 
“Specified Permitted Collateral Liens” shall mean Permitted Collateral Liens
(other than Liens permitted under clauses (c)(i) (other than any such Liens that
are non-consensual or imposed by law), (c)(ii) and (e) of the definition of
Permitted Liens and clause (j) of the definition of Permitted Liens (to the
extent related to such other specified clauses of such definition) and clauses
(m), (n) and (u) of Section 6.01 and clause (s) of Section 6.01 (to the extent
related to such other specified clauses of Section 6.01)).
 
“Statutory Reserve Rate” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
 
“Subordinations” shall have the meaning given in the Cape Town Convention.
 
“Subsidiary” shall mean, with respect to any Person (in this definition referred
to as the “parent”), any corporation, association or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the securities or other ownership or membership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
 
 
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“Supporting Route Facilities” shall mean gates, ticket counters and other
facilities assigned, allocated, leased, or made available to the Borrower at
non-U.S. airports used in the operation of scheduled service over a Route.
 
“Swap Termination Value” shall mean, in respect of any contract or agreement
relating to Indebtedness permitted by Section 6.03(f) or (g), after taking into
account the effect of any legally enforceable netting agreement relating to such
contract or agreement, (a) for any date on or after the date such contract or
agreement has been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such contract or agreement, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such contract or agreement (which may include a Lender or any
Affiliate of a Lender).
 
“Syndication Agent” shall have the meaning set forth in the first paragraph of
this Agreement.
 
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
 
“Termination Date” shall mean the earlier to occur of (a) the Maturity Date and
(b) the acceleration of the Loans in accordance with the terms hereof.
 
“Termination Event” shall mean (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. 4043), (b) an
event described in Section 4068 of ERISA, (c) the withdrawal of the Borrower or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a “substantial employer,” as such term is defined in Section 4001(a)(2) of
ERISA, (d) the incurrence of liability by the Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple Employer Plan,
(e) the imposition of Withdrawal Liability or receipt of notice from a
Multiemployer Plan that such liability may be imposed, (f) a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA, (g) providing notice of intent to
terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, if such amendment
requires the provision of security, (h) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, (i) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA) and, on and after the
effectiveness of the Pension Act, any failure by any Plan to satisfy the minimum
funding standards (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Plan, whether or not waived, (j) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, or (k) any other event or condition which would reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the imposition of any
liability under Title IV of ERISA (other than for the payment of premiums to the
PBGC in the ordinary course). Notwithstanding the above, for purposes of this
definition, the sale by the Borrower of its interest in Comair shall not be
considered a “reportable event” under clause (a) above.
 
 
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“Title 14” shall mean Title 14 of the United States Code of Federal Regulations,
including Part 93, Subparts K and S thereof, as amended from time to time or any
successor or recodified regulation.
 
“Title 49” shall mean Title 49 of the United States Code, which, among other
things, recodified and replaced the U.S. Federal Aviation Act of 1958, and the
rules and regulations promulgated pursuant thereto or any subsequent legislation
that amends, supplements or supersedes such provisions.
 
“Tooling” shall mean tooling inventory, including but not limited to dies,
molds, tooling, casting patterns, gauges, jigs, racks and stands for engines,
cowls, radome and wheels, aircraft jacks, test benches, test equipment, lathes,
welders, grinders, presses, punches and hoists and other similar items (whether
or not completed or fixed or handheld).
 
“Total Collateral Coverage Ratio” shall have the meaning set forth in Section
6.06(a).
 
“Total Obligations” shall have the meaning set forth in Section 6.06(a).
 
“Transactions” shall mean the execution, delivery and performance by the
Borrower and Guarantors of this Agreement and the other Loan Documents to which
they may be a party, the creation of the Liens in the Collateral in favor of the
Collateral Agent, the borrowing of Loans and the use of the proceeds thereof.
 
“Travel Agency Cash Transaction” shall mean any purchase in cash or check of a
ticket through a travel agency that is a member of Bank Settlement Plan or
Airline Reporting Corporation, as applicable, it being understood and agreed
that the account receivable in respect of such purchase that is included in the
calculation of Eligible Account shall be net of any set-off for commissions or
refunds and shall be included only to the extent such travel agency is
unconditionally required to pay such net amount to the applicable clearinghouse
or for the account of the Borrower.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate or the Alternate Base Rate.
 
“UBS” shall mean UBS Securities LLC.
 
“UBS Finance” shall mean UBS Loan Finance LLC.
 
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York from time to time.
 
 
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“United States Citizen” shall have the meaning set forth in Section 3.02.
 
“Unrestricted Cash” shall mean all cash and Permitted Investments of the
Borrower and the Guarantors held in accounts (other than the Escrow Accounts,
Payroll Accounts and Restricted Accounts) which are the subject of Control
Agreements that have been executed and delivered to the Collateral Agent.
 
“Unused Total Revolving Commitment” shall have the meaning set forth in the
First Lien Credit Agreement.
 
“Use or Lose Rule” shall mean with respect to FAA Slots or Foreign Slots, as the
case may be, the terms of 14 C.F.R. Section 93.227 or other applicable
utilization requirements issued by the FAA, other Governmental Authorities, any
Foreign Aviation Authorities or any Airport Authorities.
 
“Visa/MasterCard Dollar Trigger Event” shall mean any amendment to the existing
processing agreement or the Borrower entering into any replacement processing
agreement with respect to Visa and MasterCard receivables denominated in Dollars
that changes the percentage or calculation of reserves held by the credit card
processing bank in respect of such receivables (solely, in the case of any such
change in calculation, to the extent resulting in a calculation that is no
longer based upon Unearned Value (as such term is defined in the definition of
“Estimated Credit Card Receivables Component” contained herein)).
 
“Withdrawal Liability” shall have the meaning given such term under Part I of
Subtitle E of Title IV of ERISA and shall include liability that results from
either a complete or partial withdrawal.
 
SECTION 1.02.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented, extended, amended and restated or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s permitted successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement, (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights and (f) “knowledge” or “aware” or words of similar
import shall mean, when used in reference to the Borrower or the Guarantors, the
actual knowledge of any Responsible Officer.
 
 
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SECTION 1.03.  Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. Upon any such
request for an amendment, the Borrower, the Required Lenders and the
Administrative Agent agree to consider in good faith any such amendment in order
to amend the provisions of this Agreement so as to reflect equitably such
accounting changes so that the criteria for evaluating the Borrower’s financial
condition shall be the same after such accounting changes as if such accounting
changes had not occurred.
 
SECTION 2.
 
AMOUNT AND TERMS OF CREDIT
 
SECTION 2.01.  Commitments of the Lenders.
 
(a)  Second Lien Term Loan Commitment. (i) Each Lender agrees, upon the terms
and subject to the conditions herein set forth, to make available to the
Borrower on the Closing Date a term loan (a “Second Lien Term Loan”) in a
principal amount equal to such Lender’s Second Lien Term Loan Commitment. Once
repaid or prepaid, the Second Lien Term Loans may not be reborrowed.
 
(ii)  The Second Lien Term Loans shall be made by the Lenders pro rata in
accordance with their respective Second Lien Term Loan Commitments; provided,
however, that the failure of any Lender to make its Second Lien Term Loan shall
not in itself relieve the other Lenders of their obligations to lend.
 
(b)  Type of Borrowing. Except as otherwise provided in Section 2.02, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
 
(c)  Amount of Borrowing. At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is in
an integral multiple of $1,000,000 and not less than $5,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $100,000 and not less than $1,000,000.
Borrowings of more than one Type may be outstanding at the same time.
 
 
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(d)  Limitation on Interest Period. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
 
SECTION 2.02.  Requests for Borrowings.  To request the initial Borrowing of
Second Lien Term Loans, the Borrower shall notify the Administrative Agent of
such request by telephone (i) in the case of a Eurodollar Borrowing, not later
than 2:00 p.m., New York City time, two (2) Business Days before the date of the
proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Such
telephonic notice shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower. Such
telephone and written Borrowing Request shall specify the following information
in compliance with Section 2.01:
 
(a)  the aggregate amount of the requested Borrowing (which shall comply with
Section 2.01(c));
 
(b)  the date of such Borrowing, which shall be a Business Day;
 
(c)  the portion of the Borrowing that is to be an ABR Borrowing and that is to
be a Eurodollar Borrowing; and
 
(d)  in the case of such portion of the Borrowing that is a Eurodollar
Borrowing, the initial Interest Period applicable thereto, which shall be a
period contemplated by the definition of the term “Interest Period”.
 
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any portion of the requested Borrowing that is to be a Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month’s duration. Promptly following receipt of the Borrowing Request in
accordance with this Section 2.02, the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested Borrowing.
 
SECTION 2.03.  Funding of Borrowings.  (a)  Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 3:00 p.m., New York City time, or such earlier
time as may be reasonably practicable, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower designated by the Borrower in the applicable Borrowing Request.
 
(b)  Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith upon written demand such corresponding amount with interest thereon,
for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate otherwise applicable to such Borrowing. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.
 
 
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SECTION 2.04.  Interest Elections.  (a)  The Borrower may elect from time to
time to (i) convert ABR Loans to Eurodollar Loans, (ii) convert Eurodollar Loans
to ABR Loans, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto or (iii)
continue any Eurodollar Loan as such upon the expiration of the then current
Interest Period with respect thereto
 
(b)  To make an Interest Election Request pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.02 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
 
(c)  Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.01:
 
(i)    the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
 
(ii)    the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
 
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
 
(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
 
 
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(d)  Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e)  If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing, and upon the request of the Required Lenders,
(i) no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
 
SECTION 2.05.  Limitation on Eurodollar Tranches.  Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than twenty Eurodollar Tranches
shall be outstanding at any one time.
 
SECTION 2.06.  Interest on Loans. 
 
(a)  Subject to the provisions of Section 2.07, each ABR Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 360 days or, when the Alternate Base Rate is based on the Prime Rate, a year
with 365 days or 366 days in a leap year) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
 
(b)  Subject to the provisions of Section 2.07, each Eurodollar Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 360 days) at a rate per annum equal, during each Interest Period applicable
thereto, to the LIBO Rate for such Interest Period in effect for such Borrowing
plus the Applicable Margin.
 
(c)  Accrued interest on all Loans shall be payable in arrears on each Interest
Payment Date applicable thereto, on the Termination Date and after the
Termination Date on written demand and (with respect to Eurodollar Loans) upon
any repayment or prepayment thereof (on the amount repaid or prepaid); provided
that in the event of any conversion of any Eurodollar Loan to an ABR Loan,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
 
SECTION 2.07.  Default Interest.  If the Borrower or any Guarantor, as the case
may be, shall default in the payment of the principal of or interest on any Loan
or in the payment of any other amount becoming due hereunder, whether at stated
maturity, by acceleration or otherwise, the Borrower or such Guarantor, as the
case may be, shall on written demand of the Administrative Agent from time to
time pay interest, to the extent permitted by law, on all overdue amounts up to
(but not including) the date of actual payment (after as well as before
judgment) at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days or when the Alternate Base Rate is
applicable and is based on the Prime Rate, a year with 365 days or 366 days in a
leap year) equal to (a) with respect to any Loan, the rate then applicable for
such Borrowings plus 2.0% and (b) in the case of all other amounts, the rate
applicable for ABR Loans plus 2.0%.
 
 
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SECTION 2.08.  Alternate Rate of Interest.  In the event, and on each occasion,
that on the date that is two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Administrative Agent shall have
reasonably determined (which determination shall be conclusive and binding upon
the Borrower absent manifest error) that reasonable means do not exist for
ascertaining the applicable LIBO Rate, the Administrative Agent shall, as soon
as practicable thereafter, give written, facsimile or telegraphic notice of such
determination to the Borrower and the Lenders and, until the circumstances
giving rise to such notice no longer exist, any request by the Borrower for a
Borrowing of Eurodollar Loans hereunder (including pursuant to a refinancing
with Eurodollar Loans and including any request to continue, or to convert to,
Eurodollar Loans) shall be deemed a request for a Borrowing of ABR Loans.
 
SECTION 2.09.  Amortization of Second Lien Term Loan; Repayment of Loans;
Evidence of Debt.
 
(a)  Subject to adjustment pursuant to Section 2.10(d), the Borrower shall repay
to the Lenders the aggregate principal amount of all Second Lien Term Loans
outstanding on the following dates in the respective amounts set forth opposite
such dates:
 
Date
Amount
September 30, 2007
$2,250,000
December 31, 2007
$2,250,000
March 31, 2008
$2,250,000
June 30, 2008
$2,250,000
September 30, 2008
$2,250,000
December 31, 2008
$2,250,000
March 31, 2009
$2,250,000
June 30, 2009
$2,250,000
September 30, 2009
$2,250,000
December 31, 2009
$2,250,000
March 31, 2010
$2,250,000
June 30, 2010
$2,250,000
September 30, 2010
$2,250,000
December 31, 2010
$2,250,000
March 31, 2011
$2,250,000
June 30, 2011
$2,250,000
September 30, 2011
$2,250,000
December 31, 2011
$2,250,000
March 31, 2012
$2,250,000
June 30, 2012
$2,250,000
September 30, 2012
$2,250,000
December 31, 2012
$2,250,000
March 31, 2013
$2,250,000
June 30, 2013
$2,250,000
September 30, 2013
$2,250,000
December 31, 2013
$2,250,000
March 31, 2014
$2,250,000
Maturity Date
$839,250,000

 
 
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provided, however, that the final principal repayment installment of the Second
Lien Term Loans shall be repaid on the Maturity Date and in any event shall be
in an amount equal to the aggregate principal amount of all Second Lien Term
Loans outstanding on such date. Once repaid, no portion of the Second Lien Term
Loans may be reborrowed.
 
(b)  The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the ratable account of each Lender the then unpaid principal amount of
each Loan on the Termination Date.
 
(c)  Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
 
(d)  The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof. The Borrower
shall have the right, upon reasonable notice, to request information regarding
the accounts referred to in the preceding sentence.
 
(e)  The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
 
(f)  Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall promptly execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) in a form furnished
by the Administrative Agent and reasonably acceptable to the Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.02) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
 
 
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SECTION 2.10.  Mandatory Prepayment; Commitment Termination.
 
(a)    Within three (3) Business Days of the Borrower or any Guarantor receiving
any Net Cash Proceeds as a result of an Asset Sale or Recovery Event (including,
without limitation, an Event of Loss concerning an Airframe, Engine, Spare
Engine or Spare Parts), the Borrower or such Guarantor shall, if the Borrower
shall not be in compliance with Section 6.06(a) on the date such Net Cash
Proceeds are received, deposit such received Net Cash Proceeds (solely to the
extent necessary to maintain compliance with Section 6.06) into an account that
is maintained with the Administrative Agent or First Lien Administrative Agent
for such purpose and subject to a Full Control Agreement; provided that (i) in
the case of the Net Cash Proceeds of any Event of Loss so deposited and
involving an Airframe, Engine or Spare Engine, the Borrower shall be permitted
to use such Net Cash Proceeds to replace such Airframe, Engine or Spare Engine,
as the case may be, with a Replacement Airframe or Replacement Engine, as the
case may be, in accordance with the requirements of the First Lien Aircraft
Mortgage, with such Replacement Airframe or Replacement Engine to be subject to
the Lien of the Collateral Agent for the benefit of the First Priority Secured
Parties pursuant to the First Lien Aircraft Mortgage and otherwise satisfying
the requirements of the First Lien Aircraft Mortgage at the time of (or
substantially simultaneously with) the release of such Net Cash Proceeds, (ii)
in the case of Net Cash Proceeds of any  Recovery Event (other than Net Cash
Proceeds covered by clause (i) above) so deposited, the Borrower may use such
Net Cash Proceeds to repair or replace the assets which are the subject of such
Recovery Event with comparable assets, (iii) in the case of any Net Cash
Proceeds of any Asset Sale so deposited, the Borrower may use such Net Cash
Proceeds to  replace the assets which are the subject of such Asset Sale with
comparable assets within 365 days after such deposit is made, (iv) all such Net
Cash Proceeds shall be subject to release as provided in Section 6.06(c) or, at
the option of the Borrower at any time, may be applied in accordance with the
requirements of Section 2.10(b), and (v) upon the occurrence of an Event of
Default, the amount of any such deposit may be applied, subject to the
Intercreditor Agreement, by the Administrative Agent in accordance with Section
2.10(b)), provided that any release of Net Cash Proceeds pursuant to clause
(iii) of this Section shall be conditioned on the Borrower being in compliance
with Section 6.06(a), after giving effect thereto (it being understood that the
failure to be in compliance with Section 6.06(a) shall not prevent the release
of any Net Cash Proceeds in connection with any repair or replacement of assets
permitted hereunder so long as no decrease in the Total Collateral Coverage
Ratio will result therefrom).  
 
(b)    Amounts to be applied in connection with prepayments made pursuant to
this Section 2.10 shall, subject to the Intercreditor Agreement, be applied to
the prepayment of the Second Lien Term Loans on a pro rata basis. The
application of any prepayment pursuant to this Section 2.10 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans.
 
(c)    The Second Lien Term Loan Commitments shall terminate at 5:00 p.m., New
York City time, on the Closing Date. Upon the Termination Date, the Borrower
shall repay the Loans in full. 
 
(d)    All prepayments under this Section 2.10 shall be accompanied by accrued
but unpaid interest on the principal amount being prepaid to (but not including)
the date of prepayment, plus any Fees and any losses, costs and expenses, as
more fully described in Section 2.13 and 2.17 hereof. Any prepayments of the
Second Lien Term Loans under this Section 2.10 shall be applied pro rata to the
remaining scheduled amortization payments set forth in Section 2.09(a).
 
 
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SECTION 2.11.  Optional Prepayment of Loans.
 
(a)    The Borrower shall have the right at any time and from time to time to
prepay any Second Lien Term Loans, in whole or in part, (i) with respect to
Eurodollar Loans, upon (A) telephonic notice followed promptly by written or
facsimile notice or (B) written or facsimile notice received by 1:00 p.m., New
York City time, three Business Days prior to the proposed date of prepayment and
(ii) with respect to ABR Loans, upon written or facsimile notice received by
1:00 p.m., New York City time, one Business Day prior to the proposed date of
prepayment; provided that ABR Loans may be prepaid on the same day notice is
given if such notice is received by the Administrative Agent by 12:00 noon, New
York City time; provided further, however, that (A) each such partial prepayment
shall be in an amount not less than $5,000,000 and in integral multiples of
$1,000,000, (B) no prepayment of Eurodollar Loans shall be permitted pursuant to
this Section 2.11(a) other than on the last day of an Interest Period applicable
thereto unless such prepayment is accompanied by the payment of the amounts
described in Section 2.13, and (C) no partial prepayment of a Borrowing of
Eurodollar Loans shall result in the aggregate principal amount of the
Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $10,000,000. 
 
(b)    All prepayments under Section 2.11(a) shall be accompanied by accrued but
unpaid interest on the principal amount being prepaid to (but not including) the
date of prepayment, plus any Fees and any losses, costs and expenses, as more
fully described in Sections 2.13 and 2.17 hereof. Any partial prepayments of the
Second Lien Term Loans pursuant to this Section 2.11 shall be applied at the
direction of the Borrower.
 
(c)    Each notice of prepayment shall specify the prepayment date, the
principal amount of the Loans to be prepaid and, in the case of Eurodollar
Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable
and shall commit the Borrower to prepay such Loan by the amount and on the date
stated therein; provided, that the Borrower may revoke any notice of prepayment
under this Section 2.11 if such prepayment would have resulted from a
refinancing of the Obligations hereunder, which refinancing shall not be
consummated or shall otherwise be delayed. The Administrative Agent shall,
promptly after receiving notice from the Borrower hereunder, notify each Lender
of the principal amount of the Loans held by such Lender which are to be
prepaid, the prepayment date and the manner of application of the prepayment.
 
SECTION 2.12.  Increased Costs.  (a)  If any Change in Law shall:
 
(i)  impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement subject to Section
2.12(c)); or
 
(ii)  impose on any Lender or the London interbank market any other condition
(other than Taxes) affecting this Agreement or Eurodollar Loans made by such
Lender;
 
 
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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
 
(b)    If any Lender reasonably determines in good faith that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such
Lender such additional amount or amounts, in each case as documented by such
Lender to the Borrower as will compensate such Lender or such Lender’s holding
company for any such reduction suffered; it being understood that to the extent
duplicative of the provisions in Section 2.14, this Section 2.12(b) shall not
apply to Taxes.
 
(c)    The Borrower shall pay to each Lender, (i) as long as such Lender shall
be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurodollar funds or deposits, additional interest on
the unpaid principal amount of each Eurodollar Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive in the absence of
manifest error), and (ii) as long as such Lender shall be required to comply
with any reserve ratio requirement or analogous requirement of any other central
banking or financial regulatory authority imposed in respect of the maintenance
of the Second Lien Term Loan Commitments or the funding of the Eurodollar Loans,
such additional costs (expressed as a percentage per annum and rounded upwards,
if necessary, to the nearest five decimal places) equal to the actual costs
allocated to such Second Lien Term Loan Commitment or Loan by such Lender (as
determined by such Lender in good faith, which determination shall be conclusive
absent manifest error) which in each case shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall have
received at least fifteen (15) days’ prior notice (with a copy to the
Administrative Agent, and which notice shall specify the Statutory Reserve Rate,
if any, applicable to such Lender) of such additional interest or cost from such
Lender. If a Lender fails to give notice fifteen (15) days prior to the relevant
Interest Payment Date, such additional interest or cost shall be due and payable
fifteen (15) days from receipt of such notice.
 
(d)    A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender or its holding company, as the case may be, as
specified in paragraph (a), (b) or (c) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within fifteen (15)
days after receipt thereof.
 
(e)    Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right to
demand such compensation; provided, that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof. The protection of
this Section shall be available to each Lender regardless of any possible
contention as to the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.
 
 
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SECTION 2.13.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of the occurrence and
continuance an Event of Default), (b) the failure to borrow, convert, continue
or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto or (c) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Borrower pursuant to Section 2.16 or Section 10.08(b), then, in any such
event, at the request of such Lender the Borrower shall compensate such Lender
for the loss, cost and expense attributable to such event. Such loss, cost or
expense to any Lender shall be deemed to include an amount reasonably determined
in good faith by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the applicable rate of interest for such Loan (excluding,
however the Applicable Margin included therein, if any), for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within fifteen (15) days after receipt thereof.
 
SECTION 2.14.  Taxes.  (a)  Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided, that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
 
(b)    In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
 
 
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(c)    The Borrower shall indemnify the Administrative Agent and each Lender,
within thirty (30) days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
 
(d)    As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment to the extent available, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
 
(e)    Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
 
(f)    If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.14 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
 
SECTION 2.15.  Payments Generally; Pro Rata Treatment.
 
(a)    The Borrower shall make each payment or prepayment required to be made by
it hereunder (whether of principal, interest or fees, or of amounts payable
under Section 2.12 or 2.13, or otherwise) prior to 1:00 p.m., New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
reasonable discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 30 Hudson Street, 17th Floor, Jersey City, NJ 07302, pursuant to
wire instructions to be provided by the Administrative Agent, except that
payments pursuant to Sections 2.12, 2.13 and 10.04 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
 
 
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(b)    If at any time insufficient funds are received by and available to the
Administrative Agent or to the Collateral Agent to pay fully all Second Priority
Obligations then due hereunder, such funds shall be applied (i) first, towards
payment of fees and expenses then due under Section 10.04 payable to the
Administrative Agent and the Collateral Agent, in their respective capacities as
such, ratably among the parties entitled thereto in accordance with the amounts
of fees and expenses then due to such parties, (ii) second, towards payment of
fees and expenses then due under Section 10.04 payable to the Agents and the
Lenders and towards payment of interest then due on account of the Second Lien
Term Loans, ratably among the parties entitled thereto in accordance with the
amounts of such fees and expenses and interest then due to such parties, and
(iii) third, towards payment of principal of the Second Lien Term Loans then due
hereunder (pro rata among the holders of such Indebtedness), ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
 
(c)    Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
 
(d)    If any Lender shall fail to make any payment required to be made by it
pursuant to Sections 2.03(a) or (b) or 10.04(c), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender’s obligations under such Sections until all
such unsatisfied obligations are fully paid.
 
SECTION 2.16.  Mitigation Obligations; Replacement of Lenders.  (a)  If the
Borrower is required to pay any additional amount to any Lender under Section
2.12 or to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder, to assign its rights and obligations hereunder to another of its
offices, branches or affiliates or to file any certificate or document
reasonably requested by the Borrower, if, in the judgment of such Lender, such
designation, assignment or filing (i) would eliminate or reduce amounts payable
pursuant to Section 2.12 or 2.14, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
 
 
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(b)  If, after the date hereof, any Lender requests compensation under Section
2.12 or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.02), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided, that (i) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans, accrued interest thereon, accrued fees and all other amounts due,
owing and payable to it hereunder at such time, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (ii) in the case of payments required to be
made pursuant to Section 2.14, such assignment will result in a reduction in
such compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
 
SECTION 2.17.  Certain Fees.  The Borrower shall pay to the Administrative
Agent, for the respective accounts of the Administrative Agent and the Lenders,
the fees set forth in that certain Arrangers Fee Letter dated as of January 29,
2007 among the Administrative Agent, JPMSI, Goldman Sachs, LBI, LCPI, Merrill
Lynch, UBS, UBS Finance, Barclays, Barclays Capital and the Borrower at the
times set forth therein, and as otherwise heretofore agreed.
 
SECTION 2.18.  Nature of Fees.  All Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent, as provided herein and
in the fee letters described in Section 2.17. Once paid, none of the Fees shall
be refundable under any circumstances.
 
SECTION 2.19.  Right of Set-Off.  Upon the occurrence and during the continuance
of any Event of Default pursuant to Section 7.01(b), the Administrative Agent
and each Lender (and their respective banking Affiliates) is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final but excluding deposits in the Escrow Accounts, Payroll
Accounts and other accounts, in each case, held in trust for an identified
beneficiary) at any time held and other indebtedness at any time owing by the
Administrative Agent and each such Lender (or any of such banking Affiliates) to
or for the credit or the account of the Borrower or any Guarantor against any
and all of any such overdue amounts owing under the Loan Documents, irrespective
of whether or not the Administrative Agent or such Lender shall have made any
demand under any Loan Document. Each Lender and the Administrative Agent agree
promptly to notify the Borrower and Guarantors after any such set-off and
application made by such Lender or the Administrative Agent (or any of such
banking Affiliates), as the case may be, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and the Administrative Agent under this Section are in addition
to other rights and remedies which such Lender and the Administrative Agent may
have upon the occurrence and during the continuance of any Event of Default.
 
 
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SECTION 2.20.  Payment of Obligations
 
. Subject to the provisions of Section 7.01, upon the maturity (whether by
acceleration or otherwise) of any of the Obligations under this Agreement or any
of the other Loan Documents of the Borrower and the Guarantors, the Lenders
shall be entitled to immediate payment of such Obligations.
 
SECTION 2.21.  Defaulting Lenders.  (a)  If at any time any Lender becomes a
Defaulting Lender, then the Borrower may, on ten (10) Business Days’ prior
written notice to the Administrative Agent and such Lender, replace such Lender
by causing such Lender to (and such Lender shall be obligated to) assign
pursuant to Section 10.02(b) (with the assignment fee to be paid by the Borrower
in such instance) all of its rights and obligations under this Agreement to one
or more assignees; provided that neither the Administrative Agent nor any Lender
shall have any obligation to the Borrower to find a replacement Lender or other
such Person.
 
(b)    Any Lender being replaced pursuant to Section 2.21(a) above shall (i)
execute and deliver an Assignment and Acceptance with respect to such Lender’s
outstanding Second Lien Term Loan Commitments and Loans and (ii) deliver any
documentation evidencing such Loans to the Borrower or the Administrative Agent.
Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall
acquire all or a portion, as the case may be, of the assigning Lender’s
outstanding Second Lien Term Loan Commitments and Loans, (B) all obligations of
the Borrower owing to the assigning Lender relating to the Second Lien Term Loan
Commitments and Loans so assigned shall be paid in full by the assignee Lender
to such assigning Lender concurrently with such assignment and acceptance and
(C) upon such payment and, if so requested by the assignee Lender, delivery to
the assignee Lender of the appropriate documentation executed by the Borrower in
connection with previous Borrowings, the assignee Lender shall become a Lender
hereunder and the assigning Lender shall cease to constitute a Lender hereunder
with respect to such assigned Loans, except with respect to indemnification
provisions under this Agreement, which shall survive as to such assigning
Lender.
 
SECTION 3.
 
REPRESENTATIONS AND WARRANTIES
 
In order to induce the Lenders to make Loans hereunder, the Borrower and each of
the Guarantors jointly and severally represent and warrant as follows:
 
 
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SECTION 3.01.  Organization and Authority.  Each of the Borrower and the
Guarantors (a) is duly organized, validly existing and in good standing (to the
extent such concept is applicable in the applicable jurisdiction) under the laws
of the jurisdiction of its organization and is duly qualified and in good
standing in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect, (b) has the requisite corporate or limited liability
company power and authority to effect the Transactions, and (c) has all
requisite power and authority and the legal right to own or lease and operate
its properties (subject, in the case of any Restructuring Aircraft, to the
Post-Petition Aircraft Agreement applicable to such Restructuring Aircraft) and
pledge or mortgage Collateral, and to conduct its business as now or currently
proposed to be conducted.
 
SECTION 3.02.  Air Carrier Status.  (a)  Each of the Borrower and Comair is an
“air carrier” within the meaning of Section 40102 of Title 49 and holds a
certificate under Section 41102 of Title 49. Each of the Borrower and Comair
holds an air carrier operating certificate issued pursuant to Chapter 447 of
Title 49. Each of the Borrower and Comair is a “citizen of the United States” as
defined in Section 40102(a)(15) of Title 49 and as that statutory provision has
been interpreted by the DOT pursuant to its policies (a “United States
Citizen”). Each of the Borrower and Comair possesses all necessary certificates,
franchises, licenses, permits, rights, designations, authorizations, exemptions,
concessions, frequencies and consents which relate to the operation of the
routes flown by it and the conduct of its business and operations as currently
conducted except where failure to so possess would not, in the aggregate, have a
Material Adverse Effect.
 
(b)    Other than Comair, no Guarantor is an “air carrier” within the meaning of
Section 40102(a)(2) of Title 49, and no Guarantor holds a certificate under
Section 41102 of Title 49 (other than as a result of a Guarantor becoming an
“air carrier” or holding such certificate in connection with a Permitted
Acquisition).
 
SECTION 3.03.  Due Execution.  The execution, delivery and performance by each
of the Borrower and the Guarantors of each of the Loan Documents to which it is
a party (a) are within the respective corporate or limited liability company
powers of each of the Borrower and the Guarantors, have been duly authorized by
all necessary corporate or limited liability company action, including the
consent of shareholders or members where required, and do not (i) contravene the
charter, by-laws or limited liability company agreement (or equivalent
documentation) of any of the Borrower or the Guarantors, (ii) violate any
applicable law (including, without limitation, the Securities Exchange Act of
1934) or regulation (including, without limitation, Regulations T, U or X of the
Board), or any order or decree of any court or Governmental Authority, other
than violations by the Borrower or the Guarantors which would not reasonably be
expected to have a Material Adverse Effect, (iii) conflict with or result in a
breach of, constitute a default under, or create an adverse liability or rights
under, any material indenture, mortgage or deed of trust or any material lease,
agreement or other instrument binding on the Borrower or the Guarantors or any
of their properties, which, in the aggregate, would reasonably be expected to
have a Material Adverse Effect, or (iv) result in or require the creation or
imposition of any Lien upon any of the property of any of the Borrower or the
Guarantors other than the Liens granted pursuant to this Agreement or the other
Loan Documents; and (b) do not require the consent, authorization by or approval
of or notice to or filing or registration with any Governmental Authority other
than (i) the filing of financing statements under the New York Uniform
Commercial Code, (ii) the filings and consents contemplated by the Collateral
Documents, (iii) approvals, consents and exemptions that have been obtained on
or prior to the Closing Date and (iv) consents, approvals and exemptions that
the failure to obtain in the aggregate would not be reasonably expected to
result in a Material Adverse Effect. This Agreement has been duly executed and
delivered by each of the Borrower and the Guarantors. This Agreement is, and
each of the other Loan Documents to which the Borrower and each of the
Guarantors is or will be a party, when delivered hereunder or thereunder, will
be, a legal, valid and binding obligation of the Borrower and each Guarantor, as
the case may be, enforceable against the Borrower and the Guarantors, as the
case may be, in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
 
 
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SECTION 3.04.  Statements Made.  No representation or warranty or certification
of the Borrower or any Guarantor contained in writing in this Agreement, any
other Loan Document or in any other document, report, public or private
confidential information memorandum, financial statement, certificate or other
written information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished, other than to the extent that any such statements
constitute projections, budgets, estimates or other forward looking statements),
taken as a whole and in light of the circumstances in which made, contains, when
furnished, any untrue statement of a material fact or omits to state a material
fact necessary to make such statements not materially misleading; and, to the
extent that any such information constitutes projections, budgets, estimates or
other forward looking statements, such projections, budgets, estimates or other
forward looking statements were prepared in good faith on the basis of
assumptions believed by the Borrower or such Guarantor to be reasonable at the
time such projections, budgets, estimates or other forward looking statements
were furnished (it being understood that projections, budgets, estimates or
other forward looking statements by their nature are inherently uncertain, that
no assurances can be given that projections, budgets, estimates or other forward
looking statements will be realized and that actual results in fact may differ
materially from any projections, budgets, estimates or other forward looking
statements provided to the Administrative Agent or the Lenders).
 
SECTION 3.05.  Financial Statements; Material Adverse Change. 
 
(a)  The Borrower has furnished the Administrative Agent on behalf of the
Lenders with copies of the audited consolidated financial statement and
schedules of the Borrower and its Subsidiaries for the fiscal year ended
December 31, 2006, certified by its chief financial officer. Such financial
statements present fairly, in all material respects, in accordance with GAAP,
the financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis as of such date and for such period; such
balance sheets and the notes thereto disclose all liabilities, direct or
contingent, of the Borrower and its Subsidiaries as of the date thereof required
to be disclosed by GAAP and such financial statements were prepared in a manner
consistent with GAAP in all material respects.
 
(b)  Since January 29, 2007, there has been no Material Adverse Change.
 
 
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SECTION 3.06.  Ownership.  As of the Closing Date, other than as set forth on
Schedule 3.06, (a) each of the Persons listed on Schedule 3.06 is a
wholly-owned, direct or indirect Subsidiary of the Borrower, and (b) the
Borrower owns no other Subsidiaries, whether directly or indirectly.
 
SECTION 3.07.  Liens.  Except for the Liens existing on the Closing Date as
reflected on Schedule 3.07, there are no Liens of any nature whatsoever on any
assets of the Borrower or any of the Guarantors other than Liens permitted
pursuant to Section 6.01 (including any waiver or amendment thereto subsequent
to the Closing Date).
 
SECTION 3.08.  Use of Proceeds.  The proceeds of the Loans shall be used to
repay amounts outstanding under the Existing DIP Facilities, to pay certain
accrued administrative expenses, and for the payment of fees and transaction
costs as contemplated hereby and as referred to in Section 2.17.
 
SECTION 3.09.  Litigation and Environmental Matters.  Other than as set forth on
Schedule 3.09:
 
(a)  There are no actions, suits, proceedings or investigations pending or, to
the knowledge of the Borrower or the Guarantors, threatened against or affecting
the Borrower or the Guarantors or any of their respective properties, before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (i) that would reasonably be expected to
have a Material Adverse Effect or (ii) that purport to, or could reasonably be
expected to, affect the legality, validity, binding effect or enforceability of
the Loan Documents or, in any material respect, the rights and remedies of the
Administrative Agent, the Collateral Agent or the Lenders thereunder or in
connection with the Transactions. 
 
(b)  Except with respect to any matters that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect, (i) the
Borrower and each Guarantor is currently in compliance with all, and has not
violated any, Environmental Laws and/or requirements of any Airport Authority
with respect to environmental matters and maintains and complies with all, and
has not violated any, Environmental Permits and (ii) none of the Borrower or the
Guarantors has (x) become subject to any Environmental Liability, or (y)
received written or, to the knowledge of the Borrower or the Guarantors, verbal
notice of any pending or, to the knowledge of the Borrower or the Guarantors,
threatened claim with respect to any Environmental Liability, and there is no
reasonable basis for any Environmental Liability.
 
SECTION 3.10.  FAA Slot Utilization.  Except for matters which could not
reasonably be expected to have a Material Adverse Effect, the Borrower and the
Guarantors, as applicable, are utilizing, or causing to be utilized, their
respective FAA Slots in a manner consistent with applicable rules, regulations,
laws and contracts in order to preserve both their respective right to hold and
operate the FAA Slots, taking into account any waivers or other relief granted
to the Borrower and any Guarantor by the FAA, other applicable U.S. Governmental
Authority or U.S. Airport Authority. Except as otherwise disclosed in the
Borrower’s most recent Form 10-K, neither the Borrower nor any Guarantor has
received any written notice from the FAA, other applicable U.S. Governmental
Authority or U.S. Airport Authority, or are aware of any other event or
circumstance, that would be reasonably likely to impair in any material respect
their respective right to hold and operate any FAA Slot, except that which would
not reasonably be expected to have a Material Adverse Effect.
 
 
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SECTION 3.11.  Primary Foreign Slot Utilization.  The Borrower and the
Guarantors, as applicable, are utilizing, or causing to be utilized, their
respective Primary Foreign Slots in a manner consistent with applicable
regulations, foreign laws and contracts in order to preserve their respective
right to hold and operate the Primary Foreign Slots. Except as otherwise
disclosed in the Borrower’s most recent Form 10-K, neither the Borrower nor any
Guarantor, as applicable, has received any written notice from any applicable
Foreign Aviation Authorities, or is aware of any other event or circumstance
that would be reasonably likely to impair in any material respect their
respective right to hold and operate any such Primary Foreign Slot, except that
which would not reasonably be expected to have a Material Adverse Effect.
 
SECTION 3.12.  Primary Route Utilization.  The Borrower and the Guarantors, as
applicable, hold the requisite authority to operate each of their respective
Primary Routes pursuant to Title 49, applicable foreign law, and the applicable
rules and regulations of the FAA, DOT and any applicable Foreign Aviation
Authorities, and have, at all times after being awarded each such Primary Route,
complied in all material respects with all of the terms, conditions and
limitations of each such certificate or order issued by the DOT and the
applicable Foreign Aviation Authorities regarding such Primary Route and with
all applicable provisions of Title 49, applicable foreign law, and the
applicable rules and regulations of the FAA, DOT and any Foreign Aviation
Authorities regarding such Primary Route. There exists no failure of the
Borrower and any applicable Guarantor to comply with such terms, conditions or
limitations that gives the FAA, DOT or any applicable Foreign Aviation
Authorities the right to terminate, cancel, suspend, withdraw or modify in any
materially adverse respect the rights of the Borrower and the Guarantors, as
applicable, in any such Primary Route, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
 
SECTION 3.13.  Margin Regulations; Investment Company Act.
 
(a)  Neither the Borrower nor any Guarantor is engaged, nor will it engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the
Board, “Margin Stock”), or extending credit for the purpose of purchasing or
carrying Margin Stock and no proceeds of any Loans 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 in violation of Regulation U.
 
(b)  Neither the Borrower nor any Guarantor is, or after the making of the Loans
will be, or is required to be registered as an “investment company” under the
Investment Company Act of 1940, as amended. Neither the making of any Loan, nor
the application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents, will
violate any provision of such Act or any rule, regulation or order of the SEC
thereunder.
 
SECTION 3.14.  ERISA.  Except as set forth on Schedule 3.14 and other than in
connection with the bankruptcy proceedings of the Borrower and certain of the
direct and indirect subsidiaries of the Borrower in the Bankruptcy Court, no
Termination Event has occurred or is reasonably expected to occur. Except to the
extent the same could not reasonably be expected to have a Material Adverse
Effect and except as otherwise disclosed in the Borrower’s most recent Form 10-K
(including the Notes to the financial statements contained therein), the present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of all such underfunded Plans. As of the date hereof,
neither the Borrower nor any of its ERISA Affiliates contributes to or is
obligated to contribute to any Multiemployer Plan subject to Title IV of ERISA.
 
 
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SECTION 3.15.  Properties. 
 
(a)  The Borrower and the Guarantors have good title to (and with respect to
Real Property Assets, good and marketable title to) each of the properties and
assets reflected on the financial statements referred to in Section 3.05 hereof,
including, without limitation, the Real Property Assets (other than such
properties or assets disposed of in the ordinary course of business since the
date of such financial statements or as permitted hereunder). As of the Closing
Date, Schedule 3.15(a) is a true and complete description of (i) each parcel of
real property owned by the Borrower or any Guarantor and (ii) the entity who
owns such real property.
 
(b)  Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (i) each of the Borrower and
the Guarantors owns, or is licensed to use, all trademarks, trade names,
copyrights, patents and other intellectual property material to its business and
(ii) the use thereof by such Borrower or Guarantor, to the Borrower’s or such
Guarantor’s knowledge, does not infringe upon the rights of any other Person.
 
(c)  As of the Closing Date, neither the Borrower nor any Guarantor has received
any written notice of a pending or contemplated condemnation proceeding
affecting any Real Property Asset having a fair market value in excess of
$5,000,000.
 
SECTION 3.16.  Perfected Security Interests.  The Collateral Documents, taken as
a whole, are effective to create in favor of the Collateral Agent, for the
benefit of the Second Priority Secured Parties, a legal, valid and enforceable
security interest in all of the Collateral subject as to enforceability to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law. At
such time as (a) financing statements in appropriate form are filed in the
appropriate offices (and the appropriate fees are paid), (b) the Second Lien
Aircraft Mortgage (including, without limitation, any Mortgage Supplement) is
filed for recordation with the FAA (and the appropriate fees are paid) and
registrations with respect to the International Interests in the Mortgaged
Collateral constituted by the Second Lien Aircraft Mortgage are duly made in the
International Registry, (c) with respect to identified intellectual property
registered in the United States, the Second Lien Trademark Security Agreement
and the Second Lien Patent Security Agreement are filed in the appropriate
divisions of the United States Patent and Trademark Office (and the appropriate
fees are paid) and the Second Lien Copyright Security Agreement is filed in the
United States Copyright Office (and the appropriate fees are paid), (d) the
Second Lien Real Estate Mortgages are filed in the appropriate recording office
(and the appropriate fees are paid), (e) execution of the Control Agreements and
(f) delivery of pledged securities under the Second Lien Pledge Agreement
(together with appropriate stock powers) to the Administrative Agent or the
First Lien Administrative Agent, the Collateral Agent, for the benefit of the
Second Priority Secured Parties, shall have a second priority perfected security
interest and/or mortgage (or comparable Lien) in all of the Collateral to the
extent that the Liens on such Collateral may be perfected upon the filings or
upon the taking of the actions described in clauses (a) through (f) above,
subject in each case only to Liens permitted by Section 6.01 (or, in the case of
the Real Property Assets, subject only to the Permitted Liens and other Liens
specified in the applicable Second Lien Real Estate Mortgage).
 
 
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SECTION 3.17.  Payment of Taxes.  Except as set forth on Schedule 3.17 (and
except as otherwise specifically permitted by the Plan of Reorganization and the
Bankruptcy Court), each of the Borrower and the Guarantors has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid when due all Taxes required to have been paid by
it, except and solely to the extent that, in each case (a) such Taxes are being
contested in good faith by appropriate proceedings and the Borrower or such
Guarantor, as applicable, has set aside on its books adequate reserves therefor
or (b)  the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
 
SECTION 3.18.  Section 1110.  The Aircraft, Engines and Spare Engines listed on
Schedule 3.18 represent each of the Aircraft, Engine and Spare Engine
constituting Mortgaged Collateral as of the Closing Date that were first placed
in service prior to October 22, 1994.
 
SECTION 4.
 
CONDITIONS OF LENDING
 
SECTION 4.01.  Conditions Precedent to Initial Loans.  The obligation of the
Lenders to make the initial Loans is subject to the satisfaction (or waiver in
accordance with Section 10.08) of the following conditions precedent:
 
(a)  Supporting Documents. The Administrative Agent shall have received for each
of the Borrower and the Guarantors:
 
(i)  a copy of such entity’s certificate of incorporation or formation, as
amended, certified as of a recent date by the Secretary of State of the state of
its incorporation or formation;
 
 
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(ii)  a certificate of the Secretary of State of the state of such entity’s
incorporation or formation, dated as of a recent date, as to the good standing
of that entity (to the extent available in the applicable jurisdiction) and as
to the charter documents on file in the office of such Secretary of State;
 
(iii)  a certificate of the Secretary or an Assistant Secretary of such entity
dated the date of the initial Loans hereunder and certifying (A) that attached
thereto is a true and complete copy of the by-laws or limited liability company
agreement of that entity as in effect on the date of such certification, (B)
that attached thereto is a true and complete copy of resolutions adopted by the
board of directors, board of managers or members of that entity authorizing the
Borrowings hereunder, the execution, delivery and performance in accordance with
their respective terms of this Agreement, the Loan Documents and any other
documents required or contemplated hereunder or thereunder and the granting of
the Liens contemplated hereby or the other Loan Documents, (C) that the
certificate of incorporation or formation of that entity has not been amended
since the date of the last amendment thereto indicated on the certificate of the
Secretary of State furnished pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer of that entity executing this
Agreement and the Loan Documents or any other document delivered by it in
connection herewith or therewith (such certificate to contain a certification by
another officer of that entity as to the incumbency and signature of the officer
signing the certificate referred to in this clause (iii)); and
 
(iv)  an Officer’s Certificate from the Borrower certifying (A) as to the truth
in all material respects of the representations and warranties contained in the
Loan Documents as though made on and as of the date of the initial Loans, except
to the extent that any such representation or warranty relates to a specified
date, in which case such representation or warranty shall be or was true and
correct in all material respects as of such date after giving effect to the
Consummation of the Plan of Reorganization and to the Transactions and (B) the
absence of any event occurring and continuing, or resulting from the initial
extensions of credit on the Closing Date that constitutes an Event of Default or
event which, with giving of notice or passage of time or both, would be an Event
of Default.
 
(b)  Credit Agreement.  Each party hereto shall have duly executed and delivered
to the Administrative Agent this Agreement.
 
(c)  Security Agreement, Pledge Agreement and Perfection Certificate.  The
Borrower and each of the Guarantors shall have duly executed and delivered to
the Collateral Agent or the First Lien Collateral Agent, as applicable, a Second
Lien Security Agreement in substantially the form of Exhibit B (the “Second Lien
Security Agreement”) and a Second Lien Pledge Agreement in substantially the
form of Exhibit C (the “Second Lien Pledge Agreement”), together with (i) any
pledged Collateral (together with undated stock powers or note powers, as
applicable, executed in blank) required to be delivered thereunder, (ii) all
documents, certificates, forms and filing fees that the Collateral Agent may
deem necessary to perfect and protect the Liens and security interests created
under the Second Lien Security Agreement and Second Lien Pledge Agreement,
including, without limitation, financing statements in form and substance
reasonably acceptable to the Collateral Agent, as may be required to grant,
continue and maintain an enforceable security interest in the Collateral
(subject to the terms hereof and of the other Loan Documents) in accordance with
the Uniform Commercial Code as enacted in all relevant jurisdictions and
(iii) the perfection certificate attached as an exhibit to the Second Lien
Security Agreement
 
 
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(d)  SGR Security Agreement. Each of the Borrower and Comair shall have duly
executed and delivered to the Collateral Agent or First Lien Collateral Agent,
as applicable, a slot, gate and route security and pledge agreement, in
substantially the form of Exhibit D (the “Second Lien SGR Security Agreement”),
together with (i) in respect of each of the FAA Slots, undated slot transfer
documents, executed in blank to be held in escrow by the Collateral Agent or
First Lien Collateral Agent, as applicable, and (ii) all financing statements in
form and substance reasonably acceptable to the Collateral Agent, as may be
required to grant, continue and maintain an enforceable security interest in the
applicable Collateral (subject to the terms hereof and of the other Loan
Documents) in accordance with the Uniform Commercial Code as enacted in all
relevant jurisdictions
 
(e)  Aircraft Mortgage. Each of the Borrower and Comair shall have duly executed
and delivered to the Collateral Agent an aircraft mortgage, in substantially the
form of Exhibit E (the “Second Lien Aircraft Mortgage”), and a Mortgage
Supplement with respect to the Mortgaged Collateral in substantially the form
annexed to the Second Lien Aircraft Mortgage, together with (i) evidence of the
filing for recordation with the FAA of the Second Lien Aircraft Mortgage and the
Mortgage Supplement (together with any other necessary documents, instruments,
affidavits or certificates) as the Collateral Agent may deem reasonably
necessary to perfect and protect the Liens created thereby, including, without
limitation, recordings and filings with the FAA, and all filings and recording
fees and taxes in respect thereof shall have been duly paid, (ii) copies of the
Entry Point Filing Forms, and (iii) evidence that all other action that the
Collateral Agent may deem reasonably necessary to perfect and protect the Liens
and security interests created under the Second Lien Aircraft Mortgage and the
Mortgage Supplement has been taken. The parties hereto acknowledge and agree
that any Lien described in this Agreement on the Mortgaged Collateral is a Lien
in favor of the Collateral Agent for the ratable benefit of the Second Priority
Secured Parties.
 
(f)  Intellectual Property Security Agreements. The Borrower and each applicable
Guarantor shall have duly executed and delivered to the Collateral Agent a (i)
Second Lien Patent Security Agreement in substantially the form of Exhibit F-2
(the “Second Lien Patent Security Agreement”) and (ii) Second Lien Copyright
Security Agreement, in substantially the form of Exhibit F-3 (the “Second Lien
Copyright Security Agreement” ), together with all documents, certificates,
forms and filing fees that the Collateral Agent may deem reasonably necessary to
perfect and protect the Liens and security interests created in the identified
intellectual property in the Second Lien Patent Security Agreement and the
Second Lien Copyright Security Agreement.
 
(g)  Real Estate Mortgages. The Borrower or the applicable Guarantor (as the
case may be) shall have duly executed and delivered to the Collateral Agent the
Second Lien Real Estate Mortgages, together with (i) evidence that Second Lien
Real Estate Mortgages shall be recorded in all places to the extent that the
Collateral Agent may deem reasonably necessary to perfect and protect the Liens
created thereby, including, without limitation, recordings and filings with the
appropriate agencies, and all filings and recording fees and taxes in respect
thereof shall have been duly paid and (ii) evidence that all other action that
the Collateral Agent may deem reasonably necessary to perfect and protect the
Liens and security interests created under the Second Lien Real Estate Mortgages
has been taken.
 
 
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(h)  Appraisals and Field Audits. The Administrative Agent shall have received,
in form and substance reasonably satisfactory to it, (i) appraisals from (1) the
Appraisers in respect of the Appraised Collateral (other than the Real Property
Assets) and (2) the Real Estate Appraiser in respect of the Real Property Assets
and (ii) a Field Audit in respect of the Eligible Accounts Receivable.
 
(i)  Opinions of Counsel. The Administrative Agent, the Lenders and the
Collateral Agent shall have received:
 
(i)  a written opinion of Leslie P. Klemperer, Vice President and Deputy General
Counsel for the Borrower;
 
(ii)  a written opinion of Davis Polk & Wardwell, counsel to the Borrower and
the Guarantors, dated the date of the initial Loans, substantially in the form
of Exhibit G-1;
 
(iii)   a written opinion of each of (A) Kilpatrick Stockton LLP, (B) Keating
Muething & Klekamp PLL, (C) Akerman Senterfitt and (D) Morris, Nichols, Arsht &
Tunnell LLP, each a special local counsel to the Borrower and the Guarantors,
each dated the date of the initial Loans, substantially in the form of Exhibits
G-2, G-3, G-4 and G-5, respectively;
 
(iv)  a written opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special
FAA counsel, substantially in the form of Exhibit G-6; and
 
(v)  a written opinion with respect to each Second Lien Real Estate Mortgage
reasonably satisfactory to the Administrative Agent of such other local real
estate counsel as the Administrative Agent may reasonably request.
 
(j)  Payment of Fees and Expenses. The Borrower shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid Fees due,
owing and payable under and pursuant to this Agreement, as referred to in
Section 2.17 and as heretofore agreed upon by the Borrower and the
Administrative Agent, and all reasonable fees and reasonable out-of-pocket
expenses of the Administrative Agent, the Lead Arrangers, the Joint Bookrunners
and the Collateral Agent (including the reasonable fees and reasonable
out-of-pocket expenses of counsel to the Administrative Agent) as to which
invoices have been issued and presented.
 
(k)  Lien Searches; International Registry Searches. The Administrative Agent
shall have received UCC searches conducted in the jurisdictions in which the
Borrower and the Guarantors are incorporated or such other jurisdictions as the
Administrative Agent may reasonably require and Lien searches conducted in the
recording office of the Federal Aviation Administration and, with respect to the
applicable Mortgaged Collateral, “priority search certificates” (as defined in
the Regulations and Procedures for the International Registry), all as may be
reasonably satisfactory to the Administrative Agent (dated as of a date
reasonably satisfactory to the Administrative Agent), reflecting the absence of
Liens and encumbrances on the assets of the Borrower and the Guarantors other
than Liens permitted hereunder and as may be reasonably satisfactory to the
Administrative Agent and the absence of registrations on the International
Registry with respect to the applicable Mortgaged Collateral other than the
registrations contemplated herein, and (in the case of the searches conducted at
the recording office of the FAA) indicating that the Borrower (or a Guarantor)
is the registered owner of each of the aircraft which is intended to be covered
by the Second Lien Aircraft Mortgage.
 
 
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(l)  Insurance. (i) The Collateral Agent shall have received certificates of
insurance with respect to insurance maintained by the Borrower or any Guarantor,
as the case may be, which certificates evidence compliance by the Borrower and
the Guarantors with the insurance requirements set forth herein and in the
Collateral Documents as of the Closing Date and contain signatures of duly
authorized representatives of AON Risk Services or such other insurance broker
as may be reasonably acceptable to the Collateral Agent.
 
(ii) The Collateral Agent shall have been named as loss payees and/or additional
insured, as applicable, with respect to the Collateral on such policies of
insurance of the Borrower and the Guarantors as the Collateral Agent may have
reasonably requested (or as otherwise specified in the Collateral Documents).
 
(m)  Title/Survey. The Collateral Agent shall have received title insurance
policies with respect to each Real Property Asset from Lawyers Title Insurance
Company or another title company reasonably acceptable to the Collateral Agent
and real property surveys with respect to the Real Property Assets, all in form
and substance reasonably satisfactory to the Collateral Agent.
 
(n)  Order; Plan of Reorganization. (i) The Confirmation Order shall have been
entered in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, any applicable orders of the Bankruptcy Court and any applicable
local rules and the provisions relating to the Facilities contained therein
shall be reasonably satisfactory to the Administrative Agent, (ii) the
Confirmation Order shall be in full force and effect, shall not, without the
consent of the Agents (such consent not to be unreasonably withheld, conditioned
or delayed), have been reversed or modified or be subject to stay or a motion to
stay, (iii) all conditions to the effectiveness of the Plan of Reorganization
shall have been satisfied or waived (the waiver thereof (other than the waiver
of the condition that the Confirmation Order shall have become a Final Order),
if materially adverse to the Lenders, having been approved by the Administrative
Agent (which approval shall not be unreasonably withheld, conditioned or
delayed)) and the Consummation of the Plan of Reorganization shall occur on the
Closing Date contemporaneously with the making of the initial Loans hereunder,
and (iv) the pro forma capital and ownership structure shall be substantially as
described in the Joint Plan of Reorganization of the Borrower and its domestic
Subsidiaries filed with the Bankruptcy Court on April 25, 2007 and such plan
shall not have been amended in any manner materially adverse to the Lenders
without the consent of the Administrative Agent (which consent shall not be
unreasonably withheld, conditioned or delayed).
 
 
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(o)    Repayment of Existing DIP Facility. Upon Consummation of the Plan of
Reorganization and the making of the initial Loans, the Existing DIP Facilities
shall have been repaid in full (or, in the case of any Existing DIP Facility
Letter of Credit, cash-collateralized or guaranteed by a back-to-back letter of
credit) and all action necessary to release all collateral pledged to secure the
Loans shall have been taken, in form and substance reasonably satisfactory to
the Administrative Agent. Substantially all other existing Indebtedness of the
Borrower and its Subsidiaries, other than any Indebtedness otherwise permitted
hereunder, shall have been repaid, restructured or reinstated as expressly
contemplated by the Plan of Reorganization.
 
(p)    Consents. All material governmental and third party consents and
approvals necessary in connection with the financing contemplated hereby shall
have been obtained, in form and substance reasonably satisfactory to the
Administrative Agent, and be in full force and effect.
 
(q)    Financial Statements. The Lenders shall have received (i) audited
consolidated financial statements of the Borrower for the three most recent
fiscal years ended prior to the Closing Date, (ii) unaudited interim
consolidated financial statements of the Borrower for each quarterly period
ended subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this Section 4.01(q) and 60 days or more prior to the
Closing Date, (iii) a pro forma consolidated balance sheet of the Borrower as of
the date of the most recent consolidated balance sheet delivered pursuant to the
preceding clauses (i) or (ii), giving effect to the consummation of the Plan of
Reorganization and the financings contemplated hereby and thereby, and (iv) a
business plan of the Borrower including quarterly projections through December
31, 2007 and annual projections through December 31, 2010. Documents required to
be delivered pursuant to clauses (i) and (ii) hereof which are made available
via EDGAR, or any successor system of the SEC, in the Borrower’s Annual Report
on Form 10-K or Quarterly Report on Form 10-Q, shall be deemed delivered to the
Lenders on the date such documents are made so available; provided that, upon
request, the Borrower shall deliver paper copies of such documents to the
Administrative Agent.
 
(r)    No Illegality. No law or regulation shall be applicable in the reasonable
judgment of the Administrative Agent or the Lenders that restrains, prevents or
imposes materially adverse conditions upon the Transactions.
 
(s)    Representations and Warranties. All representations and warranties set
forth in Section 3 hereof shall be true and correct in all material respects on
and as of the Closing Date, after giving effect to the Consummation of the Plan
of Reorganization and to the Transactions, as though made on and as of such date
(except to the extent any such representation or warranty by its terms is made
as of a different specified date, in which event such representation or warranty
shall be true and correct in all material respects as of such specified date).
 
(t)    No Event of Default. After giving effect to the Consummation of the Plan
of Reorganization and the Transactions, no Event of Default or event which, with
the giving of notice or passage of time or both, would be an Event of Default
shall have occurred and be continuing on the Closing Date.
 
 
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(u)    Intercreditor Agreement. The Borrower, the Guarantors, the Administrative
Agent, the Collateral Agent, and the First Lien Collateral Agent shall have
executed the Intercreditor Agreement.
 
(v)    Eligible Collateral. At the time the Lenders make the initial Loans, and
after giving effect thereto, the Appraised Value of the Eligible Collateral
shall not be less than 125% of the Total Obligations outstanding on the Closing
Date.
 
(w)    Restructuring Aircraft Certificate. The Borrower shall have delivered an
Officer’s Certificate certifying that there have been no material adverse
developments or changes in the status of the Qualified Restructuring
Indebtedness from the information previously disclosed to the Administrative
Agent.
 
(x)    Eligible Accounts Receivable Certificate. The Borrower shall have
delivered an Officer’s Certificate, substantially in the form of Exhibit K,
setting forth the amount of the Eligible Accounts Receivable as of the Closing
Date, together with all supporting documents with respect to such Eligible
Accounts Receivable as the Administrative Agent may reasonably request.
 
(y)    Corporate Ratings. The Borrower shall have obtained a corporate credit
rating from S&P and a corporate family rating from Moody’s.
 
(z)    No Material Adverse Effect. Since January 29, 2007, no Material Adverse
Effect shall have occurred.
 
(aa)    First Lien Credit Agreement. The First Lien Credit Agreement shall have
become effective in accordance with its terms and the Borrower shall have
received $600,000,000 in gross proceeds from the borrowing of First Lien Loans
thereunder.
 
(bb)    Other Documentation and Information. The Administrative Agent shall have
received (i) such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower and each Guarantor and the authorization of the
Transactions and (ii) a fully executed copy of the First Lien Credit Agreement.
 
(cc)    Notice. The Administrative Agent shall have received a Borrowing Request
pursuant to Section 2.02 with respect to the borrowing of the Loans.
 

SECTION 5.
 
AFFIRMATIVE COVENANTS
 
From the date hereof and for so long as the Second Lien Term Loan Commitments
remain in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder (other than contingent indemnification
obligations not due and payable), the Borrower and each of the Guarantors agree
to:
 
SECTION 5.01.  Financial Statements, Reports, etc.  Deliver to the
Administrative Agent on behalf of the Lenders:
 
(a)  Within 90 days after the end of each fiscal year, the Borrower’s
consolidated balance sheet and related statement of income and cash flows,
showing the financial condition of the Borrower and its Subsidiaries on a
consolidated basis as of the close of such fiscal year and the results of their
respective operations during such year, the consolidated statement of the
Borrower to be audited for the Borrower by Ernst & Young LLP or other
independent public accountants of recognized national standing and accompanied
by an opinion of such accountants (without a “going concern” or like
qualification or exception and without any qualification or exception (other
than with respect to the 2005 audit and the 2006 audit) as to the scope of such
audit) and to be certified by a Responsible Officer of the Borrower to the
effect that such consolidated financial statements fairly present in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
Documents required to be delivered pursuant to this clause (a) which are made
available via EDGAR, or any successor system of the SEC, in the Borrower’s
Annual Report on Form 10-K, shall be deemed delivered to the Lenders on the date
such documents are made so available; provided that, upon request, the Borrower
shall deliver paper copies of such documents to the Administrative Agent;
 
(b)  Within 45 days after the end of each of the first three fiscal quarters of
each fiscal year, the Borrower’s consolidated balance sheets and related
statements of income and cash flows, showing the financial condition of the
Borrower and its Subsidiaries on a consolidated basis as of the close of such
fiscal quarter and the results of their operations during such fiscal quarter
and the then elapsed portion of the fiscal year, each certified by a Responsible
Officer of the Borrower as fairly presenting in all material respects the
financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes. Documents required to
be delivered pursuant to this clause (b) which are made available via EDGAR, or
any successor system of the SEC, in the Borrower’s Quarterly Report on Form
10-Q, shall be deemed delivered to the Lenders on the date such documents are
made so available; provided that, upon request, the Borrower shall deliver paper
copies of such documents to the Administrative Agent;
 
(c)  (i) concurrently with any delivery of financial statements under (a) and
(b) above, a certificate of a Responsible Officer of the Borrower (A) certifying
that no Event of Default or event which upon notice or lapse of time or both
would constitute an Event of Default has occurred, or, if such an Event of
Default or event has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, (B)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the provisions of Sections
6.04, 6.05 and 6.06 and (C) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.05 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate; and (ii) concurrently with any delivery of financial
statements under (a) above, a certificate (which certificate may be limited to
accounting matters and disclaim responsibility for legal interpretations) of the
accountants auditing the consolidated financial statements delivered under (a)
above certifying that, in the course of the regular audit of the business of the
Borrower and its Subsidiaries, such accountants have obtained no knowledge that
an Event of Default pursuant to Section 7.01(c) due to any failure to comply
with Section 6.04 or 6.05 has occurred and is continuing or if, in the opinion
of such accountants, such an Event of Default has occurred and is continuing,
specifying the nature thereof and all relevant facts with respect thereto;
 
 
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(d)  promptly after the same become publicly available, copies of all
registration statements and all periodic and other reports, proxy statements and
other materials filed by it with the SEC, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be. Documents required to be
delivered pursuant to this clause (d) which are made available via EDGAR, or any
successor system of the SEC, shall be deemed delivered when made so available;
provided that, upon request, the Borrower shall deliver paper copies of such
documents to the Administrative Agent;
 
(e)  Within ninety (90) days from the last Business Day of the immediately
preceding fiscal year, a detailed consolidated budget for the following 12-month
period (including projected statements of operations and cash flow for such
period);
 
(f)  as soon as available and in any event within fifteen (15) Business Days
after the Borrower or any of its ERISA Affiliates knows or has reason to know
that any Termination Event has occurred, a statement of a Responsible Officer of
the Borrower describing the full details of such Termination Event and the
action, if any, which the Borrower or such ERISA Affiliate is required or
proposes to take with respect thereto, together with any notices required or
proposed to be given to or filed with or by the Borrower, the ERISA Affiliate,
the PBGC, a Plan participant or the Plan administrator with respect thereto;
 
(g)  promptly and in any event within fifteen (15) Business Days after receipt
thereof by the Borrower or any of its ERISA Affiliates from the PBGC copies of
each notice received by the Borrower or any such ERISA Affiliate of the PBGC’s
intention to terminate any Single Employer Plan of the Borrower or such ERISA
Affiliate or to have a trustee appointed to administer any such Plan;
 
(h)  if requested by the Administrative Agent, promptly and in any event within
thirty (30) days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan of the Borrower or any of its ERISA
Affiliates;
 
(i)  within fifteen (15) Business Days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the
Borrower or any of its ERISA Affiliates to make timely payments to a Plan, a
copy of any such notice filed and a statement of a Responsible Officer of the
Borrower setting forth (i) sufficient information necessary to determine the
amount of the lien under Section 302(f)(3) of ERISA, (ii) the reason for the
failure to make the required payments and (iii) the action, if any, which the
Borrower or any of its ERISA Affiliates proposed to take with respect thereto;
 
 
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(j)  promptly and in any event within fifteen (15) Business Days after receipt
thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or any ERISA Affiliate
concerning (i) the imposition of Withdrawal Liability by a Multiemployer Plan,
(ii) the determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (iii) the termination of
a Multiemployer Plan within the meaning of Title IV of ERISA, or (iv) the amount
of liability incurred, or which may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause (i), (ii) or (iii)
above;
 
(k)  promptly after a Responsible Officer obtains knowledge of (i) the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or affecting the Borrower or any Subsidiary that
could reasonably be expected to result in a Material Adverse Effect; or (ii) the
receipt of any environmental audits and reports, whether prepared by personnel
of the Borrower or any Guarantor or by independent consultants, which relate to
an Environmental Liability which could be expected to have a Material Adverse
Effect, notification thereof (together with, in the case of clause (ii) above,
copies of such audits and reports), each such notice to be accompanied by a
statement of a Responsible Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto;
 
(l)  promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Guarantor as the Administrative Agent, at the request of any Lender, may
reasonably request;
 
(m)  within (i) twenty (20) Business Days following the end of each calendar
month, a certificate of a Responsible Officer of the Borrower or, if applicable,
a Guarantor, (x) stating that at all times since the last certificate delivered
under this Section 5.01(m) (or, in the case of the first certificate to be
delivered after the Closing Date, at all times since the Closing Date) the
Borrower or Guarantor, as the case may be, has utilized the Primary Routes and
the Primary Foreign Slots in a manner consistent in all material respects with
applicable regulations, rules, law, foreign law and contracts in order to
preserve their respective rights in and to use each of the Primary Routes and
Primary Foreign Slots and (y) setting forth (A) any permanent disposition or
transfer by the Borrower or such Guarantor of any Appraised FAA Slot, Primary
Foreign Slot or Primary Route and (B) airports associated with additional
Primary Routes allocated to or acquired by the Borrower or such Guarantor which
airports are not already listed on Schedule 4(g) to the Second Lien SGR Security
Agreement or Schedule 4(i) to the Second Lien SGR Security Agreement and (ii)
five (5) Business Days following the end of each calendar month, copies of any
report filed by the Borrower or any Guarantor in such calendar month with the
FAA, DOT or any other applicable Governmental Authority or Airport Authority or
any Foreign Aviation Authorities regarding utilization of Primary Routes or
Primary Foreign Slots or access to the Primary Supporting Route Facilities, as
well as a summary thereof, in a format reasonably acceptable to the
Administrative Agent;
 
(n)  at any time that Eligible Accounts Receivable shall be included as Eligible
Collateral, promptly and in any event within 30 days after the end of each month
while Eligible Accounts Receivable are part of Eligible Collateral, an Officer’s
Certificate from the Borrower, substantially in the form of Exhibit K, setting
forth the amount of Eligible Accounts Receivable as of such date, together with
all supporting documents with respect to Eligible Accounts Receivable as the
Administrative Agent may reasonably request;
 
 
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(o)  promptly after a Responsible Officer obtains knowledge thereof, notice of
any Collateral Event;
 
(p)  promptly after a Responsible Officer obtains knowledge thereof, notice of
any Event of Loss;
 
(q)  promptly after a Responsible Officer obtains knowledge of any
Visa/MasterCard Dollar Trigger Event, notification thereof (accompanied by a
statement of a Responsible Officer of the Borrower setting forth the details of
such Visa/MasterCard Dollar Trigger Event).
 
Subject to the next succeeding sentence, information delivered pursuant to this
Section 5.01 to the Administrative Agent may be made available by the
Administrative Agent to the Lenders by posting such information on the
Intralinks website on the Internet at http://www.intralinks.com. Information
delivered pursuant to this Section 5.01 may also be delivered by electronic
communication pursuant to procedures approved by the Administrative Agent
pursuant to Section 10.01 hereto. Information required to be delivered pursuant
to this Section 5.01 (to the extent not made available as set forth above) shall
be deemed to have been delivered to the Administrative Agent on the date on
which the Borrower provides written notice to the Administrative Agent that such
information has been posted on the Borrower’s website on the Internet at
http://www.delta.com (to the extent such information has been posted or is
available as described in such notice). Information required to be delivered
pursuant to this Section 5.01 shall be in a format which is suitable for
transmission.
 
Any notice or other communication delivered pursuant to this Section 5.01, or
otherwise pursuant to this Agreement, shall be deemed to contain material
non-public information unless (i) expressly marked by the Borrower as “PUBLIC”
or (ii) such notice or communication consists of copies of the Borrower’s public
filings with the SEC.
 
SECTION 5.02.  Existence.  Preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary in the normal conduct of its business except (a)(i) if in
the reasonable business judgment of the Borrower it is no longer necessary for
the Borrower and the Guarantors to preserve and maintain such rights,
privileges, qualifications, permits, licenses and franchises, and (ii) such
failure to preserve the same could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect, and (b) as otherwise permitted in connection
with (i) sales of assets permitted by Section 6.10 or (ii) mergers, liquidations
and dissolutions permitted by Section 6.02.
 
SECTION 5.03.  Insurance.
 
(a)  In addition to the requirements of Section 5.03(b) or as set forth in each
Real Property Mortgage, (i) keep its properties (other than the Mortgaged
Collateral, as to which only the insurance provisions of the Second Lien
Aircraft Mortgage shall be applicable) insured at all times, against such risks,
including fire and other risks insured against by extended coverage, and on such
term and conditions, as is prudent and customary with U.S. based companies of
the same or similar size in the same or similar businesses; (ii) maintain in
full force and effect public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by the Borrower or
any Guarantor, as the case may be, in such amounts and with such deductibles as
are customary with companies of the same or similar size in the same or similar
businesses and in the same geographic area; and (iii) maintain such other
insurance or self insurance as may be required by law.
 
 
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(b)  Maintain business interruption insurance in amounts that are reasonably
satisfactory to the Administrative Agent and as is customary in the United
States domestic airline industry for major United States air carriers having
both substantial domestic and international operations.
 
(c)  All such insurance referred to in Section 5.03(a) with respect to the
Collateral (other than the Mortgaged Collateral as to which only the provisions
of the Aircraft Mortgage shall be applicable) shall (i) contain a Lender’s Loss
Payable Endorsement in favor of the Collateral Agent, on behalf of the Second
Priority Secured Parties, in all loss or damage insurance policies, (ii) provide
that no cancellation thereof shall be effective until at least thirty (30) days
after written notice thereof to the Collateral Agent, on behalf of the Second
Priority Secured Parties, permitting the Collateral Agent to cure any default
with respect to applicable outstanding premiums, (iii) name the Collateral
Agent, for the benefit of the Second Priority Secured Parties, as loss payees
for physical damage insurance with respect to property which constitutes
Collateral (other than the Mortgaged Collateral as to which only the provisions
of the Aircraft Mortgage shall be applicable) or a Real Property Asset as to
which a Lien has been granted to the Collateral Agent, and as additional
insureds for liability insurance, (iv) provide that once the Collateral Agent
has given notice of the occurrence of an Event of Default, no loss in excess of
$5,000,000 shall be adjusted or otherwise settled without the prior written
consent of the Collateral Agent, and (v) state that none of the Collateral
Agent, any of the Lenders, nor any other Second Priority Secured Party shall be
responsible for premiums, commissions, club calls, assessments or advances.
 
(d)  Promptly deliver to the Collateral Agent copies of any notices received
from its insurers with respect to insurance programs required by the Terrorism
Risk Insurance Act of 2002 (as extended by the Terrorism Risk Insurance
Extension Act of 2005) and, if so requested by the Collateral Agent, procure and
maintain in force the insurance that is offered in such programs to the same
extent maintained by companies of the same or similar size in the same or
similar businesses.
 
(e)  No less frequently than annually, but in any event prior to expiration of
any insurance policy maintained in connection herewith or in connection with any
Collateral Document, furnish to the Collateral Agent certificates of insurance
with respect to insurance maintained by the Borrower or any Guarantor, as the
case may be, which certificates evidence compliance by the Borrower and the
Guarantors with the insurance requirements set forth herein and in any of the
Collateral Documents and contain signatures of duly authorized representatives
of AON Risk Services or such other insurance broker as may be reasonably
acceptable to the Collateral Agent, at all times prior to policy termination,
cessation or cancellation.
 
 
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(f)  Make available at the Borrower’s headquarters, upon the reasonable request
of the Collateral Agent and upon reasonable prior notice, all insurance policies
maintained by the Borrower and the Guarantors for the review of the Collateral
Agent and any agents or representatives thereof.
 
SECTION 5.04.  Maintenance of Properties.  Except to the extent otherwise
permitted hereunder, in its reasonable business judgment, keep and maintain, and
cause each of its Subsidiaries to keep and maintain, all property material to
the conduct of its business in good working order and condition (ordinary wear
and tear and damage by casualty and condemnation excepted), except where the
failure to keep such property in good working order and condition would not have
a Material Adverse Effect.
 
SECTION 5.05.  Obligations and Taxes.  Pay all its material obligations (other
than any obligations with respect to any Restructuring Aircraft, except
obligations under any Post-Petition Aircraft Agreement applicable to such
Restructuring Aircraft) promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges, levies or
claims (other than such taxes, assessments and governmental charges, levies and
claims to the extent addressed in the Plan of Reorganization, which shall be
paid in accordance with the Plan of Reorganization) imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
more than ninety (90) days delinquent, except in each case where the failure to
do so would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; provided, however, that the Borrower and each
Guarantor shall not be required to pay and discharge or to cause to be paid and
discharged any such obligation, tax, assessment, charge, levy or claim so long
as (i) the validity or amount thereof shall be contested in good faith by
appropriate proceedings and (ii) the Borrower and the Guarantors shall have set
aside on their books adequate reserves therefor in accordance with GAAP.
 
SECTION 5.06.  Notice of Event of Default, etc.  Promptly upon the Borrower’s
knowledge thereof give to the Administrative Agent notice in writing of any
Event of Default or the occurrence of any event or circumstance which with the
passage of time or giving of notice or both would constitute an Event of
Default.
 
SECTION 5.07.  Access to Books and Records.  (a)  Maintain or cause to be
maintained at all times true and complete books and records in all material
respects in a manner consistent with GAAP in all material respects of the
financial operations of the Borrower and the Guarantors and provide the
Administrative Agent, the Collateral Agent and their respective representatives
and advisors reasonable access to all such books and records (subject to
requirements under any confidentiality agreements, if applicable), as well as
any appraisals of the Collateral, during regular business hours, in order that
the Administrative Agent and the Collateral Agent may upon reasonable prior
notice and with reasonable frequency, but in any event, so long as no Event of
Default has occurred and is continuing, no more than one time per year, examine
and make abstracts from such books, accounts, records, appraisals and other
papers, and permit the Administrative Agent, the Collateral Agent and their
respective representatives and advisors to confer with the officers of the
Borrower and the Guarantors and representatives (provided that the Borrower
shall be given the right to participate in such discussions with such
representatives) of the Borrower and the Guarantors, all for the purpose of
verifying the accuracy of the various reports delivered by the Borrower or the
Guarantors to the Administrative Agent or the Lenders pursuant to this Agreement
or for otherwise ascertaining compliance with this Agreement; and at any
reasonable time and from time to time during regular business hours, upon
reasonable notice to the Borrower, permit the Administrative Agent, the
Collateral Agent, and any agents or representatives (including, without
limitation, appraisers) thereof to visit the properties of the Borrower and the
Guarantors and to conduct examinations of and to monitor the Collateral held by
the Collateral Agent, in each case at the expense of the Borrower (provided,
that the Borrower shall not be required to pay the expenses of more than one
such visit a year unless an Event of Default has occurred and is continuing).
 
 
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(b)  Grant access to and the right to inspect all final reports, final audits
(and draft reports and audits where no final reports or audits are available)
and other similar internal information of the Borrower relating to the Real
Property Assets with respect to environmental matters upon reasonable notice,
and obtain any third party verification of matters relating to the Release or
alleged Release of Hazardous Materials at the Real Property Assets and
compliance with Environmental Laws and requirements of Airport Authorities with
respect to environmental matters (for matters that would impact the value of the
Real Property Assets) reasonably requested by the Administrative Agent at any
time and from time to time.
 
SECTION 5.08.  Compliance with Laws. 
 
(a)  Comply, and cause each of its Subsidiaries to comply, with all applicable
laws, rules, regulations and orders of any Airport Authority (with respect to
environmental matters) or Governmental Authority applicable to it or its
property (including Environmental Laws), except where such noncompliance,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
 
(b)  To the extent the following are required by Environmental Laws, any
Governmental Authority or any requirements of an Airport Authority relating to
environmental matters, conduct, and cause each of its Subsidiaries to conduct,
any and all investigations, studies, sampling and testing and take, and cause
each of its Subsidiaries to take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or Release
of any Hazardous Materials for which the Borrower or the Guarantors or their
respective Subsidiaries is, or could be, liable. The foregoing shall not apply
if, and only to the extent that (i) the Borrower’s or the Guarantors’ or their
respective Subsidiaries’ liability for or any requirement of an Airport
Authority with respect to such presence, storage, use, disposal, transportation
or Release of any Hazardous Materials is being contested in good faith and by
appropriate proceedings diligently conducted by such Persons, (ii) such remedial
action is taken by other Persons responsible for such remedial action through an
indemnification of the Borrower or the Guarantors or any Subsidiary thereof or
(iii) such non-compliance would not in any case or in the aggregate reasonably
be expected to have a Material Adverse Effect. In the event that the Borrower or
the Guarantors or any of their respective Subsidiaries undertakes any such
investigation, study, sampling, testing or remedial action with respect to any
Hazardous Materials, the Borrower or such Guarantors will, and will cause any
such Subsidiary to, conduct and complete such action in compliance in all
material respects with all applicable Environmental Laws and all applicable
requirements of Airport Authorities relating to environmental matters.
 
 
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(c)  If an Event of Default has occurred and is continuing or upon a reasonable
belief that the Borrower has breached any representation, warranty or covenant
hereunder with regard to environmental matters, at the request of the
Administrative Agent from time to time, the Borrower will provide to the
Administrative Agent within sixty (60) days after such request, or such longer
time period as is reasonably necessary to secure any required governmental or
third party authorizations for soil or groundwater investigations or other
invasive samplings, at the expense of the Borrower, an environmental site
assessment report for any properties of the Borrower, the Guarantors or any of
their Subsidiaries described in such request, prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, reasonable in
scope based upon the circumstances of the request, indicating, where relevant
under the circumstances of the request, the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial action
in connection with any Hazardous Materials on such properties; without limiting
the generality of the foregoing, if the Administrative Agent reasonably
determines at any time that a material risk exists that any such report will not
be provided in the time referred to above, the Administrative Agent reasonably
may retain an environmental consulting firm to prepare such report at the
expense of the Borrower, and the Borrower and the Guarantors hereby grant, and
agree to cause any Subsidiary that owns property described in such a request to
grant, at the time of such request to the Administrative Agent, such firm and
any agents or representatives thereof a right, subject to the rights of tenants,
to enter into their respective properties to undertake such an assessment.
 
SECTION 5.09.  Appraisal Reports and Field Audits.  Cooperate with the
Appraiser, Real Estate Appraiser or Field Auditor, as the case may be, such that
the Administrative Agent shall receive one or more Appraisal Reports or Field
Audits, as the case may be, establishing the value of the Appraised Collateral
or Eligible Accounts Receivable, as the case may be, (a) in the case of
Appraisal Reports, by no later than thirty (30) days prior to each anniversary
of the Closing Date, (b) on the date upon which any additional property or
assets that constitutes Appraised Collateral (including, without limitation,
applicable Cure Collateral) is pledged as Collateral to the Collateral Agent to
secure the Second Priority Obligations, but only with respect to such additional
Collateral, (c) promptly at the request of the Administrative Agent upon the
occurrence and during the continuation of an Event of Default, (d) in the case
of Field Audits, promptly at the request of the Administrative Agent (which are
not contemplated to occur more than once per year, but in any event, so long as
no Event of Default has occurred and is continuing, no more than once per year)
and (e) upon a Change in Law with respect to any assets which constitute
Collateral, which change could reasonably be expected to result in the
Borrower’s failure to maintain the required coverage ratios pursuant to Section
6.06. In addition to the requirements set forth in this Section 5.09, if at any
time the Collateral Agent in its reasonable good faith business judgment
believes that a Collateral Event has occurred, it may request the delivery of an
updated Appraisal Report with respect to the affected Collateral, and the
Borrower and the Guarantors shall cooperate with the Appraiser to ensure that
the Collateral Agent receives the same. The Borrower may from time to time cause
to be delivered subsequent Appraisal Reports if it believes that the affected
item of Collateral has a higher Appraised Value than that reflected in the most
recent Appraisal Report delivered.
 
SECTION 5.10.  FAA and DOT Matters; Citizenship.  In the case of the Borrower
and any applicable Guarantor (a) maintain at all times its status as an “air
carrier” within the meaning of Section 40102(a)(2) of Title 49, and hold a
certificate under Section 41102(a)(1) of Title 49; (b) at all times hereunder be
a United States Citizen; (c) maintain at all times its status at the FAA as an
air carrier and hold an air carrier operating certificate and other operating
authorizations issued by the FAA pursuant to 14 C.F.R. Parts 119 and 121 as
currently in effect or as may be amended or recodified from time to time; and
(d) except as specifically permitted herein or in the Second Lien SGR Security
Agreement, possess and maintain all necessary certificates, exemptions,
franchises, licenses, permits, designations, rights, concessions, Gate
Interests, authorizations, frequencies and consents which are material to the
operation of the FAA Slots, the Routes and Foreign Slots utilized by it and the
conduct of its business and operations as currently conducted except, in any
case described in this clause (d), where the failure to do so, either
individually or in the aggregate, could not be reasonably likely to have a
Material Adverse Effect.
 
 
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SECTION 5.11.  FAA Slot Utilization. Subject to transfers, exchanges and other
dispositions permitted by this Agreement and the Second Lien SGR Security
Agreement, utilize (or arrange for utilization by exchanging FAA Slots with
other air carriers) the FAA Slots (except FAA Slots which are reasonably
determined by the Appraisers to be of de minimis value) in a manner consistent
in all material respects with applicable regulations, rules, laws and contracts
in order to preserve its right to hold and operate the FAA Slots, taking into
account any waivers or other relief granted to the Borrower by the FAA, any
other applicable Governmental Authority or any Airport Authority.
 
SECTION 5.12.  Primary Foreign Slot Utilization.  Subject to transfers,
exchanges and other dispositions permitted by this Agreement and the Second Lien
SGR Security Agreement, utilize (or arrange for utilization by exchanging
Primary Foreign Slots with other air carriers) the Primary Foreign Slots (except
Primary Foreign Slots which are reasonably determined by the Appraisers to be of
de minimis value) in a manner consistent in all material respects with
applicable regulations, rules, foreign law and contracts in order to preserve
its right to hold and operate the Primary Foreign Slots, taking into account any
waivers or other relief granted to the Borrower by any applicable Foreign
Aviation Authorities.
 
SECTION 5.13.  Primary Route Utilization.  Subject to transfers, exchanges and
other dispositions permitted by this Agreement and the Second Lien SGR Security
Agreement, utilize the Primary Routes (except Primary Routes which are
reasonably determined by the Appraisers to be of de minimis value) in a manner
consistent in all material respects with applicable regulations, rules,
treaties, foreign law and contracts in order to preserve its right to hold and
operate the Primary Routes and maintain access to the Primary Supporting Route
Facilities sufficient to ensure its ability to retain its rights in and to the
Primary Routes, taking into account any waivers or other relief granted to the
Borrower by the FAA, any other applicable Governmental Authority, any Airport
Authority or any applicable Foreign Aviation Authorities.
 
SECTION 5.14.  Additional Subsidiaries.  If any additional Subsidiary of the
Borrower is formed or acquired after the Closing Date, the Borrower will
promptly, and in any event within twenty (20) Business Days after such
Subsidiary is formed or acquired, (a) to the extent such Subsidiary is an entity
incorporated or organized in the United States and is not an Immaterial
Subsidiary, an Excluded Subsidiary or a Restricted Captive Insurance Company
Subsidiary, cause such Subsidiary to become a party to the Guarantee contained
in Section 9 hereof, each applicable Collateral Document and all other
agreements, instruments or documents that create or purport to create and
perfect a Lien in favor of the Collateral Agent for the benefit of the Second
Priority Secured Parties, by executing an Instrument of Assumption and Joinder
substantially in the form attached hereto as Exhibit H and, subject to
preexisting Liens on such Subsidiary’s assets and the terms thereof (to the
extent the same are permitted under this Agreement), promptly take such actions
to create and perfect Liens on such Subsidiary’s assets to secure the Second
Priority Obligations to the extent required under the applicable Collateral
Documents and (c) cause any Equity Interests or promissory notes evidencing
Indebtedness of such Subsidiary that, in each case, are owned by or on behalf of
the Borrower or any Guarantor to be pledged to the extent required by the
Collateral Documents, provided that, if such Subsidiary is directly owned by the
Borrower or any Guarantor and is organized under the laws of a jurisdiction
other than the United States of America or any state thereof or the District of
Columbia, Equity Interests of such Subsidiary to be pledged shall be limited to
65% of the outstanding voting Equity Interests of such Subsidiary.
 
 
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SECTION 5.15.  [Reserved]
 
SECTION 5.16.  Additional Collateral; Additional Grantors.
 
(a)  If any aircraft, engines, spare parts or owned real property (including, in
the case of owned real property, only owned real property valued individually in
excess of $5,000,000 or $20,000,000 in the aggregate from the Closing Date, but
excluding any leasehold interests) are acquired by the Borrower or any Guarantor
after the Closing Date (other than any spare parts that become subject to a Lien
pursuant to the Aircraft Mortgage upon acquisition thereof), the Borrower will
promptly notify the Administrative Agent thereof and at the Administrative
Agent’s request within forty-five (45) days of such notice, will cause such
assets to be subjected to a Lien securing the Second Priority Obligations to the
extent not excluded from the definition of “Collateral” under the Loan
Documents, subject to preexisting Liens on such assets permitted hereunder and
any other Liens permitted hereunder, and will take, and cause the Guarantors to
take, such actions as shall be necessary to grant and perfect such Liens,
including actions described in this paragraph (a), all at the expense of the
Borrower and Guarantors; provided, however, that this clause (a) shall not apply
(i) if and to the extent that, on the date of and after giving effect to such
acquisition, the Borrower shall be in compliance with Section 6.06(a) and shall
have delivered to the Administrative Agent an Officer’s Certificate certifying
to such compliance or (ii) to any aircraft, engines, spare parts or owned real
property to the extent that the Administrative Agent has received, on or before
the date of such acquisition, a copy of an executed commitment letter, letter of
intent, memorandum or understanding or other similar document that evidences a
commitment to consummate a financing of such aircraft, engines, spare parts or
owned real property within forty-five (45) days of the date of such acquisition
and such financing actually occurs within forty-five (45) days (it being
understood that the Lenders hereby authorize the Collateral Agent to withhold or
delay such filing if the Collateral Agent shall be satisfied in its sole
discretion that the applicable financing shall be consummated within a
reasonable timeframe thereafter); provided further that the Administrative Agent
shall not require the execution or delivery of any Mortgage Supplement, or
require the Borrower or any Guarantor to take any actions with respect to the
FAA, relating to any of the 737-800 aircraft to be sold pursuant to agreements
described on Schedule 5.17 hereof.
 
 
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(b)  Upon any Guarantor acquiring any right, title or interest in any FAA Slots,
Foreign Slots, Routes, Supporting Route Facilities or Gate Interests acquired in
connection with a Permitted Acquisition, such Guarantor will promptly, and in
any event within twenty (20) Business Days of such acquisition, become a party
to the Second Lien SGR Security Agreement.
 
SECTION 5.17.  Pledged Spare Parts.  Segregate all of its Pledged Spare Parts
from any Spare Parts which are subject to any consignment arrangement, and shall
keep all Spare Parts not so subject to a consignment arrangement in Spare Parts
Locations, except to the extent permitted in the Second Lien Aircraft Mortgage.
The Pledged Spare Parts will be maintained by or on behalf of the Borrower and
Comair, as required by the Second Lien Aircraft Mortgage.
 
SECTION 5.18.  Further Assurances.  Execute any and all further documents and
instruments, and take all further actions, that may be required or advisable
under applicable law, the Cape Town Convention or by the FAA, or that the
Collateral Agent may reasonably request, in order to create, grant, establish,
preserve, protect and perfect the validity, perfection and priority of the Liens
and security interests created or intended to be created by the Collateral
Documents, to the extent required under this Agreement or the Collateral
Documents, including, without limitation, amending, amending and restating,
supplementing, assigning or otherwise modifying, renewing or replacing the
Second Lien Aircraft Mortgage or other agreements, instruments or documents
relating thereto, in each case as may be reasonably requested by the Collateral
Agent, in order to (i) create interests (including, but not limited to,
International Interests, Assignments, Prospective International Interests,
Prospective Assignments, Sales, Prospective Sales, Assignments of Associated
Rights and Subordinations) that may be registered and/or assigned under the Cape
Town Convention, (ii) create, grant, establish, preserve, protect and perfect
the Liens in favor of the Collateral Agent for the benefit of the Second
Priority Secured Parties to the fullest extent possible under the Cape Town
Convention, including, where necessary, the subordination of other rights or
interests and (iii) realize the benefit of the remedial provisions that are
contemplated by the Cape Town Convention, subject to the provisions of Section
4.07 of the Second Lien Aircraft Mortgage. 
 
Without limiting the generality of the foregoing or any other provisions of the
Loan Documents, the Borrower hereby (a) agrees to exclude the application of
Article XVI(1)(a) of the Protocol and (b) consents, pursuant to Article XV of
the Protocol, to any Assignment of Associated Rights within the scope of Article
33(1) of the Cape Town Convention which is permitted or required by the
applicable Loan Documents and further agrees that the provisions of the
preceding paragraph shall apply, in particular, with respect to Articles 31(4)
and 36(1) of the Cape Town Convention to the extent applicable to any such
Assignment of Associated Rights.
 
SECTION 5.19.  Post Closing Items. 
 
(a)  Within thirty (30) days of the Closing Date, the Borrower and each
applicable Guarantor shall have duly executed and delivered to the Collateral
Agent a Trademark Security Agreement in substantially the form of Exhibit F-1
(the “Second Lien Trademark Security Agreement”), together with all documents,
certificates, forms and filing fees that the Collateral Agent may deem
reasonably necessary to perfect and protect the Liens and security interests
created in the identified intellectual property in the Second Lien Trademark
Security Agreement.
 
 
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(b)  Within thirty (30) days of the Closing Date (or such later date as the
Administrative Agent may, in its reasonable discretion, consent to in writing),
the Borrower and each applicable Guarantor shall have delivered to the
Collateral Agent or First Lien Collateral Agent a Shifting Control Agreement or
any other Control Agreement, properly executed by the Borrower or any Guarantor,
as the case may be, and each bank or other financial institution (as may be
specified by the Borrower) at which the Borrower or any Guarantor, as the case
may be, maintains a deposit account or securities account (it being understood
that no Control Agreement shall be required to be delivered with respect to any
Excluded Account).
 
(c)  Within thirty (30) days of the later of (i) the Closing Date and (ii) the
date the Collateral Agent becomes registered with the International Registry (or
such later date as the Administrative Agent may, in its reasonable discretion,
consent to in writing), the Borrower and each applicable Guarantor shall have
delivered evidence of the registrations in the International Registry of
International Interests in the Airframes, Engines and Spare Engines constituted
by the Second Lien Aircraft Mortgage.
 
SECTION 6.
 
NEGATIVE COVENANTS
 
From the date hereof and for so long as the Second Lien Term Loan Commitments
remain in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder (other than contingent indemnification
obligations not due and payable), the Borrower and each of the Guarantors will
not:
 
SECTION 6.01.  Liens.  Incur, create, assume or suffer to exist any Lien on any
asset of the Borrower or the Guarantors, now owned or hereafter acquired by the
Borrower or any of such Guarantors, other than:
 
(a)    Liens which were existing on the Closing Date as reflected on Schedule
3.07;
 
(b)    Permitted Liens;
 
(c)    Liens in favor of the Collateral Agent and the Lenders pursuant to the
Loan Documents;
 
(d)    Liens securing Indebtedness or Capitalized Leases permitted by Section
6.03(l) or any permitted refinancing thereof, provided that such Lien attach
only to the assets of the Borrower or Guarantor (including related leases
thereof and, in the case of personal property, other assets integral to the use
thereof including security deposits from any sublessee collaterally assigned for
the benefit of lessors) subject to such acquisition or financing;
 
(e)    Liens on the Collateral that are pari passu with the Liens in favor of
the First Lien Collateral Agent securing the Designated Cash Management
Obligations;
 
(f)    Liens on the Collateral that are pari passu with the Liens in favor of
the First Lien Collateral Agent securing Indebtedness permitted by Section
6.03(f) or (g) and relating to Designated Hedging Agreements; provided that the
maximum amount of such Indebtedness that constitutes First Priority Obligations
shall not exceed $200,000,000 at any time;
 
 
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(g)    licenses, leases and subleases of (A) Mortgaged Collateral and Collateral
(as defined in the Second Lien SGR Security Agreement) granted to others but
only to the extent permitted by the Second Lien Aircraft Mortgage with respect
to Mortgaged Collateral and to the extent permitted by the Second Lien SGR
Security Agreement with respect to Collateral as defined therein and (B) all
other assets to the extent such license, sublicense, lease or sublease does not
interfere in any material respect with the business of the Borrower and the
Guarantors, taken as a whole;
 
(h)    Liens arising from precautionary UCC financing statements regarding
operating leases permitted by this Agreement;
 
(i)    any interest or title of a licensor, sublicensor, lessor, sublessor or
airport operator under any lease, license or use agreement; 
 
(j)    Liens on real and personal property acquired in connection with
acquisitions permitted by this Agreement to the extent such Liens exist on such
acquired property at the time of acquisition or Liens existing on any property
or asset of any Person that becomes a Guarantor after the date hereof prior to
the time such Person becomes a Guarantor, provided, (1) such Liens are not
created in contemplation of or in connection with such acquisition or such
Person becoming a Guarantor, as the case may be, (2) such Liens shall not apply
to any other property or assets of the Borrower or any Guarantor and (3) such
Liens shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Guarantor, as the case may be;
 
(k)    Liens in favor of credit card processors securing obligations in
connection with credit card processing services incurred in the ordinary course
of business and consistent with past practices;
 
(l)    Liens on (1) the Borrower’s right to receive a refund of unearned
insurance premiums and (2) insurance policies and the proceeds thereof, to
secure the Borrower’s payment of such insurance premiums financed by
Indebtedness permitted pursuant to Section 6.03(e);
 
(m)    Liens on the Collateral in favor of the First Lien Collateral Agent
securing the First Priority Obligations;
 
(n)    junior Liens on the Collateral securing the Indebtedness permitted
pursuant to Section 6.03(m), provided, that such Liens shall be subject in all
respects to an intercreditor agreement substantially in the form of the
Intercreditor Agreement;
 
(o)    Liens consisting of setoff or netting rights in connection with Hedging
Agreements;
 
(p)    Liens securing reimbursement obligations in respect of standby or
documentary letters of credit or bankers acceptances, provided that in the case
of (1) documentary letters of credit or bankers acceptances, such Liens attach
only to the documents, goods covered thereby and proceeds thereof and (2) in the
case of standby letters of credit, such Liens may only be on cash in an amount
not to exceed $172,500,000;
 
 
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(q)    Liens on the underlying commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business;
 
(r)    Liens which arise under Article 2 of the UCC;
 
(s)    replacement, extension and renewal of any Lien permitted hereby, provided
that any such replacement, extension, or renewal of any Lien shall not extend to
any property or assets of the Borrower or any Guarantor which was not subject to
the Lien being replaced, extended or renewed;
 
(t)    Liens in favor of any of the Borrower or a Guarantor that do not encumber
any Collateral;
 
(u)    Liens arising by operation of law in connection with judgments,
attachment or awards which do not constitute an Event of Default hereunder;
 
(v)     other Liens incurred by the Borrower and the Guarantors (except with
respect to Real Property Assets) so long as the Indebtedness and other
obligations secured thereby does not exceed Indebtedness permitted by Section
6.03(ee);
 
(w)    Liens on cash collateral and fuel inventory (and the proceeds thereof) or
letters of credit in each case securing Indebtedness permitted pursuant to
Section 6.03(f), and Indebtedness permitted by Section 6.03(g) in an aggregate
amount at any one time for all such cash and letters of credit in excess of the
amount thereof that is secured as permitted by Section 6.01(f), not in excess
(other than with respect to Liens on fuel inventory and the proceeds thereof) of
$575,000,000;
 
(x)    Liens on Margin Stock, if and to the extent the value of all Margin Stock
of the Borrower and its Subsidiaries exceeds 25% of the total assets subject to
this Section 6.01;
 
(y)    Liens on any Restructuring Aircraft created by or pursuant to any
Post-Petition Aircraft Agreement;
 
(z)    Liens on the Excluded Accounts and amounts on deposit therein in favor of
the beneficiaries of the amounts on deposit therein to the extent such Liens
secure obligations owed to such beneficiaries;
 
(aa)    the Lien of the Jet Fuel Counterparty on the Jet Fuel Assets, in the
event that the transactions underlying the Jet Fuel Inventory Supply Agreement
are re-characterized as Indebtedness owed by the Borrower;
 
(bb)    Liens attaching solely to cash earnest money deposits in connection with
Investments permitted pursuant to Section 6.09;
 
 
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(cc)    Liens securing Indebtedness permitted by (i) Section 6.03(h) and (ii)
Section 6.03(y);
 
(dd)    Liens on cash collateral securing surety and appeal bonds in an
aggregate amount for all such cash collateral not exceeding $172,500,000; and
 
(ee)    other Liens so long as the obligations secured thereby do not exceed
$28,750,000 at any time.
 
SECTION 6.02.  Merger, etc.  Merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except (a) that any Subsidiary
(so long as such Subsidiary is not the Borrower) may merge into the Borrower or
any other Guarantor in a transaction in which the Borrower or any Guarantor is
the surviving corporation, provided that (i) immediately after giving effect
thereto no Event of Default or event with which upon notice or the passage of
time or both would constitute an Event of Default shall have occurred and be
continuing and (ii) any such merger involving a Person whose Equity Interests
are not 100% owned by the Borrower directly or indirectly immediately prior to
such merger shall not be permitted unless also permitted by Section 6.10; (b)
that any Subsidiary (so long as such Subsidiary is not the Borrower) may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders, provided that an Event of Default
does not result from such liquidation or dissolution; (c) any Person (other than
the Borrower) may merge into the Borrower or any Guarantor pursuant to a
Permitted Acquisition in which the Borrower or such Guarantor is the surviving
corporation; (d) asset sales permitted hereunder; and (e) any Permitted Change
of Control Transaction.
 
SECTION 6.03.  Indebtedness.  Contract, create, incur, assume or suffer to exist
any Indebtedness, except for:
 
(a)    Indebtedness under the Loan Documents;
 
(b)    Indebtedness incurred pursuant to the First Lien Credit Agreement or any
refinancing thereof in accordance with the Intercreditor Agreement; provided
that the principal amount of Indebtedness incurred in connection with any such
refinancing shall not exceed the amount permitted by the Intercreditor
Agreement;
 
(c)    Indebtedness incurred prior to the Closing Date or with respect to which
an option exists (including existing Capitalized Leases) as set forth on
Schedule 6.03;
 
(d)    intercompany Indebtedness between the Borrower and the Guarantors, which
Indebtedness shall be pledged to the Collateral Agent pursuant to the Second
Lien Pledge Agreement, to the extent required pursuant to the terms thereof;
 
(e)    Indebtedness of the Borrower or any Guarantor owed to one or more Persons
in connection with the financing of certain insurance premiums;
 
 
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(f)    Indebtedness owed to any First Lien Lender (or any of its banking
Affiliates) or any other Person in respect of fuel hedges and other derivatives
contracts, in each case to the extent that such agreement or contract is entered
into for bona fide hedging purposes and, in the case of such other derivatives
contracts, in the ordinary course of business;
 
(g)    Indebtedness owed to any First Lien Lender or any of its banking
Affiliates or any other Person in respect of (i) foreign exchange contracts,
currency swap agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in foreign exchange rates and
currency values and (ii) interest rate swap, cap or collar agreements, interest
rate future or option contracts and other similar agreements designed to hedge
against fluctuations in interest rates, in each case to the extent that such
agreement or contract is entered into in the ordinary course of business for
bona fide hedging purposes;
 
(h)    Indebtedness owed to any First Lien Lender or any of its banking
Affiliates or any other Person in respect of any overdrafts and related
liabilities arising from treasury, depository and cash management services or in
connection with any automated clearing house transfers of funds;
 
(i)    Indebtedness of any of the Borrower and the Guarantors consisting of
take-or-pay obligations contained in supply agreements entered into in the
ordinary course of business and consistent with past practices of the Borrower
and the Guarantors;
 
(j)    Indebtedness of any of the Borrower and the Guarantors arising in the
ordinary course of business of the relevant party and owing to Citibank, N.A.,
its banking Affiliates and other financial institutions providing netting
services permitted to be incurred and outstanding pursuant to this Agreement so
long as such Indebtedness does not remain outstanding for more than three (3)
Business Days from the date of its incurrence;
 
(k)    Indebtedness of any of the Borrower and the Guarantors to credit card
processors in connection with credit card processing services incurred in the
ordinary course of business of the Borrower and the Guarantors;
 
(l)    (i) Indebtedness incurred to finance the acquisition of aircraft,
engines, spare parts or other operating assets; provided that no such
Indebtedness may be incurred more than twelve (12) months after such acquisition
if, after giving effect to such Indebtedness, an Event of Default shall have
occurred and be continuing under Section 6.06; and (ii) other Indebtedness
secured by aircraft, engines, spare parts or other operating assets that are not
subject to Liens described in Section 6.01(c) (including without limitation as a
result of any release of such Liens pursuant to Section 6.06(c));
 
(m)    Indebtedness of the Borrower and the Guarantor in an aggregate amount not
to exceed $1,150,000,000, provided that such Indebtedness shall have a final
maturity six months after the Maturity Date and shall be on terms reasonably
satisfactory to the Administrative Agent;
 
(n)    Indebtedness consisting of promissory notes issued to current or former
directors, consultants, managers, officers and employees or their spouses or
estates to purchase or redeem capital stock of the Borrower issued to such
director, consultant, manager, officer or employee in an aggregate amount not to
exceed $1,150,000 annually;
 
 
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(o)    Indebtedness to the extent permitted by an Investment permitted by
Section 6.09(j);
 
(p)    Indebtedness of a person or acquired assets that is the subject of a
Permitted Acquisition which Indebtedness was in existence at the time of such
Permitted Acquisition and not incurred in contemplation thereof;
 
(q)    intercompany Indebtedness owed by the Borrower and any Guarantor to
another Subsidiary, which is not a Guarantor, in an amount not to exceed
$57,500,000 in the aggregate at any one time outstanding;
 
(r)    any Indebtedness extending, renewing, replacing or refinancing
(collectively, “Refinancing”) all or any portion of any Indebtedness permitted
under paragraph (c), (l), (m), (p), (x), (y) or (z), provided that (1) any such
Refinancing of Indebtedness permitted under clause (m) which is subordinated to
the Obligations shall remain subordinated on substantially the same basis, and
(2) the weighted average life to maturity of such Indebtedness, in the case of
clause (m), shall not be shortened, provided further that any such Refinancing
of Indebtedness permitted under clause (c) or (l)(i) may exceed the amount being
Refinanced so long as the Lien securing such Refinancing does not extend to any
property or asset of the Borrower or any Guarantor which was not subject to the
Lien securing the Indebtedness being Refinanced; 
 
(s)    other unsecured Indebtedness incurred subsequent to the Closing Date;
 
(t)    Indebtedness in respect of Redeemable Stock;
 
(u)    Indebtedness in respect of deferred rent;
 
(v)    Indebtedness in respect of deferred taxes;
 
(w)    Indebtedness permitted to be secured pursuant to Section 6.01(p);
 
(x)    Indebtedness under the ALPA Notes and the CVG Notes;
 
(y)    Indebtedness secured by purchase money security interests and Capitalized
Leases (including in the form of sale-leaseback, synthetic lease or similar
transactions) to the extent such Indebtedness was incurred in connection with
ARB Indebtedness; provided, that the amount of such Indebtedness does not exceed
100% of the purchase price or construction cost (including any capitalized
interest and issuance fees and expenses) of the subject asset; 
 
(z)    Indebtedness relating to any Restructuring Aircraft created by or
pursuant to any Post-Petition Aircraft Agreement;

(aa)    Indebtedness consisting of indemnification obligations owed by Comair to
Bombardier Inc., a Canadian national corporation, relating to certain CRJ
leases, in an amount not to exceed $9,000,000 in the aggregate;
 
 
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(bb)    in the event that the transactions underlying the Jet Fuel Inventory
Supply Agreement are re-characterized as Indebtedness owed by the Borrower, such
Indebtedness;
 
(cc)    reimbursement obligations in respect of standby or documentary letters
of credit or bankers acceptances that are secured by Liens permitted pursuant to
Section 6.01(p);
 
(dd)    surety and appeal bonds secured by Liens permitted pursuant to Section
6.01(dd); and

(ee)    Indebtedness not to exceed $28,750,000 at any one time outstanding for
Indebtedness of the Borrower or any Guarantor incurred subsequent to the Closing
Date that will be secured Indebtedness.
 
SECTION 6.04.  Fixed Charge Coverage.  Permit the Fixed Charge Coverage Ratio as
of the last day of each fiscal quarter ending in the months below to be less
than the corresponding ratio opposite such month:
 
Fiscal quarter ending
Ratio
   
June 2007
0.85:1.00
September 2007
0.85:1.00
December 2007
0.85:1.00
March 2008 and thereafter for
each fiscal quarter ending
through the Maturity Date
1.02:1.00

SECTION 6.05.  Unrestricted Cash Reserve.  Permit the aggregate amount of
Unrestricted Cash to be less than $650,000,000 at any time after the 30th day
following the Closing Date. 
 
SECTION 6.06.  Coverage Ratio.  (a)  Permit at any time the ratio (the “Total
Collateral Coverage Ratio”) of (i) the Appraised Value of the Eligible
Collateral to (ii) the sum of the aggregate outstanding principal amount of the
First Lien Obligations plus the outstanding principal amount of the Second Lien
Term Loans (such sum the “Total Obligations”) to be less than 125%, provided,
that if, (A) upon (i) delivery of an Appraisal Report or a Field Audit (as
applicable) pursuant to Section 5.09 hereof or (2) the establishment of reserves
pursuant to clause (B) of the definition of “Appraised Value” contained herein
and (B) solely with respect to determining compliance with this Section as a
result thereof, it is determined that the Borrower shall not be in compliance
with this Section 6.06(a), the Borrower shall, within forty-five (45) days of
the date of such Appraisal Report, Field Audit or establishment of reserves (as
applicable), (I) designate Cure Collateral as additional Eligible Collateral in
accordance with clause (d) of the definition of Eligible Collateral in Section
1.01 or (II) prepay the Loans, in each case in an amount sufficient to enable
the Borrower to comply with this Section 6.06(a). 
 
(b)  Notwithstanding anything to the contrary contained herein, if the Borrower
shall fail at any time to be in compliance with Section 6.06(a) solely as a
result of an Event of Loss (as defined in the Second Lien Aircraft Mortgage) or
other Recovery Event, in each case, covered by insurance (pursuant to which the
Collateral Agent is named as loss payee and with respect to which payments are
to be delivered directly to the Collateral Agent or First Lien Collateral Agent)
for which the insurer thereof has been notified of the relevant claim and has
not challenged such coverage, any calculation made pursuant to Section 6.06(a)
shall deem the Borrower to have received Net Cash Proceeds (and to have taken
all steps necessary to designate, and to have designated, such Net Cash Proceeds
as Cure Collateral) in an amount equal to the expected coverage amount (as
determined by the Borrower in good faith and updated from time to time to
reflect any agreements reached with the applicable insurer and net of any
amounts required to be paid out of such proceeds and secured by a Lien permitted
pursuant to Section 6.01(l)) until the earlier of (i) the date any such Net Cash
Proceeds are actually received by the Collateral Agent or First Lien Collateral
Agent, as applicable, (ii) the date that is 270 days after such Event of Loss or
Recovery Event and (iii) the date on which any such insurer denies such claim;
provided that, prior to giving effect to this clause (c), the Appraised Value of
the Eligible Collateral shall be no less than 100% of the Total Obligations. It
is understood and agreed that if the Collateral Agent should receive any Net
Cash Proceeds directly from the insurer in respect of an Event of Loss or a
Recovery Event and at the time of such receipt, (A) no Event of Default shall
have occurred and be continuing and the Borrower is in compliance with Section
6.06(a) (without giving effect to the receipt of such Net Cash Proceeds), the
Collateral Agent shall promptly cause such proceeds to be paid to the Borrower
or the applicable Guarantor and (B) an Event of Default shall have occurred and
be continuing or the Borrower fails to be in compliance with Section 6.06(a)
(without giving effect to the receipt of such Net Cash Proceeds), the Collateral
Agent shall promptly cause such proceeds to be deposited into the account of the
Borrower or the applicable Guarantor maintained for such purpose with the
Administrative Agent that is subject to a Full Control Agreement and such
proceeds shall be applied or released from such account in accordance with
Section 2.10(a).
 
 
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(c)  At the Borrower’s request, (i) the Lien on an operating asset constituting
Collateral in connection with any financing permitted pursuant to (x) Section
6.03(l) secured by such operating asset or (y) Section 6.03(y) or (ii) the Lien
on an asset constituting Eligible Collateral will be promptly released,
provided, in each case, that the following conditions are satisfied or waived:
(A) no Event of Default or event which upon notice or lapse of time or both
would constitute an Event of Default shall have occurred and be continuing, (B)
either (x) after giving effect to such release, the remaining Eligible
Collateral shall continue to satisfy this Section 6.06, (y) the Borrower shall
prepay the Loans in an amount required to comply with this Section 6.06, or (z)
the Borrower shall deliver to the Collateral Agent Cure Collateral in an amount
required to comply with this Section 6.06, and (C) the Borrower shall deliver an
Officer’s Certificate demonstrating compliance with this Section 6.06 following
such release. In connection herewith, the Collateral Agent agrees to promptly
provide any documents or releases reasonably requested by the Borrower to
evidence such release.
 
SECTION 6.07.  Dividends; Capital Stock.  Declare or pay, directly or
indirectly, or otherwise make any Restricted Payment or set apart any sum for
the aforesaid purposes, except (a) dividends or other distributions or transfers
to the Borrower or another Guarantor; (b) dividends by any Guarantor to any
other holder of its equity on a pro rata basis; (c) dividends in the form of
capital stock or increases in the aggregate liquidation value of any preferred
stock; (d) repurchases of Equity Interests deemed to occur upon (i) the exercise
of stock options if the Equity Interests represent a portion of the exercise
price thereof or (ii) the withholding of a portion of Equity Interests issued to
(A) employees under the Plan of Reorganization and (B) employees and other
participants under an equity compensation program of the Borrower or its
Subsidiaries, in each case to cover withholding tax obligations of such persons
in respect of such issuance; (e) dividends or repurchases of Equity Interests
with the proceeds from the issuance of additional Equity Interests or
subordinated Indebtedness permitted hereunder, provided that no Event of Default
shall have occurred and be continuing at the time of payment of such dividend;
(f) to the extent not otherwise permitted under clauses (c) or (e) of this
Section, dividends or other distributions or transfers pursuant to stock option
plans, other benefit plans or other arrangements for management or employees of
the Borrower and its Subsidiaries in a maximum aggregate amount not to exceed
$2,300,000; and (g) other Restricted Payments in an aggregate amount not to
exceed $1,150,000 annually.
 
 
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SECTION 6.08.  Transactions with Affiliates.  Sell or transfer any property or
assets to, or otherwise engage in any other material transactions with, any of
its Affiliates (other than the Borrower and its Subsidiaries), other than (a) on
overall terms and conditions not less favorable to the Borrower or such
Guarantor than could be obtained on an arm’s-length basis from unrelated third
parties; (b) transactions contemplated by the Plan of Reorganization; (c) fees
and compensation paid to, and indemnities provided on behalf of, officers,
directors or employees of the Borrower or any Guarantor as reasonably determined
by the board of directors or senior management, as the case may be, of the
Borrower or any Guarantor; (d) any dividends, other distributions or payments
permitted by Section 6.07; (e) the existence of, and the performance by a
Guarantor or the Borrower of its obligations under the terms of, any limited
liability company, limited partnership or other organization document or
securityholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party on the Closing Date
and set forth on Schedule 6.08, and similar agreements that it may enter into
thereafter; (f) the provision of any legal, accounting or administrative
services to the Borrower or any of its Subsidiaries in the ordinary course of
business in accordance with past practices; and (g) transactions with Affiliates
set forth on Schedule 6.08.
 
SECTION 6.09.  Investments, Loans and Advances.  Purchase, hold or acquire any
Investments, except for:
 
(a)    ownership by the Borrower and the Guarantors of the capital stock of each
of the Subsidiaries subject in each case to Section 6.02;
 
(b)    Permitted Investments;
 
(c)    advances and loans among the Borrower and the Guarantors;
 
(d)    Investments in the Escrow Accounts and other trust accounts;
 
(e)    Investments existing on the date hereof and described on Schedule 6.09
hereto;
 
(f)    Investments in connection with (i) foreign exchange contracts, currency
swap agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in foreign interest rates and
currency values, (ii) interest rate swap, cap or collar agreements and interest
rate future or option contracts and other similar agreements designed to hedge
against fluctuations in interest rates, and (iii) fuel hedges and other
derivatives contracts, in each case to the extent that such agreement or
contract is entered into for bona fide hedging purposes and (other than in the
case of fuel hedges) in the ordinary course of business;
 
 
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(g)    Investments received (x) in settlement of amounts due to any of the
Borrower and the Guarantors effected in the ordinary course of business
(including as a result of dispositions permitted by this Agreement) or (y) in
connection with the bankruptcy or the reorganization of any customers or
suppliers;
 
(h)    Investments in an amount not to exceed $172,500,000 in the aggregate at
any one time outstanding in connection with (1) Investments in travel or airline
related businesses made in connection with marketing and promotion agreements,
alliance agreements, distribution agreements, agreements with respect to fuel
consortiums, agreements relating to flight training, agreements relating to
insurance arrangements, agreements relating to parts management systems and
other similar agreements, (2) additional Investments in joint ventures listed on
Schedule 6.09 or Investments in new joint ventures made after the Closing Date,
and (3) Investments by the Borrower and the Guarantors not otherwise permitted
under this Agreement;
 
(i)    advances to officers, directors and employees of the Borrower and the
Guarantors in an aggregate not to exceed (i) $287,500 at any time outstanding to
any individual officer, director or employee or (ii) $5,750,000 in the aggregate
at any time outstanding for all such advances;
 
(j)    Investments held or invested in by any of the Borrower and the Guarantors
in the form of foreign cash equivalents in the ordinary course of business;
 
(k)    advances to officers, directors and employees of the Borrower and the
Guarantors in connection with relocation expenses or signing bonuses for newly
hired officers, directors or employees of the Borrower and the Guarantors;
 
(l)    Investments in the form of lease, utility and other similar deposits or
any other deposits permitted hereunder in the ordinary course of business;
 
(m)    pledges and deposits by the Borrower and the Guarantors permitted under
Sections 6.01 or 6.03;
 
(n)    (i) Investments and guarantees by the Borrower and the Guarantors
permitted under Sections 6.01 or 6.03, (ii) Guarantees in the ordinary course of
business of obligations that do not constitute Indebtedness of (A) the Borrower
or any of its Subsidiaries or (B) any regional air carrier that is a member of
the Delta Connection program owed to airport operators in connection with its
activities under the Delta Connection program and (iii) advances to airport
operators of landing fees and other customary airport charges on behalf of
carriers for which the Borrower or any of its Subsidiaries provides ground
handling services;
 
(o)    loans or Investments by the Borrower or any Guarantor that could
otherwise be made as a distribution permitted under Section 6.07; provided that
for purposes of Section 6.07 such loan or Investment shall be treated as a
distribution thereunder;
 
 
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(p)    Investments held by the Borrower or any Guarantor to the extent such
Investments reflect an increase in the value of Investments;
 
(q)    Investments by the Borrower and the Guarantors creating new Subsidiaries
so long as they comply with Section 5.14 hereof;
 
(r)    Investments in Subsidiaries which are not Guarantors in an aggregate
amount not to exceed $28,750,000 in the aggregate at any one time outstanding;
 
(s)    Investments in Aero Assurance, Ltd. or New Sky, Ltd., to the extent
reasonably necessary to support the working capital insurance obligations of the
Borrower and the Guarantors;
 
(t)    any Permitted Acquisition by the Borrower or any Guarantor so long as (1)
on a pro forma basis after giving effect to such Permitted Acquisition, the
Borrower and the Guarantors shall be in compliance with Sections 6.04, 6.05 and
6.06 and (2) in the event the purchase price for such Permitted Acquisition
exceeds $750,000,000, the sum of (A) the unrestricted cash of the Borrower and
its Subsidiaries and (B) the Unused Total Revolving Commitment, in each case, as
determined immediately prior to such acquisition, shall be no less than
$1,500,000,000;
 
(u)    any Investments acquired in connection with Permitted Acquisitions;
 
(v)    capitalization or forgiveness of any Indebtedness owed to the Borrower by
any Guarantor or owed to any Guarantor by the Borrower or any other Guarantor;
 
(w)    cancellation, forgiveness, set-off, or acceptance of prepayments by the
Borrower or any Guarantor with respect to debt, other obligations and/or equity
securities in the ordinary course of business and to the extent not otherwise
prohibited by the terms of this Agreement;
 
(x)    Investments consisting of the acquisition of equity interests pursuant to
Sections 6.07(d) and 6.07(e);
 
(y)    the Borrower and the Guarantors may hold Investments comprised of notes
payable, or stock or other securities issued by Account Debtors to the Borrower
or such Guarantor, as the case may be, pursuant to negotiated agreements with
respect to settlement of such Account Debtor’s Accounts in the ordinary course
of business, consistent with past practices;
 
(z)    the Borrower and the Guarantors may make Investments with the funds held
in the Excluded Accounts;
 
(aa)    the Borrower may make any Investment in any Guarantor, any Guarantor may
make any Investment in the Borrower and any Guarantor may make any Investment in
any other Guarantor;
 
 
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(bb)    the Borrower may make Investments in the form of advances under a
revolving loan facility in an aggregate principal amount not to exceed
$28,750,000 outstanding at any time, to the Borrower’s Plans or any similar
benefit plans of the Borrower (together, the “Benefits Plans”) for the payment
of ordinary operating expenses of the Benefits Plans (including the payment of
benefits in accordance with the terms of the Benefits Plans and periodic
premiums under insurance or annuity contracts) or for the purposes incidental to
the ordinary operation of the Benefits Plans;
 
(cc)    Investments resulting from any sale or other Disposition of assets
otherwise permitted by Section 6.10; and
 
(dd)    the Borrower and the Guarantors may make other Investments in an
aggregate amount outstanding at any one time not to exceed $28,750,000 for all
Investments made pursuant to this clause (dd). 
 
The amount of any investment or loan shall be the initial amount of such
investment less all returns of principal, capital, dividends and other cash
returns thereof and less all liabilities expressly assumed by another person in
connection with the sale of such investment.
 
SECTION 6.10.  Disposition of Assets.  Sell or otherwise Dispose of any
Collateral (including, without limitation, the capital stock of any Subsidiary,
but excluding any Permitted Disposition), except that such sale or other
Disposition of Collateral shall be permitted provided that upon consummation of
any such sale or other Disposition (i) no Event of Default shall have occurred
and be continuing and (ii) the Borrower is in compliance, after giving effect to
the grace periods referred to in Section 6.06 and after giving effect to such
sale or other Disposition (including any deposit of any Net Cash Proceeds
received upon consummation thereof in an account subject to a Full Control
Agreement), with Section 6.06 hereof; provided that nothing contained in this
Section 6.10 is intended to excuse performance by the Borrower or any Guarantor
of any requirement of any Collateral Document that would be applicable to a
Disposition permitted hereunder.
 
SECTION 6.11.  Nature of Business.  Enter into any business that is materially
different from those conducted by the Borrower and the Guarantors on the Closing
Date, except for any business ancillary to the businesses conducted by the
Borrower and the Guarantors on the Closing Date.
 
SECTION 6.12.  Fiscal Year.  Change the last day of its fiscal year from
December 31.
 
SECTION 7.

EVENTS OF DEFAULT
 
SECTION 7.01.  Events of Default.  In the case of the happening of any of the
following events and the continuance thereof beyond the applicable grace period
if any (each, an “Event of Default”):
 
 
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(a)  any representation or warranty made by the Borrower or any Guarantor in
this Agreement, in any other Loan Document or in any written document required
to be delivered in connection herewith or therewith, shall prove to have been
false or materially misleading when made or delivered; or
 
(b)  default shall be made in the payment of any (i) Fees or interest on the
Loans and such default shall continue unremedied for more than five (5) Business
Days, (ii) other amounts payable hereunder when due (other than amounts set
forth in clauses (i) and (iii) hereof), and such default shall continue
unremedied for more than ten (10) Business Days, or (iii) principal of the
Loans, when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
 
(c)  default shall be made by the Borrower or any Guarantor in the due
observance or performance of any covenant, condition or agreement contained in
Section 6 hereof (subject to the Borrower’s right to cure non-compliance with
the covenants contained in Section 6.06(a) as described therein); or 
 
(d)  default shall be made by the Borrower or any Guarantor in the due
observance or performance of any other covenant, condition or agreement to be
observed or performed pursuant to the terms of this Agreement or any of the
other Loan Documents and such default shall continue unremedied for more than
thirty (30) days from the earlier of (i) a Responsible Officer having knowledge
of such default and (ii) written notice by the Administrative Agent of such
default; or
 
(e)  other than with respect to (x) any Qualified Restructuring Indebtedness and
(y) any Specified Jet Fuel Action, the Borrower or any Guarantor or any of their
respective Subsidiaries shall fail to make any payment of principal, interest or
premium in respect of any Material Indebtedness, when and as the same shall
become due and payable (after giving effect to any applicable grace periods or
waivers or amendments); or
 
(f)  other than with respect to (x) any Qualified Restructuring Indebtedness,
(y) any Specified Jet Fuel Action and (z) the Regional Airports Improvement
Corporation Facilities Sublease Refunding Revenue Bonds, Issue of 1996, Delta
Air Lines, Inc. (Los Angeles International Airport), any event or condition
occurs that results in any Material Indebtedness becoming due prior to its
scheduled maturity or (in the case of any Material Indebtedness other than
Indebtedness under the First Lien Credit Agreement) that enables or permits
(after giving effect to any grace periods) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity, provided that
the foregoing shall not apply to Indebtedness that becomes due as a result of
(i) the sale, transfer or other disposition (including as a result of a casualty
or condemnation event) of any property or assets pursuant to the terms of such
Indebtedness to the extent that (A) such sale, transfer or other disposition
does not give rise to a default thereunder and (B) the payment of such
Indebtedness is made in accordance with the terms of such Indebtedness with the
proceeds of such sale, transfer or other disposition or (ii) in the case of any
ARB Indebtedness, a change in law causing a determination of taxability-related
call in respect of such ARB Indebtedness; or
 
 
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(g)  an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Guarantor or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Guarantor for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for sixty
(60) days or an order or decree approving or ordering any of the foregoing shall
be entered; or
 
(h)  the Borrower or any Guarantor shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Guarantor or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or
 
(i)  the Borrower or any Guarantor admits in writing its inability to pay its
debts; or
 
(j)  a Change of Control shall occur; or
 
(k)  any material provision of any Loan Document shall, for any reason, cease to
be valid and binding on the Borrower or any of the Guarantors, or the Borrower
or any of the Guarantors shall so assert in any pleading filed in any court or
any material portion of any Lien on the Collateral (as reasonably determined by
the Administrative Agent, the Collateral Agent and the Borrower) intended to be
created by the Loan Documents shall cease to be or shall not be a valid and
perfected Lien having the priorities contemplated hereby or thereby; or
 
(l)  any final judgment in excess of $57,500,000 (exclusive of any Qualified
Judgment, any Specified Jet Fuel Action and any judgment or order the amounts of
which are fully covered by insurance less any applicable deductible and as to
which the insurer has been notified of such judgment and has not denied
coverage) shall be rendered against the Borrower or any of the Guarantors and
the enforcement thereof shall not have been stayed, vacated, satisfied,
discharged or bonded pending appeal within sixty (60) consecutive days; or
 
(m)  any Termination Event that could reasonably be expected to result in a
Material Adverse Effect shall have occurred; or
 
(n)  (i) the Borrower or any ERISA Affiliate thereof shall have been notified by
the sponsor or trustee of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate
does not have reasonable grounds, in the opinion of the Administrative Agent, to
contest such Withdrawal Liability and is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner, and (iii) the amount of such
Withdrawal Liability specified in such notice, when aggregated with all other
amounts required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date of such notification), exceeds an amount
that could reasonably be expected to result in a Material Adverse Effect; or
 
 
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(o)  the Borrower or any ERISA Affiliate thereof shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount that could reasonably be
expected to result in a Material Adverse Effect; or
 
(p)  it shall be determined that the Borrower or any Guarantor is liable for the
payment of claims arising out of any failure to comply (or to have complied)
with applicable Environmental Laws or regulations or requirements of Airport
Authorities (with respect to environmental matters) the payment of which will
have a Material Adverse Effect, and the enforcement thereof shall not have been
stayed, vacated or discharged within 30 days; or
 
(q)  all or substantially all of the Borrower’s flights and operations are
suspended for more than two (2) consecutive days (other than as a result of an
FAA suspension due to force majeure or any other extraordinary event similarly
affecting major United States air carriers having both substantial domestic and
international operations);
 
then, and in every such event and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders, the Administrative Agent shall, by written notice to the Borrower, take
one or more of the following actions, at the same or different times: (i)
declare the Loans or any portion thereof then outstanding to be forthwith due
and payable, whereupon the principal of the Loans together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower and the
Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (ii) set-off amounts in any accounts (other than
Escrow Accounts, Payroll Accounts or other accounts held in trust for an
identified beneficiary) maintained with the Administrative Agent or the
Collateral Agent (or any of their respective affiliates) and apply such amounts
to the obligations of the Borrower and the Guarantors hereunder and in the other
Loan Documents; and (iii) exercise any and all remedies under the Loan Documents
and under applicable law available to the Administrative Agent, the Collateral
Agent and the Lenders. In case of any event with respect to the Borrower
described in clause (g) or (h) of this Section, the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower. Any payment received as a result
of the exercise of remedies hereunder shall be applied in accordance with
Section 2.15(b).
 
 
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SECTION 8.
 
THE AGENTS
 
SECTION 8.01.  Administration by Agents.  (a)  Each of the Lenders hereby
irrevocably appoints the Administrative Agent and the Collateral Agent as its
agents and authorizes the Administrative Agent and the Collateral Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent and the Collateral Agent by the terms hereof, together with
such actions and powers as are reasonably incidental thereto.
 
(b)  Each of the Lenders hereby authorizes the Administrative Agent and the
Collateral Agent, as applicable, and in their sole discretion:
 
(i)  in connection with the sale or other disposition of any asset that is part
of the Collateral of the Borrower or any Guarantor, as the case may be, to the
extent permitted by the terms of this Agreement, to release a Lien granted to
the Collateral Agent, for the benefit of the Second Priority Secured Parties, on
such asset;
 
(ii)  to determine that the cost to the Borrower or any Guarantor, as the case
may be, is disproportionate to the benefit to be realized by the Second Priority
Secured Parties by perfecting a Lien in a given asset or group of assets
included in the Collateral and that the Borrower or such Guarantor, as the case
may be, should not be required to perfect such Lien in favor of the Collateral
Agent, for the benefit of the Second Priority Secured Parties;
 
(iii)  to enter into and perform its obligations under the other Loan Documents;
and
 
(iv)  to enter into intercreditor and/or subordination agreements in accordance
with Section 6.01(n) on terms acceptable to the Administrative Agent.
 
SECTION 8.02.  Rights of Administrative Agent and Collateral Agent.  Any
institution serving as the Administrative Agent and the Collateral Agent
hereunder shall have the same rights and powers in their respective capacities
as Lenders as any other Lender and may exercise the same as though it were not
an Administrative Agent or Collateral Agent, and such bank and its respective
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Administrative Agent or Collateral Agent hereunder.
 
SECTION 8.03.  Liability of Agents.
 
(a)  The Administrative Agent and the Collateral Agent shall not have any duties
or obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (i) the Administrative Agent and the Collateral
Agent shall not be subject to any fiduciary or other implied duties, regardless
of whether an Event of Default has occurred and is continuing, (ii) the
Administrative Agent and the Collateral Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that each such
agent is required to exercise in writing as directed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.08), and (iii) except as expressly set
forth herein, the Administrative Agent and the Collateral Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the institution serving as an Administrative
Agent or Collateral Agent or any of its Affiliates in any capacity. Neither the
Administrative Agent nor the Collateral Agent shall be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 10.08) or in the absence of its
own gross negligence, bad faith or willful misconduct. The Administrative Agent
and the Collateral Agent shall be deemed not to have knowledge of any Event of
Default unless and until written notice thereof is given to the Administrative
Agent and the Collateral Agent by the Borrower or a Lender, and the
Administrative Agent and the Collateral Agent shall not be responsible for, or
have any duty to ascertain or inquire into, (A) any statement, warranty or
representation made in or in connection with this Agreement, (B) the contents of
any certificate, report or other document delivered hereunder or in connection
herewith, (C) the performance or observance of any of the covenants, agreements
or other terms or conditions set forth herein, (D) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement,
instrument or document, or (E) the satisfaction of any condition set forth in
Section 4 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent and the Collateral Agent.
 
 
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(b)  The Administrative Agent and the Collateral Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent and the Collateral Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent and the Collateral Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
(c)  Each of the Administrative Agent and the Collateral Agent may perform any
and all of its respective duties and exercise its respective rights and powers
by or through any one or more sub-agents appointed by such agent. The
Administrative Agent and the Collateral Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers through its Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
the Collateral Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent and Collateral Agent.
 
SECTION 8.04.  Reimbursement and Indemnification.  Each Lender agrees (a) to
reimburse on demand the Administrative Agent (and the Collateral Agent) for such
Lender’s Aggregate Exposure Percentage of any expenses and fees incurred for the
benefit of the Lenders under this Agreement and any of the Loan Documents,
including, without limitation, counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, and any other
expense incurred in connection with the operations or enforcement thereof, not
reimbursed by the Borrower or the Guarantors and (b) to indemnify and hold
harmless the Administrative Agent and the Collateral Agent and any of their
Related Parties, on demand, in the amount equal to such Lender’s Aggregate
Exposure Percentage, 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 it or any of them in any way relating to or arising out
of this Agreement or any of the Loan Documents or any action taken or omitted by
it or any of them under this Agreement or any of the Loan Documents to the
extent not reimbursed by the Borrower or the Guarantors (except such as shall
result from their respective gross negligence or willful misconduct).
 
 
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SECTION 8.05.  Successor Agents.  Subject to the appointment and acceptance of a
successor agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation by the Administrative Agent, the Required Lenders shall have the
right, with the consent (provided no Event of Default or event which upon notice
or lapse of time or both would constitute an Event of Default has occurred or is
continuing) of the Borrower, to appoint a successor. If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, in consultation
with the Borrower, on behalf of the Lenders, appoint a successor Administrative
Agent which shall be a bank institution with an office in New York, New York, or
an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 10.04 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as an Administrative Agent.
 
SECTION 8.06.  Independent Lenders.  Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or the
Collateral Agent or any other Lender and based on such 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 Administrative Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
 
SECTION 8.07.  Advances and Payments.
 
 
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(a)  On the date of each Loan, the Administrative Agent shall be authorized (but
not obligated) to advance, for the account of each of the Lenders, the amount of
the Loan to be made by it in accordance with its Second Lien Term Loan
Commitment hereunder. Should the Administrative Agent do so, each of the Lenders
agrees forthwith to reimburse the Administrative Agent in immediately available
funds for the amount so advanced on its behalf by the Administrative Agent,
together with interest at the Federal Funds Effective Rate if not so reimbursed
on the date due from and including such date but not including the date of
reimbursement.
 
(b)  Any amounts received by the Administrative Agent in connection with this
Agreement (other than amounts to which the Administrative Agent is entitled
pursuant to Sections 2.16, 8.04 and 10.04), the application of which is not
otherwise provided for in this Agreement, shall be applied in accordance with
Section 2.15(b). All amounts to be paid to a Lender by the Administrative Agent
shall be credited to that Lender, after collection by the Administrative Agent,
in immediately available funds either by wire transfer or deposit in that
Lender’s correspondent account with the Administrative Agent, as such Lender and
the Administrative Agent shall from time to time agree.
 
SECTION 8.08.  Sharing of Setoffs.  Each Lender agrees that if it shall, through
the exercise either by it or any of its banking Affiliates of a right of
banker’s lien, setoff or counterclaim against the Borrower or a Guarantor,
including, but not limited to, a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim and received by such Lender (or any of its banking Affiliates)
under any applicable bankruptcy, insolvency or other similar law, or otherwise,
obtain payment in respect of its Loans as a result of which the unpaid portion
of its Loans is proportionately less than the unpaid portion of the Loans of any
other Lender (a) it shall promptly purchase at par (and shall be deemed to have
thereupon purchased) from such other Lender a participation in the Loans of such
other Lender, so that the aggregate unpaid principal amount of each Lender’s
Loans and its participation in Loans of the other Lenders shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to the obtaining of such
payment was to the principal amount of all Loans outstanding prior to the
obtaining of such payment and (b) such other adjustments shall be made from time
to time as shall be equitable to ensure that the Lenders share such payment
pro-rata, provided, that if any such non-pro-rata payment is thereafter
recovered or otherwise set aside, such purchase of participations shall be
rescinded (without interest). The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding (or deemed to be holding) a
participation in a Loan acquired pursuant to this Section or any of its banking
Affiliates may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender as fully as if such Lender was the original obligee thereon, in the
amount of such participation.
 
SECTION 8.09.  Other Agents.  No Agent (other than the Administrative Agent and
the Collateral Agent) shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, no such Agent shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any such Agent in
deciding to enter into this Agreement or in taking or not taking action
hereunder. Each such Agent shall be entitled to the benefit of the exculpation
and indemnification provided in this Section 8 to the same extent as the
Administrative Agent and the Collateral Agent.
 
 
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SECTION 9.
 
GUARANTY
 
SECTION 9.01.  Guaranty.
 
(a)  Each of the Guarantors unconditionally and irrevocably guarantees the due
and punctual payment by the Borrower of the Second Priority Obligations
(including interest accruing on and after the filing of any petition in
bankruptcy or of reorganization of the obligor whether or not post filing
interest is allowed in such proceeding). Each of the Guarantors further agrees
that, to the extent permitted by applicable law, the Second Priority Obligations
may be extended or renewed, in whole or in part, without notice to or further
assent from it, and it will remain bound upon this guaranty notwithstanding any
extension or renewal of any of the Second Priority Obligations. The Second
Priority Obligations of the Guarantors shall be joint and several.
 
(b)  To the extent permitted by applicable law, each of the Guarantors waives
presentation to, demand for payment from and protest to the Borrower or any
other Guarantor, and also waives notice of protest for nonpayment. The
obligations of the Guarantors hereunder shall not, to the extent permitted by
applicable law, be affected by (i) the failure of the Administrative Agent or a
Lender to assert any claim or demand or to enforce any right or remedy against
the Borrower or any other Guarantor under the provisions of this Agreement or
any other Loan Document or otherwise; (ii) any extension or renewal of any
provision hereof or thereof; (iii) any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of any
of the Loan Documents; (iv) the release, exchange, waiver or foreclosure of any
security held by the Collateral Agent for the Second Priority Obligations or any
of them; (v) the failure of the Collateral Agent or a Lender to exercise any
right or remedy against any other Guarantor; or (vi) the release or substitution
of any Collateral or any other Guarantor.
 
(c)  To the extent permitted by applicable law, each of the Guarantors further
agrees that this guaranty constitutes a guaranty of payment when due and not
just of collection, and waives any right to require that any resort be had by
the Administrative Agent, the Collateral Agent or a Lender to any security held
for payment of the Second Priority Obligations or to any balance of any deposit,
account or credit on the books of the Administrative Agent, the Collateral Agent
or a Lender in favor of the Borrower or any other Guarantor, or to any other
Person.
 
(d)  To the extent permitted by applicable law, each of the Guarantors hereby
waives any defense that it might have based on a failure to remain informed of
the financial condition of the Borrower and of any other Guarantor and any
circumstances affecting the ability of the Borrower to perform under this
Agreement.
 
(e)  To the extent permitted by applicable law, each Guarantor’s guaranty shall
not be affected by the genuineness, validity, regularity or enforceability of
the Second Priority Obligations or any other instrument evidencing any Second
Priority Obligations, or by the existence, validity, enforceability, perfection,
or extent of any collateral therefor or by any other circumstance relating to
the Second Priority Obligations which might otherwise constitute a defense to
this guaranty (other than the occurrence of the Second Priority Obligations
Payment Date). None of the Administrative Agent, the Collateral Agent, nor any
of the Lenders makes any representation or warranty in respect to any such
circumstances or shall have any duty or responsibility whatsoever to any
Guarantor in respect of the management and maintenance of the Second Priority
Obligations.
 
 
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(f)  Upon the occurrence of the Obligations becoming due and payable (by
acceleration or otherwise), the Lenders shall be entitled to immediate payment
of such Obligations by the Guarantors upon written demand by the Administrative
Agent.
 
SECTION 9.02.  No Impairment of Guaranty.  To the extent permitted by applicable
law, the obligations of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense (other than the occurrence
of the Second Priority Obligations Payment Date) or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Second Priority Obligations. To the extent permitted by
applicable law, without limiting the generality of the foregoing, the
obligations of the Guarantors hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent, the Collateral
Agent or a Lender to assert any claim or demand or to enforce any remedy under
this Agreement or any other agreement, by any waiver or modification of any
provision hereof or thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Second Priority Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantors or would
otherwise operate as a discharge (other than the occurrence of the Second
Priority Obligations Payment Date) of the Guarantors as a matter of law, until
the Second Priority Obligations Payment Date shall have occurred.
 
SECTION 9.03.  Continuation and Reinstatement, etc.  Each Guarantor further
agrees that its guaranty hereunder shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Second Priority Obligation is rescinded or must otherwise be restored by the
Administrative Agent, any Lender or any other Second Priority Secured Party upon
the bankruptcy or reorganization of the Borrower or a Guarantor, or otherwise.
 
SECTION 9.04.  Subrogation.  Upon payment by any Guarantor of any sums to the
Administrative Agent, the Collateral Agent or a Lender hereunder, all rights of
such Guarantor against the Borrower arising as a result thereof by way of right
of subrogation or otherwise, shall in all respects be subordinate and junior in
right of payment to the prior payment in full of all the Second Priority
Obligations (including interest accruing on and after the filing of any petition
in bankruptcy or of reorganization of an obligor whether or not post filing
interest is allowed in such proceeding). If any amount shall be paid to such
Guarantor for the account of the Borrower relating to the Second Priority
Obligations, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent and the Lenders to be credited and applied to the Second
Priority Obligations, whether matured or unmatured.
 
 
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SECTION 10.
 
MISCELLANEOUS
 
SECTION 10.01.  Notices.  (a)  Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
or under any other Loan Document shall be in writing (including by facsimile or
electronic mail (other than to the Borrower, unless agreed) pursuant to
procedures approved by the Administrative Agent), and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
 
(i)  if to the Borrower or any Guarantor, to it at Delta Air Lines, Inc., 1030
Delta Boulevard, Atlanta, GA 30354, Attention of: (x) Treasurer, Dept. 856,
Telecopier No.: (404) 715-4862, Telephone No.: (404) 714-1724 and (y) General
Counsel, Dept. 971, Telecopier No.: (404) 715-2233, Telephone No.: (404)
715-2611;
 
(ii)  if to GSCP as Administrative Agent, to it at c/o Goldman, Sachs & Co., 30
Hudson Street, 17th Floor, Jersey City, NJ 07302, Attention: SBD Operations,
Attention: Pedro Ramirez (Telecopier:  (212) 357-4597, email and for delivery of
final financial statements for posting: ), with a copy to Goldman Sachs Credit
Partners L.P., 1 New York Plaza, New York, New York  10004, Attention: Rob
Schatzman (Telecopier:  (212) 902-3000); and
 
(iii)  if to any other Lender, to it at its address (or telecopy number) set
forth in Annex A hereto or, if subsequently delivered, an administrative
questionnaire in a form as the Administrative Agent may require.
 
(b)  Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided, that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
reasonable discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided, that approval of such procedures may be limited to particular notices
or communications.
 
(c)  Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
 
SECTION 10.02.  Successors and Assigns.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) the Borrower
may not assign or otherwise transfer any of their rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (d) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
 
 
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(b)  (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:
 
(A)  the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Second Lien
Term Loan to an assignee that is (I) immediately prior to giving effect to such
assignment a Lender, (II) an Affiliate of a Lender, or (III) an Approved Fund;
 
(B)  the Borrower; provided that no consent of the Borrower shall be required
for an assignment (I) if an Event of Default has occurred and is continuing or
(II) if the assignee is a Lender, an Affiliate of a Lender or an Approved Fund.
 
(ii)  Assignments shall be subject to the following additional conditions:
 
(A)  any assignment of any portion of the Loans shall be made to an Eligible
Assignee;
 
(B)  except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Loans, the amount of such Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000, and after giving effect to such
assignment, the portion of the Loan held by the assigning Lender shall not be
less than $1,000,000, in each case unless the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;
 
 
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(C)  each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
 
(D)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 for the account of the Administrative Agent; and
 
(E)  the assignee, if it was not a Lender immediately prior to such assignment,
shall deliver to the Administrative Agent an administrative questionnaire in a
form as the Administrative Agent may require.
 
For the purposes of this Section 10.02(b), the term “Approved Fund” means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
 
(iii)  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.12, 2.14 and 10.04). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.02
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of
this Section.
 
(iv)  The Administrative Agent shall maintain at its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Second Lien Term Loan
Commitments of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrower, the Guarantors, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
 
(c)  Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee’s completed administrative
questionnaire in a form as the Administrative Agent may require (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register; provided, that if either the assigning Lender or the
assignee shall have failed to make any payment required to be made by it
pursuant to Section 2.03(b) or 10.04(c), the Administrative Agent shall have no
obligation to accept such Assignment and Acceptance and record the information
therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
 
 
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(d)    (i)  Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Second Lien Term Loan
Commitment and the Loans owing to it); provided, that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative 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. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided, that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
10.08(a) that affects such Participant. Subject to paragraph (d)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.12 and 2.14 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 8.08 as though it were a Lender, provided such
Participant agrees to be subject to the requirements of Section 8.08 as though
it were a Lender.
 
(ii)  A Participant shall not be entitled to receive any greater payment under
Section 2.14 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.14 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.14(e) as though it were a
Lender.
 
(e)  Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 10.02 shall not apply to
any such pledge or assignment of a security interest; provided, that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
 
 
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(f)  Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.02, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower or any of the Guarantors furnished to such Lender by or
on behalf of the Borrower or any of the Guarantors; provided, that prior to any
such disclosure, each such assignee or participant or proposed assignee or
participant are advised of and agree to be bound by either the provisions of
Section 10.03 or other provisions at least as restrictive as Section 10.03.
 
SECTION 10.03.  Confidentiality.  Each Lender agrees to keep any information
delivered or made available by the Borrower or any of the Guarantors to it
confidential from anyone other than persons employed or retained by such Lender
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans, and who are advised by such Lender of the
confidential nature of such information; provided, that nothing herein shall
prevent any Lender from disclosing such information (a) to any of its Affiliates
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to keep
such information confidential) or to any other Lender, (b) upon the order of any
court or administrative agency, (c) upon the request or demand of any regulatory
agency or authority, (d) which has been publicly disclosed other than as a
result of a disclosure by the Administrative Agent or any Lender which is not
permitted by this Agreement, (e) in connection with any litigation to which the
Administrative Agent, any Lender, or their respective Affiliates may be a party
to the extent reasonably required, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to such Lender’s legal
counsel and independent auditors, and (h) to any actual or proposed participant
or assignee of all or part of its rights hereunder or to any direct or indirect
contractual counterparty (or the professional advisors thereto) to any swap or
derivative transaction relating to the Borrower and its obligations, in each
case, subject to the proviso in Section 10.02(f). If any Lender is in any manner
requested or required to disclose any of the information delivered or made
available to it by the Borrower or any of the Guarantors under clauses (b) or
(e) of this Section, such Lender will, to the extent permitted by law, provide
the Borrower with prompt notice, to the extent reasonable, so that the Borrower
may seek, at its sole expense, a protective order or other appropriate remedy or
may waive compliance with this Section.
 
SECTION 10.04.  Expenses; Indemnity; Damage Waiver.  (a) (i)  The Borrower shall
pay or reimburse: (A) all reasonable fees and reasonable out-of-pocket expenses
of the Administrative Agent (including the reasonable fees, disbursements and
other charges of Simpson Thacher & Bartlett LLP (“Simpson Thacher”), special
counsel to the Administrative Agent, and any other regulatory or local counsel
retained by Simpson Thacher or the Administrative Agent) associated with the
syndication of the credit facilities provided for herein, and the preparation,
execution, delivery and administration of the Loan Documents and any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated); and (B) all
fees and out-of-pocket expenses of the Administrative Agent (including the
reasonable fees, disbursements and other charges of Simpson Thacher, special
counsel to the Administrative Agent, and any other counsel retained by Simpson
Thacher or the Administrative Agent) and the Lenders in connection with the
enforcement of the Loan Documents.
 
 
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(ii)  The Borrower shall pay or reimburse all reasonable fees and reasonable
expenses of the Administrative Agent and its internal and third-party auditors,
the Appraisers, the Real Estate Appraiser and consultants incurred in connection
with the Administrative Agent’s (a) periodic field examinations and appraisals
and (b) other monitoring of assets as allowed hereunder.
 
(iii)  All payments or reimbursements pursuant to the foregoing clauses (a)(i)
and (ii) shall be paid within thirty (30) days of written demand together with
back-up documentation supporting such reimbursement request.
 
(b)  The Borrower shall indemnify each Agent and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or Release
of Hazardous Materials on or from any property owned or operated by the Borrower
or any of its Subsidiaries, or any Environmental Liability related in any way or
asserted against the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided, that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the bad faith, gross negligence or willful misconduct of such
Indemnitee.
 
(c)  To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent such portion of
the unpaid amount equal to such Lender’s Aggregate Exposure Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought); provided, that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
 
(d)  To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions
or any Loan or the use of the proceeds thereof.
 
 
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SECTION 10.05.  Governing Law; Jurisdiction; Consent to Service of Proces.  (a)
 This Agreement shall be construed in accordance with and governed by the law of
the State of New York.
 
(b)  The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, 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 such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall, to
the extent permitted by law, 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 the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against the Borrower or its properties in the courts of any
jurisdiction.
 
(c)  The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which 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 in any court referred to in paragraph (b)
of this Section. 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.
 
(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
 
SECTION 10.06.  No Waiver.  No failure on the part of the Administrative Agent
or the Collateral Agent or any of the Lenders to exercise, and no delay in
exercising, any right, power or remedy hereunder or any of the other Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.
 
SECTION 10.07.  Extension of Maturity.  Should any payment of principal of or
interest or any other amount due hereunder become due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
 
 
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SECTION 10.08.  Amendments, etc.
 
(a)  No modification, amendment or waiver of any provision of this Agreement or
any Collateral Document (other than any Control Agreement), and no consent to
any departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given; provided, however, that no such
modification or amendment shall without the written consent of (i) each Lender
directly affected thereby (A) increase the Second Lien Term Loan Commitment of
any Lender or extend the expiry of the Second Lien Term Loan Commitment of any
Lender (it being understood that a waiver of an Event of Default shall not
constitute an increase in or extension of the expiry of the Second Lien Term
Loan Commitment of a Lender), (B) reduce the principal amount of any Loan or the
rate of interest payable thereon (provided that only the consent of the Required
Lenders shall be necessary for a waiver of default interest referred to in
Section 2.07), extend the scheduled date or reduce the amount of any required
amortization payment of the Second Lien Term Loan pursuant to Section 2.09, or
extend any date for the payment of interest hereunder or extend the final
maturity of the Borrower’s obligations hereunder or (C) amend, modify or waive
any provision of Section 2.15(b) or (ii) all of the Lenders (A) amend or modify
any provision of this Agreement which provides for the unanimous consent or
approval of the Lenders, (B) amend this Section 10.08 or modify the percentage
of the Lenders required in the definition of Required Lenders or (C) release all
or substantially all of the Liens granted to the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document, or release all or
substantially all of the Guarantors. No such amendment or modification shall
adversely affect the rights and obligations of the Administrative Agent or the
Collateral Agent hereunder without its prior written consent. No notice to or
demand on the Borrower or any Guarantor shall entitle the Borrower or any
Guarantor to any other or further notice or demand in the same, similar or other
circumstances. Each assignee under Section 10.02(b) shall be bound by any
amendment, modification, waiver, or consent authorized as provided herein, and
any consent by a Lender shall bind any Person subsequently acquiring an interest
on the Loans held by such Lender. No amendment to this Agreement shall be
effective against the Borrower or any Guarantor unless signed by the Borrower or
such Guarantor, as the case may be. 
 
(b)  Notwithstanding anything to the contrary contained in Section 10.08(a),
(i) in the event that the Borrower requests that this Agreement be modified or
amended in a manner which would require the unanimous consent of all of the
Lenders and such modification or amendment is agreed to by the Required Lenders,
then the Borrower may replace any such non-consenting Lender in accordance with
Section 10.02; provided that such amendment or modification can be effected as a
result of the assignment contemplated by such Section (together with all other
such assignments required by the Borrower to be made pursuant to this clause
(i)); (ii) no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder, except that the Second Lien Term
Loan Commitment of such Lender may not be increased or extended without the
consent of such Lender (it being understood that any Loans held or deemed held
by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder
requiring any consent of the Lenders) and (iii) if the Administrative Agent and
the Borrower shall have jointly identified an obvious error or any error or
omission of a technical or immaterial nature in any provision of the Loan
Documents, then the Administrative Agent and the Borrower shall be permitted to
amend such provision and such amendment shall become effective without any
further action or consent of any other party to any Loan Document if the same is
not objected to in writing by the Required Lenders within five (5) Business Days
notice thereof.
 
 
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SECTION 10.09.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
 
SECTION 10.10.  Headings.  Section headings used herein are for convenience only
and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
 
SECTION 10.11.  Survival.  All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Second Lien Term Loan Commitments have not expired
or terminated. The provisions of Sections 2.12, 2.13, 2.14 and 10.04 and Section
8 shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Second Lien Term Loan Commitments or
the termination of this Agreement or any provision hereof.
 
SECTION 10.12.  Execution in Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement
constitutes the entire contract among the parties relating to the subject matter
hereof and supersedes any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy or electronic .pdf copy shall be effective as delivery of a manually
executed counterpart of this Agreement.
 
SECTION 10.13.  USA Patriot Act.  Each Lender that is subject to the
requirements of the Patriot Act hereby notifies the Borrower and each Guarantor
that pursuant to the requirements of the Act, it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and each Guarantor and other information
that will allow such Lender to identify the Borrower and each Guarantor in
accordance with the Patriot Act.
 
SECTION 10.14.  Registrations with International Registry.  Each of the parties
hereto consents to the registrations with the International Registry of the
International Interest constituted by the Second Lien Aircraft Mortgage, and
each party hereto covenants and agrees that it will take all such action
reasonably requested by Borrower or Collateral Agent in order to make any
registrations with the International Registry, including becoming a registry
user entity with the International Registry and providing consents to any
registration as may be contemplated by the Loan Documents.
 
SECTION 10.15.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 10.16.  Intercreditor Arrangements.  Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement or any other Loan Document and the exercise of any
right or remedy by the Administrative Agent or the Collateral Agent hereunder or
under any other Loan Document are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement, this Agreement and any other Loan Document, the terms of the
Intercreditor Agreement shall govern and control with respect to any right or
remedy. Without limiting the generality of the foregoing, and notwithstanding
anything herein to the contrary, all rights and remedies of the Administrative
Agent or the Collateral Agent (and the Lenders) shall be subject to the terms of
the Intercreditor Agreement, and until the First Priority Obligations Payment
Date (as defined in the Intercreditor Agreement), any obligation of the Borrower
and any Guarantor hereunder or under any other Loan Document with respect to the
delivery or control of any Collateral, the novation of any lien on any
certificate of title, bill of lading or other document, the giving of any notice
to any bailee or other Person, the provision of voting rights or the obtaining
of any consent of any Person shall be deemed to be satisfied if the Borrower or
such Guarantor, as applicable, complies with the requirements of the similar
provision of the applicable First Lien Loan Document. Until the First Priority
Obligations Payment Date (as defined in the Intercreditor Agreement), the
delivery of any Collateral to the First Lien Collateral Agent pursuant to the
First Lien Loan Documents shall satisfy any delivery requirement hereunder or
under any other Loan Document.
 

 
102

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and the year first written.
 

        DELTA AIR LINES, INC.  
   
   
    By:   /s/ Paul A. Jacobson  

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Name: Paul A. Jacobson   Title: Vice President and Treasurer

 

        ASA HOLDINGS, INC.  
   
   
    By:   /s/ Paul A. Jacobson  

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Name: Paul A. Jacobson   Title: President

 

        COMAIR HOLDINGS, LLC  
   
   
    By:   /s/ Dan Dixon  

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Name: Dan Dixon  
Title: Vice President, Chief Financial Officer and Treasurer

 

        COMAIR, INC.  
   
   
    By:   /s/ Dan Dixon  

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Name: Dan Dixon
 
Title: Vice President and CFO

 

        COMAIR SERVICES, INC.  
   
   
    By:   /s/ Dan Dixon  

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Name: Dan Dixon  
Title: Vice President

 

        CROWN ROOMS, INC.  
   
   
    By:   /s/ Mona Warwar      

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Name: Mona Warwar
 
Title: Assistant Treasurer

 

        DAL GLOBAL SERVICES, LLC  
   
   
    By:   /s/ Mona Warwar      

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Name: Mona Warwar
 
Title: Assistant Treasurer

 
 
 
 

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        DAL MOSCOW, INC.  
   
   
    By:   /s/ Mona Warwar      

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Name: Mona Warwar
 
Title: Assistant Treasurer

 

        DELTA AIRELITE BUSINESS JETS, INC.  
   
   
  By:   /s/ Michael B. Green  

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Name: Michael B. Green  
Title: President

 

        DELTA BENEFITS MANAGEMENT, INC.  
   
   
  By:   /s/ Michael O. Randolfi  

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Name: Michael O. Randolfi  
Title: Treasurer

 

        DELTA CONNECTION ACADEMY, INC.  
   
   
    By:   /s/ Jason Dauderman  

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Name: Jason Dauderman  
Title: VP of Finance and CFO

 

        DELTA LOYALTY MANAGEMENT SERVICES, LLC  
   
   
    By:   /s/ Michael O. Randolfi  

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Name: Michael O. Randolfi  
Title: Treasurer

 

        DELTA TECHNOLOGY, LLC  
   
   
    By:   /s/ E. Alan Arnold  

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Name: E. Alan Arnold  
Title: Secretary

 

        EPSILON TRADING, LLC  
   
   
    By:   /s/ Edward M. Smith  

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Name: Edward M. Smith
 
Title: Treasurer and Comptroller

 

 
 

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        KAPPA CAPITAL MANAGEMENT, INC.  
   
   
    By:   /s/ Michael O. Randolfi  

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Name: Michael O. Randolfi  
Title: President

 

 
 

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        BARCLAYS CAPITAL, as Syndication Agent and Joint Bookrunner  
   
   
    By:   /s/ Diane F. Rolfe  

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Name: Diane F. Rolfe  
Title: Director

 

       
C.I.T. LEASING CORPORATION, as Co-Documentation Agent
 
   
   
    By:   /s/ Nicholas Pastushan   

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Name: Nicholas Pastushan  
Title: Senior Vice President 

        CREDIT SUISSE SECURITIES (USA) LLC, as Co-Documentation Agent  
   
   
    By:   /s/ Chris Cunningham  

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Name: Chris Cunningham  
Title: Managing Director

 

        GOLDMAN SACHS CREDIT PARTNERS, L.P., as Administrative Agent, Collateral
Agent, Co-Lead Arranger, Joint Bookrunner and Lender  
   
   
    By:   /s/ Bruce H. Mendelsohn  

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Name: Bruce H. Mendelsohn
 
Title: Authorized Signatory

 

       
MERRILL LYNCH COMMERCIAL FINANCE CORP., as Co-Lead Arranger and Joint Bookrunner
 
   
   
    By:   /s/ Joshua A. Green  

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Name: Joshua A. Green  
Title: Managing Director