Exhibit 10.5 (a)
 
EXECUTION COPY
 

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

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

$1,900,000,000

AMENDED AND RESTATED
SECURED SUPER-PRIORITY DEBTOR IN POSSESSION
CREDIT AGREEMENT

Dated as of March 27, 2006

among

DELTA AIR LINES, INC.,
a Debtor and Debtor in Possession,
as Borrower,

THE OTHER CREDIT PARTIES SIGNATORY HERETO,
each a Debtor and Debtor in Possession,
as Credit Parties,

THE LENDERS SIGNATORY HERETO FROM TIME TO TIME,
as Lenders,

and

GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender

* * *

GE CAPITAL MARKETS, INC.,
as Sole Lead Arranger and Sole Book Runner for
Term Loan A and Term Loan B

* * *

GE CAPITAL MARKETS, INC.
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as Joint Lead Arrangers and Joint Book Runners for
Term Loan C
 

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

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

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

 
TABLE OF CONTENTS
 

           
Page
1.
 
AMOUNT AND TERMS OF CREDIT
 
2
   
1.1
 
Credit Facilities
 
2
   
1.2
 
Prepayments
 
3
   
1.3
 
Priority and Application of Payments
 
5
   
1.4
 
Use of Proceeds
 
6
   
1.5
 
Interest and Applicable Margins
 
6
   
1.6
 
Term A Borrowing Base
 
8
   
1.7
 
[Reserved.]
 
8
   
1.8
 
Fees
 
8
   
1.9
 
Receipt of Payments
 
8
   
1.10
 
Loan Account and Accounting
 
8
   
1.11
 
Indemnity
 
9
   
1.12
 
Access
 
10
   
1.13
 
Taxes
 
11
   
1.14
 
Capital Adequacy; Increased Costs; Illegality
 
12
   
1.15
 
Regulation D Compensation
 
14
2.
 
CONDITIONS PRECEDENT
 
14
   
2.1
 
Conditions to Effectiveness of Section 6.7(e)
 
14
   
2.2
 
Conditions to Effectiveness Generally
 
15
   
2.3
 
Conditions to Effectiveness of Certain Other Provisions
 
16
3.
 
REPRESENTATIONS AND WARRANTIES
 
17
   
3.1
 
Corporate Existence; Compliance with Law
 
17
   
3.2
 
Executive Offices, Collateral Locations, FEIN
 
17
   
3.3
 
Corporate Power, Authorization, Enforceable Obligations
 
18
   
3.4
 
Financial Statements and Projections
 
18
   
3.5
 
Material Adverse Effect; Burdensome Restrictions; Default
 
19
   
3.6
 
Ownership of Property; Real Estate; Liens
 
19
   
3.7
 
Labor Matters
 
20
   
3.8
 
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness
 
21
   
3.9
 
Government Regulation
 
21

 

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

 

   
3.10
 
Margin Regulations
 
21
   
3.11
 
Taxes
 
21
   
3.12
 
ERISA
 
22
   
3.13
 
No Litigation
 
23
   
3.14
 
Intellectual Property
 
23
   
3.15
 
Full Disclosure
 
23
   
3.16
 
Environmental Matters
 
24
   
3.17
 
Insurance
 
24
   
3.18
 
Use of Proceeds
 
24
   
3.19
 
Deposit
 
25
   
3.20
 
Trade Relations
 
25
   
3.21
 
Compliance With Industry Standards
 
25
   
3.22
 
Post-Petition Skymiles Facility
 
25
   
3.23
 
Secured, Super-Priority Obligations
 
25
   
3.24
 
Certificated Air Carrier
 
26
   
3.25
 
U.S. Citizen
 
26
   
3.26
 
Spare Parts
 
26
   
3.27
 
Aircraft; Engines
 
26
   
3.28
 
Slots, Primary Gates and Routes
 
26
4.
 
FINANCIAL STATEMENTS AND INFORMATION
 
27
   
4.1
 
Reports and Notices
 
27
   
4.2
 
Communication with Accountants
 
27
5.
 
AFFIRMATIVE COVENANTS
 
27
   
5.1
 
Maintenance of Existence and Conduct of Business
 
27
   
5.2
 
Payment of Charges
 
28
   
5.3
 
Books and Records
 
29
   
5.4
 
Insurance; Damage to or Destruction of Collateral
 
29
   
5.5
 
Compliance with Laws
 
31
   
5.6
 
Intellectual Property
 
31
   
5.7
 
Environmental Matters
 
31
   
5.8
 
Landlords’ Agreements; Bailee Letters
 
32
   
5.9
 
[Reserved.]
 
32
   
5.10
 
Notices
 
32

 
ii

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

 

   
5.11
 
Further Assurances
 
32
   
5.12
 
Additional Guaranties and Collateral Documents
 
33
   
5.13
 
Pledged Spare Parts
 
35
   
5.14
 
Aircraft Mortgage; Spare Parts Mortgage; SGR Security Agreement
 
35
   
5.15
 
Slot Utilization
 
35
   
5.16
 
ERISA/Labor Matters
 
36
   
5.17
 
Maintenance of Liens and Collateral
 
36
   
5.18
 
Use of Proceeds
 
36
   
5.19
 
Cash Management Systems
 
37
   
5.20
 
Appraisals
 
37
6.
 
NEGATIVE COVENANTS
 
37
   
6.1
 
Mergers, Subsidiaries, Etc
 
37
   
6.2
 
Investments; Loans and Advances
 
37
   
6.3
 
Indebtedness
 
39
   
6.4
 
Affiliate Transactions
 
42
   
6.5
 
Capital Structure and Business
 
42
   
6.6
 
Guaranteed Indebtedness
 
42
   
6.7
 
Liens
 
42
   
6.8
 
Sale of Stock and Assets
 
44
   
6.9
 
[Reserved.]
 
46
   
6.10
 
Financial Covenants
 
46
   
6.11
 
Hazardous Materials
 
46
   
6.12
 
Sale-Leasebacks
 
47
   
6.13
 
Restricted Payments
 
47
   
6.14
 
Change of Corporate Name or Location; Change of Fiscal Year
 
47
   
6.15
 
No Impairment of Intercompany Transfers
 
48
   
6.16
 
Limitation on Negative Pledge Clauses
 
48
   
6.17
 
No Speculative Transactions
 
48
   
6.18
 
Real Estate Purchases and Leases
 
49
   
6.19
 
Changes Relating to Permitted Subordinated Indebtedness and Post-Petition
Skymiles Facility Documents
 
49
   
6.20
 
Cancellation of Indebtedness
 
50

 
iii

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

 
7.
 
TERM
     
50
   
7.1
 
Termination
 
50
   
7.2
 
Survival of Obligations Upon Termination of Financing Arrangements
 
50
8.
 
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
 
50
   
8.1
 
Events of Default
 
50
   
8.2
 
Remedies
 
54
   
8.3
 
Waivers by Credit Parties
 
54
9
 
GUARANTY
     
55
   
9.1
 
Guaranty of Obligations of Borrower
 
55
   
9.2
 
Demand by Secured Parties
 
56
   
9.3
 
Enforcement of Guaranty
 
56
   
9.4
 
Waiver
 
56
   
9.5
 
Benefit of Guaranty
 
56
   
9.6
 
Modification of Obligations, Etc
 
57
   
9.7
 
Waiver of Subrogation, Etc
 
57
   
9.8
 
Election of Remedies
 
58
10
 
SECURITY
     
59
   
10.1
 
Security
 
59
   
10.2
 
Perfection of Security Interests
 
61
   
10.3
 
Rights of Lender; Limitations on Lenders’ Obligations
 
62
   
10.4
 
Covenants of the Credit Parties with Respect to Collateral
 
63
   
10.5
 
Performance by Administrative Agent of the Credit Parties’ Obligations
 
67
   
10.6
 
Limitation on Administrative Agent’s duty in Respect of Collateral
 
67
   
10.7
 
Remedies; Rights Upon Default
 
68
   
10.8
 
The Administrative Agent’s Appointment as Attorney-in-Fact
 
74
   
10.9
 
[Reserved]
 
75
   
10.10
 
Intercreditor Issues
 
75
   
10.11
 
Release of Collateral
 
76
11.
 
ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT
 
77
   
11.1
 
Assignment and Participations
 
77
   
11.2
 
Appointment of Administrative Agent
 
79
   
11.3
 
Administrative Agent’s Reliance, Etc
 
80
   
11.4
 
GE Capital and Affiliates
 
81

 
iv

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

 

   
11.5
 
Lender Credit Decision
 
81
   
11.6
 
Indemnification
 
81
   
11.7
 
Successor Agents
 
82
   
11.8
 
Setoff and Sharing of Payments
 
83
   
11.9
 
Payments; Non-Funding Lenders; Information; Actions in Concert
 
83
12.
 
SUCCESSORS AND ASSIGNS
 
84
   
12.1
 
Successors and Assigns
 
84
13.
 
MISCELLANEOUS
 
85
   
13.1
 
Complete Agreement; Modification of Agreement
 
85
   
13.2
 
Amendments and Waivers
 
85
   
13.3
 
Fees and Expenses
 
88
   
13.4
 
No Waiver
 
89
   
13.5
 
Remedies
 
90
   
13.6
 
Severability
 
90
   
13.7
 
Conflict of Terms
 
90
   
13.8
 
Confidentiality
 
90
   
13.9
 
GOVERNING LAW
 
91
   
13.10
 
Notices
 
92
   
13.11
 
Section Titles
 
93
   
13.12
 
Counterparts
 
93
   
13.13
 
WAIVER OF JURY TRIAL
 
93
   
13.14
 
Press Releases and Related Matters
 
94
   
13.15
 
[Reserved]
 
94
   
13.16
 
Advice of Counsel
 
94
   
13.17
 
No Strict Construction
 
94

 
INDEX OF APPENDICES
 
Annex A
(Recitals)
-
Definitions
Annex B
(Section 1.1(a))
-
Letters of Credit
Annex C
(Section 5.19)
-
Cash Management Systems
Annex D
(Section 2.2(c))
-
Closing Checklist

 
v

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

 
Annex E
(Section 4.1(a))
-
Financial Statements and Projections — Reporting
Annex F
(Section 4.1(b))
-
Collateral Reports
Annex G
(Section 6.10)
-
Financial Covenants
Annex H
(Section 11.9(a))
-
Lenders’ Wire Transfer Information
Annex I
(Section 13.10)
-
Notice Addresses
Annex J
(from Annex A - Commitments Definition)
-
Commitments as of Closing Date
Annex K
(from Annex A- Permitted Investments Definition)
-
Investments Guidelines
       

Exhibit 1.1
-
Form of Note
Exhibit 1.5(e)
-
Form of Notice of Conversion/Continuation
Exhibit 4.1(b)
-
Form of Borrowing Base Certificate
Exhibit 11.1(a)
-
Form of Assignment Agreement
     
Disclosure Schedule 3.1
-
Type of Entity; State of Organization
Disclosure Schedule 3.2
-
Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a)
-
Financial Statements
Disclosure Schedule 3.6
-
Real Estate and Leases:
Part 1
-
Owned Real Estate
Part 2
-
Material Real Estate Contracts
Part 3
-
Leases Affecting Owned Real Estate
Disclosure Schedule 3.7
-
Labor Matters
Disclosure Schedule 3.8
-
Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11
-
Tax Matters
Disclosure Schedule 3.12
-
ERISA Plans
Disclosure Schedule 3.14
-
Intellectual Property
Disclosure Schedule 3.16
-
Environmental Matters
Disclosure Schedule 3.17
-
Insurance:
Part 1
-
Insurance Policies
Part 2
-
Those Insurance Policies with respect to Collateral
Disclosure Schedule 3.19
-
Deposit
Disclosure Schedule 3.20
-
Trade Relations
Disclosure Schedule 3.26
-
Spare Parts
Disclosure Schedule 3.27
-
Eligible Aircraft; Eligible Engines
Disclosure Schedule 3.28
-
Primary Slots and Primary Routes
Disclosure Schedule 5.1
-
Trade Names
Disclosure Schedule 6.2
-
Existing Investments
Disclosure Schedule 6.3
-
Existing Indebtedness
Disclosure Schedule 6.7
-
Existing Liens
Disclosure Schedule 6.15
-
Restrictions on Intercompany Transfers
Disclosure Schedule 6.16
-
Negative Pledge Clauses
Disclosure Schedule 10.1
-
Commercial Tort Claims
Disclosure Schedule 10.4
-
Pledged Collateral
Part 1
-
Pledged Shares
Part 2
-
Pledged Indebtedness

 
vi

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

 
Exhibit A
-
Form of Power of Attorney
Exhibit B
-
Form of Aircraft Mortgage
Exhibit C
-
Form of Copyright Security Agreements
Exhibit D
-
Form of Mortgage
Exhibit E
-
Form of SGR Security Agreement
Exhibit F
-
Form of Spare Parts Mortgage
Exhibit G
-
Form of Trademark Security Agreements
Exhibit H
-
Form of Pledge Amendment

 
vii

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

This AMENDED AND RESTATED SECURED SUPER-PRIORITY DEBTOR IN POSSESSION CREDIT
AGREEMENT (this “Agreement”), dated as of March 27, 2006, among DELTA AIR LINES,
INC., a Delaware corporation, as a debtor and debtor in possession under chapter
11 of the Bankruptcy Code (as defined below) (“Borrower”); the other Credit
Parties signatory hereto, each as a debtor and debtor in possession under
chapter 11 of the Bankruptcy Code; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, “GE Capital”), for itself, as
Lender, and as administrative agent and collateral agent for the Lenders (in
such capacity, the “Administrative Agent”); and the other Lenders signatory
hereto from time to time, amends and restates the Existing Credit Agreement (as
defined below).
 
RECITALS
 
WHEREAS, on September 14, 2005, (the “Petition Date”), Borrower and each of the
other Credit Parties filed voluntary petitions for relief (collectively, the
“Cases”) under chapter 11 of the Bankruptcy Code with the United States
Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”);
and
 
WHEREAS, Borrower and the other Credit Parties are continuing to operate their
respective businesses and manage their respective properties as debtors and
debtors in possession under sections 1107 and 1108 of the Bankruptcy Code; and
 
WHEREAS, the Borrower, the other Credit Parties signatory thereto, GE Capital,
as administrative agent and collateral agent for the lenders, and the other
lenders signatory thereto are parties to the Secured Super-Priority Debtor in
Possession Credit Agreement, dated as of September 16, 2005 as amended on
October 7, 2005 pursuant to Amendment No. 1 thereto (as amended, modified or
supplemented prior to the date hereof, the “Existing Credit Agreement”);
 
WHEREAS, (a) this Agreement, on the terms and subject to the conditions set
forth herein, shall amend and restate the Existing Credit Agreement in its
entirety as of the Effective Date, (b) this Agreement shall not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence payment of all or any of such obligations and liabilities
and (c) from and after the Effective Date, the Existing Credit Agreement shall
be of no further force or effect, except to evidence the Obligations (as defined
therein) incurred, the representations and warranties made and the actions or
omissions performed or required to be performed thereunder prior to the
Effective Date; and
 
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Schedules, Exhibits and other attachments (collectively, “Appendices”)
hereto, or expressly identified to this Agreement, are incorporated herein by
reference, and taken together with this Agreement, shall constitute but a single
agreement. These Recitals shall be construed as part of the Agreement.
 

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

 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
 
1. AMOUNT AND TERMS OF CREDIT
 
1.1    Credit Facilities.
 
(a)    Term Loan A.
 
(i)    On the Effective Date the aggregate principal amount of Term Loan A (as
defined in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement is $600,000,000 and shall be deemed outstanding under this Agreement
(collectively, the “Term Loan A”). The Borrower may from time to time deposit
the proceeds of the Term Loan A in the L/C Cash Collateral Account. Unless a
Default or an Event of Default shall have occurred and be continuing, the L/C
Cash Collateral may be withdrawn by the Borrower from the L/C Cash Collateral
Account from time to time upon 3 Business Days’ notice to the Administrative
Agent, provided that the aggregate amount of L/C Cash Collateral held in the L/C
Cash Collateral Account thereafter would not be less than an amount equal to
100% of the aggregate face amount of all outstanding Letters of Credit. The
obligations of each Term A Lender hereunder shall be several and not joint. The
Term Loan A shall, upon the request of any Lender pursuant to Section 1.10, be
evidenced by promissory notes substantially in the form of Exhibit 1.1 (each a
“Note” and collectively the “Notes”), and, upon such request as provided in
Section 1.10, Borrower shall execute and deliver each Note to the applicable
Term A Lender. Each Note shall represent the obligation of Borrower to pay the
amount of the applicable Term A Lender’s Term Loan A, together with interest
thereon as prescribed in Section 1.5.
 
(ii)    The aggregate outstanding principal balance of the Term Loan A
(including the portion of the Term Loan A the proceeds of which are held by the
Administrative Agent in the L/C Cash Collateral Account) shall be due and
payable in full in immediately available funds on the Maturity Date, if not
sooner paid in full. No payment with respect to the Term Loan A may be
reborrowed. The deposit of proceeds of the Term Loan A in the L/C Cash
Collateral Account as provided in Section 1.1(a)(i) above, is not and shall not
be deemed to be a repayment of the Term Loan A.
 
(iii)    Each payment of principal with respect to the Term Loan A shall be paid
to the Administrative Agent for the ratable benefit of each Term A Lender,
ratably in proportion to each such Term A Lender’s respective Term A Commitment.
 
(iv)    Subject to and in accordance with the terms and conditions contained
herein and in Annex B, unless a Default or an Event of Default shall have
occurred and be continuing, each L/C Issuer agrees to issue one or more Letters
of Credit at the request of the Borrower from time to time during the period
commencing on the Effective Date and ending on the earlier of the Maturity Date
and 30 days prior to the Scheduled Maturity Date, up to a maximum amount of
$200,000,000 (the “L/C Subfacility”).
 
2

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

 
(b)    Term Loan B.
 
(i)    On the Effective Date the aggregate principal amount of Term Loan B (as
defined in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement is $700,000,000 and shall be deemed outstanding under this Agreement
(collectively, the “Term Loan B”). The obligations of each Term B Lender
hereunder shall be several and not joint. The Term Loan B shall, upon the
request of any Lender pursuant to Section 1.10, be evidenced by a Note, and,
upon such request as provided in Section 1.10, Borrower shall execute and
deliver each Note to the applicable Term B Lender. Each Note shall represent the
obligation of Borrower to pay the amount of the applicable Term B Lender’s Term
Loan B, together with interest thereon as prescribed in Section 1.5.
 
(ii)    The aggregate outstanding principal balance of the Term Loan B shall be
due and payable in full in immediately available funds on the Maturity Date, if
not sooner paid in full. No payment with respect to the Term Loan B may be
reborrowed.
 
(iii)    Each payment of principal with respect to the Term Loan B shall be paid
to the Administrative Agent for the ratable benefit of each Term B Lender,
ratably in proportion to each such Term B Lender’s respective Term B Commitment.
 
(c)    Term Loan C.
 
(i)    On the Effective Date the aggregate principal amount of Term Loan C (as
defined in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement is $600,000,000 and shall be deemed outstanding under this Agreement
(collectively, the “Term Loan C”). The obligations of each Term C Lender
hereunder shall be several and not joint. The Term Loan C shall, upon the
request of any Lender pursuant to Section 1.10, be evidenced by a Note, and,
upon such request as provided in Section 1.10, Borrower shall execute and
deliver each Note to the applicable Term C Lender. Each Note shall represent the
obligation of Borrower to pay the amount of the applicable Term C Lender’s Term
Loan C, together with interest thereon as prescribed in Section 1.5.
 
(ii)    The aggregate outstanding principal balance of the Term Loan C shall be
due and payable in full in immediately available funds on the Maturity Date, if
not sooner paid in full. No payment with respect to the Term Loan C may be
reborrowed.
 
(iii)    Each payment of principal with respect to the Term Loan C shall be paid
to the Administrative Agent for the ratable benefit of each Term C Lender,
ratably in proportion to each such Term C Lender’s respective Term C Commitment.
 
1.2    Prepayments. 
 
(a)    Voluntary Prepayments. Borrower may at any time on at least three (3)
Business Days’ prior written notice to the Administrative Agent, voluntarily
prepay all or part of the Term Loan; provided that any such prepayment shall be
in a minimum amount of $5,000,000 and integral multiples of $250,000 in excess
of such amount and shall be accompanied by payment of any LIBOR funding breakage
costs in accordance with Section 1.11(b); provided, further, that any such
prepayment shall be applied pursuant to Section 1.3.
 
3

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

 
(b)    Mandatory Prepayments.
 
(i)    If at any time the aggregate outstanding principal amount of the Term
Loan A exceeds the Term A Borrowing Base, Borrower shall immediately repay the
aggregate outstanding amount of the Term Loan A to the extent required to
eliminate such excess.
 
(ii)    Upon receipt by any Credit Party of Net Cash Proceeds arising from an
Asset Sale (other than an Asset Sale of Skymiles Collateral) or Property Loss
Event, Borrower shall immediately prepay the Loans in an amount equal to 100% of
such Net Cash Proceeds; provided, that, immediately upon receipt by any Credit
Party of such Net Cash Proceeds, Borrower may, at its option, deposit 100% of
such Net Cash Proceeds in the Cash Collateral Account, in each case, to be
applied in accordance with Section 1.2(c).
 
(c)    Application of Net Cash Proceeds. Any Net Cash Proceeds received by
Borrower or any other Credit Party or the Administrative Agent under any Loan
Document (except as otherwise expressly provided herein or therein) shall be
applied pursuant to Section 1.3; provided, however, that, in the event Borrower
has elected to deposit such Net Cash Proceeds in the Cash Collateral Account in
accordance with Section 1.2(b)(ii):
 
(i)    upon any Asset Sale of Collateral included in the Term A Borrowing Base,
the Administrative Agent shall (A) upon receipt of a Borrowing Base Certificate
prior to the Prepayment Date that includes one or more assets (the “Replacement
Borrowing Base Assets” and which, other than in the case of Aircraft or Engines,
may consist of any type of asset eligible to be included in the Term A Borrowing
Base and, in the case of Aircraft or Engines, shall consist of Additional
Aircraft or Additional Engines, as the case may be) replacing the asset or
assets (the “Original Borrowing Base Assets”) giving rise to such Net Cash
Proceeds, release to Borrower an amount equal to (1) such Net Cash Proceeds
minus (2) the amount, if any, by which (x) the Allocated Amount for the Original
Borrowing Base Assets exceeds (y) the Allocated Amount for the Replacement
Borrowing Base Assets and (B) on the earlier of (1) the election by the
Administrative Agent, the Requisite Term A Lenders, the Requisite Term B Lenders
or the Requisite Term C Lenders following the occurrence of any Event of Default
and (2) the Prepayment Date, apply the balance of such Net Cash Proceeds
pursuant to Section 1.3;
 
(ii)    upon a Reinvestment Event, all or a portion of such Net Cash Proceeds,
as specified in a Reinvestment Notice, shall be used to acquire or construct
Permitted Reinvestment Collateral (the “Reinvestment Deferred Amount”) and such
Reinvestment Deferred Amount shall, within five (5) Business Days of delivery of
a Reinvestment Release Request, be released to Borrower to acquire or construct
such Permitted Reinvestment Collateral until the Reinvestment Prepayment Date
corresponding thereto, on which date the remaining Net Cash Proceeds, if any,
shall be applied pursuant to Section 1.3;
 
4

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

 
(iii)    upon a Property Loss Event involving any Aircraft or Engines, Borrower
shall comply with the applicable notice provisions and requirements for
Replacement Aircraft or Replacement Engines as set forth in the Aircraft
Mortgage; and
 
(iv)    upon a Property Loss Event involving any Real Estate subject to a
Mortgage, Borrower shall comply with the applicable provisions and requirements
set forth in such Mortgage.
 
(d)    No Implied Consent. Nothing in this Section 1.2 shall be construed to
constitute the Administrative Agent’s or Lender’s consent to any transaction
that is not permitted by other provisions of this Agreement or the other Loan
Documents.
 
1.3    Priority and Application of Payments.
 
So long as no Event of Default has occurred and is continuing, payments matching
specific scheduled or required payments then due shall be applied to those
scheduled or required payments. As to any other payment and as to all payments
made when an Event of Default has occurred and is continuing or following the
Maturity Date, Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of Borrower, and
Borrower and each Secured Party hereby irrevocably agrees that the
Administrative Agent shall have the continuing exclusive right to apply any and
all such payments against the Obligations as follows: first, to Fees and
reimbursable expenses of the Administrative Agent then due and payable pursuant
to any of the Loan Documents; second, to Fees and reimbursable expenses of Term
A Lenders and Letter of Credit Obligations of L/C Issuers then due and payable
pursuant to any of the Loan Documents; third, to interest then due and payable
on the Term Loan A; fourth, to prepay the remaining principal amount of the Term
Loan A, until the Term Loan A shall have been paid in full; fifth, to all other
Obligations then due and payable to the Term A Lenders; sixth, to Fees and
reimbursable expenses of Term B Lenders then due and payable pursuant to any of
the Loan Documents; seventh, to interest then due and payable on the Term Loan
B; eighth, to prepay the remaining principal amount of the Term Loan B, until
the Term Loan B shall have been paid in full; ninth, to all other Obligations
then due and payable to the Term B Lenders; tenth, to Fees and reimbursable
expenses of Term C Lenders then due and payable pursuant to any of the Loan
Documents; eleventh, to interest then due and payable on the Term Loan C;
twelfth, to prepay the remaining principal amount of the Term Loan C, until the
Term Loan C shall have been paid in full; and last, to all other Obligations
then due and payable to the Term C Lenders. All payments and prepayments applied
to a particular Loan shall be applied ratably to the portion thereof held by
each Lender as determined by its Pro Rata Share. Notwithstanding anything herein
to the contrary, no Credit Party shall be obligated to make any payment to any
Secured Party under any Loan Document from the proceeds of Skymiles Collateral
at any time after the delivery to Borrower of a Notice of Actionable Default and
until the withdrawal of all pending Notices of Actionable Default except as and
to the extent set forth in the Skymiles Intercreditor Agreement.
 
5

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

 
1.4    Use of Proceeds.
 
Borrower shall utilize the proceeds of the Loans and Letters of Credit solely
for the general corporate purposes of the Credit Parties.
 
1.5    Interest and Applicable Margins.
 
(a)    Borrower shall pay interest to the Administrative Agent, for the ratable
benefit of Lenders in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Term Loan A, at the election of Borrower, (A) the
Index Rate plus the Applicable Term A Index Margin per annum or (B) at the
election of Borrower, the applicable LIBOR Rate plus the Applicable Term A LIBOR
Margin per annum; (ii) with respect to the Term Loan B, at the election of
Borrower, (A) the Index Rate plus the Applicable Term B Index Margin per annum
or (B) the applicable LIBOR Rate plus the Applicable Term B LIBOR Margin per
annum; and (iii) with respect to the Term Loan C, at the election of Borrower,
(A) the Index Rate plus the Applicable Term C Index Margin per annum or (B) the
applicable LIBOR Rate plus the Applicable Term C LIBOR Margin per annum.
 
The applicable margins are as follows:
 
Applicable Term A Index Margin
 
2.00
%
Applicable Term A LIBOR Margin
 
2.75
%
Applicable Term B Index Margin
 
4.00
%
Applicable Term B LIBOR Margin
 
4.75
%
Applicable Term C Index Margin
 
6.75
%
Applicable Term C LIBOR Margin
 
7.50
%

(b)    If any payment on any Loan becomes due and payable on a day other than a
Business Day, the maturity thereof will be extended to the next succeeding
Business Day (except as set forth in the definition of LIBOR Period) and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
 
(c)    All computations of interest shall be made by the Administrative Agent on
the basis of a 360-day year (or, in the case of interest calculated based on the
Index Rate, a 365/366 day year), in each case for the actual number of days
occurring in the period for which such interest is payable. The Index Rate is a
floating rate determined for each day. Each determination by the Administrative
Agent of interest rates hereunder shall be presumptive evidence of the
correctness of such rates.
 
(d)    So long as an Event of Default has occurred and is continuing under
Section 8.1(a), or so long as any other Event of Default has occurred and is
continuing and at the election of any of (i) the Administrative Agent, (ii) the
Requisite Term A Lenders, (iii) the Requisite Term B Lenders or (iv) the
Requisite Term C Lenders confirmed by written notice from the Administrative
Agent to Borrower, (A) the interest rates applicable to the Loans shall be
increased by two percentage points (2%) per annum above the rates of interest
otherwise applicable to such Loans hereunder (the “Default Rate”), and (B) all
other outstanding Obligations shall bear interest at the Default Rate applicable
to the Term Loan C. Interest at the Default Rate shall accrue from the initial
date of such Event of Default until that Event of Default is cured or waived and
shall be payable upon demand. 
 
6

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

 
(e)    So long as no Event of Default has occurred and is continuing, Borrower
shall have the option to (i) convert at any time all or any part of outstanding
Loans from Index Rate Loans to LIBOR Loans, (ii) convert any LIBOR Loan to an
Index Rate Loan, subject to payment of LIBOR breakage costs in accordance with
Section 1.11(b) if such conversion is made prior to the expiration of the LIBOR
Period applicable thereto, or (iii) continue all or any portion of any Loan as a
LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding
LIBOR Period of that continued Loan shall commence on the first day after the
last day of the LIBOR Period of the Loan to be continued. Any Loan or group of
Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $5,000,000 and
integral multiples of $500,000 in excess of such amount. Any such election must
be made by 11:00 a.m. (New York time) on the third Business Day prior to (1) the
date of any proposed borrowing which is to bear interest at the LIBOR Rate, (2)
the end of each LIBOR Period with respect to any LIBOR Loans to be continued as
such, or (3) the date on which Borrower wishes to convert any Index Rate Loan to
a LIBOR Loan for a LIBOR Period designated by Borrower in such election. If no
election is received with respect to a LIBOR Loan by 11:00 a.m. (New York time)
on the third Business Day prior to the end of the LIBOR Period with respect
thereto (or if an Event of Default has occurred and is continuing), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrower must make such election by notice to the Administrative Agent in
writing, by telecopy or overnight courier. In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a “Notice
of Conversion/Continuation”) in the form of Exhibit 1.5(e).
 
(f)    Notwithstanding anything to the contrary set forth in this Section 1.5,
if a court of competent jurisdiction determines in a final order that the rate
of interest payable hereunder exceeds the highest rate of interest permissible
under law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by the Administrative Agent, on
behalf of applicable Lenders, is equal to the total interest that would have
been received had the interest rate payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the Closing Date as
otherwise provided in this Agreement. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate.
 
7

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

 
1.6    Term A Borrowing Base.
 
The Administrative Agent shall have the right to modify or eliminate Reserves
against Eligible Accounts, Eligible Unbilled Accounts and Eligible Refundable
Ticket Accounts, Eligible Real Estate, Eligible Aircraft, Eligible Engines,
Eligible Spare Parts, Eligible Ground Service Equipment, Eligible Flight
Simulators and Eligible Tooling from time to time in its reasonable credit
judgment. In addition, the Administrative Agent reserves the right, at any time
and from time to time after the Closing Date, to adjust any of the eligibility
criteria and to establish new eligibility criteria, and to adjust advance rates
with respect to Eligible Accounts, Eligible Unbilled Accounts and Eligible
Refundable Ticket Accounts, Eligible Real Estate, Eligible Aircraft, Eligible
Engines, Eligible Spare Parts, Eligible Ground Service Equipment, Eligible
Flight Simulators and Eligible Tooling, in its reasonable credit judgment,
reflecting changes in the collectibility or realization values (in the case of
Accounts) or changes in the Fair Market Value or Net Orderly Liquidation Value
(in the case of the other components of the Term A Borrowing Base), in each
case, arising or discovered by the Administrative Agent after the Closing Date,
subject to the approval of each of the Supermajority Term A Lenders, the
Requisite Term B Lenders and the Requisite Term C Lenders in the case of
adjustments or new eligibility criteria, reductions in the amount of the
Reserves in effect on the Closing Date or changes in advance rates which have
the effect of making more credit available.
 
1.7    [Reserved.]
 
1.8    Fees.
 
Borrower shall pay to GE Capital the Fees specified in the Fee Letters. 
 
1.9    Receipt of Payments.
 
Borrower shall make each payment under this Agreement not later than 2:00 p.m.
(New York time) on the day when due in immediately available funds in Dollars to
the Collection Account. For purposes of computing interest as of any date, all
payments shall be deemed received on the Business Day on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. New York time. Payments received after 2:00 p.m. New York time on any
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.
 
1.10    Loan Account and Accounting.
 
The Administrative Agent shall maintain a loan account (the “Loan Account”) on
its books to record each of Term Loan A, Term Loan B and Term Loan C, all
payments made by Borrower with respect to such Term Loan, and all other debits
and credits as provided in this Agreement with respect to such Term Loan or any
other Obligations with respect to such Term Loan. All entries in the Loan
Account shall be made in accordance with the Administrative Agent’s customary
accounting practices as in effect from time to time. The balance in the Loan
Account, as recorded on the Administrative Agent’s most recent printout or other
written statement, shall, absent manifest error, be presumptive evidence of the
amounts due and owing to the Administrative Agent and the Lenders by Borrower;
provided, that any failure to so record or any error in so recording shall not
limit or otherwise affect Borrower’s duty to pay the Obligations with respect to
the Term Loans. The Administrative Agent shall render to Borrower a monthly
accounting of transactions with respect to each Term Loan setting forth the
balance of the Loan Account for the immediately preceding month. Any Lender may
elect, by notice to Borrower and the Administrative Agent, to have such Lender’s
Term Loan be evidenced by a Note issued to that Lender. If no such Note is
requested, such Lender may rely on the Term Loan Account as evidence of the
amount of Obligations with respect to the Term Loan from time to time owing to
it. Unless Borrower notifies the Administrative Agent in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the date thereof, each and every such
accounting shall be presumptive evidence of all matters reflected therein. Only
those items expressly objected to in such notice shall be deemed to be disputed
by Borrower.
 
8

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

 
1.11   Indemnity.
 
(a)    Each Credit Party that is a signatory hereto shall jointly and severally
indemnify and hold harmless each of the Administrative Agent, Lenders and their
respective Affiliates, and each such Person’s respective officers, directors,
employees, attorneys, agents and representatives (each, an “Indemnified
Person”), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys’ fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents, and
associated with Electronic Transmissions or E-Systems as well as failures caused
by Borrower’s equipment, software, services or otherwise used in connection
therewith (collectively, “Indemnified Liabilities”); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person’s gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
 
(b)    To induce Lenders to provide the LIBOR Rate option on the terms provided
herein, if (i) any LIBOR Loans are repaid in whole or in part prior to the last
day of any applicable LIBOR Period (whether that repayment is made pursuant to
any provision of this Agreement or any other Loan Document or occurs as a result
of acceleration, by operation of law or otherwise); (ii) Borrower shall default
in payment when due of the principal amount of or interest on any LIBOR Loan;
(iii) Borrower shall refuse to accept any borrowing of, or shall request a
termination of any borrowing, conversion into or continuation of LIBOR Loans
after Borrower has given notice requesting the same in accordance herewith; or
(iv) Borrower shall fail to make any prepayment of a LIBOR Loan after Borrower
has given a notice thereof in accordance herewith, then Borrower shall indemnify
and hold harmless each Lender from and against any loss or expense arising from
the reemployment of funds obtained by it or from fees payable to terminate
deposits from which such funds were obtained. For the purpose of calculating
amounts payable to a Lender under this subsection, each Lender shall be deemed
to have actually funded its relevant LIBOR Loan through the purchase of a
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
that LIBOR Loan and having a maturity comparable to the relevant LIBOR Period;
provided, that each Lender may fund each of its LIBOR Loans in any manner it
sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.11(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within thirty (30) days of receipt thereof, specifying the basis for such
objection in detail.
 
9

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

 
1.12    Access.
 
(a)    Each Credit Party shall, during normal business hours, from time to time
upon five (5) Business Days’ prior notice as frequently as the Administrative
Agent reasonably determines to be appropriate (and subject to such other
restrictions on inspections set forth in the Aircraft Mortgage with respect to
Aircraft and Engines or the Spare Parts Mortgage with respect to Spare Parts):
(i) provide the Administrative Agent and any of its officers, employees and
agents access to its officers and employees, and with prior notice and the
opportunity to be present, advisors of each Credit Party, (ii) permit the
Administrative Agent, and any of its officers, employees and agents, to inspect,
audit and make extracts from any Credit Party’s Books and Records (subject to
requirements under any confidentiality agreements, if applicable) , and (iii)
permit the Administrative Agent, and any of its officers, employees and agents,
to have access to properties, facilities and to the Collateral and to inspect,
audit, review, evaluate, conduct field examinations and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party;
provided, that so long as no Event of Default has occurred and is continuing,
such access and inspections shall not be permitted more frequently than (A) once
in any calendar quarter with respect to any Collateral of the type described in
clauses (d) through (m) of the definition of “Term A Borrowing Base,” (B) twice
every calendar year with respect to any Collateral of the type described in
clauses (a) through (c) of the definition of “Term A Borrowing Base,” and (C) as
set forth in the other applicable Collateral Documents. Representatives of other
Lenders may accompany the Administrative Agent’s representatives on regularly
scheduled audits at no charge to Borrower. Each Credit Party shall make
available to the Administrative Agent and its counsel reasonably promptly
originals or copies of all Books and Records (subject to requirements under any
confidentiality agreements, if applicable) that the Administrative Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for the Administrative Agent, as it may from time to time request, to
obtain records from any service bureau or other Person that maintains records
for such Credit Party and shall maintain supporting documentation on media,
including computer tapes and discs owned by such Credit Party. The
Administrative Agent will give Lenders at least five (5) days’ prior written
notice of regularly scheduled audits.
 
10

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

 
(b)    If an Event of Default has occurred and is continuing, each such Credit
Party shall provide such access as set forth in clause (a) above to the
Administrative Agent and to each Lender at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrower shall provide the Administrative Agent and each Lender with access,
with prior notice and opportunity for Borrower to be present, to its suppliers,
service providers and customers.
 
1.13   Taxes.
 
(a)    Any and all payments by Borrower hereunder or under the Notes shall be
made, in accordance with this Section 1.13, free and clear of and without
deduction for any and all present or future Taxes. If Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder or
under the Notes, (i) unless such Taxes are imposed as the result of a
determination that an applicable Certificate of Exemption (as defined in Section
1.13(c)) did not entitle a Foreign Lender to an exemption from such Taxes at the
time such Foreign Lender became a Lender hereunder, the sum payable shall be
increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 1.13) the Administrative Agent or Lenders, as applicable, receive
an amount equal to the sum they would have received had no such deductions been
made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the
full amount deducted to the relevant taxing or other authority in accordance
with applicable law. Within thirty (30) days after the date of any such payment
of Taxes, Borrower shall furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof. 
 
(b)    Borrower shall indemnify and, within ten (10) days of demand therefor,
pay the Administrative Agent and each Lender for the full amount of Taxes paid
by the Administrative Agent or such Lender, as appropriate, with respect to
payments received from Borrower hereunder and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted unless such Taxes
are imposed as the result of a determination that establishes that an applicable
Certificate of Exemption did not in fact entitle a Foreign Lender to an
exemption from such Taxes at the time such Foreign Lender became a Lender
hereunder.
 
(c)    Each Person organized under the laws of a jurisdiction outside the United
States (a “Foreign Person”) as to which payments to be made under this Agreement
or under the Notes are completely exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and the
Administrative Agent a properly completed and executed IRS Form W-8ECI or Form
W-8BEN or other applicable form, certificate or document prescribed by the IRS
or the United States certifying as to such Foreign Person’s entitlement to such
complete exemption (a “Certificate of Exemption”). Any Foreign Person that seeks
to become a Lender under this Agreement shall provide a Certificate of Exemption
to Borrower and the Administrative Agent prior to becoming a Lender hereunder.
No Foreign Person may become a Lender hereunder if such Foreign Person fails to
deliver a Certificate of Exemption in advance of becoming a Lender. For the
avoidance of doubt, (i) any Sale described in Section 11.1(a) to a Foreign
Person shall only become effective upon delivery by the party to whom such Sale
is made to the Borrower and the Administrative Agent of a Certificate of
Exemption, and (ii) any participant or SPV described in Section 11.1(e) shall
not be entitled to any benefit under Section 1.13 unless such participant or SPV
delivers to Borrower and the Administrative Agent a Certificate of Exemption. In
addition, any Lender that is not a Foreign Person and that is a partnership or
trust for U.S. federal income tax purposes shall not be entitled to any payment
by Borrower pursuant to Section 1.13(b) with respect to any Taxes paid by such
Lender with respect to any Foreign Person that is a partner or owner of an
interest in such Lender unless such Lender had obtained a Certificate of
Exemption from such Foreign Person at the later of the times (i) such Lender
became a Lender hereunder and (ii) such Foreign Person became a partner or owner
of an interest in such Lender.
 
11

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

 
(d)    Each Lender agrees that, as promptly as practicable after it becomes
aware of any circumstance that would result in any additional payment by
Borrower pursuant to Section 1.13(a) or (b), such Lender shall, to the extent
not inconsistent with such Lender’s internal policies of general application use
reasonable commercial efforts to mitigate any Taxes that would result in such
payments by Borrower. If Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 1.13, then such Lender,
at the request of Borrower and at Borrower’s expense, will change the
jurisdiction of its lending office if such change (i) will eliminate or reduce
any such additional payment which may thereafter accrue and (ii) as determined
by such Lender in its sole discretion, is not otherwise materially
disadvantageous to such Lender, provided, that the mere existence of fees,
charges, costs or expenses that such Borrower has offered and agreed to pay on
behalf of a Lender shall not be deemed to be disadvantageous to such Lender.
 
1.14   Capital Adequacy; Increased Costs; Illegality.
 
(a)    If any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by any Lender with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender’s capital as a consequence of its obligations
hereunder, then Borrower shall from time to time upon demand by such Lender
(with a copy of such demand to the Administrative Agent) pay to the
Administrative Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to the Administrative Agent shall be
presumptive evidence of the matters set forth therein.
 
(b)    If, due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) other than in respect
of taxes (including income taxes) or (ii) the compliance with any guideline or
request from any central bank or other non-tax Governmental Authority (whether
or not having the force of law), in each case occurring after the Closing Date,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining any Loan, then Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost.
A certificate as to the amount of such increased cost, submitted to Borrower and
to the Administrative Agent by such Lender, shall be presumptive evidence of the
matters set forth therein. Each Lender agrees that, as promptly as practicable
after it becomes aware of any circumstances referred to above which would result
in any such increased cost, the affected Lender shall, to the extent not
inconsistent with such Lender’s internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrower pursuant to this Section 1.14(b).
 
12

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

 
(c)    Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) after the Closing Date shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender to agree to make or to make or to continue to fund or maintain
any LIBOR Loan, then, unless that Lender is able to make or to continue to fund
or to maintain such LIBOR Loan at another branch or office of that Lender
without, in that Lender’s reasonable opinion, materially and adversely affecting
it or its Loans or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrower through the Administrative Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or
maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in
full all outstanding LIBOR Loans owing to such Lender, together with interest
accrued thereon, unless Borrower, within five (5) Business Days after the
delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans.
 
(d)    Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender’s right to demand compensation with respect to such period or any
other period, provided, that Borrower shall not be required to compensate a
Lender pursuant to this Section 1.14 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender notifies Borrower
of the circumstance giving rise to such increased costs or reductions and of
such Lender’s intention to claim compensation therefor.
 
(e)    Within thirty (30) days after receipt by Borrower of written notice and
demand from any Lender (an “Affected Lender”) for payment of additional amounts
or increased costs as provided in Sections 1.13(a), 1.13(b), 1.14(a) or 1.14(b),
Borrower may, at its option, notify the Administrative Agent and such Affected
Lender of its intention to replace the Affected Lender. So long as no Default or
Event of Default has occurred and is continuing, Borrower, with the consent of
the Administrative Agent, may obtain, at Borrower’s expense, a replacement
Lender (“Replacement Lender”) for the Affected Lender, which Replacement Lender
must be reasonably satisfactory to the Administrative Agent. If Borrower obtains
a Replacement Lender within ninety (90) days following notice of its intention
to do so, the Affected Lender must sell and assign its Loans and Commitments to
such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued and unpaid interest and Fees
with respect thereto through the date of such sale and such assignment shall not
require the payment of an assignment fee to the Administrative Agent; provided,
that Borrower shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment. Notwithstanding the foregoing,
Borrower shall not have the right to obtain a Replacement Lender if the Affected
Lender rescinds its demand for increased costs or additional amounts within
fifteen (15) days following its receipt of Borrower’s notice of intention to
replace such Affected Lender. Furthermore, if Borrower gives a notice of
intention to replace and does not so replace such Affected Lender within ninety
(90) days thereafter, Borrower’s rights under this Section 1.14(e) shall
terminate with respect to such Affected Lender and Borrower shall promptly pay
all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 1.13(a), 1.13(b), 1.14(a) or 1.14(b).
 
13

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

 
1.15   Regulation D Compensation.
 
If and so long as a reserve requirement of the type referred to in clause (i)(B)
below is prescribed by the Federal Reserve Board (or any successor), each Lender
subject to such requirement may require Borrower to pay, contemporaneously with
each payment of interest on each such Lender’s LIBOR Loans, additional interest
on such LIBOR Loan at a rate per annum determined by such Lender up to but not
exceeding the excess of (i) (A) the applicable LIBOR Rate divided by (B) a
number equal to 1.0 minus the aggregate (but without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on the day
that is two (2) LIBOR Business Days prior to the beginning of such LIBOR Period
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Federal Reserve Board) that are required to be maintained by
a member bank of the Federal Reserve System over (ii) the applicable LIBOR Rate.
 
2. CONDITIONS PRECEDENT
 
2.1    Conditions to Effectiveness of Section 6.7(e).
 
The amendment and restatement set forth herein of Section 6.7(e) of the Existing
Credit Agreement and the corresponding amendments to Annex A to add definitions
for “GECAS Facilities”, “Letter of Intent” and “U.S. Bank” reflected in this
Agreement shall become effective on the date on which each of the following
conditions precedent is satisfied or provided for in a manner reasonably
satisfactory to the Administrative Agent, or duly waived in writing in
accordance with Section 13.2:
 
(a)    Credit Agreement. The Administrative Agent shall have received
counterparts of this Agreement duly executed by each of Borrower, the other
Credit Parties, the Administrative Agent and the Requisite Lenders or, with
respect to the Requisite Lenders, Administrative Agent shall have received a
separate written consent approving the above referenced amendment and
restatement of Section 6.7(e) and the corresponding amendments to Annex A to add
definitions for “GECAS Facilities”, “Letter of Intent” and “U.S. Bank” reflected
in this Agreement, or authorizing the Administrative Agent to enter into this
Agreement on behalf of the Requisite Lenders.
 
14

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

 
(b)    Amex Consent. Amex shall have amended the Post-Petition Skymiles Facility
Documents to permit the incurrence of the Liens permitted by Section 6.7(e)
hereof.
 
2.2    Conditions to Effectiveness Generally.
 
Other than as provided in Section 2.1 hereof and the amendment and restatement
set forth herein of (i) Section 1.3 of the Existing Credit Agreement, (ii)
Section 1.5 of the Existing Credit Agreement and (iii) those provisions of the
Existing Credit Agreement relating to Letters of Credit (including Annex B
thereto), this Agreement shall become effective on the date (the “Effective
Date”) on which each of the following conditions precedent is satisfied or
provided for in a manner reasonably satisfactory to the Administrative Agent, or
duly waived in writing in accordance with Section 13.2:
 
(a)    Credit Agreement. The Administrative Agent shall have received
counterparts of this Agreement duly executed by each of Borrower, the other
Credit Parties, the Administrative Agent and the Requisite Lenders or, with
respect to the Requisite Lenders, Administrative Agent shall have received a
separate written consent approving the above referenced amendment and
restatement and authorizing the Administrative Agent to enter into this
Agreement on behalf of the Requisite Lenders.
 
(b)    Reaffirmation. The Administrative Agent shall have received reaffirmation
of the Collateral Documents, duly executed and delivered by each Credit Party.
 
(c)    Loan Documents. The Administrative Agent shall have received such
documents, instruments and agreements listed on Annex D, and such other
documents, instruments and agreements as the Administrative Agent shall request,
in its discretion exercised reasonably in accordance with its customary business
practices for comparable debtor in possession transactions, in connection with
the transactions contemplated by this Agreement and the other Loan Documents,
each in form and substance reasonably satisfactory to the Administrative Agent.
 
(d)    Approvals. The Administrative Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons, including all requisite Governmental Authorities, to
the execution and delivery of this Agreement and the other Loan Documents, (ii)
satisfactory evidence that the Credit Parties have obtained all material
governmental and third party approvals or waivers necessary in connection with
the performance and consummation of this Agreement and the other Loan Documents
and the continuing operations of Borrower and its Subsidiaries shall have been
obtained and be in full force and effect, or (iii) an officer’s certificate in
form and substance reasonably satisfactory to the Administrative Agent affirming
that no such consents or approvals are required.
 
(e)    Payment of Fees. Borrower shall have paid to the Administrative Agent and
the Lenders, the Fees required to be paid on or prior to the Effective Date in
the respective amounts specified in the Fee Letters, and shall have reimbursed
the Administrative Agent and the Arrangers for all fees, costs and expenses of
closing presented as of the Effective Date.
 
15

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

 
(f)     No Material Adverse Effect. There has been no Material Adverse Effect
since the date of Borrower’s Form 10-Q for the six-month period ended June 30,
2005 as updated by subsequent public filings prior to September 10, 2005.
 
(g)    No Default. No Default or Event of Default under this Agreement or any
other Loan Document shall have occurred and be continuing.
 
(h)    Final Order. The Final Order shall be in full force and effect and shall
not have been vacated, reversed, modified, amended or stayed without the prior
written consent of the Administrative Agent, the Arrangers and the Requisite
Lenders.
 
2.3    Conditions to Effectiveness of Certain Other Provisions.
 
(a)    The amendment and restatement set forth herein of Section 1.3 of the
Existing Credit Agreement shall become effective on the date on which (x) each
of the conditions in Section 2.2 shall have been satisfied and (y) the
Administrative Agent shall have received counterparts of this Agreement duly
executed by the Term A Lenders, the Term B Lenders and the Term C Lenders, or a
separate written consent approving the above referenced amendment and
restatement and authorizing the Administrative Agent to enter into this
Agreement on behalf of the Term A Lenders, the Term B Lenders and Term C
Lenders, respectively.
 
(b)    The amendment and restatement set forth herein of (i) Section 1.5 of the
Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term A Index Margin or the Applicable Term A LIBOR Margin and (ii)
those provisions of the Existing Credit Agreement relating to Letters of Credit
(including Annex B thereto) shall not be effective until the date on which (x)
each of the conditions in Section 2.2 shall have been satisfied and (y) the
Administrative Agent shall have received counterparts of this Agreement duly
executed by the Term A Lenders or a separate written consent approving the above
referenced amendment and restatement and authorizing the Administrative Agent to
enter into this Agreement on behalf of the Term A Lenders.
 
(c)    The amendment and restatement set forth herein of Section 1.5 of the
Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term B Index Margin or the Applicable Term B LIBOR Margin shall not
be effective until the date on which (x) each of the conditions in Section 2.2
shall have been satisfied and (y) the Administrative Agent shall have received
counterparts of this Agreement duly executed by the Term B Lenders or a separate
written consent approving the above referenced amendment and restatement and
authorizing the Administrative Agent to enter into this Agreement on behalf of
the Term B Lenders.
 
(d)    The amendment and restatement set forth herein of Section 1.5 of the
Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term C Index Margin or the Applicable Term C LIBOR Margin shall not
be effective until the date on which (x) each of the conditions in Section 2.1
shall have been satisfied and (y) the Administrative Agent shall have received
counterparts of this Agreement duly executed by the Term C Lenders or a separate
written consent approving the above referenced amendment and restatement and
authorizing the Administrative Agent to enter into this Agreement on behalf of
the Term C Lenders.
 
16

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

 
3. REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Administrative Agent to enter into this Agreement,
the Credit Parties executing this Agreement, jointly and severally, make the
following representations and warranties to the Administrative Agent and each
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.
 
3.1    Corporate Existence; Compliance with Law.
 
Each Credit Party (a) is a corporation, limited liability company or limited
partnership duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization set forth in
Disclosure Schedule 3.1; (b) is duly qualified to conduct business and is in
good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in losses or liabilities
which could reasonably be expected to have a Material Adverse Effect; (c) has
the requisite power and authority to own, pledge, mortgage or otherwise encumber
and operate its properties, to lease the property it operates under lease and to
conduct its business as now conducted or proposed to be conducted; (d) subject
to specific representations regarding Environmental Laws, has all licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except where the
failure to do so would not result in losses or liabilities which could
reasonably be expected to have a Material Adverse Effect; (e) is in compliance
with its charter and bylaws or partnership or operating agreement, as
applicable; and (f) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except to the extent permitted by Bankruptcy
Code or where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
 
3.2    Executive Offices, Collateral Locations, FEIN.
 
As of the Closing Date, each Credit Party’s name as it appears in official
filings in its state of incorporation or organization, state of incorporation or
organization, organization type, organization number, if any, issued by its
state of incorporation or organization, and the location as of the Closing Date
of each Credit Party’s chief executive office, principal place of business and
location and the hangars, terminals, maintenance facilities, warehouses and
premises at which any Collateral is located as of the Closing Date are set forth
in Disclosure Schedule 3.2, and none of such Collateral has been kept at any
location other than the locations listed on Disclosure Schedule 3.2 within four
(4) months preceding the Closing Date (or since its acquisition if less than
four (4) months prior to the Closing Date). In addition, Disclosure Schedule 3.2
lists the federal employer identification number of each Credit Party as of the
Closing Date. Each Credit Party has only one jurisdiction of existence,
incorporation or organization, as applicable.
 
17

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

 
3.3    Corporate Power, Authorization, Enforceable Obligations.
 
Upon the entry by the Bankruptcy Court of the Final Order, the execution,
delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within
such Person’s power; (b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action; (c) do not contravene
any provision of such Person’s charter, bylaws or partnership or operating
agreement as applicable; (d) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any material lease,
material agreement or other material instrument entered into or assumed by such
Person after the commencement of the Cases to which such Person is a party or by
which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of the Administrative Agent for the benefit of the Secured
Parties, pursuant to the Loan Documents and the Final Order; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except (i) those referred to in Section 2.2(d), all of which will have
been duly obtained, made or complied with prior to the Closing Date and (ii) any
consents, notices or approvals pursuant to the Federal Assignment of Claims Act
of 1940 or any applicable state, county or municipal law restricting the
assignment of any Accounts for which the Account Debtor is the United States
government or a political subdivision thereof or any state, county or
municipality or department, agency or instrumentality thereof. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.
 
3.4    Financial Statements and Projections.
 
Except for the Projections, all Financial Statements concerning Borrower and its
Subsidiaries that are referred to below have been prepared in accordance with
GAAP consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for the
absence of footnotes and normal year-end audit adjustments) and present fairly
in all material respects the consolidated financial position of Borrower and its
Subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
 
(a)    Financial Statements. The following Financial Statements attached hereto
as Disclosure Schedule 3.4(a) have been delivered on the date hereof:
 
(i)    The audited consolidated balance sheet at December 31, 2004 of Borrower
and its Subsidiaries and the related consolidated statements of operations, cash
flows and shareowners’ (deficit) equity for the Fiscal Year then ended, reported
on by Deloitte Touche LLP.
 
18

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

 
(ii)    The unaudited consolidated balance sheet at June 30, 2005 of Borrower
and its Subsidiaries and the related consolidated statements of operations and
cash flows for the six (6) months then ended.
 
(b)    Projections. The Projections delivered to Lenders prior to the date
hereof have been prepared by Borrower and reflect projections for the period
beginning on August 1, 2005 on a month-by-month basis through December 31, 2007.
The Projections are based upon the same accounting principles (other than
adjustments related to the impact of the Cases) as those used in the preparation
of the financial statements described above and are based on assumptions
believed by Borrower to be reasonable at the time such Projections were
delivered in light of conditions and facts known to Borrower as of the date
thereof (it being understood that projections by their nature are inherently
uncertain, the Projections are not a guaranty of future performance, and actual
results may differ materially from the Projections).
 
3.5    Material Adverse Effect; Burdensome Restrictions; Default.
 
Since the date of Borrower’s Form 10-Q for the six-month period ended June 30,
2005 as updated by subsequent public filings prior to September 10, 2005, (a) no
Credit Party has incurred any obligations, contingent or noncontingent
liabilities, liabilities for Charges, long-term leases or unusual forward or
long-term commitments that are not reflected in the Projections delivered to
Lenders prior to the date hereof and that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract, lease
or other agreement or instrument has been entered into by any Credit Party or
has become binding upon any Credit Party’s assets and no law or regulation
applicable to any Credit Party has been adopted that has or could reasonably be
expected to have a Material Adverse Effect, and (c) no Credit Party is in
default and to the best of Borrower’s knowledge no third party is in default
under any material contract, lease or other agreement or instrument, that alone
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Since the date of Borrower’s Form 10-Q for the six-month period ended
June 30, 2005 as updated by subsequent public filings prior to September 10,
2005, no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
 
3.6    Ownership of Property; Real Estate; Liens.
 
(a)    Each Credit Party warrants that it has good, marketable, legal and valid
title to, or legal and valid leasehold interests in, all of its personal
property constituting Collateral.
 
(b)    As of the Closing Date, the real estate listed in Part 1 of Disclosure
Schedule 3.6 (“Owned Real Estate”) constitutes substantially all of the real
property owned by any Credit Party. As of the Closing Date, Borrower reasonably
believes the leases and other agreements listed in Part 2 of Disclosure Schedule
3.6 constitute all of the Material Real Estate Contracts. Each Credit Party owns
good and marketable fee simple title to all of its Owned Real Estate. As of the
Closing Date, Borrower has valid and enforceable leasehold interests in all of
its material leased real estate, excluding any leased real estate that is
occupied on a month to month or “at will” basis (such material leased real
estate of the Credit Parties, together with the Owned Real Estate, being herein
collectively referred to as “Real Estate”). As of the Closing Date, there are no
purchase options, rights of first refusal or similar contractual rights that
exist with respect to the Owned Real Estate, except as disclosed in Part 1 of
Disclosure Schedule 3.6. As of the Closing Date, true, correct and complete
copies of all Material Real Estate Contracts and leases, usufructs, use
agreements or other occupancy or facility agreements affecting the Owned Real
Estate have been delivered to the Administrative Agent. Part 3 of Disclosure
Schedule 3.6 describes all of the leases, usufructs, use agreements or other
occupancy or facility agreements by a Credit Party for any Owned Real Estate
with respect to which such Credit Party is a landlord as of the Closing Date. As
of the Closing Date, none of the properties and assets of any Credit Party are
subject to any Liens other than Permitted Encumbrances and other Liens permitted
by Section 6.7. As of the Closing Date, no portion of any Credit Party’s Owned
Real Estate has suffered any material damage by fire or other casualty loss
since September 10, 2005 that has not heretofore been repaired and restored in
all material respects to its original condition or otherwise remedied. As of the
Closing Date, Borrower reasonably believes all material permits required to have
been issued or appropriate to enable the Owned Real Estate to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect. Since November
30, 2004, there have been no changes or improvements to the Owned Real Estate
that would require a change in any Credit Party’s current certificates of
occupancy.
 
19

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

 
(c)    [Reserved.]
 
(d)    As of the Closing Date, each Credit Party that is party to the Spare
Parts Mortgage has established and is maintaining reasonable safeguards against
theft of the Spare Parts and the Spare Parts are located at the Designated Spare
Parts Location, except to the extent permitted under the Spare Parts Mortgage.
 
3.7    Labor Matters.
 
Except as set forth on Disclosure Schedule 3.7: (a) no strikes are pending
against any Credit Party (i) in the United States and (ii) outside of the United
States, except those that, in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the operations of such Credit Party; (b) no
other material labor disputes against any Credit Party are pending or, to any
Credit Party’s knowledge, threatened, except those that, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect; (c) hours worked
by and payment made to employees of each Credit Party to such Credit Party’s
knowledge, comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters except to the extent that
non-compliance could not reasonably be expected to have a Material Adverse
Effect; (d) as of the Closing Date, no Credit Party is a party to or bound by
any domestic collective bargaining agreement (and true and complete copies of
any agreements described on Disclosure Schedule 3.7 have been delivered to the
Administrative Agent); (e) there is no organizing activity involving any Credit
Party pending or, to any Credit Party’s knowledge, threatened by any labor union
or group of employees, except those that, in the aggregate, would not reasonably
be expected to have a Material Adverse Effect; (f) there are no representation
proceedings pending or, to any Credit Party’s knowledge, threatened with the
National Mediation Board, and no labor organization or group of employees of any
Credit Party has made a pending demand for recognition, except those that, in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect; and (g) there are no material complaints or charges against any Credit
Party pending or, to any Credit Party’s knowledge, threatened to be filed with
any Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Credit Party of any individual, except those that, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
 
20

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

 
3.8    Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.
 
Except as set forth in Disclosure Schedule 3.8, as of the Closing Date, no
Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. As of
the Closing Date, all of the issued and outstanding Stock of each Credit Party
is owned by each of the Stockholders and in the amounts set forth in Disclosure
Schedule 3.8. Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, there are no outstanding rights to purchase, options, warrants or similar
rights or agreements pursuant to which any Credit Party may be required to
issue, sell, repurchase or redeem any of its Stock or other equity securities or
any Stock or other equity securities of its Subsidiaries. All outstanding
Indebtedness and Guaranteed Indebtedness of each Credit Party as of the Closing
Date (except for the Obligations) is described in Section 6.3 (including
Disclosure Schedule 6.3).
 
3.9    Government Regulation.
 
No Credit Party is required to register as an “investment company” as such term
is defined in the Investment Company Act of 1940. No Credit Party is subject to
regulation under the Public Utility Holding Company Act of 1935 that restricts
or limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Loans by Lenders to Borrower, the issuance of any
Letter of Credit on behalf of Borrower, the application of the proceeds thereof
and repayment thereof will not violate any provision of any such statute or any
rule, regulation or order issued by the Securities and Exchange Commission.
 
3.10   Margin Regulations.
 
No Credit Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as “Margin Stock”). None of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a “purpose credit” within the meaning of
Regulations T, U or X of the Federal Reserve Board.
 
3.11   Taxes.
 
Except as provided on Disclosure Schedule 3.11, (and except as otherwise
permitted by the Bankruptcy Court and the Bankruptcy Code) all Federal and other
material tax returns, reports and statements, including information returns,
required by any Governmental Authority to be filed by any Credit Party have been
filed with the appropriate Governmental Authority, all such returns, reports and
statements are true and correct in all material respects and, subject to the
automatic stay, all Charges shown to be due and payable on such returns, reports
and statements have been or will be timely paid prior to the date on which any
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof, excluding Charges or other amounts being contested in accordance with
Section 5.2(b) and unless the failure to so file or pay would not be reasonably
expected to result in a Material Adverse Effect. Proper and accurate amounts
have been withheld by each Credit Party from amounts paid to its respective
employees for all periods in full and complete compliance in all material
respects with all applicable federal, state, local and foreign laws and such
withholdings have been or will be timely paid, subject to the automatic stay, to
the respective Governmental Authorities. Except as provided on Disclosure
Schedule 3.11, to each Credit Party’s knowledge, as of the Closing Date, none of
the Credit Parties and their respective predecessors are liable for any Charges:
(a) under any agreement (including any tax sharing agreements) or (b) as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would reasonably be expected to have a
Material Adverse Effect.
 
21

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

 
3.12   ERISA.
 
(a)    Disclosure Schedule 3.12(a) lists as of the Closing Date, all Pension
Plans, including Title IV Plans, Multiemployer Plans, ESOPs and all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest form IRS/DOL 5500-series for each such Plan have been delivered to the
Administrative Agent. Except with respect to Multiemployer Plans, each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC and to the knowledge of any Credit Party,
nothing has occurred that would cause the loss of such qualification or
tax-exempt status. To the knowledge of any Credit Party and except for
non-compliance to the extent permitted under the Bankruptcy Code, each Plan is
in compliance in all material respects with the applicable provisions of ERISA
and the IRC. Each Credit Party and all ERISA Affiliates have made all material
contributions and paid all material amounts due as required by either Section
412 of the IRC or Section 302 of ERISA prior to the date of commencement of the
Cases.
 
(b)    Except as set forth in Disclosure Schedule 3.12(b) or which would
reasonably be expected not to have a Material Adverse Effect, as of the Closing
Date (i) no Title IV Plan has any material Unfunded Pension Liability; (ii)
other than the Cases, no ERISA Event or event described in Section 4062(e) of
ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (iii) there are no pending, or to the knowledge of any Credit Party,
threatened material claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any material liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated pursuant to a “standard termination” as that term
is used in Section 4041 of ERISA, nor has any Title IV Plan of any Credit Party
or ERISA Affiliate (determined at any time within the past five years) with
material Unfunded Pension Liabilities been transferred outside of the
“controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate; and (vi) except in the case of any ESOP, Stock
of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no
more than 10% of the fair market value of the assets of any Plan measured on the
basis of fair market value as of the latest valuation date of any Plan.
 
22

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

 
3.13   No Litigation. 
 
Other than the Cases, no unstayed action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of any officer of such Credit
Party, threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, “Litigation”) that,
individually or in the aggregate, (a) challenges any Credit Party’s right or
power to enter into or perform any of its obligations under the Loan Documents
to which it is a party, or the validity or enforceability of any Loan Document
or any action taken thereunder or (b) could reasonably be expected to have a
Material Adverse Effect.
 
3.14   Intellectual Property.
 
Each Credit Party owns or has rights to use all Intellectual Property necessary
to continue to conduct its business as now conducted by it or presently proposed
to be conducted by it, and each U.S. registered Patent, U.S. registered
Trademark, U.S. registered Copyright and U.S. License in effect on the Closing
Date is listed, together with application or registration numbers, as
applicable, in Disclosure Schedule 3.14. To the knowledge of any Credit Party,
each Credit Party conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect and no material claim or litigation regarding any of the foregoing is
pending or threatened. Except as set forth in Disclosure Schedule 3.14, as of
the Closing Date, no Credit Party is aware of any infringement claim by any
other Person with respect to any material Intellectual Property.
 
3.15   Full Disclosure.
 
No information contained in this Agreement, any of the other Loan Documents,
Financial Statements or Collateral Reports or other written reports from time to
time prepared by any Credit Party and delivered hereunder or any written
statement prepared by any Credit Party and furnished by or on behalf of any
Credit Party to the Administrative Agent or Lender pursuant to the terms of this
Agreement (other than any Projections) contains or will contain, when taken as a
whole, any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made and as of
the date when made. Projections from time to time delivered hereunder are or
will be based upon the estimates and assumptions stated therein, all of which
Borrower believed at the time of delivery to be reasonable in light of the
conditions and facts known to Borrower as of such delivery date (it being
understood that projections by their nature are inherently uncertain, such
Projections are not a guaranty of future performance and actual results may
differ materially from those set forth in such Projections). 
 
23

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

 
3.16   Environmental Matters.
 
(a)    Except as set forth in Disclosure Schedule 3.16 or for any matter for
which notice has been given under Section 5.7, and except for any matter that
would not reasonably be expected to result in any Credit Party incurring
Environmental Liabilities in excess of $500,000 individually or $2,500,000 in
the aggregate in a Fiscal Year, as of the Closing Date: (i) the Owned Real
Estate is free of contamination from any Hazardous Material; (ii) no Credit
Party has caused or suffered to occur any material Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate;
(iii) the Credit Parties are and have been in compliance with all Environmental
Laws; (iv) the Credit Parties have obtained, and are in compliance with, all
Environmental Permits required by Environmental Laws for the operations of their
respective businesses as presently conducted or as proposed to be conducted,
which compliance includes obtaining, maintaining and complying with required
Environmental Permits and all such Environmental Permits are valid, uncontested
and in good standing; (v) no Credit Party knows of any existing circumstances or
conditions, including any Releases of Hazardous Materials, which is likely to
result in an Environmental Liability; (vi) there is no unstayed Litigation
arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs or expenses or
injunctive relief against, or that alleges criminal misconduct by, any Credit
Party; (vii) no notice has been received by any Credit Party identifying it as a
“potentially responsible party” or requesting information under CERCLA or
analogous state statutes; and (viii) the Credit Parties have provided to the
Administrative Agent copies of all existing environmental reports, reviews and
audits in their possession, custody or control relating to the Owned Real Estate
and material written information pertaining to any Environmental Liabilities of
any Credit Party.
 
(b)    Each Credit Party hereby acknowledges and agrees that the Administrative
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party’s affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party’s conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or Environmental
Permits.
 
(c)    None of the items set forth on Disclosure Schedule 3.16 either
individually or in the aggregate would be reasonably likely to have a Material
Adverse Effect.
 
3.17   Insurance.
 
Part 1 of Disclosure Schedule 3.17 lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the scope and term of each such policy. Part 2 of
Disclosure Schedule 3.17 identifies those insurance policies which relate to the
Collateral.
 
3.18   Use of Proceeds.
 
The proceeds of the Loans and the Letters of Credit are being used by Borrower
for general corporate purposes of the Credit Parties.
 
24

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

 
3.19   Deposit.
 
Disclosure Schedule 3.19 lists, as of the Closing Date, all banks and other
financial institutions at which any Credit Party maintains deposit or other
accounts in the United States, and such Schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held and the complete account number therefor.
 
3.20   Trade Relations.
 
As of the Closing Date and except as set forth in Disclosure Schedule 3.20 or
resulting directly from the commencement of the Cases, there exists no actual
or, to the knowledge of any Credit Party, threatened termination or cancellation
of, or any material adverse modification or change in the business relationship
(including, without limitation, any code sharing arrangements) of any Credit
Party with any service provider or supplier whose services during the preceding
twelve (12) months caused them to be ranked among the ten largest service
providers or suppliers of the Credit Parties taken as a whole.
 
3.21   Compliance With Industry Standards.
 
Borrower maintains its Books and Records, Aircraft, Engines, Spare Parts and
other assets and properties that are used in the conduct of its business in
compliance in all material respects with applicable law, including but not
limited to all rules, regulations and standards of the FAA or any other
applicable Aviation Authority.
 
3.22   Post-Petition Skymiles Facility.
 
All of the Post-Petition Skymiles Facility Documents have been provided to the
Administrative Agent on or prior to the Closing Date and contain all of the
material terms related to the Advance Payment arrangements described therein as
of the Closing Date, other than terms relating generally to Amex’s purchase of
Skymiles from Delta set forth in the American Express Co-Branded Credit Card
Program Agreement and the Membership Rewards Agreement, each as amended and
supplemented from time to time, that do not relate to the Advance Payments (as
defined in the Post-Petition Skymiles Facility Documents).
 
3.23   Secured, Super-Priority Obligations.
 
(a)    On and after the Closing Date, the provisions of the Loan Documents and
the Final Order are effective to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, legal, valid and perfected Liens on and
security interests (having the priority provided for herein and in the Final
Order) in all right, title and interest in the Collateral, enforceable against
each Credit Party that owns an interest in such Collateral.
 
(b)    Pursuant to subsections 364(c)(2) and (3) of the Bankruptcy Code and the
Final Order, all amounts owing by the Borrower under the Loan and by the
Guarantors in respect thereof will be secured by a first priority perfected Lien
on the Collateral, subject only to (i) the Liens of the Skymiles Agent in the
Skymiles Collateral pursuant to an order of the Bankruptcy Court in form and
substance satisfactory to the Administrative Agent, (ii) valid, perfected,
nonavoidable and enforceable Liens existing as of the Petition Date, (iii) valid
liens in existence at the commencement of the Cases to the extent perfected
subsequent to such commencement as permitted by Section 546(b) of the Code (iv)
the Carve-Out and (v) Permitted Liens permitted pursuant to Section 6.7(a), (c),
(e), (f), (i), (j) (subject, in the case of Amex, to the Skymiles Intercreditor
Agreement), (n), (o), (q), (r) or (s).
 
25

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

 
(c)    Pursuant to section 364(c)(i) of the Bankruptcy Code and the Final Order,
all obligations of the Borrower and the obligations of the Guarantors under the
Guaranty in respect thereof at all times will constitute allowed Super-Priority
Claim in each of the Cases having priority over all administrative expenses of
the kind specified in sections 503(b) or 507(b) of the Bankruptcy Code, subject
only to the Carve-Out.
 
(d)    The Final Order and the transactions contemplated hereby and thereby, are
in full force and effect and have not been vacated, reversed, modified, amended
or stayed in any manner that affects the rights or duties of the Administrative
Agent, the Arrangers or the Lenders, in each case, without the prior written
consent of the Administrative Agent.
 
3.24   Certificated Air Carrier.
 
Each Air Carrier is a Certificated Air Carrier and possesses all necessary
certificates, franchises, licenses, permits, rights, designations,
authorizations, exemptions, concessions and consents which are material to the
operation of the routes flown by it and the conduct of its business and
operations as currently conducted (the “Permits”). Neither the DOT nor FAA nor
any other Aviation Authority has taken any action or proposed or, to such Air
Carrier’s knowledge, threatened to take any action, to amend, modify, suspend,
revoke, terminate, cancel, or otherwise affect such Permits and Op Specs, in
each case, in an adverse manner.
 
3.25   U.S. Citizen.
 
Each Air Carrier is a “citizen of the United States” as defined in Section
40102(a)(15) of Title 49.
 
3.26   Spare Parts.
 
Set forth on Disclosure Schedule 3.26, is a true, correct and complete list of
each Designated Spare Parts Location as of the Closing Date.
 
3.27   Aircraft; Engines.
 
Set forth on Disclosure Schedule 3.27 is a true, correct and complete list of
Eligible Aircraft and Eligible Engines as of the Closing Date.
 
3.28   Slots, Primary Gates and Routes.
 
(a)    Set forth on Disclosure Schedule 3.28 is a complete and accurate list, as
of the Closing Date, of all Primary Slots and Primary Routes of the Credit
Parties, except those that are licensed for less than one (1) IATA season. Such
Disclosure Schedule 3.28 shall be revised from time to time by Borrower, or as
reasonably requested by the Administrative Agent, to reflect all Primary Slots
and Primary Routes of such Credit Parties. Each such Credit Party, if
applicable, represents and warrants that it holds each of the FAA Slots pursuant
to authority granted by the FAA pursuant to Title 14 of the United States Code.
 
26

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

 
(b)    As of the Closing Date, the Credit Parties are utilizing, or causing to
be utilized, in all material respects, the Slots, Primary Gates and Routes as
required by the applicable Governmental Authority, Airport Authority or Foreign
Aviation Authority. As of the Closing Date, except as disclosed in Borrower’s
Form 10-K for the Fiscal Year ended December 31, 2004, none of the Credit
Parties has received any notice from any Governmental Authority, Airport
Authority or Foreign Aviation Authority or is aware of any other event or
circumstance, that would be reasonably likely to impair its right to hold and
use Primary Gates, Slots and Routes in any material respect, except that which
would not reasonably be expected to result in a Material Adverse Effect.
 
4. FINANCIAL STATEMENTS AND INFORMATION
 
4.1    Reports and Notices.
 
(a)    Borrower hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to the Administrative Agent and Lenders, as
required, the Financial Statements, notices, Projections and other information
at the times, to the Persons and in the manner set forth in Annex E.
 
(b)    Borrower hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to the Administrative Agent and Lenders, as
required, the various Collateral Reports (including Borrowing Base Certificates
in the form of Exhibit 4.1(b)) at the times, to the Persons and in the manner
set forth in Annex F.
 
4.2    Communication with Accountants.
 
Each Credit Party executing this Agreement authorizes (a) the Administrative
Agent and (b) so long as an Event of Default has occurred and is continuing,
each Lender, to communicate, with prior notice to Borrower and Borrower’s
opportunity to be present, directly with its independent registered public
accountants and authorizes and shall instruct those accountants to communicate
to the Administrative Agent and such Lender, with notice to Borrower,
information relating to any Credit Party with respect to the business, results
of operations and financial condition of any Credit Party as the Administrative
Agent or such Lender shall reasonably request.
 
5. AFFIRMATIVE COVENANTS
 
Each Credit Party agrees that from and after the Closing Date and until the
Termination Date:
 
5.1    Maintenance of Existence and Conduct of Business.
 
Except as otherwise required by the Bankruptcy Code, each Credit Party
shall (a) except as otherwise permitted by Section 6.1 or Section 6.8, do or
cause to be done all things necessary to preserve and keep in full force and
effect its legal existence, all rights, permits, licenses, approvals and
privileges (including all Permits) necessary in the conduct of its business, and
its material rights and franchises entered into or assumed after the
commencement of the Cases, and; (b) at all times maintain, preserve and protect
all of its assets and properties (including all Collateral) used or useful and
necessary in the conduct of its business, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices except as otherwise permitted in the
applicable Loan Documents; and (c) except where failure to do so could not
reasonably be expected to have a Material Adverse Effect, transact business only
in such corporate and trade names as are set forth in Disclosure Schedule 5.1.
 
27

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

 
5.2    Payment of Charges.
 
(a)    Unless payment thereof is precluded by the Cases and subject to Section
5.2(b), each Credit Party shall pay and discharge or cause to be paid and
discharged promptly all Charges arising after the Petition Date payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
operations, its property (real, personal or mixed) and all Charges with respect
to tax, social security and unemployment withholding with respect to its
employees, (ii) lawful claims for labor, materials, supplies and services or
otherwise, and (iii) all storage or rental charges payable to warehousemen and
bailees, in each case, before any thereof shall become past due, except in each
case, where the failure to pay or discharge such Charges would not result in
aggregate liabilities in excess of $5,000,000.
 
(b)    Each Credit Party may in good faith contest, by appropriate proceedings,
the validity or amount of any Charges, Taxes or claims described in Section
5.2(a); provided, that (i) adequate reserves with respect to such contest are
maintained on the books of such Credit Party, in accordance with GAAP; (ii) no
Lien shall be imposed to secure payment of such Charges that is superior to any
of the Liens securing payment of the Obligations and such contest is maintained
and prosecuted continuously and with diligence and operates to suspend
collection or enforcement of such Charges (except where the failure to pay or
discharge such Charges would not result in aggregate liabilities or Liens in
excess of $5,000,000); (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses and shall deliver to the
Administrative Agent evidence reasonably acceptable to the Administrative Agent
of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth in this
Section 5.2(b) are no longer met.
 
(c)    Notwithstanding the foregoing, this Section 5.2 shall not be construed to
require Borrower to pay any obligation arising under any agreement with respect
to Section 1110 Assets unless Borrower is approved by the Bankruptcy Court to
make such payment.
 
28

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

 
5.3    Books and Records.
 
Each Credit Party shall keep adequate Books and Records with respect to its
business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a). Upon reasonable
request of the Administrative Agent, each Credit Party shall deliver any
requested Chattel Paper or Instrument to the Administrative Agent (in each case,
accompanied by instruments of transfer executed in blank), and shall, if
requested by the Administrative Agent, mark any Chattel Paper or Instrument that
has not been delivered to the Administrative Agent with a legend that provides
that the writing and the obligations evidenced or secured thereby are subject to
the security interest of the Administrative Agent for the benefit of the Secured
Parties.
 
5.4    Insurance; Damage to or Destruction of Collateral. Except as set forth in
the Aircraft Mortgage and the Spare Parts Mortgage with respect to the
Collateral addressed therein:
 
(a)    The Credit Parties shall, at their sole cost and expense, maintain
insurance at all times against such risks as is customary for companies of the
same or similar size in the same or similar business and industry or as
otherwise required in the Collateral Documents. Such policies of insurance as in
effect on the Closing Date are described, collectively, in Part 1 and Part 2 of
Disclosure Schedule 3.17. Except for policies of insurance relating to
Collateral addressed by the Aircraft Mortgage and the Spare Parts Mortgage, the
policies of insurance (or the loss payable and additional insured endorsements
delivered to the Administrative Agent) described in Part 2 of Disclosure
Schedule 3.17, which lists those policies relating to the Collateral, shall
contain provisions pursuant to which the insurer agrees to provide thirty (30)
days’ prior written notice to the Administrative Agent in the event of any
non-renewal, cancellation or material adverse amendment of any such insurance
policy. If any Credit Party at any time or times hereafter shall fail to obtain
or maintain any of the policies of insurance listed in Part 2 of Disclosure
Schedule 3.17 or to pay all premiums relating thereto, the Administrative Agent
may at any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
that the Administrative Agent deem advisable. The Administrative Agent shall
have no obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, the Administrative Agent shall not be deemed to have
waived any Default or Event of Default arising from any Credit Party’s failure
to maintain such insurance or pay any premiums therefor. All sums so disbursed,
including reasonable attorneys’ fees, court costs and other charges related
thereto, shall be payable on demand by Borrower to the Administrative Agent and
shall be additional Obligations hereunder secured by the Collateral.
 
(b)    The Administrative Agent reserves the right at any time upon any change
in any Credit Party’s risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require, upon prior written notice to such Credit Party,
additional forms and limits of insurance, in the Administrative Agent’s
reasonable opinion, to adequately protect both the Administrative Agent’s and
the Lenders’ interests in all or any portion of the Collateral needed to ensure
that each Credit Party is protected by insurance in amounts and with coverage
customary for its industry with respect to such Collateral; such additional
forms and limits of insurance to be obtained and in effect within thirty (30)
days of such written notice. If reasonably requested by the Administrative
Agent, each Credit Party shall deliver to the Administrative Agent from time to
time a report of a reputable insurance broker reasonably satisfactory to the
Administrative Agent, with respect to its insurance policies.
 
29

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

 
(c)    Borrower on behalf of each Credit Party shall deliver to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, with respect to the insurance policies listed on Part 2 of
Disclosure Schedule 3.17, endorsements to (i) all “All Risk” property and
business interruption insurance naming the Administrative Agent for the benefit
of Secured Parties, as lender loss payee as its interests may appear; provided,
that, with respect to business interruption insurance only, so long as no Event
of Default has occurred or is continuing, the Administrative Agent shall
promptly release to Borrower any insurance proceeds received in connection with
such business interruption insurance, and (ii) all general liability and other
liability policies naming the Administrative Agent for the benefit of Secured
Parties, as an additional insured as its interests may appear. Borrower on
behalf of each Credit Party irrevocably makes, constitutes and appoints the
Administrative Agent (and all officers, employees or agents designated by the
Administrative Agent), so long as the anticipated insurance proceeds exceed
$5,000,000, as Borrower’s and each Credit Party’s true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such “All Risk” property policies of insurance, endorsing the name of Borrower
or such Credit Party on any check or other item of payment for the proceeds of
such “All Risk” property policies of insurance and for making all determinations
and decisions with respect to such “All Risk” property policies of insurance.
The Administrative Agent shall have no duty to exercise any rights or powers
granted to them pursuant to the foregoing power-of-attorney. Borrower shall
promptly notify the Administrative Agent of any loss, damage, or destruction to
the Collateral in the amount of $1,000,000 or more, whether or not covered by
insurance. All Net Cash Proceeds from insurance required under the Loan
Documents shall be applied in accordance with Section 1.2.
 
(d)    Notwithstanding the foregoing, subject to the Final Order, where casualty
or condemnation proceeds are required to be applied to the repair or restoration
of the affected property, which does not constitute Collateral included in the
Term A Borrowing Base, or to be delivered to a third party or deposited in an
escrow or similar account, by the express terms of any lease, usufruct, use
agreement or other occupancy or facility agreement to which Borrower or any
Credit Party is a party and that either (i) constitutes a Lien permitted
hereunder having priority over the Administrative Agent’s Liens, for the benefit
of Secured Parties or (ii) affects leased real estate or usufruct or pursuant to
the express terms of documents entered into in connection with ARB Indebtedness,
either existing as of the Closing Date or permitted under this Agreement, then
the Administrative Agent’s rights under this Agreement with respect to any
casualty or condemnation proceeds or insurance policies required to be
maintained under any such lease, usufruct, use agreement or other occupancy or
facility agreement or other document entered into in connection with such ARB
Indebtedness to which Borrower or any Credit Party is a party shall be subject
to the terms and conditions of such agreement, including without limitation the
settlement of claims, the repair and restoration obligations of Borrower or any
Credit Party and the delivery or deposit of any casualty or condemnation
proceeds for repair or restoration.
 
30

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

 
5.5    Compliance with Laws.
 
Except as otherwise permitted by the Bankruptcy Code, each Credit Party shall
comply with all federal, state, local and foreign laws and regulations
applicable to it, including labor laws, and Environmental Laws and Environmental
Permits, and laws and regulations of any Aviation Authority applicable to it,
except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
(including, without limitation, as a result of the loss of any material Permit).
 
5.6    Intellectual Property.
 
Subject to Section 6.8(i), each Credit Party shall own or have rights to use all
Intellectual Property necessary to continue to conduct its business as now
conducted by it or presently proposed to be conducted by it. Each Credit Party
shall do or cause to be done all things necessary to preserve and keep in full
force and effect at all times all material registered Patents, Trademarks, trade
names, Copyrights and service marks necessary in the conduct of its business.
Each Credit Party shall conduct its business and affairs without infringement of
or interference with any Intellectual Property of any other Person in any
material respect.
 
5.7    Environmental Matters.
 
Except as otherwise required by the Bankruptcy Code, each Credit Party shall and
shall cause each Person within its control to: (a) conduct its operations and
keep and maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are necessary to
comply in all material respects with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under,
above, to, from or about any of its Real Estate; (c) notify the Administrative
Agent promptly after such Credit Party becomes aware of any violation of
Environmental Laws or Environmental Permits or any Release on, at, in, under,
above, to, from or about any Real Estate that is reasonably likely to result in
any Credit Party incurring Environmental Liabilities in excess of $500,000
individually or $2,500,000 in the aggregate in a Fiscal Year; and (d) promptly
forward to the Administrative Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in any Credit Party incurring Environmental Liabilities in
excess of $500,000 individually or $2,500,000 in the aggregate in a Fiscal Year.
If the Administrative Agent at any time has a reasonable basis to believe that
there may be a violation of any Environmental Laws or Environmental Permits by
any Credit Party or any Environmental Liability arising thereunder, or a Release
of Hazardous Materials on, at, in, under, above, to, from or about any of its
Real Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, upon the Administrative Agent’s
written request (i) cause the performance of such environmental audits including
subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower’s expense, as the Administrative Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to the Administrative Agent
and shall be in form and substance reasonably acceptable to the Administrative
Agent, and (ii) permit the Administrative Agent or their representatives to have
access to all Real Estate (subject, in the case of leased Real Estate, to the
terms of the applicable lease or other agreement which governs rights of access
to leased Real Estate) for the purpose of conducting such environmental audits
and testing as the Administrative Agent deem appropriate, including subsurface
sampling of soil and groundwater; provided, that the Administrative Agent shall
use commercially reasonable efforts to cause such audits or testing to be
conducted in a manner that does not unreasonably interfere with the operations
of the relevant Credit Party. Borrower shall reimburse the Administrative Agent
for the reasonable costs of such audits and tests and the same will constitute a
part of the Obligations secured hereunder.
 
31

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

 
5.8    Landlords’ Agreements; Bailee Letters.
 
If requested by the Administrative Agent in its reasonable discretion, each
Credit Party shall use commercially reasonable efforts to obtain a landlord’s
agreement or bailee letter, as applicable, from the lessor of each leased
property or bailee with respect to any warehouse, processor or converter
facility, maintenance facilities or other location where Collateral with an
aggregate book value in excess of $10,000,000 is stored or located, in each
case, to the extent the Liens and other unstayed rights of the applicable
warehouseman, bailee or lessor are senior to or pari passu with the Liens of the
Administrative Agent (each such location, a “Material Location”), which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord or bailee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to the Administrative Agent. With respect to each Material Location leased or
owned on or after the Closing Date, if the Administrative Agent has requested
but, within sixty (60) days following such request, has not received a landlord
agreement or bailee letter, Borrower’s Eligible Spare Parts, Eligible Ground
Service Equipment and Eligible Tooling at that location shall, in the
Administrative Agent’s discretion, be subject to such Reserves as may be
established by the Administrative Agent in its reasonable credit judgment. Each
Credit Party shall timely and fully pay and perform its material obligations
under all leases and other agreements entered into or assumed after the
commencement of the Cases in all respects with respect to Material Locations.
 
5.9    [Reserved.]
 
5.10   Notices.
 
Promptly after the sending or filing thereof, Borrower shall send Administrative
Agent copies of all material notices, certificates or reports delivered pursuant
to, or in connection with, any Post-Petition Skymiles Facility Document.
 
5.11   Further Assurances.
 
Subject to Section 5.12(b), each Credit Party executing this Agreement agrees
that it shall, at such Credit Party’s expense and upon the reasonable request of
the Administrative Agent, duly execute and deliver, or cause to be duly executed
and delivered, to the Administrative Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of the Administrative Agent, in accordance with its customary
business practices for comparable debtor in possession transactions, to carry
out more effectively the provisions and purposes of this Agreement and each Loan
Document.
 
32

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

 
5.12   Additional Guaranties and Collateral Documents.
 
(a)    Except as otherwise set forth in the Aircraft Mortgage, to the extent not
delivered to the Administrative Agent on or before the Closing Date (including
in respect of after-acquired property, other than real estate and interests in
real estate that are not Owned Real Estate, and Persons that become Subsidiaries
of any Credit Party after the Closing Date), Borrower agrees promptly to do, or
cause each Subsidiary of Borrower (other than Excluded Subsidiaries) to do, each
of the following, unless otherwise agreed by the Administrative Agent:
 
(i)     deliver to the Administrative Agent such duly executed supplements and
amendments to this Agreement, in each case in form and substance reasonably
satisfactory to the Administrative Agent and as the Administrative Agent
reasonably deems necessary in order to ensure that each Domestic Subsidiary of
Borrower (other than Excluded Subsidiaries), guaranties, as primary obligor and
not as surety, the full and punctual payment when due of the Obligations or any
part thereof;
 
(ii)     deliver to the Administrative Agent such duly executed supplements and
amendments to any of the Collateral Documents, in each case in form and
substance reasonably satisfactory to the Administrative Agent and as the
Administrative Agent reasonably deems necessary in order to (A) effectively
grant to the Administrative Agent for the benefit of the Secured Parties, a
valid, perfected and enforceable security interest in all assets, personal
property or property interests that constitute Collateral owned by any Credit
Party and (B) effectively grant to the Administrative Agent for the benefit of
the Secured Parties, a valid, perfected and enforceable security interest in all
Stock and other debt Securities of any Credit Party and each direct Subsidiary
of each Credit Party (other than the Stock of the Excluded Issuers); provided,
however, that, in no event shall (x) more than 65% of the outstanding voting
Stock of any Subsidiary which is not a Domestic Subsidiary be pledged to secure
the Obligations or (y) the Stock of any joint venture company be pledged to the
extent that such pledge is restricted by legally binding arrangements between
the joint venture parties;
 
(iii)    deliver to the Administrative Agent all certificates, instruments and
other documents representing all Collateral required to be pledged and delivered
under the Collateral Documents and all other Stock and other debt Securities
being pledged pursuant to the joinders, amendments and supplements executed
pursuant to clause (ii) above;
 
(iv)    to the extent permitted hereunder, if any Credit Party acquires a fee
simple ownership interest in real estate after the Closing Date, or discovers
that it owns any fee simple interest in real estate not constituting Owned Real
Estate, within ninety (90) days thereof, execute and deliver to the
Administrative Agent, a Mortgage granting the Administrative Agent for the
benefit of Secured Parties a valid, perfected and enforceable first priority
Lien on such real estate and, if reasonably required by the Administrative
Agent, environmental audits, mortgage title insurance policy, real property
survey, local counsel opinion(s), supplemental casualty insurance and flood
insurance, and such other documents, instruments or agreements reasonably
requested by the Administrative Agent, in each case, in form and substance
reasonably satisfactory to the Administrative Agent (it being understood and
agreed that each such real estate so acquired shall be considered “Owned Real
Estate” for purposes of this Agreement from and after the date of its
acquisition);
 
33

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

 
(v)    if such Subsidiary is party to a Case, to obtain an order of the
Bankruptcy Court confirming in such Case extension of the terms of the Final
Order to such new Subsidiary as a debtor and debtor in possession;
 
(vi)    to take such other actions as the Administrative Agent reasonably deems
necessary to ensure the validity or continuing validity of the guaranties
required to be given pursuant to clause (i) above or to create, maintain or
perfect the security interest required to be granted pursuant to
clause (ii) above, including the filing of financing statements or other
recordations in such jurisdictions as may be required by the Collateral
Documents, the Code, the FAA or applicable law, or as may be reasonably
requested by the Administrative Agent; and
 
(vii)   if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above in connection with
the addition of any Guarantor or Collateral acquired after the date hereof,
which opinions shall be in form and substance consistent with those delivered on
the Closing Date and from counsel reasonably satisfactory to the Administrative
Agent.
 
(b)    Notwithstanding the foregoing, (i) prior to the occurrence of any Event
of Default, the Administrative Agent shall not take any security interest in or
require any actions to be taken with respect to (A) those assets as to which the
Administrative Agent shall determine, in their reasonable discretion, that the
cost of obtaining such security interest or taking such action are excessive in
relation to the benefit to Lenders afforded thereby, (B) property the
acquisition or construction of which was financed through Indebtedness (existing
as of the Closing Date (other than Gates) or as permitted by Section 6.3(a)),
and (C) any property to the extent that the granting of such a security interest
would constitute a breach or violation of a valid and effective restriction in
favor of a third party (including, without limitation, mandatory consent
rights), that would result in the termination of any Credit Party’s interest in
such Collateral or give rise to any indemnification obligations or any right to
terminate or commence the exercise of remedies under such restrictions, (ii) the
Administrative Agent shall not take any security interest in, or require any
Credit Party to take any action referred to in Section 5.12(a)(iv) with respect
to, real estate, or require the execution or delivery of any Aircraft Mortgage
or Spare Parts Mortgage, or require any Credit Party to take any actions with
respect to the FAA relating to any of the 737-800 aircraft described in Section
6.8(m) hereof or with respect to any asset (A) until the expiration of 90 days
after the date of acquisition thereof, unless Borrower shall have given the
Administrative Agent notice that it does not intend to finance such acquisition
as permitted by Section 6.3(a)(i), and (B) previously securing or financed by
Existing Secured Indebtedness until the expiration of 90 days after such
Existing Secured Indebtedness has been repaid, unless Borrower shall have given
the Administrative Agent notice that it does not intend to finance such asset as
permitted by Section 6.3(a)(v), and (iii) Liens required to be granted and
actions required to be taken pursuant to this Section 5.12 shall all be subject
to exceptions and limitations (including Liens permitted pursuant to Section
6.7) consistent with those set forth herein and in the Collateral Documents as
in effect on the Closing Date.
 
34

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

 
5.13   Pledged Spare Parts.
 
Each Credit Party shall 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 Designated Spare Parts
Locations, except to the extent permitted in the Spare Parts Mortgage. The
Pledged Spare Parts will be maintained by or on behalf of the Air Carriers that
are Credit Parties, as required by the Spare Parts Mortgage.
 
5.14   Aircraft Mortgage; Spare Parts Mortgage; SGR Security Agreement.
 
Each Air Carrier that is a Credit Party shall execute the Aircraft Mortgage, the
Spare Parts Mortgage and the SGR Security Agreement.
 
5.15   Slot Utilization.
 
(a)    Subject to transfers, exchanges and other dispositions permitted by this
Agreement and the SGR Security Agreement, from and after the Closing Date
Borrower shall cause the FAA Slots to have sufficient Slot Utilization, for
purposes of 14 C.F.R. 93.227 (the “Slot Utilization Regulations”) and shall at
the end of Week 4 of any respective Two-Month FAA Reporting Period for FAA Slots
present to each Administrative Agent (i) if, during Week 1, Week 2, Week 3 or
Week 4, the FAA or any applicable Foreign Aviation Authority has revoked,
terminated or canceled any Credit Parties’ right to utilize any Primary Slot, a
list of all such Primary Slots and (ii) a certification from Borrower that
either:
 
(i)    the FAA Slots have been utilized at the following rates (a week shall be
deemed to be seven (7) days for purposes of this Section 5.14): (x) sixty-five
percent (65%) for each hourly period for Weeks 1-4 of the respective Two-Month
FAA Reporting Period for Slots in DCA and LGA; (y) sixty-five percent (65%) for
each half hour period for Weeks 1-4 of the respective Two-Month FAA Reporting
Period for arrival Slots in DCA and LGA; or
 
(ii)    Borrower intends to effectuate full compliance with all of the slot
utilization covenants pursuant to exchanging slots at such airports with third
party air carriers and such officer has no reason to believe that Borrower will
fail to comply with the Slot Utilization Regulations.
 
(b)    Subject to transfers, exchanges and other dispositions permitted by this
Agreement and the SGR Security Agreement, utilize the Foreign Slots in a manner
consistent in all material respects with applicable regulations and contracts in
order reasonably to preserve its right to hold and operate the Foreign Slots,
taking into account any waivers or other relief granted by any applicable
Aviation Authority.
 
35

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

 
5.16   ERISA/Labor Matters.
 
Borrower shall furnish the Administrative Agent (with sufficient copies for each
of Lenders) each of the following:
 
(a)    promptly and in any event within thirty (30) days of filing or receipt by
Borrower, with respect to any Title IV Plan, copies of the most recent annual
reports or returns (IRS Form 5500), audited or unaudited financial statements
and actuarial valuations with respect to such Plans;
 
(b)    promptly and in any event within ten (10) days after Borrower, any
Subsidiary of Borrower or any ERISA Affiliate knows or has reason to know that a
request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of an officer of Borrower describing such waiver request and the
action, if any, Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed with the PBGC or the IRS
pertaining thereto;
 
(c)    simultaneously with the date that Borrower, any Subsidiary of Borrower or
any ERISA Affiliate files a notice of intent to terminate any Title IV Plan, a
copy of each notice;
 
(d)    promptly and in any event within three (3) days after Borrower, any
Subsidiary of Borrower or any ERISA Affiliate receives any adverse communication
from a Governmental Authority which could result in an increase to or accelerate
the payment of any liability with respect to a Pension Plan, a copy of such
notice; and
 
(e)    simultaneously with the date that any Credit Party (i) commences or
terminates negotiations with any collective bargaining agent for the purpose of
materially changing any collective bargaining agreement; (ii) reaches an
agreement with any collective bargaining agent prior to ratification for the
purpose of materially changing any collective bargaining agreement; (iii)
ratifies any agreement reached with a collective bargaining agent for the
purpose of materially changing any collective bargaining agreement; or (iv)
becomes subject to a “cooling off period” under the auspices of the National
Mediation Board, notification of the commencement or termination of such
negotiations, a copy of such agreement or notice of such ratification or a
“cooling off period,” as the case may be.
 
5.17   Maintenance of Liens and Collateral.
 
Each Credit Party, subject to Section 5.12, shall do or cause to be done all
things necessary to preserve and keep in full force and effect at all times the
Liens securing the Obligations as provided in the Loan Documents.
 
5.18   Use of Proceeds.
 
The proceeds of the Loans and the Letters of Credit will be used by Borrower for
the general corporate purposes of the Credit Parties.
 
36

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

 
5.19   Cash Management Systems.
 
Borrower will establish and will maintain until the Termination Date, the Cash
Management Systems as described in Annex C.
 
5.20   Appraisals.
 
Each Credit Party shall provide the Administrative Agent access to its
properties and to the Collateral in accordance with Section 1.12 and permit the
Administrative Agent to have an Appraiser conduct appraisals as set forth in
Annex F.
 
6. NEGATIVE COVENANTS
 
Each Credit Party agrees that from and after the Closing Date until the
Termination Date:
 
6.1    Mergers, Subsidiaries, Etc.
 
No Delta Company shall directly or indirectly, by operation of law or otherwise,
merge or consolidate with any Person or acquire Stock of any Person; provided,
that (a) any Subsidiary may merge or consolidate with (i) Borrower or a
Guarantor in a transaction in which Borrower or any Guarantor is the surviving
Person and (ii) if such Subsidiary is not a Guarantor, any other Delta Company,
(b) Borrower may merge or consolidate with, or acquire Stock of, any Person to
effectuate an Investment permitted by Section 6.2 in a transaction in which
Borrower is the surviving Person, (c) any Subsidiary may merge or consolidate
with, or acquire Stock of, any Person to effectuate an Investment permitted by
Section 6.2 in a transaction in which a Subsidiary is the surviving Person and
(d) any Subsidiary may merge or consolidate with another Person in connection
with any sale or other disposition of such Subsidiary permitted pursuant to
Section 6.8; provided, that such merger, consolidation or acquisition shall not
result in the acquisition of Stock located outside of the United States in an
amount in excess of $25,000,000 in the aggregate.
 
6.2    Investments; Loans and Advances.
 
Except as otherwise expressly permitted by this Section 6.2, no Delta Company
shall make or permit to exist any investment in, or make, accrue or permit to
exist loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise (all of the foregoing,
“Investments”), except (without duplication):
 
(a)    each Delta Company may hold Investments comprised of notes payable, or
stock or other securities issued by Account Debtors to such Delta Company
pursuant to negotiated agreements with respect to settlement of such Account
Debtor’s Accounts in the ordinary course of business, consistent with past
practices;
 
(b)    each Delta Company may maintain its existing investments in its
Subsidiaries as of the Closing Date summarized on Disclosure Schedule 3.8 or
6.2;
 
37

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

 
(c)    each Delta Company may make investments, subject to Section 5.19, in
Permitted Investments;
 
(d)    each Delta Company may maintain its Investments existing as of the
Closing Date summarized on Disclosure Schedule 6.2;
 
(e)    Investments (i) may be made by any Credit Party in any other Credit
Party, (ii) may be made by any Delta Company that is not a Credit Party in any
other Delta Company, subject to compliance with Section 6.3(a)(vii) and (iii)
constituting capital contributions or intercompany loans or advances may be made
to Aero Assurance, Ltd. or New Sky, Ltd. for the purpose of cash collateralizing
letters of credit issued for the account of such captive insurance Subsidiaries
to the extent permitted under Section 6.3(a)(xiii);
 
(f)     each Delta Company may make Investments with the funds held in the
Excluded Accounts;
 
(g)    each Delta Company may make Investments consisting of (i) 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 (iii) fuel hedges and other derivatives
contracts, in each case, to the extent that such agreement or contract is
permitted by Section 6.3 and Section 6.17 and entered into in the ordinary
course of business;
 
(h)    the Delta Companies, in the aggregate, may make Investments in an amount
not to exceed $10,000,000 outstanding at any time 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;
 
(i)     the Delta Companies may make advances to their respective officers,
directors and employees in an amount not to exceed (i) $10,000 outstanding at
any time to any individual officer, director or employee and (ii) $7,000,000 in
the aggregate outstanding at any time for all such advances;
 
(j)     the Delta Companies may make advances in respect of (i) signing bonuses
for newly hired officers, directors or employees of any Delta Company in an
amount not to exceed $250,000 individually outstanding at any time and (ii)
relocation expenses for newly hired officers, directors or employees of any
Delta Company in an amount not to exceed $5,000,000 in the aggregate outstanding
at any time;
 
(k)    the Delta Companies may make Investments in the form of foreign cash
equivalents in the ordinary course of business and consistent with past
practices;
 
(l)     [Reserved];
 
(m)    the Delta Companies may make additional Investments in Subsidiaries that
are not Credit Parties in an aggregate amount at any one time not to exceed
$5,000,000;
 
38

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

 
(n)    the Delta Companies may make any Investment consisting of the acquisition
of Stock of any Person; provided, that (i) such Person becomes a Credit Party or
is merged with or into Borrower or a Credit Party immediately upon consummation
of such acquisition and (ii) such acquisition is permitted by Section 6.10;
 
(o)    the Delta Companies may make any Investment consisting of the acquisition
of equity interests permitted pursuant to Section 6.13(d) and (e); and
 
(p)    the Delta Companies may make other Investments in an aggregate amount
outstanding at any one time not to exceed $25,000,000 for all Investments made
pursuant to this clause (p).
 
The term “Investments” shall not include deposits to secure the performance of
leases.
 
6.3    Indebtedness.
 
(a)    No Delta Company shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication):
 
(i)     Indebtedness secured by purchase money security interests and Capital
Leases (including in the form of sale-leaseback, synthetic lease or similar
transactions or created solely in connection with the restructuring of any
operating lease of Non-1110 Aviation Assets or Section 1110 Assets which existed
on the Petition Date) to the extent such Indebtedness was incurred in connection
with the restructuring of existing operating leases as provided in the
parenthetical above or finance the acquisition or construction of aircraft,
equipment and real estate to the extent permitted by Section 6.10 or 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) of the subject asset;
 
(ii)    the Loans and the other Obligations;
 
(iii)    [Reserved];
 
(iv)    Indebtedness existing as of the Closing Date described in Disclosure
Schedule 3.12(b) or 6.3;
 
(v)    Indebtedness incurred after the Closing Date; provided, that (A) such
indebtedness is (x) secured by (or finances) assets which, as of the Closing
Date, secured (or were financed by) other Indebtedness outstanding on the
Closing Date described in Disclosure Schedule 6.3 (the “Existing Secured
Indebtedness”), (y) incurred within one hundred eighty (180) days after the
repayment in full of such Existing Secured Indebtedness and (z) is in an
aggregate principal amount not exceeding the maximum principal amount of such
Existing Secured Indebtedness outstanding at any time on or prior to the Closing
Date and (B) such Existing Secured Indebtedness shall have been repaid in full
on the scheduled maturity date thereof (a “Permitted Secured Financing”);
 
39

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

 
(vi)    Indebtedness under the Post-Petition Skymiles Facility in an aggregate
principal amount not to exceed $350,000,000;
 
(vii)   Indebtedness consisting of intercompany loans and advances made (A)
among Credit Parties, (B) among Delta Companies that are not Credit Parties and
(C) by a Credit Party to Aero Assurance, Ltd. or New Sky Ltd. permitted pursuant
to Section 6.2(e)(iii), provided, that (A) to the extent any such loan or
advance is evidenced by a promissory note (the “Intercompany Notes”) held by any
Credit Party, the applicable Credit Party shall have pledged and delivered such
note to the Administrative Agent pursuant to this Agreement as additional
collateral security for the Obligations, (B) each applicable Credit Party shall
record all intercompany transactions on its Books and Records in the ordinary
course of business and (C) the obligations of any Credit Party under any such
intercompany loans to any other Delta Company shall be subordinated to the
Obligations of such Credit Party under the Loan Documents in a manner reasonably
satisfactory to the Administrative Agent;
 
(viii)   Indebtedness owed to any Lender (or any of its affiliates) or any other
Person in connection with Investments permitted under Section 6.2(g);
 
(ix)    Indebtedness 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 (but subject to compliance
with Section 5.19);
 
(x)     Indebtedness consisting of take-or-pay obligations contained in supply
agreements entered into in the ordinary course of business and consistent with
past practices;
 
(xi)    Indebtedness to credit card processors in connection with credit card
processing services incurred in the ordinary course of business and consistent
with past practices;
 
(xii)   Indebtedness owing by the Credit Parties to Citibank, N.A. and its
banking Affiliates, arising in the ordinary course of business, providing
netting services with respect to intercompany Indebtedness 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 and does not exceed an aggregate outstanding amount of
$50,000,000;
 
(xiii)   Indebtedness in respect of letters of credit in an aggregate
outstanding amount not to exceed $150,000,000;
 
(xiv)    surety and appeal bonds in an aggregate outstanding amount not to
exceed $80,000,000;
 
(xv)   other unsecured Indebtedness incurred subsequent to the Closing Date;
provided, that no principal payments shall be required thereunder (except upon
acceleration) on or prior to the Scheduled Maturity Date;
 
40

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

 
(xvi)    Permitted Subordinated Indebtedness;
 
(xvii)   Indebtedness constituting a Permitted Refinancing of Indebtedness
referred to in clauses (i), (iv), (v), (vi) or (xvi) above;
 
(xviii)   unsecured Indebtedness (including letters of credit) incurred
subsequent to the Closing Date to provide credit support for (x) obligations
arising in the ordinary course of business and consistent with past practices in
connection with credit card processing services and (y) the Indebtedness
described in clause (ix) above;
 
(xix)    other unsecured Indebtedness incurred subsequent to the Closing Date in
an aggregate amount not to exceed $25,000,000 outstanding at any time; and
 
(xx)     refinancings, replacements and restructurings of Indebtedness
(outstanding on the Petition Date and permitted by Section 6.3(a)(iv)) secured
directly or indirectly by “equipment” described in Section 1110(a)(3) of the
Bankruptcy Code or by any equipment that would have qualified as such equipment
had it been placed in service after October 22, 1994 (collectively, “Section
1110-Type Indebtedness”); provided, that (A) the principal amount of such
existing Indebtedness shall not be increased above the principal amount thereof
outstanding immediately prior to such refinancing, replacement or restructuring
unless (1) the interest expense, if any, on any scheduled payments deferred as a
result of such refinancing is not paid currently but is recapitalized as
principal or (2) such refinancing increases the principal amount of such
refinanced Section 1110-Type Indebtedness but the overall effect on the
aggregate amount of existing Indebtedness secured directly or indirectly by
“equipment” described in Section 1110(a)(3) of the Bankruptcy Code or by
equipment that would have qualified as such equipment had it been placed in
service after October 22, 1994 is reduced or remains the same, or the financing
expenses in connection with all such Indebtedness is reduced (it being
understood that any such increase in Indebtedness may not be granted
Super-Priority Claim status pursuant to Section 364(c)(1) of the Bankruptcy
Code), (B) after giving effect thereto, the average maturity of all the
then-outstanding Section 1110-Type Indebtedness shall not be shortened as a
result of such refinancing, replacement or restructuring, (C) the weighted
average life to maturity of all such existing Section 1110-Type Indebtedness
shall not be reduced as a result of such refinancing, replacement or
restructuring, and (D) the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such refinancing, replacement or
restructuring.
 
(b)    No Credit Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or other
amount in respect of any post-petition Indebtedness prior to its scheduled
maturity, other than (i) the Obligations; (ii) Indebtedness secured by a Lien
permitted under Section 6.7 if the asset securing such Indebtedness on a
first-priority basis has been sold or otherwise disposed of in accordance with
Section 6.8; (iii) Indebtedness upon any Permitted Refinancing; (iv) other
Indebtedness (excluding Permitted Subordinated Indebtedness) not in excess of
$10,000,000; (v) Indebtedness incurred subsequent to the Closing Date permitted
under Section 6.3(a) other than Indebtedness permitted under Section 6.3(a)(iv),
(vi), (xv), (xvi) or any Permitted Refinancing of Indebtedness permitted by any
of the foregoing; (vi) as otherwise permitted in Section 6.13; and (vii) ARB
Indebtedness in order to minimize, in Borrower’s reasonable judgment upon
opinion of counsel, such Credit Party’s potential liability arising from a loss
of the tax exempt status of such Indebtedness.
 
41

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

 
6.4    Affiliate Transactions.
 
None of the Credit Parties will sell or transfer any property or assets to, or
otherwise engage in any other material transactions with, any of its Affiliates
(other than the other Credit Parties), except transactions (a) at prices and on
terms and conditions no less favorable to such Credit Party than could be
obtained on an arm’s length basis from unrelated third parties, (b) reasonable
and customary fees and compensation paid to, and indemnity provided on behalf
of, officers, directors or employees of such Credit Party and other transactions
permitted by Section 6.2(i) and (j), (c) any dividends, other distributions or
payments permitted by Section 6.13, (d) any Investment in a Delta Company
permitted by Section 6.2 or intercompany transactions with a Delta Company
permitted by Section 6.3, and (e) provision of legal, accounting or
administrative services to any Delta Company in the ordinary course of business
in accordance with past practices.
 
6.5    Capital Structure and Business.
 
No Credit Party shall amend its charter or bylaws in a manner that would
adversely affect the Administrative Agent or Lenders, or such Credit Party’s
duty or ability to repay the Obligations, in any material respect. No Credit
Party shall engage in any business other than the businesses currently engaged
in by it and businesses that are reasonably related thereto.
 
6.6    Guaranteed Indebtedness.
 
No Credit Party shall create, incur, assume or permit to exist any Guaranteed
Indebtedness, except (without duplication) (a) by endorsement of instruments or
items of payment for deposit to the general account of any Credit Party in the
ordinary course of business, (b) Guaranteed Indebtedness incurred for the
benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement, (c) Guaranteed Indebtedness to the extent
constituting Indebtedness permitted by Section 6.3 and (d) to the extent
existing on the Closing Date as set forth in Disclosure Schedule 6.3.
 
6.7    Liens.
 
No Credit Party shall create, incur, assume or permit to exist any Lien on or
with respect to the Collateral or any of its other properties or assets (whether
now owned or hereafter acquired), except for:
 
(a)    Permitted Encumbrances;
 
(b)    Liens in existence as of the Closing Date and summarized on Disclosure
Schedule 6.7;
 
42

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

 
(c)    Liens created after the Closing Date by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness, in each case, permitted in Section 6.3(a)(i); provided, that
such Liens attach only to the assets (including related leases and subleases
thereof and other assets integral to the use thereof including security deposits
from any sublessee collaterally assigned for the benefit of lessors) subject to
such purchase money debt and such Indebtedness is incurred within one hundred
eighty (180) days following such purchase and does not exceed 100% of the
purchase price of the subject assets;
 
(d)    Liens (having the priority set forth in the Skymiles Intercreditor
Agreement) securing the “Obligations” as defined in the Post-Petition Skymiles
Facility Documents, so long as the Skymiles Intercreditor Agreement is in full
force and effect;
 
(e)    Liens on assets that are the subject of the GECAS Facilities (including
any arising as a result of any cross-collateralization thereof authorized at any
time by the Bankruptcy Court);
 
(f)     Liens on assets that are the subject of a Permitted Secured Financing;
provided, that such Liens attach only to the assets subject to the Existing
Secured Indebtedness related thereto; 
 
(g)    other Liens securing Indebtedness permitted by Section 6.3(a)(ix) and
(xii);
 
(h)    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;
 
(i)     any interest or title of a licensor, lessor or sublessor granted to
others, but only to the extent permitted by any of the Collateral Documents;
 
(j)     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;
 
(k)    Liens on cash deposits that do not constitute Collateral in an aggregate
amount not in excess of $150,000,000;
 
(l)     Liens on cash deposits pledged as collateral for Indebtedness permitted
under Section 6.3(a)(viii) in connection with Investments permitted under
Section 6.2(g)(iii), to the extent that the aggregate amount of such cash
deposits at any time does not exceed the greater of (i) $300,000,000 and (ii)
15% of the then outstanding unrestricted cash balance of the Delta Companies;
 
(m)   Liens on Margin Stock, if and to the extent the value of all Margin Stock
of Borrower and its Subsidiaries exceeds 25% of the total assets subject to this
Section 6.7;
 
43

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

 
(n)    Liens on real and personal property acquired in connection with
acquisitions permitted by this Article 6 to the extent such Liens exist on such
acquired property at the time of acquisition; provided, that such Liens attach
only to the assets (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;
 
(o)    Liens securing a Permitted Refinancing of Indebtedness, to the extent
such Indebtedness being refinanced was originally secured in accordance with
this Section 6.7; provided that such Lien does not attach to any additional
property or assets of Borrower or any Subsidiary;
 
(p)    Liens securing the Loans and the other Obligations;
 
(q)    any Lien on any Non-1110 Aviation Assets or Section 1110 Assets securing
Indebtedness permitted under Section 6.3(a)(xx) or created as a result of the
restructuring of any operating lease of Non-1110 Aviation Assets or Section 1110
Assets permitted under Section 6.3(a)(i); provided, that such Liens attach only
to the assets securing the applicable Indebtedness permitted under Section
6.3(a)(i) or (a)(iv);
 
(r)     Liens created after the Closing Date in connection with operating
Leases; provided, that, except in the case of Liens arising under Section
6.7(e), such Liens attach only to the assets subject to such Lease (including
any sublease thereof, other assets integral to the use thereof and security
deposits from any sublessee collaterally assigned for the benefit of lessors);
and
 
(s)    other Liens so long as the value of the property subject to such Liens,
and the Indebtedness and other obligations secured thereby, do not exceed, in
the aggregate, $2,000,000.
 
No Credit Party shall grant, or permit any of its Subsidiaries to grant, except
as expressly permitted by this Agreement, any Lien on any of its respective
assets securing the Senior Claims or the Junior Claims (as each such term is
defined in the Skymiles Intercreditor Agreement), as the case may be, to any
Person other than each of the Administrative Agent and the Skymiles Agent on
behalf of the applicable Secured Parties (as defined in the Skymiles
Intercreditor Agreement), subject to the relative priorities set forth in the
Skymiles Intercreditor Agreement.
 
6.8    Sale of Stock and Assets.
 
No Credit Party shall sell, transfer, convey, assign or otherwise dispose of any
of its properties or other assets, including the Stock of any of its
Subsidiaries (whether in a public or a private offering or otherwise) or any of
its Accounts (any such disposition being an “Asset Sale”), other than (without
duplication):
 
(a)    sales and other dispositions of assets (excluding those assets subject to
clause (c) or (i) below), and swaps, exchanges, interchange or pooling of assets
(subject to the limitations set forth in the Collateral Documents), in the
ordinary course of business;
 
44

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

 
(b)    sales or dispositions of surplus, obsolete, negligible or uneconomical
assets no longer used in the business of Borrower and the Guarantors;
 
(c)    the sale or other disposition of any Collateral consisting of (i) up to
fifteen (15) 767-200 aircraft or (ii) other Collateral included in the Term A
Borrowing Base having a book value not exceeding $50,000,000 in the aggregate in
any Fiscal Year; provided, that, in each case, any disposition of any such
Collateral included in the Term A Borrowing Base (other than DFW Assets) may
only be sold for value in excess of the Allocated Amount for such Collateral;
 
(d)    Excluded Sales;
 
(e)    all sales of assets of DLMS securing its obligations under the Skymiles
Facility;
 
(f)     dispositions of Section 1110 Assets or Non-1110 Aviation Assets,
consisting of the return thereof to the party that had provided financing
therefor; provided, that such dispositions, in the aggregate, shall not
materially and adversely affect the operations of the Delta Companies, taken as
a whole;
 
(g)    sales or dispositions of assets among (i) Borrower and the Guarantors or
(ii) Subsidiaries that are not Guarantors;
 
(h)    sales or dispositions of other assets in arm’s length transactions at
fair market value in an aggregate amount not to exceed $50,000,000 in the
aggregate in any Fiscal Year;
 
(i)     (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 the Guarantors and (ii) licensing or sublicensing
of Intellectual Property in the ordinary course of business consistent with past
practices;
 
(j)     dispositions of assets located outside of the United States in an
aggregate amount not to exceed $5,000,000;
 
(k)    the sale or discount of Accounts to a collection agency in connection
with collections of delinquent receivables;
 
(l)     (i) abandonment of Slots, Gates, 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 Projections, (B)
in connection with the downsizing of any other hub or facility as reflected in
the Projections, which does not materially and adversely affect the business of
Borrower and the Guarantors, 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 the Guarantors, taken as a whole, (ii)
transfer or other disposition of Slots to the extent permitted by Section 7(b)
of the SGR Security Agreement in an aggregate amount not to exceed $25,000,000,
(iii) exchange of Slots to the extent permitted by Section 7(c) of the SGR
Security Agreement and (iv) assignments of leases or granting of leases of (x)
Aircraft or Engines to the extent permitted pursuant to the Aircraft Mortgage
and (y) other aircraft or engines (that do not constitute Collateral) in the
ordinary course of business;
 
45

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

 
(m)   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 a Delta
Company was a party as of the Closing Date;
 
(n)    sale-leaseback, synthetic lease or similar transactions to the extent not
prohibited by Section 6.12;
 
(o)    to the extent not prohibited by Section 6.18 or any of the Collateral
Documents, the disposition of leasehold or similar interests in Real Estate that
is not Owned Real Estate, 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;
 
(p)    any sale of Margin Stock for fair value as determined in good faith by
Borrower; and
 
(q)    any Property Loss Event (without giving effect to the thresholds set
forth in the definition thereof);
 
(r)     rejection of executory contracts in accordance with an order of the
Bankruptcy Court to the extent such rejections do not, individually or in the
aggregate, materially and adversely affect the business of Borrower and the
Guarantors, taken as a whole; and
 
(s)    sale of Excluded Properties; provided, that, if such Excluded Properties
are included in the Term A Borrowing Base, the sale price shall be in excess of
the Allocated Amount for such Excluded Properties.
 
6.9    [Reserved.]
 
6.10       Financial Covenants.
 
Borrower shall not breach or fail to comply with any of the Financial Covenants.
 
6.11       Hazardous Materials.
 
No Credit Party shall cause or knowingly permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value or marketability of any of the Real
Estate or any of the Collateral, other than in the case of each of clauses (a)
and (b), such violations, Releases or Environmental Liabilities that could not
reasonably be expected to have a Material Adverse Effect.
 
46

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

 
6.12   Sale-Leasebacks.
 
No Credit Party shall engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its Primary Gates, Primary Routes, Primary Slots or
owned assets (including without limitation, any aircraft), except (i) any
sale-leaseback, synthetic lease or similar transaction permitted by Section
6.3(a)(i), (ii) in connection with Section 1110 Assets or Non-1110 Aviation
Assets and (iii) any sale-leaseback or similar transaction of any owned asset
that constitutes a fixture on, or that is used primarily in the operation of,
leased Real Estate, to the extent that such sale-leaseback occurs in connection
with an assignment or rejection of the lease of such Real Estate followed by a
lease-back of all or a portion of such Real Estate.
 
6.13   Restricted Payments.
 
No Credit Party shall make any Restricted Payment, except (a) payments of
principal of and interest on intercompany loans and advances between Borrower
and Guarantors to the extent permitted by Section 6.3, (b) dividends and
distributions by Subsidiaries of Borrower, (c) dividends and distributions by
Borrower with respect to its Stock payable solely in additional shares of its
common Stock, (d) pursuant to stock option plans or other benefit plans for
management or employees of Borrower and its Subsidiaries in a maximum aggregate
amount not to exceed $2,000,000, (e) the redemption of the Class B shares of
Delta Benefits Management Inc. held by Aon Group, Inc., pursuant to put and call
rights existing on the date hereof (f) scheduled payments of interest with
respect to Permitted Subordinated Indebtedness and any Permitted Refinancing
thereof (or, subject to any applicable subordination terms, upon acceleration),
and (g) scheduled payments of principal and interest with respect to, and
payment of fees and other charges required by the terms of, the Post-Petition
Skymiles Facility (or, subject to the Skymiles Intercreditor Agreement, upon
acceleration), provided that no such payments shall be made from proceeds of
Collateral other than Skymiles Collateral (A) from and after the issuance of any
Notice of Actionable Default and until the withdrawal of all pending Notices of
Actionable Default or (B) during the period in which the Excess Aggregate Cash
on Hand is lower than the lesser of (x) $200 million and (y) the aggregate
amount of “Obligations” (as defined in the Post-Petition Skymiles Facility
Documents) arising in connection with the Bankruptcy Loans (as defined in the
Post-Petition Skymiles Facility Documents) outstanding at such time; provided
that such Restricted Payments in clause (a) shall be permitted so long as no
Event of Default has occurred and is continuing or would result after giving
effect to such Restricted Payments and the Administrative Agent shall not have
notified Borrower to stop such payments.
 
6.14    Change of Corporate Name or Location; Change of Fiscal Year.
 
No Credit Party shall (a) change its name as it appears in official filings in
the state of its incorporation or other organization, (b) change its chief
executive office, principal place of business, corporate offices or warehouses,
hangars, terminals, maintenance facilities or other locations at which
Collateral with book value in excess of $5,000,000, individually or in the
aggregate, is held or stored, or the location of its records concerning such
Collateral, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization,
in each case, without at least thirty (30) days’ prior written notice to the
Administrative Agent; provided, that (i) in the case of clauses (b) or (e), any
such new location shall be in the continental United States and (ii) the Credit
Parties shall be in compliance with the Spare Parts Mortgage at all times. No
Credit Party shall change its Fiscal Year.
 
47

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

 
6.15   No Impairment of Intercompany Transfers.
 
No Credit Party shall directly or indirectly enter into or become contractually
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement, the other Loan Documents and the Post-Petition Skymiles Facility
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
by a Credit Party or the making or repayment of intercompany loans by a
Subsidiary of Borrower to Borrower; other than (a) prohibitions or restrictions
existing on the Closing Date and listed on Disclosure Schedule 6.15, and any
extension or renewal thereof on terms no less favorable to such Credit Party and
(b) prohibitions or restrictions set forth in the Loan Documents or the
Post-Petition Skymiles Facility Documents (to the extent consistent with such
provisions in the Loan Documents).
 
6.16   Limitation on Negative Pledge Clauses.
 
No Credit Party will enter into any agreement (other than the Loan Documents)
with any Person which prohibits or limits the ability of such Credit Party to
create, incur, assume or suffer to exist any Lien securing the Obligations upon
any of its properties, assets or revenues, whether now owned or hereafter
acquired, other than agreements that contain (a) prohibitions or limitations
existing on the Closing Date and listed on Disclosure Schedule 6.16, and any
extension or renewal thereof on terms no less favorable to the Credit Parties,
(b) prohibitions set forth in the Loan Documents and the Post-Petition Skymiles
Facility Documents, (c) customary prohibitions, restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale;
provided, that such restrictions and conditions apply only to the Subsidiary
that is to be sold and such sale is permitted hereunder, (d) prohibitions or
restrictions imposed by any agreement relating to secured Indebtedness or other
obligations permitted by this Agreement if such restriction or condition applies
only to property secured or financed by such Indebtedness or other obligations
and (e) restrictions prohibiting Liens contained in agreements relating to the
use and occupancy of airport premises and facilities, operating leases, Capital
Leases or Licenses with respect to properties subject thereto and interests
created therein.

6.17   No Speculative Transactions.
 
No Credit Party shall engage in any transaction involving commodity options,
futures contracts or similar transactions, except solely to hedge in the
ordinary course of business.
 
48

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

 
6.18   Real Estate Purchases and Leases.
 
No Credit Party shall purchase a fee simple ownership interest in real estate
with an aggregate purchase price in excess of $30,000,000. No Credit Party shall
modify, amend, extend, cancel, terminate or otherwise change in any materially
adverse manner any term, covenant or condition of any lease, sublease, usufruct,
use agreement or other occupancy or facility agreement affecting its Real Estate
as of the Closing Date, and no Credit Party shall hereafter enter into any new
lease, sublease, usufruct, use agreement or other occupancy or facility
agreement granting such Credit Party possessory, use or similar rights in or to
any real estate, unless such modification, amendment, extension, cancellation,
termination or other change, or such new lease, sublease, usufruct, use
agreement or other occupancy or facility agreement, (a) is not prohibited by the
Collateral Documents, (b) would not have a Material Adverse Effect, and (c)
would not materially and adversely affect the Administrative Agent’s Liens, for
the benefit of Secured Parties, in the Collateral stored or located at the
location to which such modification or other change, or such new lease or other
agreement relates. Further, no Credit Party shall assign, sublet or otherwise
dispose of any such lease, sublease, usufruct, use agreement or other occupancy
or facility agreement to which such Credit Party is now or hereafter a
counterparty, except for an assignment, subletting or disposition that (x) is
not prohibited by Section 6.8 or the Collateral Documents, (y) would not have a
Material Adverse Effect and (z) would not materially and adversely affect the
Administrative Agent’s Liens, for the benefit of Secured Parties, in the
Collateral stored or located at such location.
 
6.19   Changes Relating to Permitted Subordinated Indebtedness and Post-Petition
Skymiles Facility Documents.
 
(a)     No Credit Party shall change or amend the terms of any Permitted
Subordinated Indebtedness (or any indenture or agreement in connection
therewith) if the effect of such amendment is to: (i) increase the interest rate
on such Permitted Subordinated Indebtedness; (ii) change the dates upon which
payments of principal or interest are due on such Permitted Subordinated
Indebtedness other than to extend such dates; (iii) change any default or event
of default other than to delete or make less restrictive any default provision
therein with respect to such Permitted Subordinated Indebtedness; (iv) change
the redemption or prepayment provisions of such Permitted Subordinated
Indebtedness other than to extend the dates therefor or to reduce the premiums
payable in connection therewith; (v) grant any security or collateral to secure
payment of such Permitted Subordinated Indebtedness; or (vi) change or amend any
other term, in each case, if such change or amendment would materially increase
the obligations of the Credit Party thereunder or confer additional material
rights on the holder of such Permitted Subordinated Indebtedness, in each case,
in a manner adverse to any Credit Party, the Administrative Agent or any Lender.
 
(b)     No Credit Party shall change or amend the terms of the Post-Petition
Skymiles Facility Documents, if the effect of such amendment is to: (i) increase
the interest rate on the Post-Petition Skymiles Facility; (ii) change the dates
upon which payments of principal or interest are due on the Post-Petition
Skymiles Facility other than to extend such dates; (iii) change any default or
event of default other than to delete or make less restrictive any default
provision therein with respect to the Post-Petition Skymiles Facility; (iv)
change the redemption or prepayment provisions of the Post-Petition Skymiles
Facility other than to extend the dates therefor or to reduce the premiums
payable in connection therewith; (v) grant any security or collateral to secure
payment of the Post-Petition Skymiles Facility; or (vi) change or amend any
other term if such change or amendment would materially increase the obligations
of the Credit Party thereunder or confer additional material rights on the
holder of the Post-Petition Skymiles Facility, in each case, in a manner adverse
to any Credit Party, the Administrative Agent or any Lender.
 
49

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

 
6.20   Cancellation of Indebtedness.
 
No Credit Party shall, nor shall they permit any of its Subsidiaries to, cancel
any claim or Indebtedness owed to any of them except (i) in the ordinary course
of business consistent with past practice, (ii) in respect of intercompany
Indebtedness among the Credit Parties or (iii) negotiated on an arm’s-length
basis and for consideration reasonably deemed by the Borrower to be reasonable.
 
7.     TERM
 
7.1     Termination.
 
The financing arrangements contemplated hereby shall be in effect until the
Maturity Date, and the Loans and all other Obligations shall be automatically
due and payable in full on such date.
 
7.2     Survival of Obligations Upon Termination of Financing Arrangements.
 
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of the Administrative Agent
and the Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Maturity Date. Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of the Administrative Agent and
each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Article 13, the payment obligations under Sections 1.13 and 1.14,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
 
8.     EVENTS OF DEFAULT; RIGHTS AND REMEDIES
 
8.1     Events of Default.
 
The occurrence of any one or more of the following events (regardless of the
reason therefor) shall constitute an “Event of Default” hereunder:
 
(a)     Borrower (i) fails to make any payment of principal of the Loans or any
Letter of Credit Obligation when due and payable, (ii) fails to make any payment
of interest on, or Fees owing in respect of, the Loans or any of the other
Obligations within three (3) Business Days of the date when due and payable, or
(iii) fails to pay or reimburse the Administrative Agent or any L/C Issuer or
Lender for any expense reimbursable hereunder or under any other Loan Document
within ten (10) days following the demand for such reimbursement or payment of
expenses.
 
50

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

 
(b)     Any Credit Party fails or neglects to perform, keep or observe any of
the provisions of Sections 1.2, 1.3, 1.4, 5.4, 5.14, 5.16 or Article 6, the
reporting requirements of Section 5.15, the insurance provisions in the
Collateral Documents or any of the provisions set forth in Annexes C or G,
respectively.
 
(c)     Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4.1 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for three (3) Business Days
or more.
 
(d)     (x) Borrower fails to perform or observe any covenant, condition or
agreement to be performed or observed by it under the Aircraft Mortgage, and
such failure continues unremedied for a period of sixty (60) days after receipt
by Borrower of a notice thereof from the Administrative Agent (such failure, a
“Maintenance Default”); provided that, if Borrower shall have undertaken to cure
any such failure which arises under Sections 7.02 or 7.04 of the Aircraft
Mortgage as those sections relate to maintenance, service, repair or overhauls
and such failure is capable of being remedied, no such failure shall constitute
an Event of Default for a period of ninety (90) days after such notice is
received by Borrower (“Maintenance Cure Period”) so long as Borrower is
diligently proceeding to remedy such failure; provided further that, if not
cured, such failure shall constitute an Event of Default if not remedied within
180 days after receipt by Borrower of such notice of a Maintenance Default or
(y) any Credit Party fails or neglects to perform, keep or observe any other
provision of this Agreement, any of the other Loan Documents or the Collateral
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for thirty (30) days
or more.
 
(e)     Except for defaults resulting directly from the commencement of the
Cases and defaults resulting from obligations (other than the Obligations) with
respect to which the Bankruptcy Code prohibits any Credit Party from complying
or permits an Credit Party not to comply, a default or breach occurs under any
other agreement, document or instrument to which any Credit Party is a party
that is not cured within any applicable grace period therefor, and such default
or breach (i) involves the failure to make any payment when due in respect of
any post-petition Indebtedness or Guaranteed Indebtedness (other than the
Obligations) of any Credit Party in excess of $25,000,000 in the aggregate
(including (x) undrawn committed or available amounts and (y) amounts owing to
all creditors under any combined or syndicated credit arrangements), or (ii)
causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness or
a trustee to cause, post-petition Indebtedness or Guaranteed Indebtedness or a
portion thereof in excess of $25,000,000 in the aggregate to become due prior to
its stated maturity or prior to its regularly scheduled dates of payment, or
cash collateral to be demanded in respect thereof, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee.
 
(f)     Any information contained in any Borrowing Base Certificate is untrue or
incorrect in any material respect, or any representation or warranty herein or
in any Loan Document or in any written statement, report, financial statement or
certificate (other than a Borrowing Base Certificate) made or delivered to the
Administrative Agent or any Lender by any Credit Party is untrue or incorrect in
any material respect, in each case, as of the date when made or deemed made.
 
51

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

 
(g)     [Reserved].
 
(h)     The Loan Documents and the Final Order shall, for any reason, cease to
create a valid Lien on any of the Collateral purported to be covered thereby or
such Lien shall cease to be a perfected Lien having the priority provided for
herein and in the Final Order, or any Credit Party shall so allege in any
pleading filed in any court or any material provision of any Loan Document
shall, for any reason, cease to be valid and binding on each Credit Party party
thereto (or any Credit Party shall challenge the enforceability of any Loan
Document or shall assert in writing, or engage in any action or inaction based
on any such assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance
with its terms).
 
(i)      A final unstayed judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate at any time are outstanding against one
or more of the Credit Parties (which judgments are not covered by insurance
policies as to which liability has been accepted by the insurance carrier), and
the same are not, within thirty (30) days after the entry thereof, discharged or
bonded pending appeal, or such judgments are not discharged prior to the
expiration of any such stay.
 
(j)      Suspension of all or substantially all of the Credit Parties' flight
and other operations for longer than two days (excluding, however, any such
suspension as a result of an order by an Aviation Authority due to a force
majeure or any other extraordinary event similarly affecting all major U.S.
commercial carriers) or entry of an order by the Bankruptcy Court authorizing
the same.
 
(k)     Any Change of Control occurs.
 
(l)      Any Air Carrier shall cease to be a Certificated Air Carrier or a
“citizen of the United States” as defined in Section 40102(a)(15) of Title 49.
 
(m)     (i) In the case of any Primary Route, any applicable Aviation Authority
revokes, terminates or cancels any Credit Party’s Permits to use, occupy or
maintain such Primary Route, whether as a result of any revocation, termination
or cancellation of any Primary Gate, Primary Slot or otherwise; (ii) in the case
of any Primary Slot, any applicable Aviation Authority revokes, terminates or
cancels any Credit Party’s Permits to use, occupy or maintain such Primary Slot
or any Credit Party surrenders such Primary Slot to the applicable Aviation
Authority; provided, that an Event of Default shall not occur under this clause
(m)(ii) if the aggregate value of all such Primary Slots that have been revoked,
terminated, surrendered or canceled does not exceed an amount equal to the sum
of (i) $25,000,000 plus (ii) the lesser of (x) the amount of cash and Cash
Equivalents held in the SGR Cash Collateral Account and (y) $25,000,000;
provided, further, that, in the event the Administrative Agent, in its
reasonable discretion, determines that the aggregate value of all such Primary
Slots that have been revoked, terminated, surrendered or canceled exceeds
$25,000,000, the Administrative Agent shall promptly request an appraisal from
an Appraiser, and each Credit Party shall permit such appraisals to be
conducted, for purposes of determining such value.
 
52

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

 
(n)     In the case of any other Slots, Gates or Routes, any applicable Aviation
Authority modifies, suspends, revokes, terminates, cancels or otherwise takes
any action that adversely affects any Credit Party’s Permits or any Credit
Party’s use or occupation or maintenance of such Slots, Gates and Routes due to
any Credit Party’s failure to abide by applicable law or any contract governing
the use of such Slots, Gates and Routes, or any Credit Party otherwise ceases to
use, occupy or maintain such Slots, Gates and Routes, and any event referred to
in this clause (n) could reasonably be expected to have a Material Adverse
Effect.
 
(o)     Any Lien shall arise on the assets of any Credit Party in favor of the
PBGC or an ERISA Plan and such lien has not been stayed pursuant to the
Bankruptcy Code, but only to the extent that such Lien could reasonably be
expected to result in liability to any Credit Party in an amount which would
exceed $1,000,000.
 
(p)     Any of the Cases shall be dismissed (or the Bankruptcy Court shall make
a ruling requiring the dismissal of the Cases) or converted to a case under
chapter 7 of the Bankruptcy Code (except to the extent the disposition of assets
upon such liquidation would be permitted under Section 6.8), or any Credit Party
shall file any pleading requesting any such relief; a trustee under chapter 7 or
chapter 11 of the Bankruptcy Code, a responsible officer or an examiner with
enlarged powers relating to the operation of the business (powers beyond those
set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) under section
1106(b) of the Bankruptcy Code shall be appointed in any of the Cases; or an
application shall be filed by any Credit Party for the approval of, or the Court
shall enter an order granting, (i) other than any Claim of Amex under the
Post-Petition Skymiles Facility Documents with respect to the Skymiles
Collateral, any other Claim having priority senior to or pari passu with the
claims of the Administrative Agent and the Lenders under the Loan Documents or,
without the prior written consent of the Administrative Agent, any other claim
having priority over any or all administrative expenses of the kind specified in
sections 503(b) or 507(b) of the Bankruptcy Code (other than the Carve-Out) or
(ii) any Lien on the Collateral having a priority senior to or pari passu with
the Liens and security interests granted herein, except the Liens on Skymiles
Collateral securing the obligations under the Post-Petition Skymiles Facility
and except as otherwise expressly provided herein.
 
(q)     Any Credit Party shall file a motion seeking, or the Bankruptcy Court
shall enter, an order (i) approving any payment (as adequate protection or
otherwise) on account of any Claim against any Credit Party arising or deemed to
have arisen prior to the Petition Date, other than a Permitted Prepetition
Payment, (ii) approving any other First Day Order not reasonably acceptable to
the Administrative Agent, (iii) granting relief from the automatic stay
applicable under section 362 of the Bankruptcy Code to any holder of any
security interest to permit foreclosure or obtain liens on any assets which have
a value in excess of $10,000,000 (it being understood that neither the
relinquishment by the Borrower or Guarantors of Section 1110 Assets, nor the
foreclosure of security interests in Section 1110 Assets (or in property in the
possession of the applicable secured party) as to which defaults have not been
cured pursuant to Section 1110 of the Bankruptcy Code, shall be considered to be
included in this paragraph) provided that, if any Credit Party would otherwise
be permitted under this Agreement to make a payment to the holder of a security
interest in cash or Cash Equivalents (“Cash Collateral”), and the obligation to
make such payment is secured by such Cash Collateral, then in lieu of making
such payment, such Credit Party may direct or authorize such secured party to,
and such secured party may, apply such Cash Collateral to satisfy such payment
obligation (including by way of setoff against or foreclosure on such Cash
Collateral), (iv) authorizing the sale of all or substantially all of Borrower’s
assets (unless such order contemplates payment in full in cash of the
Obligations upon consummation of such sale, whether pursuant to a Plan of
Reorganization or otherwise) or (v) except to the extent the disposition of
assets upon such liquidation would be permitted under Section 6.8, approving the
implementation of liquidation under chapter 11 of the Bankruptcy Code in any
Case; or
 
53

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

 
(r)      (i) The Final Order shall cease to be in full force and effect, or (ii)
any Credit Party shall fail to comply with the terms of the Final Order in any
material respect, or (iii) the Final Order shall be amended, supplemented,
stayed, reversed, vacated or otherwise modified (or any of the Credit Parties
shall apply for authority to do so) in any manner that affects the rights or
duties of the Administrative Agent, the Arrangers or the Lenders, in each case,
without the prior written consent of the Administrative Agent.
 
8.2     Remedies.
 
(a)     If any Event of Default has occurred and is continuing, without further
order of, application to, or action by, the Bankruptcy Court, the Administrative
Agent may (and at the written request of any of the Requisite Term A Lenders,
the Requisite Term B Lenders or the Requisite Term C Lenders shall), without
notice except as otherwise expressly provided herein, increase the rate of
interest applicable to the Loans to the Default Rate.
 
(b)     If any Event of Default has occurred and is continuing, without further
order of, application to, or action by, the Bankruptcy Court, (i) the
Administrative Agent may (and at the written request of (A) the Requisite
Lenders or (B) after 120 days following the occurrence of such Event of Default,
any of the Requisite Term A Lenders, the Requisite Term B Lenders or the
Requisite Term C Lenders, shall), without notice, declare all or any portion of
the Obligations, including all or any portion of any Loan to be forthwith due
and payable, all without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Borrower and each other Credit Party;
or (ii) the Administrative Agent may (and at the written request of the
Requisite Lenders, shall), without notice except as required by the Final Order,
exercise any rights and remedies provided to the Administrative Agent under the
Loan Documents or at law or equity, including all remedies provided under the
Code.
 
(c)     In addition, subject solely to any requirement of the giving of notice
by the terms of the Final Order, the automatic stay provided in section 362 of
the Bankruptcy Code shall be deemed automatically vacated without further action
or order of the Bankruptcy Court and the Administrative Agent and the Lenders
shall be entitled to exercise all of their respective rights and remedies under
the Loan Documents, including, without limitation, all rights and remedies with
respect to the Collateral and the Guarantors.
 
8.3     Waivers by Credit Parties.
 
Except as otherwise provided for in this Agreement, by applicable law or the
Final Order, each Credit Party waives: (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by the Administrative Agent on which any Credit Party may in any way
be liable, and hereby ratifies and confirms whatever the Administrative Agent
may do in this regard, (b) all rights to notice and a hearing prior to the
Administrative Agent’s taking possession or control of, or to the Administrative
Agent’s replevy, attachment or levy upon, the Collateral or any bond or security
that might be required by any court prior to allowing the Administrative Agent
to exercise any of their remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
 
54

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

 
9.     GUARANTY
 
9.1     Guaranty of Obligations of Borrower. Each Guarantor hereby jointly and
severally unconditionally guarantees to Secured Parties, and their respective
successors, endorsees, transferees and assigns, the prompt payment (whether at
stated maturity, by acceleration or otherwise) and performance of the
Obligations of Borrower. Guarantors agree that this Agreement is a guaranty of
payment and performance and not of collection, and that their obligations under
this Agreement shall be primary, absolute and unconditional, irrespective of,
and unaffected by:
 
(a)     the genuineness, validity, regularity, enforceability or any future
amendment of, or change in any other Loan Document or any other agreement,
document or instrument to which any Credit Party and/or Guarantors are or may
become a party;
 
(b)     the absence of any action to enforce any other Loan Document or the
waiver or consent by any Secured Party with respect to any of the provisions
thereof;
 
(c)     the existence, value or condition of, or failure to perfect its Lien
against, any Collateral for the Obligations or any action, or the absence of any
action, by Secured Parties in respect thereof (including, without limitation,
the release of any such security);
 
(d)     the insolvency of any Credit Party; or
 
(e)     any other action or circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor,
 
it being agreed by each Guarantor that its obligations under this Agreement
shall not be discharged until the Termination Date. Each Guarantor shall be
regarded, and shall be in the same position, as principal debtor with respect to
the Obligations. Each Guarantor agrees that any notice or directive given at any
time to Secured Parties which is inconsistent with the waiver in the immediately
preceding sentence shall be null and void and may be ignored by Secured Parties,
and, in addition, may not be pleaded or introduced as evidence in any litigation
relating to this Agreement for the reason that such pleading or introduction
would be at variance with the written terms of this Agreement, unless Secured
Parties have specifically agreed otherwise in writing. It is agreed among each
Guarantor and Secured Parties that the foregoing waivers are of the essence of
the transaction contemplated by the Loan Documents and that, but for this
Agreement and such waivers, Secured Parties would decline to enter into this
Agreement.
 
55

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

 
9.2     Demand by Secured Parties. In addition to the terms of the Guaranty set
forth in Section 9.1 hereof, and in no manner imposing any limitation on such
terms, it is expressly understood and agreed that, if, at any time, the
outstanding principal amount of the Obligations under this Agreement (including
all accrued interest thereon) is declared to be immediately due and payable,
then Guarantors shall, without demand (except as required by the Final Order),
pay to the holders of the Obligations the entire amount of the outstanding
Obligations due and owing to such holders. Payment by Guarantors shall be made
to Administrative Agent in immediately available federal funds to the Cash
Collateral Account and applied to the Obligations in accordance with
Section 1.3.
 
9.3     Enforcement of Guaranty. In no event shall any Secured Party have any
obligation (although it is entitled, at its option) to proceed against Borrower
or any other Credit Party or any Collateral pledged to secure Obligations before
seeking satisfaction from any or all of the Guarantors, and Secured Parties may
proceed, prior or subsequent to, or simultaneously with, the enforcement of
Secured Parties’ rights hereunder, to exercise any right or remedy which it may
have against any Collateral, as a result of any Lien it may have as security for
all or any portion of the Obligations.
 
9.4     Waiver. In addition to the waivers contained in Section 9.1 hereof,
Guarantors waive, and agree that they shall not at any time insist upon, plead
or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshaling of assets or redemption laws,
or exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantors of their Obligations
under, or the enforcement by Secured Parties of, this Agreement. Guarantors
hereby waive diligence, presentment and demand (whether for non-payment or
protest or of acceptance, maturity, extension of time, change in nature or form
of the Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Obligations, notice of adverse change in Borrower’s financial condition or any
other fact which might increase the risk to Guarantors) with respect to any of
the Obligations or all other demands whatsoever and waive the benefit of all
provisions of law which are or might be in conflict with the terms of this
Agreement. Guarantors represent, warrant and jointly and severally agree that,
as of the date of this Agreement, their obligations under this Agreement are not
subject to any offsets or defenses against Secured Parties or any Credit Party
of any kind. Guarantors further jointly and severally agree that their
obligations under this Agreement shall not be subject to any counterclaims or
offsets or defenses against Secured Parties or against any Credit Party of any
kind which may arise in the future.
 
9.5     Benefit of Guaranty. The provisions of this Agreement are for the
benefit of Secured Parties and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
Credit Party and Secured Parties, the obligations of any Credit Party under the
Loan Documents. In the event all or any part of the Obligations are transferred,
indorsed or assigned by any Secured Party to any Person or Persons, any
reference to “Secured Party” herein shall be deemed to refer equally to such
Person or Persons.
 
56

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

 
9.6     Modification of Obligations, Etc. Each Guarantor hereby acknowledges and
agrees that Secured Parties may at any time or from time to time, with or
without the consent of, or notice to, Guarantors or any of them:
 
(a)     change or extend the manner, place or terms of payment of, or renew or
alter all or any portion of, the Obligations;
 
(b)     take any action under or in respect of the Loan Documents in the
exercise of any remedy, power or privilege contained therein or available to it
at law, equity or otherwise, or waive or refrain from exercising any such
remedies, powers or privileges;
 
(c)     amend or modify, in any manner whatsoever, the Loan Documents, other
than this Article 9;
 
(d)     extend or waive the time for any Credit Party’s performance of, or
compliance with, any term, covenant or agreement on its part to be performed or
observed under the Loan Documents, or waive such performance or compliance or
consent to a failure of, or departure from, such performance or compliance;
 
(e)     take and hold Collateral for the payment of the Obligations guaranteed
hereby or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Secured Parties have been
granted a Lien, to secure any Obligations;
 
(f)      release anyone who may be liable in any manner for the payment of any
amounts owed by other Guarantors or any other Credit Party to any Secured Party;
 
(g)     modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of any Guarantor or any
Credit Party are subordinated to the claims of Secured Parties; and/or
 
(h)     apply any sums by whomever paid or however realized to any amounts owing
by any other Guarantor or any other Credit Party to any Secured Party in such
manner as any Secured Party shall determine in its discretion;
 
and Secured Parties shall not incur any liability to Guarantors as a result
thereof, and no such action shall impair or release the Obligations of
Guarantors or any of them under this Agreement.
 
9.7     Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in
this Agreement, or in any other Loan Document, each Guarantor hereby:
 
(a)     expressly and irrevocably waives, on behalf of itself and its successors
and assigns (including any surety), any and all rights at law or in equity to
subrogation, to reimbursement, to exoneration, to contribution, to
indemnification, to set off or to any other rights that could accrue to a surety
against a principal, to a guarantor against a principal, to a guarantor against
a maker or obligor, to an accommodation party against the party accommodated, to
a holder or transferee against a maker, or to the holder of any claim against
any Person, and which such Guarantor may have or hereafter acquire against any
Credit Party in connection with or as a result of such Guarantor’s execution,
delivery and/or performance of this Agreement, or any other documents to which
such Guarantor is a party or otherwise; and
 
57

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

 
(b)     acknowledges and agrees that this waiver is intended to benefit Secured
Parties and shall not limit or otherwise effect any Guarantor’s liability
hereunder or the enforceability of this Agreement and their rights under this
Section 9.7 shall survive payment in full of the Obligations.
 
9.8     Election of Remedies. If Administrative Agent may, under applicable law,
proceed to realize benefits under any of the Loan Documents giving Secured
Parties a Lien upon any Collateral owned by any Credit Party, either by judicial
foreclosure or by non-judicial sale or enforcement, Administrative Agent may, at
its sole option, determine which of such remedies or rights it may pursue
without affecting any of such rights and remedies under this Agreement. If, in
the exercise of any of its rights and remedies, Administrative Agent shall
forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any Credit Party, whether because of any applicable laws
pertaining to “election of remedies” or the like, Guarantors hereby consent to
such action by Administrative Agent and waive any claim based upon such action,
even if such action by Administrative Agent shall result in a full or partial
loss of any rights of subrogation which Guarantors might otherwise have had but
for such action by Administrative Agent. Any election of remedies which results
in the denial or impairment of the right of Administrative Agent to seek a
deficiency judgment against any Credit Party shall not impair each Guarantor’s
obligation to pay the full amount of the Obligations. In the event
Administrative Agent shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by law or the Loan Documents, Administrative Agent may
bid all or less than the amount of the Obligations and the amount of such bid
need not be paid by Administrative Agent but shall be credited against the
Obligations in accordance with Section 1.3. The amount of the successful bid at
any such sale shall be conclusively deemed to be the fair market value of the
Collateral and the difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Agreement, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Secured Parties might otherwise be
entitled but for such bidding at any such sale.
 
58

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

 
10.     SECURITY
 
10.1   Security. 
 
(a)     To secure the prompt and complete payment, performance and observance of
all of the Obligations, in addition to other “Collateral” upon which a Lien is
granted under the other Collateral Documents, each Credit Party hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to
Administrative Agent, for itself and for the benefit of the Secured Parties, a
first priority Lien (subject only to (i) the Liens of the Skymiles Agent in the
Skymiles Collateral pursuant to an order of the Bankruptcy Court in form and
substance satisfactory to the Administrative Agent, (ii) valid, perfected,
nonavoidable and enforceable Liens existing as of the Petition Date, (iii) valid
liens in existence at the commencement of the Cases to the extent perfected
subsequent to such commencement as permitted by Section 546(b) of the Code, (iv)
the Carve-Out and (v) Permitted Liens permitted pursuant to Section 6.7(a), (c),
(e), (f), (i), (j) (subject, in the case of Amex, to the Skymiles Intercreditor
Agreement), (n), (o), (q), (r) or (s)) in accordance with sections 364(c)(2) and
364(c)(3) of the Bankruptcy Code upon all of the following property now owned or
at any time hereafter acquired by a Credit Party or in which such Credit Party
now has or at any time in the future may acquire any right, title or interest
(capitalized terms contained in this section, unless the context indicates
otherwise, or unless defined elsewhere herein, have the meanings provided for in
the Code to the extent the same is used or defined therein):
 
(i)      all Accounts;
 
(ii)     all Chattel Paper;
 
(iii)    all Documents;
 
(iv)    all General Intangibles (including payment intangibles and Software);
 
(v)     all Goods, Inventory and Equipment, including spare parts, Flight
Simulators and Tooling, and other personal property, whether tangible or
intangible or wherever located;
 
(vi)    all Instruments;
 
(vii)   all Investment Property;
 
(viii)       all Vehicles;
 
(ix)     all real property (subject to Section 5.12(b));
 
(x)      the commercial tort claims described on Disclosure Schedule 10.1;
 
(xi)     all Deposit Accounts of any Credit Party, including all Blocked
Accounts, Concentration Accounts and all other bank accounts and all deposits
therein;
 
(xii)    all money, cash or cash equivalents of any Credit Party;
 
(xiii)        all Supporting Obligations and Letter of Credit Rights of any
Credit Party;
 
(xiv)        to the extent not otherwise included, all monies and other property
of any kind which is, after the Petition Date, received by such Credit Party in
connection with refunds with respect to taxes, assessments and governmental
charges imposed on such Credit Party or any of its property or income;
 
(xv)         to the extent not otherwise included, all causes of action (other
than claims of the Credit Parties under Sections 502(d), 544, 545, 547, 548 and
550 of the Bankruptcy Code) and all monies and other property of any kind
received therefrom, and all monies and other property of any kind recovered by
any Credit Party; and
 
59

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

 
(xvi)        all property of any Credit Party held by the Administrative Agent
or any other Secured Party, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Credit Party or as to which such Credit Party may have any
right or power;
 
(xvii)       to the extent not otherwise included, all Proceeds of each of the
foregoing, tort claims, insurance claims and other rights to payment not
otherwise included in the foregoing and products of the foregoing and all
accessions to, substitutions and replacements for, and rents and profits of,
each of the foregoing;
 
provided, that “Collateral” shall not include (i) the Excluded Collateral
provided that if and when any property shall cease to be Excluded Collateral,
such property shall be deemed at all times from and after the date such property
ceased to be Excluded Collateral to constitute Collateral and (ii) any General
Intangibles or other rights arising under any contract, instrument, license or
other document if the grant of a security interest therein would constitute a
breach or violation of a valid and effective restriction in favor of a third
party, but only to the extent, and for so long as, in the case of clause (ii)
such restriction is not terminated or rendered unenforceable or otherwise deemed
ineffective by any applicable law.
 
(b)     [Reserved].
 
(c)     To the extent a security interest hereunder would be created in any
asset in which a security interest is created under any Collateral Document, the
rights, remedies and obligations of the relevant Credit Party and the Secured
Parties with respect to such asset shall be governed by such Collateral Document
and not this Agreement.
 
60

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

 
10.2   Perfection of Security Interests.
 
(a)     At any time and from time to time, upon the reasonable request of the
Administrative Agent and at the sole expense of the Credit Parties, each Credit
Party shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as the Administrative
Agent may deem desirable to obtain the full benefits of any security interest
granted or purported to be granted by such Credit Party hereunder and of the
rights and powers herein granted, including (i) upon the reasonable request of
the Administrative Agent, using its commercially reasonable efforts to secure
all consents and approvals necessary or appropriate for the assignment to or for
the benefit of Administrative Agent of any License or Contract held by such
Credit Party and to enforce the security interests granted hereunder, (ii)
unless Administrative Agent shall otherwise consent in writing (which consent
may be revoked), delivering to Administrative Agent all Collateral consisting of
negotiable Documents and certificated securities (in each case, accompanied by
stock powers, allonges or other instruments of transfer executed in blank)
promptly after such Credit Party receives the same, (iii) delivering any
requested Chattel Paper or Instrument to Administrative Agent (in each case
accompanied by instruments of transfer executed in blank), (iv) obtaining or
using commercially reasonable efforts to obtain, (A) waivers or subordinations
of Liens from landlords at locations required by Section 5.8 of this Agreement
and (B) signed acknowledgements of Administrative Agent’s Liens from bailees at
locations required by Section 5.8 of this Agreement having possession of any
Credit Party’s Goods that they hold for the benefit of Secured Parties, (v) to
the extent required by this Agreement and not waived by Administrative Agent in
writing (which waiver may be revoked) obtaining authenticated Control Letters
from each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities,
in each case constituting Collateral, to or for any Credit Party; provided, that
the Administrative Agent shall not deliver a notice that it is exercising
exclusive control over any financial assets or commodities to any such issuer,
securities intermediary or commodities intermediary unless an Event of Default
has occurred and is continuing, (vi) in accordance with and to the extent
required by Annex C to this Agreement, obtaining a blocked account or similar
agreement with each bank or financial institution holding a Deposit Account for
such Credit Party; provided, that the Administrative Agent shall not deliver a
notice that it is exercising exclusive control over any Deposit Account to any
such bank or financial institution unless an Event of Default has occurred and
is continuing, (vii) for each Credit Party that is or becomes the beneficiary of
a letter of credit with a face amount in excess of $1,000,000, promptly, and in
any event within two (2) Business Days after becoming a beneficiary, notifying
Administrative Agent thereof and thereafter, unless the related Letter-of-Credit
Rights constitute a Supporting Obligation for which Administrative Agent’s
security interest is perfected, using its commercially reasonable efforts to
cause the issuer and/or confirmation bank with respect to such Letter-of-Credit
Rights to enter into a tri-party agreement with Administrative Agent assigning
such Letter-of-Credit Rights to Administrative Agent and directing all payments
thereunder to a Blocked Account, all in form and substance reasonably
satisfactory to Administrative Agent, (viii) taking all steps necessary to grant
the Administrative Agent control of all electronic chattel paper in accordance
with the Code and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act, (ix) promptly, and in any event within five (5) Business Days
after the same is acquired by it, notifying the Administrative Agent of any
commercial tort claim (as defined in the Code) involving a claim of more than
$1,000,000 acquired by it and if requested by the Administrative Agent, entering
into a supplement to this Agreement, granting to Administrative Agent a Lien in
such commercial tort claim, (x) maintaining complete and accurate stock records,
(xi) except as otherwise provided in clause (vii) hereof, delivering to the
Administrative Agent all documents, certificates and Instruments necessary or
desirable to perfect the Administrative Agent’s Lien on letters of credit on
which such Credit Party is named as beneficiary and all acceptances issued in
connection therewith and (xii) taking such other steps as are deemed necessary
or desirable to maintain the Administrative Agent’s security interest in the
Collateral.
 
61

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

 
(b)     Each Credit Party hereby irrevocably authorizes the Administrative Agent
at any time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all assets of such Credit Party
or words of similar effect, regardless of whether any particular asset comprised
in the Collateral falls within the scope of Article 9 of the Code in such
jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) contain any other information required by part 5 of Article 9 of
the Code for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether such Credit Party is an
organization, the type of organization and any organization identification
number issued to such Credit Party, and (ii) in the case of a financing
statement filed as a fixture filing, a sufficient description of real property
to which the Collateral relates. Each Credit Party agrees to furnish any such
information to the Administrative Agent promptly upon request. Each Credit Party
also ratifies its authorization for the Administrative Agent to have filed in
any Uniform Commercial Code jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
 
(c)     Notwithstanding subsections (a) and (b) of this Section 10.2, or any
failure on the part of any Credit Party or the Administrative Agent to take any
of the actions set forth in such subsections, the Liens and security interests
granted herein shall be deemed valid, enforceable and perfected by entry of the
Final Order. No financing statement, notice of lien, mortgage, deed of trust or
similar instrument in any jurisdiction or filing office need be filed or any
other action taken in order to validate and perfect the Liens and security
interests granted by or pursuant to this Agreement or the Final Order.
 
10.3   Rights of Lender; Limitations on Lenders’ Obligations.
 
(a)     Subject to each Credit Party’s rights and duties under the Bankruptcy
Code (including section 365 of the Bankruptcy Code), it is expressly agreed by
each Credit Party that, anything herein to the contrary notwithstanding, each
such Credit Party shall remain liable under each of its Contracts and each of
its Licenses to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, unless such Credit Party determines in
its reasonable good faith judgment that such Contract or License is no longer
valuable to such Credit Party’s business, economically or otherwise. Neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any Contract or License by reason of or arising out of this
Agreement or the granting herein of a Lien thereon or the receipt by
Administrative Agent or any Secured Party of any payment relating to any
Contract or License pursuant hereto. Neither Administrative Agent nor any
Secured Party shall be required or obligated in any manner to perform or fulfill
any of the obligations of any Credit Party under or pursuant to any Contract or
License, or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any performance
by any party under any Contract or License, or to present or file any claims, or
to take any action to collect or enforce any performance or the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
 
(b)     Subject to Section 10.5 hereof, the Administrative Agent authorizes each
Credit Party to collect its Accounts, provided that such collection is performed
in accordance with such Credit Party’s customary procedures, and the
Administrative Agent may, upon the occurrence and during the continuation of any
Event of Default and without notice, other than any requirement of notice
provided in the Final Order, limit or terminate said authority at any time.
 
(c)     Subject to any requirement of notice provided in the Final Order, the
Administrative Agent may at any time after an Event of Default has occurred and
is continuing without prior notice to any Credit Party, notify Account Debtors
and other Persons obligated on the Collateral that Administrative Agent has a
security interest therein, and that payments shall be made directly to
Administrative Agent. Subject to any requirement of notice provided in the Final
Order, upon the reasonable request of Administrative Agent, each Credit Party
shall so notify Account Debtors and other Persons obligated on Collateral. Once
any such notice has been given to any Account Debtor or other Person obligated
on the Collateral, the affected Credit Party shall not give any contrary
instructions to such Account Debtor or other Person without Administrative
Agent’s prior written consent. Subject to any requirement of notice provided in
the Final Order, upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent may in its own name, or in the name of others,
communicate with such parties to such Accounts, Contracts, Instruments,
Investment Property and Chattel Paper to verify with such Persons to the
Administrative Agent’s reasonable satisfaction the existence, amount and terms
of any such Accounts, Contracts, Instruments, Investment Property or Chattel
Paper.
 
62

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

 
(d)     Subject to any requirement of notice provided in the Final Order,
Administrative Agent may at any time in Administrative Agent’s own name, in the
name of a nominee of Administrative Agent or in the name of any Credit Party
communicate (by mail, telephone, facsimile or otherwise) with Account Debtors to
verify with such Persons, to Administrative Agent’s satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts and/or payment
intangibles comprising Collateral; provided that unless an Event of Default
shall have occurred and be continuing, the Administrative Agent shall not do any
of the foregoing except during normal business hours and after giving such
Credit Party reasonable prior notice and opportunity to be present. If an Event
of Default shall have occurred and be continuing, each Credit Party, at its own
expense, shall cause the independent certified public accountants then engaged
by such Credit Party to prepare and deliver to Administrative Agent and each
Secured Party at any time and from time to time promptly upon Administrative
Agent’s written request the following reports with respect to each Credit Party:
(i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as Administrative Agent
may request. Administrative Agent may at any time in Administrative Agent’s own
name, in the name of a nominee of Administrative Agent or in the name of any
Credit Party communicate (by mail, telephone, facsimile or otherwise) with
parties to Contracts and obligors in respect of Instruments to verify with such
Persons, to Administrative Agent’s satisfaction, the existence, amount, terms
of, and any other matter relating to, Instruments, Chattel Paper and/or payment
intangibles comprising Collateral; provided that unless an Event of Default
shall have occurred and be continuing, the Administrative Agent shall not do any
of the foregoing except during normal business hours and after giving such
Credit Party reasonable prior notice and opportunity to be present. Each Credit
Party, at its own expense, shall deliver to Administrative Agent the results of
each physical verification, if any, which such Credit Party may in its
discretion have made, or caused any other Person to have made on its behalf, of
all or any portion of its Inventory.
 
10.4   Covenants of the Credit Parties with Respect to Collateral. Each Credit
Party covenants and agrees with Administrative Agent, for the benefit of Secured
Parties, that from and after the date of this Agreement and until the
Termination Date:
 
(a)     Maintenance of Records. Credit Parties shall keep and maintain, at their
own cost and expense, satisfactory and complete records of the Collateral,
including a record of any and all payments received and any and all credits
granted with respect to the Collateral and all other dealings with the
Collateral, in each case in a manner consistent with past practice. Upon request
by the Administrative Agent, Credit Parties shall mark their books and records
pertaining to the Collateral to evidence this Agreement and the Liens granted
hereby. If any Credit Party retains possession of any Chattel Paper or
Instruments with Administrative Agent’s consent, such Chattel Paper and
Instruments shall, if requested by Administrative Agent, be marked with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the security interest of General Electric Capital Corporation, as
Administrative Agent, for the benefit of Secured Parties.”
 
63

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

 
(b)     Covenants Regarding Patent, Trademark and Copyright Collateral.
 
(i)        Credit Parties shall notify Administrative Agent promptly if they
know or have reason to know that any application or registration relating to any
material Patent, Trademark or Copyright (now or hereafter existing) may become
abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court) regarding any Credit Party’s ownership of any
material Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
 
(ii)       Promptly after any Credit Party, either itself or through the
Administrative Agent, employee, licensee or designee, files an application for
the registration of any Patent, Trademark or Copyright with the United States
Patent and Trademark Office or the United States Copyright Office, Credit Party
shall give Administrative Agent written notice of such filing and, upon request
of Administrative Agent, Credit Party shall execute and deliver any and all
Patent Security Agreements, Copyright Security Agreements or Trademark Security
Agreements as Administrative Agent may request to evidence Administrative
Agent’s Lien on such Patent, Trademark or Copyright, and the General Intangibles
of such Credit Party relating thereto or represented thereby.
 
(iii)      Credit Parties shall take all actions necessary or requested by
Administrative Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of the Patents,
Trademarks and Copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings unless such Credit
Party reasonably determines that such Patent, Trademark or Copyright Collateral
is in no way material to the conduct of its business or operations,
 
(iv)      In the event that any of the Patent, Trademark or Copyright Collateral
is infringed upon, or misappropriated or diluted by a third party, such Credit
Party shall comply with Section 10.2(a)(ix) of this Agreement. Such Credit Party
shall, unless such Credit Party reasonably determines that such Patent,
Trademark or Copyright Collateral is in no way material to the conduct of its
business or operations, promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as
Administrative Agent shall deem appropriate under the circumstances to protect
such Patent, Trademark or Copyright Collateral.
 
64

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

 
(c)     [Reserved].
 
(d)     Further Identification of Collateral. In addition to any other
requirements herein, Credit Parties will, if so requested by Administrative
Agent, furnish to Administrative Agent, as often as Administrative Agent
reasonably requests, statements and schedules further identifying and describing
the Collateral as Administrative Agent may reasonably request, all in such
detail as Administrative Agent may specify.
 
(e)     Notices. Credit Parties will advise Administrative Agent promptly, in
reasonable detail of any Lien or claim made or asserted against any of the
Collateral other than in respect of Permitted Liens.
 
(f)      Terminations; Amendments Not Authorized. Except to the extent permitted
by clause (g), each Credit Party acknowledges that it is not authorized to file
any financing statement or amendment or termination statement with respect to
any financing statement relating to the Collateral and filed pursuant to the
terms hereof without the prior written consent of Administrative Agent and
agrees that it will not do so without the prior written consent of
Administrative Agent, subject to such Credit Party's rights under Section
9-509(d)(2) of the Code.
 
(g)     Authorized Terminations and Subordinations. Administrative Agent will
promptly deliver to each Credit Party for filing or authorize each Credit Party
to prepare and file termination statements and releases in respect of any sales,
transfers, conveyances, assignments or other dispositions of Collateral made in
accordance with Section 6.8 of this Agreement. Administrative Agent will, upon
request of any Credit Party, expressly subordinate, in form and substance
reasonably satisfactory to the Administrative Agent the Liens granted hereunder
to any prior Lien permitted under Section 6.7 of this Agreement.
 
(h)     Motor Vehicles. Upon request, each Credit Party shall deliver to
Administrative Agent a motor vehicle certificate of title, if any, for all motor
vehicles from time to time owned by it and shall cause those title certificates
to be filed (with Administrative Agent’s Lien noted thereon) in the appropriate
state motor vehicle filing office.
 
(i)       Pledged Collateral.
 
(i)        All certificates and all promissory notes and instruments evidencing
the Pledged Collateral shall be delivered to and held by or on behalf of
Administrative Agent, for itself and the benefit of Secured Parties, pursuant
hereto. All Pledged Shares shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Administrative Agent and all promissory notes or other instruments evidencing
the Pledged Indebtedness shall be endorsed by the applicable Credit Party.
 
65

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

 
(ii)       Without the prior written consent of Administrative Agent, no Credit
Party will sell, assign, transfer, pledge, or otherwise encumber any of its
rights in or to the Pledged Collateral, or any unpaid dividends, interest or
other distributions or payments with respect to the Pledged Collateral or grant
a Lien in the Pledged Collateral, unless otherwise expressly permitted by this
Agreement;
 
(iii)      Each Credit Party will, at its expense, promptly execute, acknowledge
and deliver all such instruments and take all such actions as Administrative
Agent from time to time may reasonably request in order to ensure to
Administrative Agent and Secured Parties obtain the benefits of the Liens in and
to the Pledged Collateral intended to be created by this Agreement, including
the filing of any necessary Code financing statements, which may be filed by
Administrative Agent with or (to the extent permitted by law) without the
signature of Credit Party, and will cooperate with Administrative Agent, at such
Credit Party’s expense, in obtaining all necessary approvals and making all
necessary filings under federal, state, local or foreign law in connection with
such Liens or any sale or transfer of the Pledged Collateral; provided that
Administrative Agent shall not, prior to the occurrence of any Event of Default,
require any actions to be taken with respect to (i) those assets as to which
Administrative Agent shall determine, in its reasonable discretion, that the
cost of obtaining such security interest or taking such action are excessive in
relation to the benefit to Lenders afforded thereby, (ii) property the
acquisition or construction of which was financed through Indebtedness (existing
as of the Closing Date or as permitted by Section 6.3(a) of this Agreement), and
(iii) all property to the extent that the granting of such a security interest
or taking such action would constitute a breach or violation of a valid and
effective restriction in favor of a third party (including, without limitation,
mandatory consent rights), or give rise to any indemnification obligations or
any right to terminate or commence the exercise of remedies under such
restrictions;
 
(iv)     Each Credit Party has and will defend the title to the Pledged
Collateral and the Liens of Administrative Agent in the Pledged Collateral
against the claim of any Person (other than the holder of a Permitted Lien) and
will maintain and preserve such Liens (it being understood that nothing in this
clause (iv) will prevent such Credit Party from disposing of Pledged Collateral
as otherwise permitted by Section 6.8); and
 
(v)      Each Credit Party will, upon obtaining ownership of any additional
Stock of a Pledged Entity or promissory notes or instruments representing
Pledged Indebtedness or Stock or promissory notes or instruments otherwise
required to be pledged to Administrative Agent pursuant to any of the Loan
Documents, which Stock, notes or instruments are not already Pledged Collateral,
promptly (and in any event within five (5) Business Days) deliver to
Administrative Agent a Pledge Amendment, duly executed by such Credit Party, in
substantially the form of Exhibit H hereto (a “Pledge Amendment”) in respect of
any such additional Stock, notes or instruments, pursuant to which such Credit
Party shall pledge to Administrative Agent all of such additional Stock, notes
and instruments; provided that such Credit Party shall be required to do the
foregoing with respect to any such promissory note or instrument only if
requested to do so by the Administrative Agent pursuant to Section 10.2(a)(ii)
of this Agreement. Credit Party hereby authorizes Administrative Agent to attach
each Pledge Amendment to this Agreement and agrees that all Pledged Shares and
Pledged Indebtedness listed on any Pledge Amendment delivered to Administrative
Agent shall for all purposes hereunder be considered Pledged Collateral. This
clause (v) shall not apply to any Excluded Equity.
 
66

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

 
10.5   Performance by Administrative Agent of the Credit Parties’ Obligations.
If any Credit Party fails to perform or comply with any of its agreements
contained herein and the Administrative Agent, as provided for by the terms of
this Agreement, shall itself perform or comply, or otherwise cause performance
or compliance, with such agreement, the expenses of the Administrative Agent
incurred in connection with such performance or compliance, together with
interest thereon at the rate then in effect in respect of Term Loan C, shall be
payable by such Credit Party to the Administrative Agent on demand and shall
constitute Obligations secured by the Collateral. Performance of such Credit
Party’s obligations as permitted under this Section 10.5 shall in no way
constitute a violation of the automatic stay provided by section 362 of the
Bankruptcy Code and each Credit Party hereby waives applicability thereof.
Moreover, the Administrative Agent shall in no way be responsible for the
payment of any costs incurred in connection with preserving or disposing of
Collateral pursuant to section 506(c) of the Bankruptcy Code and the Collateral
may not be charged for the incurrence of any such cost.
 
10.6   Limitation on Administrative Agent’s duty in Respect of Collateral. The
Administrative Agent and each Secured Party shall use reasonable care with
respect to the Collateral in its possession or under its control. Neither the
Administrative Agent nor any Secured Party shall have any other duty as to any
Collateral in its possession or control or in the possession or control of any
agent or nominee of the Administrative Agent or such Secured Party, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.
 
67

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

 
10.7   Remedies; Rights Upon Default.
 
(a)     In addition to all other rights and remedies granted to it under the
other Loan Documents and under any other instrument or agreement securing,
evidencing or relating to any of the Secured Obligations, if any Event of
Default shall have occurred and be continuing, the Administrative Agent may
exercise all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, each Credit Party expressly agrees
that in any such event the Administrative Agent, without demand of performance
or other demand, advertisement or notice of any kind (except the notice required
by the Final Order or the notice specified below of time and place of public or
private sale) to or upon such Credit Party or any other Person (all and each of
which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the Code and other applicable law), may, to the
maximum extent permitted by law, forthwith enter upon the premises of such
Credit Party where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving such Credit Party or
any other Person notice and opportunity for a hearing on the Administrative
Agent’s claim or action and may collect, receive, assemble, process, appropriate
and realize upon the Collateral, or any part thereof, and may forthwith sell,
lease, license, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or any
part thereof, in one or more parcels at a public or private sale or sales, at
any exchange at such prices as it may deem acceptable, for cash or on credit or
for future delivery without assumption of any credit risk. The Administrative
Agent or any Secured Party shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of Secured Parties, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of
redemption each Credit Party hereby releases. Such sales may be adjourned and
continued from time to time with or without notice. The Administrative Agent
shall have the right to conduct such sales on any Credit Party’s premises or
elsewhere and shall have the right to use any Credit Party’s premises without
charge for such time or times as the Administrative Agent may deem necessary or
advisable. EACH CREDIT PARTY HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF SUCH CREDIT PARTY WITH
RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED
SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF
ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST
AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO
VOTE THE PLEDGED SHARES, THE APPOINTMENT OF ADMINISTRATIVE AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.
NOTWITHSTANDING THE FOREGOING, (X) ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY
TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR
ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO AND (Y) ADMINISTRATIVE AGENT
SHALL NOT EXERCISE ANY SUCH RIGHT WITH RESPECT TO ANY REGULATED SUBSIDIARY
UNLESS ANY AND ALL REGULATORY APPROVALS REQUIRED UNDER APPLICABLE LAW SHALL HAVE
BEEN OBTAINED.
 
(b)     If any Event of Default shall have occurred and be continuing, each
Credit Party further agrees, at Administrative Agent’s request, to assemble the
Collateral and make it available to Administrative Agent at a place or places
designated by Administrative Agent which are reasonably convenient to
Administrative Agent and such Credit Party, whether at such Credit Party’s
premises or elsewhere. Until Administrative Agent is able to effect a sale,
lease, or other disposition of Collateral, the Administrative Agent shall have
the right to hold or use Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by Administrative Agent. The Administrative
Agent shall have no obligation to any Credit Party to maintain or preserve the
rights of Credit Party as against third parties with respect to Collateral while
Collateral is in the possession of the Administrative Agent. The Administrative
Agent may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of the Administrative Agent’s
remedies (for the benefit of Secured Parties), with respect to such appointment
without prior notice or hearing as to such appointment. The Administrative Agent
shall deposit the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale to the Cash Collateral Account and such net
proceeds shall be applied in accordance with Section 1.3. To the maximum extent
permitted by applicable law, each Credit Party waives all claims, damages, and
demands against the Administrative Agent or any Secured Party arising out of the
repossession, retention or sale of the Collateral except such as arise solely
out of the gross negligence or willful misconduct of the Administrative Agent or
such Secured Party as finally determined by a court of competent jurisdiction.
Each Credit Party agrees that ten (10) days prior notice by Administrative Agent
of the time and place of any public sale or of the time after which a private
sale may take place is reasonable notification of such matters. Credit Parties
shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Secured Obligations,
including any attorneys’ fees and other expenses incurred by Administrative
Agent or any Secured Party to collect such deficiency.
 
68

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

 
(c)     Except as otherwise specifically provided herein, each Credit Party
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Agreement or
any Collateral.
 
(d)     To the extent that applicable law imposes duties on the Administrative
Agent to exercise remedies in a commercially reasonable manner, each Credit
Party acknowledges and agrees that it is not commercially unreasonable for the
Administrative Agent (i) to fail to incur expenses reasonably deemed significant
by the Administrative Agent to prepare Collateral for disposition or otherwise
to complete raw material or work in process into finished goods or other
finished products for disposition, (ii) to fail to obtain third party consents
for access to Collateral to be disposed of, or to obtain or, if not required by
other law, to fail to obtain governmental or third party consents for the
collection or disposition of Collateral to be collected or disposed of, (iii) to
fail to exercise collection remedies against Account Debtors or other Persons
obligated on Collateral or to remove Liens on or any adverse claims against
Collateral, (iv) to exercise collection remedies against Account Debtors and
other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (vi) to contact other Persons,
whether or not in the same business as the Credit Parties, for expressions of
interest in acquiring all or any portion of such Collateral, (vii) to hire one
or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or
credit enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Administrative Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Credit Party acknowledges that the
purpose of this Section 10.7(d) is to provide non-exhaustive indications of what
actions or omissions by the Administrative Agent would not be commercially
unreasonable in the Administrative Agent’s exercise of remedies against the
Collateral and that other actions or omissions by the Administrative Agent shall
not be deemed commercially unreasonable solely on account of not being indicated
in this Section 10.7(d). Without limitation upon the foregoing, nothing
contained in this Section 10.7(d) shall be construed to grant any rights to any
Credit Party or to impose any duties on the Administrative Agent that would not
have been granted or imposed by this Agreement or by applicable law in the
absence of this Section 10.7(d).
 
69

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

 
(e)     Neither the Administrative Agent nor any Secured Party shall be required
to make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Credit Party, any other obligor, guarantor, pledgor or any other
Person with respect to the payment of the Secured Obligations or to pursue or
exhaust any of their rights or remedies with respect to any Collateral therefore
or any direct or indirect guarantee thereof. Neither the Administrative Agent
nor the Secured Parties shall be required to marshal the Collateral or any
guarantee of the Secured Obligations or to resort to the Collateral or any such
guarantee in any particular order, and all of its and their rights hereunder or
under any other Loan Document shall be cumulative. To the extent it may lawfully
do so, each Credit Party absolutely and irrevocably waives and relinquishes the
benefit and advantage of, and covenants not to assert against the Administrative
Agent or any Secured Party, any valuation, stay, appraisement, extension,
redemption or similar laws and any and all rights or defenses it may have as a
surety now or hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Agreement, or otherwise.
 
(f)      Upon the occurrence of an Event of Default and during the continuation
of such Event of Default, and concurrently with written notice to Credit
Parties, Administrative Agent is hereby authorized and empowered to transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon, to sell in one or more sales
after ten (10) days’ notice of the time and place of any public sale or of the
time at which a private sale is to take place (which notice Credit Parties agree
is commercially reasonable) the whole or any part of the Pledged Collateral and
to otherwise act with respect to the Pledged Collateral as though Administrative
Agent was the outright owner thereof in each case provided that no such action
shall be taken with respect to the Stock of any Regulated Subsidiary unless any
and all regulatory approvals required under applicable law shall have been
obtained. Any sale shall be made at a public or private sale at Administrative
Agent’s place of business, or at any place to be named in the notice of sale,
either for cash or upon credit or for future delivery at such price as
Administrative Agent may deem fair, and Administrative Agent may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of such Credit Party or
any right of redemption. Each sale shall be made to the highest bidder, but
Administrative Agent reserves the right to reject any and all bids at such sale
which, in its discretion, it shall deem inadequate. Demands of performance,
except as otherwise herein specifically provided for, notices of sale,
advertisements and the presence of property at sale are hereby waived and any
sale hereunder may be conducted by an auctioneer or any officer or agent of
Administrative Agent.
 
70

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

 
(g)     If, at the original time or times appointed for the sale of the whole or
any part of the Pledged Collateral, the highest bid, if there be but one sale,
shall be inadequate to discharge in full all the Secured Obligations, or if the
Pledged Collateral has been offered for sale in lots, and if at any of such
sales, the highest bid for the lot offered for sale would indicate to
Administrative Agent, in its discretion, that the proceeds of the sales of the
whole of the Pledged Collateral would be unlikely to be sufficient to discharge
all the Secured Obligations, the Administrative Agent may, on one or more
occasions and in its sole discretion, postpone effectuating any of said sales by
public announcement at the time of sale or the time of previous postponement of
sale, and no other notice of such postponement or postponements of sale need be
given, any other notice being hereby waived; provided, however, that any sale or
sales made after such postponement shall be after ten (10) days’ notice to such
Credit Party.
 
(h)     If, at any time when Administrative Agent in its sole discretion
determines, following the occurrence and during the continuance of an Event of
Default, that, in connection with any actual or contemplated exercise of its
rights (when permitted under this Section 10.7(h) to sell the whole or any part
of the Pledged Shares hereunder, it is necessary or advisable to effect a public
registration of all or part of the Pledged Collateral pursuant to the Securities
Act of 1933, as amended (or any similar statute then in effect) (the “Act”),
such Credit Party shall, in an expeditious manner, cause the Pledged Entities
to:
 
(i)        Prepare and file with the Securities and Exchange Commission (the
“Commission”) a registration statement with respect to the Pledged Shares and in
good faith use commercially reasonable efforts to cause such registration
statement to become and remain effective;
 
(ii)       Prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to comply
with the provisions of the Act with respect to the sale or other disposition of
the Pledged Shares covered by such registration statement whenever
Administrative Agent shall desire to sell or otherwise dispose of the Pledged
Shares;
 
(iii)      Furnish to Administrative Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Administrative Agent may request in order
to facilitate the public sale or other disposition of the Pledged Shares by
Administrative Agent;
 
(iv)      Use commercially reasonable efforts to register or qualify the Pledged
Shares covered by such registration statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
Administrative Agent shall request, and do such other reasonable acts and things
as may be required of it to enable Administrative Agent to consummate the public
sale or other disposition in such jurisdictions of the Pledged Shares by
Administrative Agent;
 
71

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

 
(v)       Furnish, at the request of Administrative Agent, on the date that
shares of the Pledged Collateral are delivered to the underwriters for sale
pursuant to such registration or, if the security is not being sold through
underwriters, on the date that the registration statement with respect to such
Pledged Shares becomes effective, (A) an opinion, dated such date, of the
independent counsel representing such registrant for the purposes of such
registration, addressed to the underwriters, if any, and in the event the
Pledged Shares are not being sold through underwriters, then to Administrative
Agent, in customary form and covering matters of the type customarily covered in
such legal opinions; and (B) a comfort letter, dated such date, from the
independent certified public accountants of such registrant, addressed to the
underwriters, if any, and in the event the Pledged Shares are not being sold
through underwriters, then to Administrative Agent, in a customary form and
covering matters of the type customarily covered by such comfort letters and as
the underwriters or Administrative Agent shall reasonably request. The opinion
of counsel referred to above shall additionally cover such other legal matters
with respect to the registration in respect of which such opinion is being given
as Administrative Agent may reasonably request. The letter referred to above
from the independent certified public accountants shall additionally cover such
other financial matters (including information as to the period ending not more
than five (5) Business Days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as
Administrative Agent may reasonably request; and
 
(vi)      Otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable but not later than 18 months
after the effective date of the registration statement, an earnings statement
covering the period of at least 12 months beginning with the first full month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
 
(i)      All expenses incurred in complying with Section 10.7(h) hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel for the registrant,
the fees and expenses of counsel for Administrative Agent, expenses of the
independent certified public accountants (including any special audits incident
to or required by any such registration) and expenses of complying with the
securities or blue sky laws or any jurisdictions, shall be paid by Credit
Parties.
 
72

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

 
(j)      If, at any time when Administrative Agent shall determine to exercise
its right to sell the whole or any part of the Pledged Collateral hereunder,
such Pledged Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Act, Administrative Agent may,
in its discretion (subject only to applicable requirements of law), sell such
Pledged Collateral or part thereof by private sale in such manner and under such
circumstances as Administrative Agent may deem necessary or advisable, but
subject to the other requirements of this Section 10.7, and shall not be
required to effect such registration or to cause the same to be effected.
Without limiting the generality of the foregoing, in any such event,
Administrative Agent in its discretion (x) may, in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under said Act (or similar
statute), (y) may approach and negotiate with a single possible purchaser to
effect such sale, and (z) may restrict such sale to a purchaser who is an
accredited investor under the Act and who will represent and agree that such
purchaser is purchasing for its own account, for investment and not with a view
to the distribution or sale of such Pledged Collateral or any part thereof. In
addition to a private sale as provided above in this Section 10.7, if any of the
Pledged Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section 10.7, then Administrative Agent shall not be required
to effect such registration or cause the same to be effected but, in its
discretion (subject only to applicable requirements of law), may require that
any sale hereunder (including a sale at auction) be conducted subject to
restrictions:
 
(i)        as to the financial sophistication and ability of any Person
permitted to bid or purchase at any such sale;
 
(ii)       as to the content of legends to be placed upon any certificates
representing the Pledged Collateral sold in such sale, including restrictions on
future transfer thereof;
 
(iii)      as to the representations required to be made by each Person bidding
or purchasing at such sale relating to that Person’s access to financial
information about such Credit Party and such Person’s intentions as to the
holding of the Pledged Collateral so sold for investment for its own account and
not with a view to the distribution thereof; and
 
(iv)      as to such other matters as Administrative Agent may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws.
 
(k)      Each Credit Party recognizes that Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof in accordance with clause (j)
above. Each Credit Party also acknowledges that any such private sale may result
in prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the Pledged Entity to
register such securities for public sale under the Act, or under applicable
state securities laws, even if such Credit Party and the Pledged Entity would
agree to do so.
 
(l)       Each Credit Party agrees to the maximum extent permitted by applicable
law that following the occurrence and during the continuance of an Event of
Default it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder, and
each Credit Party waives the benefit of all such laws to the extent it lawfully
may do so. Each Credit Party agrees that it will not interfere with any right,
power and remedy of Administrative Agent provided for in this Agreement or now
or hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by Administrative Agent of any one or more
of such rights, powers or remedies. No failure or delay on the part of
Administrative Agent to exercise any such right, power or remedy and no notice
or demand which may be given to or made upon Credit Parties by Administrative
Agent with respect to any such remedies shall operate as a waiver thereof, or
limit or impair Administrative Agent’s right to take any action or to exercise
any power or remedy hereunder, without notice or demand, or prejudice its rights
as against any Credit Party in any respect.
 
73

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

 
(m)     Each Credit Party further agrees that a breach of any of the covenants
contained in this Section 10.7 will cause irreparable injury to Administrative
Agent, that Administrative Agent shall have no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section 10.7 shall be specifically enforceable against the
Credit Parties, and each Credit Party hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that the Secured Obligations are not then due and payable in
accordance with the agreements and instruments governing and evidencing such
Obligations.
 
(n)     To the extent that any rights and remedies under this Section 10.7 would
otherwise be in violation of the automatic stay of section 362 of the Bankruptcy
Code, such stay shall be deemed modified, as set forth in the Final Order, as
applicable, to the extent necessary to permit the Administrative Agent to
exercise such rights and remedies.
 
10.8   The Administrative Agent’s Appointment as Attorney-in-Fact.
 
(a)     On the Closing Date each Credit Party executed and delivered to
Administrative Agent a power of attorney (the “Power of Attorney”) substantially
in the form attached hereto as Exhibit A. The power of attorney granted pursuant
to the Power of Attorney is a power coupled with an interest and shall be
irrevocable until the Termination Date. The powers conferred on Administrative
Agent, for the benefit of Secured Parties, under the Power of Attorney are
solely to protect Administrative Agent’s interests (for the benefit of Secured
Parties) in the Collateral and shall not impose any duty upon the Administrative
Agent or any Secured Party to exercise any such powers. Administrative Agent
agrees that (a) except for the powers granted in clause (h) of the Power of
Attorney, it shall not exercise any power or authority granted under the Power
of Attorney unless an Event of Default has occurred and is continuing, and (b)
Administrative Agent shall account for any moneys received by the Administrative
Agent in respect of any foreclosure on or disposition of Collateral pursuant to
the Power of Attorney provided that neither the Administrative Agent nor any
Secured Party shall have any duty as to any Collateral, and Administrative Agent
and the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers. NEITHER THE ADMINISTRATIVE
AGENT, THE SECURED PARTIES NOR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY CREDIT PARTY
FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT
IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION,
NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.
 
74

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

 
(b)     The Administrative Agent agrees that it will forbear from exercising the
power of attorney or any rights granted to the Administrative Agent pursuant to
this Section 10.8, except upon the occurrence or during the continuation of an
Event of Default. The Credit Parties hereby ratify, to the extent permitted by
law, all that said attorneys shall lawfully do or cause to be done by virtue
hereof. Exercise by the Administrative Agent of the powers granted hereunder is
not a violation of the automatic stay provided by section 362 of the Bankruptcy
Code and each Credit Party waives applicability thereof. The power of attorney
granted pursuant to this Section 10.8 is a power coupled with an interest and
shall be irrevocable until the Obligations are indefeasibly paid in full.
 
(c)     The powers conferred on the Administrative Agent hereunder are solely to
protect the Administrative Agent’s and the Lenders' interests in the Collateral
and shall not impose any duty upon it to exercise any such powers. The
Administrative Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, employees or agents shall be responsible to any Credit
Party for any act or failure to act, except for its own gross negligence or
willful misconduct.
 
(d)     Each Credit Party also authorizes the Administrative Agent, at any time
and from time to time upon the occurrence and during the continuation of any
Event of Default or as otherwise expressly permitted by this Agreement, (i) to
communicate in its own name or the name of its Subsidiaries with any party to
any Contract with regard to the assignment of the right, title and interest of
such Credit Party in and under the Contracts hereunder and other matters
relating thereto and (ii) to execute any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
 
(e)     All Obligations shall constitute, in accordance with section 364(c)(1)
of the Bankruptcy Code, claims against the Borrower and each Credit Party in
their respective Cases which are administrative expense claims having priority
over any all administrative expenses of the kind specified in sections 503(b) or
507(b) of the Bankruptcy Code.
 
10.9     [Reserved].
 
10.10   Intercreditor Issues.
 
Notwithstanding anything herein to the contrary, for so long as the
Post-Petition Skymiles Facility Documents are in effect, if any Credit Party is
in compliance with any requirements relating to SkyMiles Collateral imposed by
the Post-Petition Skymiles Collateral Documents which are equivalent to
requirements set forth in this Agreement (other than creation and, with respect
to Collateral which is not Control Collateral (as defined below), perfection, of
any Lien hereunder), such Credit Party need not comply with (and shall be deemed
to have satisfied) such requirements of this Agreement. Without limiting the
foregoing:
 
(a)     any covenant hereunder requiring (or any representation or warranty
hereunder to the extent that it would have the effect of requiring) the delivery
of possession or control to the Administrative Agent of Control Collateral that
is SkyMiles Collateral shall be deemed to have been satisfied (or such
representation and warranty shall be deemed to be true) if such possession or
control shall have been delivered to SkyMiles Agent as provided in the
Post-Petition Skymiles Facility Documents (as used herein, “Control Collateral”
shall mean any Collateral (including, without limitation, any Collateral
consisting of any Deposit Account, Investment Property, Letter-of-Credit Rights,
electronic chattel paper or money) as to which a Lien therein may be perfected
through possession or other control by any secured party or any agent therefor);
 
75

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

 
(b)     if any provision hereof shall require any Credit Party to take any
action with respect to any SkyMiles Collateral if requested to do so by the
Administrative Agent, such Credit Party shall be required to take such action
only if and to the extent that the SkyMiles Agent shall have requested the
Credit Party to take such action pursuant to the corresponding provision of the
Post-Petition Skymiles Facility Documents;
 
(c)     if any provision hereof shall require any Credit Party to take any
action with respect to any SkyMiles Collateral unless the Administrative Agent
shall have otherwise provided its consent or a waiver, such Credit Party shall
not be required to take such action if and to the extent that the SkyMiles Agent
shall have provided its consent or a waiver to the Credit Party not taking such
action pursuant to the corresponding provision of the Post-Petition Skymiles
Facility Documents; and 
 
(d)     if any provision hereof permits any Credit Party to take any action with
respect to any SkyMiles Collateral only upon receiving the Administrative
Agent’s consent to do so, the Administrative Agent shall be deemed to have
provided such consent if and to the extent that the SkyMiles Agent shall have
provided its consent to such Credit Party taking such action pursuant to the
corresponding provision of the Post-Petition Skymiles Facility Documents. 
 
10.11    Release of Collateral.
 
(a)     The Liens granted pursuant to this Agreement shall automatically
terminate, and all the Collateral shall be automatically released, without
further action by the Administrative Agent and without any further notice or
consent to or of any Secured Party, on the Termination Date.
 
(b)     Immediately upon (i) any sale, transfer, conveyance, assignment or other
disposition by any Credit Party of any Collateral permitted by this Agreement
(or pursuant to a valid waiver or consent to any transaction otherwise
prohibited by this Agreement), (ii) any part of the Collateral becoming subject
to a Lien permitted by Section 6.7(f) or (iii) any Pledged Collateral being
cancelled, replaced or repaid in accordance with the terms of this Agreement,
such Collateral shall be automatically released from the security interest
granted pursuant to this Agreement and the Lien on such Collateral in favor of
the Administrative Agent, for itself and for the benefit of the Secured Parties,
shall automatically terminate (and, if such Collateral consists of all of the
equity interest in a Subsidiary Guarantor, such Subsidiary Guarantor shall be
released from its Guaranty), in each case without further action by the
Administrative Agent and without any further notice or consent to or of any
Secured Party.
 
76

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

 
(c)     At the request of the Borrower, the Administrative Agent shall, and each
of the Secured Parties hereby authorizes and directs the Administrative Agent
(without any further notice or consent to or of any Secured Party) to, promptly
release or subordinate, as requested by the holders of any Lien permitted by
Section 6.7(a), (c), (e), (f), (i), (j) (subject, in the case of Amex, to the
Skymiles Intercreditor Agreement), (n), (o), (q), (r) or (s), any part of the
Collateral that is subject to a Lien permitted by such section.
 
(d)     At the request of the Borrower, the Administrative Agent shall, and each
of the Secured Parties hereby authorizes and directs the Administrative Agent
(without further notice or consent to or of any Secured Party) to, execute and
deliver or file such termination or partial release statements and take such
other actions (including return of Collateral) as are necessary to terminate,
release or subordinate Liens pursuant to this Section 10.11 promptly upon the
effectiveness of any such termination, release or subordination. The
Administrative Agent and the Secured Parties hereby acknowledges and agree that
the Credit Parties may use the Collateral to the extent permitted under the
Credit Agreement.
 
11.     ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT
 
11.1   Assignment and Participations. 
 
(a)     Right to Assign. Each Lender may sell, transfer, negotiate or assign all
or a portion of its rights and obligations hereunder (including all or a portion
of its Commitments and its rights and obligations with respect to Loans) to (i)
any existing Lender, (ii) any Affiliate or Approved Fund of any existing Lender
or (iii) any other Person acceptable (which acceptance shall not be unreasonably
withheld or delayed) to the Administrative Agent and, as long as no Event of
Default is continuing, the Borrower; provided, that (x) such Sales do not have
to be ratable between the Term Loans but must be ratable among the obligations
owing to and owed by such Lender with respect to a Term Loan and (y) for each
Term Loan, the aggregate outstanding principal amount (determined as of the
effective date of the applicable Assignment) of the Loans and Commitments
subject to any such Sale shall be an integral multiple of $1,000,000, unless
such Sale is made to an existing Lender or an Affiliate or Approved Fund of any
existing Lender, is of the assignor’s (together with its Affiliates and Approved
Funds) entire interest in such Term Loan or is made with the prior consent of
the Borrower and the Administrative Agent. In the case of any assignment of Term
Loan A, the proceeds of any L/C Cash Collateral held by the Administrative Agent
shall not be released in connection with any such assignment, but shall instead
continue to be held by the Administrative Agent for application as provided by
Annex B.
 
(b)     Procedure. The parties to each Sale made in reliance on clause (a) above
(other than those described in clause (e) below) shall execute and deliver to
the Administrative Agent (which shall keep a copy thereof) an Assignment,
together with any existing Note subject to such Sale (or any affidavit of loss
therefor acceptable to the Administrative Agent), any Certificates of Exemption
required to be delivered pursuant to Section 1.13 (which shall also be delivered
to Borrower) and, except with respect to any assignment by any Arranger (or any
Affiliate or Related Person of such Arranger) of the Commitments or Loans held
on the Closing Date by such Person to the extent such assignment is made as part
of the primary syndication of the applicable Term Loan, payment by the assignee
of an assignment fee in the amount of $3,500. Upon receipt of all the foregoing,
and conditioned upon such receipt and upon the Administrative Agent consenting
to such Assignment, from and after the effective date specified in such
Assignment, the Administrative Agent shall record or cause to be recorded in the
Loan Account the information contained in such Assignment.
 
77

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

 
(c)      Effectiveness. Effective upon the entry of such record in the Loan
Account, (i) such assignee shall become a party hereto and, to the extent that
rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment, shall have the rights and obligations of a
Lender, (ii) any applicable Note shall be transferred to such assignee through
such entry and (iii) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the termination of
the Commitments and the payment in full of the Obligations) and be released from
its obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment, and, in the case of an
Assignment covering all or the remaining portion of an assigning Lender’s rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto.
 
(d)     Grant of Security Interests. In addition to the other rights provided in
this Section 11.1, each Lender may grant a security interest in, or otherwise
assign as collateral, any of its rights under this Agreement, whether now owned
or hereafter acquired (including rights to payments of principal or interest on
the Loans), to (A) any federal reserve bank (pursuant to Regulation A of the
Federal Reserve Board), without notice to the Administrative Agent or (B) any
holder of, or trustee for the benefit of the holders of, such Lender’s
Securities by notice to the Administrative Agent; provided, that no such holder
or trustee, whether because of such grant or assignment or any foreclosure
thereon (unless such foreclosure is made through an assignment in accordance
with clause (b) above), shall be entitled to any rights of such Lender hereunder
and no such Lender shall be relieved of any of its obligations hereunder.
 
(e)      Participants and SPVs. In addition to the other rights provided in this
Section 11.1, each Lender may, (x) with notice to the Administrative Agent,
grant to an SPV the option to make all or any part of any Loan that such Lender
would otherwise be required to make hereunder (and the exercise of such option
by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign
to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from the Administrative Agent or the Borrower,
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents; provided, that, whether as a
result of any term of any Loan Document or of such grant or participation, (i)
no such SPV or participant shall have a commitment, or be deemed to have made an
offer to commit, to make Loans hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such
Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and
obligations of the Credit Parties and the Secured Parties towards such Lender,
under any Loan Document shall remain unchanged and each other party hereto shall
continue to deal solely with such Lender, which shall remain the holder of the
Obligations in the Register, except that (A) each such participant and SPV shall
be entitled to the benefit of Section 1.11, Section 1.13 and Section 1.14, but,
in the case of Section 1.13, only to the extent Borrower and the Administrative
Agent receive a Certificate of Exemption with respect to any such participant or
SPV that is a Foreign Person and in each such case only to the extent of any
amount to which such Lender would be entitled in the absence of any such grant
or participation and (B) each such SPV may receive other payments that would
otherwise be made to such Lender with respect to Loans funded by such SPV to the
extent provided in the applicable option agreement and set forth in a notice
provided to the Administrative Agent by such SPV and such Lender; provided, that
in no case (including pursuant to clause (A) or (B) above) shall an SPV or
participant have the right to enforce any of the terms of any Loan Document, and
(iii) the consent of such SPV or participant shall not be required (either
directly, as a restraint on such Lender’s ability to consent hereunder or
otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses (viii)(B) and (viii)(C) of Section 13.2(a) with respect to amounts,
or dates fixed for payment of amounts, to which such participant or SPV would
otherwise be entitled and, in the case of participants, except for those
described in Section 13.2(a)(xii) (or amendments, consents and waivers with
respect to Section 10.10 to release all or substantially all of the Collateral).
No party hereto shall institute (and Borrower shall cause each other Credit
Party not to institute) against any SPV grantee of an option pursuant to this
clause (e) any bankruptcy, reorganization, insolvency, liquidation or similar
proceeding, prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper of such SPV; provided, however, that
each Lender having designated an SPV as such agrees to indemnify each
Indemnified Person against any Liability that may be incurred by, or asserted
against, such Indemnified Person as a result of failing to institute such
proceeding (including a failure to get reimbursed by such SPV for any such
Liability). The agreement in the preceding sentence shall survive the
termination of the Commitments and the payment in full of the Obligations.
 
78

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

 
11.2   Appointment of Administrative Agent.
 
GE Capital is hereby appointed to act as the Administrative Agent on behalf of
the Lenders and the Secured Parties under this Agreement and the other Loan
Documents. The provisions of this Section 11.2 are solely for the benefit of the
Administrative Agent and Lenders and no Credit Party nor any other Person shall
have any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Loan
Documents, the Administrative Agent shall act solely as an agent of the Lenders,
and the Administrative Agent does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
Credit Party or any other Person. The Administrative Agent shall have no duties
or responsibilities except for those expressly set forth in this Agreement and
the other Loan Documents. The duties of the Administrative Agent shall be
mechanical and administrative in nature, and the Administrative Agent shall not
have, or be deemed to have, by reason of this Agreement, any other Loan Document
or otherwise a fiduciary relationship in respect of any Lender. Except as
expressly set forth in this Agreement and the other Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for failure to disclose, any information relating to any Credit Party or
any of their respective Subsidiaries or any Account Debtor that is communicated
to or obtained by GE Capital or any of its Affiliates in any capacity. Neither
the Administrative Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
 
79

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

 
If the Administrative Agent shall request instructions from Requisite Lenders,
Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C Lenders,
Supermajority Term A Lenders, all Lenders or all affected Lenders with respect
to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from Requisite Lenders,
Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C Lenders,
Supermajority Term A Lenders, all Lenders or all affected Lenders, as the case
may be, and the Administrative Agent shall not incur liability to any Person by
reason of so refraining. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of the Administrative Agent,
be contrary to law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of the Administrative Agent, expose the
Administrative Agent to Environmental Liabilities or (c) if the Administrative
Agent shall not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of Requisite
Lenders, Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C
Lenders, Supermajority Term A Lenders, all Lenders or all affected Lenders, as
applicable.
 
11.3   Administrative Agent’s Reliance, Etc. None of the Administrative Agent or
any of its Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the other Loan Documents,
except for damages caused by its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Administrative
Agent: (a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to the
Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the Books and Records to
the extent not prohibited by a confidentiality agreement in favor of a third
party) of any Credit Party; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
 
80

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

 
11.4   GE Capital and Affiliates.
 
With respect to its Commitments hereunder, GE Capital shall have the same rights
and powers under this Agreement and the other Loan Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include GE Capital in its individual capacity. GE Capital and its Affiliates may
lend money to, invest in, and generally engage in any kind of business with, any
Credit Party, any of their Affiliates and any Person who may do business with or
own securities of any Credit Party or any such Affiliate, all as if GE Capital
were not the Administrative Agent and without any duty to account therefor to
Lenders. GE Capital and its Affiliates may accept fees and other consideration
from any Credit Party for services in connection with this Agreement or
otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between GE Capital as a Lender
holding disproportionate interests in the Loans (including the L/C Cash
Collateral) and GE Capital as the Administrative Agent.
 
11.5   Lender Credit Decision.
 
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own 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 deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest of each
other Lender as a result of Lenders holding disproportionate interests in the
Loans (including the L/C Cash Collateral), and expressly consents to, and waives
any claim based upon, such conflict of interest.
 
11.6   Indemnification.
 
Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by Credit Parties and without limiting the Obligations of Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted to be taken by the
Administrative Agent in connection therewith; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent’s gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Administrative Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that the Administrative Agent is not reimbursed for such expenses by
Credit Parties.
 
81

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

 
11.7   Successor Agents.
 
The Administrative Agent may resign at any time by giving not less than thirty
(30) days’ prior written notice thereof to Lenders and Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
the Administrative Agent. If a successor Administrative Agent shall not have
been so appointed by the Requisite Lenders and shall not have accepted such
appointment within thirty (30) days after the resigning Administrative Agent’s
giving notice of resignation, then such resigning Administrative Agent on behalf
of the Lenders may appoint a successor Administrative Agent, which shall be a
Lender, if such Lender is willing to accept such appointment, or otherwise shall
be a commercial bank or financial institution or a subsidiary of a commercial
bank or financial institution if such commercial bank or financial institution
is organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $300,000,000. If a
successor Administrative Agent has not been appointed pursuant to the foregoing,
within thirty (30) days after the date such notice of resignation was given by
such resigning Administrative Agent, such resignation shall become effective and
the Requisite Lenders shall thereafter perform all the duties of the
Administrative Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Administrative Agent as provided above. Any successor
Administrative Agent appointed by Requisite Lenders hereunder shall be subject
to the approval of Borrower, such approval not to be unreasonably withheld or
delayed; provided, that such approval shall not be required if a Default or an
Event of Default has occurred and is continuing. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the resigning
Administrative Agent. Upon the earlier of (i) the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent or (ii)
the effective date of the resigning Administrative Agent’s resignation, such
resigning Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Administrative Agent
shall continue. After any Administrative Agent’s resignation hereunder, the
provisions of this Article 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was acting as the Administrative Agent
under this Agreement and the other Loan Documents.
 
82

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

 
11.8    Setoff and Sharing of Payments.
 
In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, each Lender is hereby authorized upon
the occurrence and during the continuance of any Event of Default and subject to
Section 11.9(d), at any time or from time to time, without prior notice to any
Credit Party or to any Person other than the Administrative Agent (except as
otherwise required by the Final Order), any such notice being hereby expressly
waived, to offset and to appropriate and to apply any and all balances held by
it at any of its offices for the account of Borrower or any Guarantor
(regardless of whether such balances are then due to Borrower or any Guarantor)
and any other properties or assets at any time held or owing by that Lender or
that holder to or for the credit or for the account of Borrower or any Guarantor
against and on account of any of the Obligations that are not paid when due;
provided, that the Lender exercising such offset rights shall give notice
thereof to the affected Credit Party, except as otherwise required by the Final
Order, promptly after exercising such rights. Any Lender exercising a right of
setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender’s
or holder’s Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares, (other
than offset rights exercised by any Lender with respect to Sections 1.11, 1.13
or 1.14). Each Term A Lender’s obligation under this Section 11.8 shall be in
addition to and not in limitation of its obligations to purchase a participation
in an amount equal to its Pro Rata Share of the Letter of Credit Obligations as
provided in Annex B. Borrower and each Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such amounts so offset to other Lenders and holders and
(b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers’ lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
 
11.9    Payments; Non-Funding Lenders; Information; Actions in Concert.
 
(a)     Payments. Not less than once during each calendar month or more
frequently at the Administrative Agent’s election (each, a “Settlement Date”),
the Administrative Agent shall advise each Lender by telephone, or telecopy of
the amount of such Lender’s Pro Rata Share of principal, interest and Fees paid
for the benefit of Lenders with respect to each applicable Loan. Provided that
each Lender has funded all payments and Loans required to be made by it and
purchased all participations required to be purchased by it under this Agreement
and the other Loan Documents as of such Settlement Date, the Administrative
Agent shall pay to each Lender such Lender’s Pro Rata Share of principal,
interest and Fees paid by Borrower since the previous Settlement Date for the
benefit of such Lender on the Loans held by it. To the extent that any Lender (a
“Non-Funding Lender”) has failed to fund all such payments and Loans or failed
to fund the purchase of all such participations, the Administrative Agent shall
be entitled to set off the funding short-fall against that Non-Funding Lender’s
Pro Rata Share of all payments received from Borrower. Such payments shall be
made by wire transfer to such Lender’s account (as specified by such Lender in
Annex H or the applicable Assignment Agreement) not later than 2:00 p.m. (New
York time) on the next Business Day following each Settlement Date.
 
83

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

(b)    Return of Payments.
 
(i)    If the Administrative Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by the Administrative Agent from Borrower and such related payment
is not received by the Administrative Agent, then the Administrative Agent will
be entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.
 
(ii)    If the Administrative Agent determines at any time that any amount
received by the Administrative Agent under this Agreement must be returned to
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Loan Document, the Administrative Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to the Administrative Agent on demand any portion of such amount that the
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as the Administrative Agent is required to pay to Borrower or
such other Person, without setoff, counterclaim or deduction of any kind.
 
(c)    Dissemination of Information. The Administrative Agent shall use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by the Administrative Agent from, or delivered by the
Administrative Agent to, any Credit Party, with notice of any Event of Default
of which the Administrative Agent has actually become aware and with notice of
any action taken by the Administrative Agent following any Event of Default;
provided, that the Administrative Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to
the Administrative Agent’s gross negligence or willful misconduct. Lenders
acknowledge that Borrower is required to provide Financial Statements and
Collateral Reports to Lenders in accordance with Annexes E and F hereto and
agree that the Administrative Agent shall not have the duty to provide the same
to Lenders.
 
(d)    Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of the Administrative Agent and Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of the Administrative Agent or Requisite
Lenders. 
 
12. SUCCESSORS AND ASSIGNS
 
12.1   Successors and Assigns.
 
This Agreement and the other Loan Documents shall be binding on and shall inure
to the benefit of each Credit Party, the Administrative Agent, Lenders and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of the
Administrative Agent and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of the Administrative Agent and Lenders shall be void. The terms
and provisions of this Agreement are for the purpose of defining the relative
rights and obligations of each Credit Party, the Administrative Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
 
84

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

 
13. MISCELLANEOUS
 
13.1   Complete Agreement; Modification of Agreement.
 
The Loan Documents constitute the complete agreement between the parties with
respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in Section 13.2. Any letter of interest, commitment
letter, fee letter or confidentiality agreement, if any, between any Credit
Party and the Administrative Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement. Notwithstanding the foregoing, the Fee Letters and all obligations of
Borrower with respect to syndication contained in the GE Capital Commitment
Letter shall survive the execution and delivery of this Agreement and shall
continue to be binding obligations of the parties.
 
13.2   Amendments and Waivers.
 
(a)    Except as otherwise expressly provided in this Agreement, the Requisite
Lenders (or the Administrative Agent with the prior written consent of the
Requisite Lenders), on the one hand, and Borrower, on the other hand, may from
time to time enter into written amendments, supplements or modifications for the
purpose of adding, deleting or modifying any provision of any Loan Document or
changing in any manner the rights, remedies, obligations and duties of the
parties thereto, and with the written consent of the Requisite Lenders, the
Administrative Agent, on behalf of Lenders, may execute and deliver a written
instrument waiving, on such terms and conditions as may be specified in such
instrument, any of the requirements applicable to the Credit Parties, as the
case may be, party to any Loan Document, or any Default or Event of Default and
its consequences; provided, that:
 
(i)     the Requisite Term A Lenders (or the Administrative Agent with the prior
written consent of the Requisite Term A Lenders), on the one hand, and Borrower,
on the other hand, may amend, supplement or otherwise modify or waive any of the
terms and provisions (and related definitions) (A) related solely to the
borrowings (including any conditions to such borrowings) and payment procedures
with respect to the Term Loan A and (B) solely affecting the relative rights,
remedies, obligations and priorities among Term A Lenders, which does not
adversely affect any Term B Lender or Term C Lender (in each case, except to the
extent any such amendment, supplement, modification or waiver would result in an
increase of the aggregate Term A Commitment or the aggregate outstanding
principal amount of the Term Loan A);
 
85

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

 
(ii)    the Requisite Term B Lenders (or the Administrative Agent with the prior
written consent of the Requisite Term B Lenders), on the one hand, and Borrower,
on the other hand, may amend, supplement or otherwise modify or waive any of the
terms and provisions (and related definitions) (A) related solely to the
borrowings (including any conditions to such borrowings) and payment procedures
with respect to the Term Loan B and (B) solely affecting the relative rights,
remedies, obligations and priorities among Term B Lenders, which does not
adversely affect any Term A Lender or Term C Lender (in each case, except to the
extent any such amendment, supplement, modification or waiver would result in an
increase of the aggregate Term B Commitment or the aggregate outstanding
principal amount of the Term Loan B);
 
(iii)   the Requisite Term C Lenders (or the Administrative Agent with the prior
written consent of the Requisite Term C Lenders), on the one hand, and Borrower,
on the other hand, may amend, supplement or otherwise modify or waive any of the
terms and provisions (and related definitions) (A) related solely to the
borrowings (including any conditions to such borrowings) and payment procedures
with respect to the Term Loan C and (B) solely affecting the relative rights,
remedies, obligations and priorities among Term C Lenders, which does not
adversely affect any Term A Lender or Term B Lender (in each case, except to the
extent any such amendment, supplement, modification or waiver would result in an
increase of the aggregate Term C Commitment or the aggregate outstanding
principal amount of the Term Loan C);
 
(iv)   no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or the other Loan Documents; and
 
(v)    the Administrative Agent may, with the consent of Borrower, amend, modify
or supplement any Loan Document to cure any ambiguity, typographical error,
defect or inconsistency;
 
provided, further, that no amendment, supplement, modification or waiver shall
be effective to:
 
(vi)   without the prior written consent of each of the Requisite Term A
Lenders, the Requisite Term B Lenders and the Requisite Term C Lenders, (A)
amend, supplement, modify or waive any provision of paragraph (c) (Aggregate
Cash on Hand) of Annex G, (B) unless expressly permitted by this Agreement,
release or permit any Credit Party to sell or otherwise dispose of assets in an
aggregate amount in excess of $75,000,000 or (C) increase the Commitment of any
Lender or extend any scheduled final maturity of any Loan; or
 
(vii)   without the prior written consent of each of the Supermajority Term A
Lenders, the Requisite Term B Lenders and the Requisite Term C Lenders, amend,
supplement, modify or waive any of the terms and provisions (and related
definitions) related to the Term A Borrowing Base (including advance rates and
eligibility criteria) if more credit would be available to Borrower thereafter;
provided, that Borrower's consent will not be required with respect to any
modifications made in accordance with Section 1.6;
 
86

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

 
provided, further, that no such amendment, supplement, modification or waiver
shall be effective to, without the prior written consent, in addition to Lenders
required above to take such action, of each Lender directly affected thereby:
 
(viii)   (A) modify the Commitment of such Lender or subject such Lender to any
additional obligation, (B) extend any scheduled final maturity of any Loan owing
to such Lender, (C) waive or reduce, or postpone or cancel any scheduled date
fixed for the payment of (it being understood that any mandatory prepayment
required under Section 1.2(b) does not constitute any scheduled date fixed for
payments), principal of or interest on any such Loan or any fees owing to such
Lender, (D) reduce, or release Borrower from its obligations to repay, any other
Obligation owed to such Lender or (E) consent to the assignment or transfer by
Borrower of any of its rights and obligations under this Agreement;
 
(ix)    amend, modify or waive any provision of Section 1.2, 1.3 or 11.8;
 
(x)    subordinate any of the Obligations or Liens securing the Obligations,
except as permitted by this Agreement and the Skymiles Intercreditor Agreement;
or
 
(xi)    (A) amend, modify or waive this Section 13.2 or any other provision
specifying the Administrative Agent, Lenders or group of Lenders required for
any amendment, modification or waiver thereof or (B) change the respective
percentages specified in the definition of “Requisite Lenders,” “Requisite Term
A Lenders,” “Requisite Term B Lenders,” “Requisite Term C Lenders,” or
“Supermajority Term A Lenders”; or
 
provided, further, that no such amendment, supplement, modification or waiver
shall be effective to, without the prior written consent of all Lenders:
 
(xii)   (A) release any Guarantor from the obligations provided for in the
Collateral Documents, except as otherwise permitted herein or in the other Loan
Documents, or (B) release or permit any Credit Party to sell or otherwise
dispose of all or substantially all of the Collateral provided for in the
Collateral Documents; provided, however, that no waiver, amendment, supplement
or modification shall be required for the Administrative Agent to take
additional Collateral pursuant to any Loan Document.
 
(b)    Any waiver, amendment, supplement or modification pursuant to this
Section 13.2 shall apply equally to each of Lenders and shall be binding upon
Lenders and all future holders of any of the Loans, the Notes, the Letter of
Credit Obligations and all other Obligations.
 
87

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

 
(c)    To the extent (a) the consent or vote of any Lender in its capacity as a
Term A Lender, a Term B Lender or a Term C Lender, as applicable, is required,
but not obtained (any such Lender whose consent is not obtained as described in
this Section 13.2(c) being referred to as a “Non-Consenting Lender”) in
connection with any proposed amendment, modification, supplement, waiver or
exercise of remedies (a “Proposed Change”) and (b) the Administrative Agent
shall have consented to such Proposed Change, at the request of Borrower and
with the consent of the Administrative Agent (not to be unreasonably withheld),
any Person reasonably acceptable to such Administrative Agent (which Person may
be the Lender acting as such Administrative Agent and shall have consented to
such Proposed Change) shall have the right (but not the obligation) to purchase
from such Non-Consenting Lender, and such Non-Consenting Lender shall, upon the
request of such Administrative Agent, sell and assign to such Person all of the
applicable Commitments and Loans of such Non-Consenting Lender for an amount
equal to the principal balance of all applicable Loans held by such
Non-Consenting Lender and all accrued and unpaid interest and fees with respect
thereto through the date of such sale and purchase (the “Purchase Amount”);
provided, however, that such sale and purchase (and the corresponding
assignment) shall not be effective until (A) such Administrative Agent shall
have received from such Person an agreement in form and substance satisfactory
to such Administrative Agent whereby such Person shall agree to be bound by the
terms hereof and (B) such Non-Consenting Lender shall have received the Purchase
Amount from such Person. Each Lender agrees that, if it becomes a Non-Consenting
Lender, it shall execute and deliver to the Administrative Agent the Note or
Notes evidencing such Commitments or Loans and an Assignment Agreement to
evidence such sale and assignment; provided, however, that the failure of any
Non-Consenting Lender to deliver such Note or Notes or execute an Assignment
Agreement shall not render such sale and purchase (and the corresponding
assignment) invalid.
 
(d)    Upon the Termination Date, the Administrative Agent shall deliver to
Borrower termination statements, mortgage releases, reconveyances and other
documents necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations.
 
13.3   Fees and Expenses.
 
Borrower shall reimburse (i) the Administrative Agent for all fees, costs and
expenses (including the reasonable fees and expenses of all of its counsel,
advisors, consultants and auditors) and (ii) the Administrative Agent (and, with
respect to clauses (b), (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers)
incurred in connection with the negotiation, preparation and filing and/or
recordation of the Loan Documents and incurred in connection with:
 
(a)    any amendment, modification or waiver of, or consent with respect to, or
termination of, any of the Loan Documents or advice in connection with the
syndication and administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
 
(b)    any litigation, contest, dispute, suit, proceeding or action (whether
instituted by the Administrative Agent, any Lender, any Credit Party or any
other Person and whether as a party, witness or otherwise) in any way relating
to the Collateral, any of the Loan Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against any or all
of the Credit Parties or any other Person that may be obligated to the
Administrative Agent by virtue of the Loan Documents, including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or
more Events of Default; provided, that in the case of reimbursement of counsel
for Lenders other than the Administrative Agent, such reimbursement shall be
limited to one counsel for all such Lenders; provided, further, that no Person
shall be entitled to reimbursement under this clause (b) in respect of any
litigation, contest, dispute, suit, proceeding or action to the extent any of
the foregoing results from such Person’s gross negligence or willful misconduct;
 
88

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

 
(c)    any attempt to enforce any remedies of the Administrative Agent or any
Lender against any or all of the Credit Parties or any other Person that may be
obligated to the Administrative Agent or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in the course
of any work-out or restructuring of the Loans during the pendency of one or more
Events of Default; provided, that in the case of reimbursement of counsel for
Lenders other than the Administrative Agent, such reimbursement shall be limited
to one counsel for all such Lenders;
 
(d)    any workout or restructuring of the Loans during the pendency of one or
more Events of Default; and
 
(e)    efforts to (i) monitor the Loans or any of the other Obligations, (ii)
evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral, in each case pursuant
to and in accordance with the terms of the Loan Documents;
 
including, as to each of clauses (a) through (e) above, all reasonable
attorneys’ and other professional and service providers’ fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 13.3, all of
which shall be payable, on demand, by Borrower to the Administrative Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges;
charges for any E-System; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
 
13.4   No Waiver.
 
The Administrative Agent’s or any Lender’s failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of the Administrative Agent or such Lender thereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver of an
Event of Default shall not suspend, waive or affect any other Event of Default
whether the same is prior or subsequent thereto and whether the same or of a
different type. Subject to the provisions of Section 13.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by the Administrative Agent or any Lender, unless such
waiver or suspension is by an instrument in writing signed by an officer of or
other authorized employee of the Administrative Agent and the applicable
required Lenders and directed to Borrower specifying such suspension or waiver.
 
89

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

 
13.5   Remedies.
 
The Administrative Agent’s and Lenders’ rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies that the
Administrative Agent or any Lender may have under any other agreement, including
the other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
 
13.6   Severability.
 
Wherever possible, each provision of this Agreement and the other Loan Documents
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement or any other Loan
Document shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such other Loan Document.
 
13.7   Conflict of Terms.
 
Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
 
13.8   Confidentiality.
 
The Administrative Agent and Lender agree to use commercially reasonable efforts
(equivalent to the efforts the Administrative Agent or Lender applies to
maintain the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit Parties
and designated as confidential for a period of two (2) years following receipt
thereof, except that the Administrative Agent and Lender may disclose such
information (a) to Persons employed or engaged by the Administrative Agent or
Lender; (b) to any bona fide assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this
Section 13.8 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (a) above); (c) as required or requested
by any Governmental Authority or reasonably believed by the Administrative Agent
or Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the Administrative
Agent’s or Lender’s counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which the Administrative Agent or Lender is a party related to
the Loan Documents or the Loans or other Obligations thereunder; (f) that ceases
to be confidential through no fault of the Administrative Agent or Lender; (g)
to its affiliates and its and their directors, officers, employees, advisors,
representatives or agents, and (h) to ratings agencies.
 
90

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

 
13.9   GOVERNING LAW.
 
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE
LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,
NEW YORK SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN THE CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT THE ADMINISTRATIVE AGENT, LENDERS AND THE CREDIT PARTIES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK COUNTY AND; PROVIDED, FURTHER THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT. EACH CREDIT
PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES,
TO THE EXTENT PERMITTED BY LAW, ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS, TO THE EXTENT PERMITTED BY LAW, TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT
PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET
FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL, TO THE EXTENT
PERMITTED BY LAW, BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY’S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES
MAILS, PROPER POSTAGE PREPAID.
 
91

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

 
13.10  Notices.
 
(a)    Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three (3) Business Days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission, when sent
by telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 13.10); (c) one
(1) Business Day after deposit with a reputable overnight courier with all
charges prepaid or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address or
facsimile number indicated in Annex I  or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Borrower or the Administrative Agent) designated in Annex I 
to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
 
(b)    Subject to the provisions of Section 13.10(a), each of the Administrative
Agent, Borrower, the Lenders, the L/C Issuers and each of their Related Persons
is authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein; provided, that
notices to any Credit Party shall not be made by any posting to an Internet or
extranet based site or other equivalent service but may be made by e-mail or
E-fax, if available, so long as such notices are also sent in accordance with
Section 13.10(a). Each Credit Party and each Secured Party hereby acknowledges
and agrees that the use of Electronic Transmissions is not necessarily secure
and that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes and accepts
such risks by hereby authorizing the transmission of Electronic Transmissions.
 
(c)    Subject to the provisions of Section 13.10(a), (i)(A) no posting to any
E-System shall be denied legal effect merely because it is made electronically,
(B) each E Signature on any such posting shall be deemed sufficient to satisfy
any requirement for a “signature” and (C) each such posting shall be deemed
sufficient to satisfy any requirement for a “writing”, in each case including
pursuant to any Loan Document, any applicable provision of any Uniform
Commercial Code, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each Secured
Party and Credit Party may rely and assume the authenticity thereof, (iii) each
such posting containing a signature, a reproduction of a signature or an
E-Signature shall, for all intents and purposes, have the same effect and weight
as a signed paper original and (iv) each party hereto or beneficiary hereto
agrees not to contest the validity or enforceability of any posting on any
E-System or E-Signature on any such posting under the provisions of any
applicable Requirement of Law requiring certain documents to be in writing or
signed; provided, however, that nothing herein shall limit such party’s or
beneficiary’s right to contest whether any posting to any E-System or
E-Signature has been altered after transmission.
 
92

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

 
(d)    All uses of an E-System shall be governed by and subject to, in addition
to this Section 13.10, separate terms and conditions posted or referenced in
such E-System and related contractual obligations executed by Secured Parties
and Delta Companies in connection with the use of such E-System.
 
(e)    ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND
“AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS
WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC
TRANSMISSION AND DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN. NO
WARRANTY OF ANY KIND IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PERSONS IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS. The Credit Parties agree (and Borrower shall cause each other Credit
Party to agree) that the Administrative Agent has no responsibility for
maintaining or providing any equipment, software, services or any testing
required in connection with any Electronic Transmission or otherwise required
for any E-System.
 
13.11  Section Titles.
 
The Section titles and Table of Contents contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
 
13.12  Counterparts.
 
This Agreement may be executed in any number of separate counterparts, each of
which shall collectively and separately constitute one agreement.
 
13.13  WAIVER OF JURY TRIAL.
 
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE
ADMINISTRATIVE AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
 
93

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

 
13.14  Press Releases and Related Matters.
 
Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of the Administrative Agent or any Arranger or its
affiliates or referring to this Agreement, the other Loan Documents without at
least two (2) Business Days’ prior notice to the Administrative Agent or such
Arranger, as the case may be, and without the prior written consent of the
Administrative Agent or such Arranger, as the case may be, unless (and only to
the extent that) such Credit Party or Affiliate is required to do so under law
and then, in any event, such Credit Party or Affiliate will consult, to the
extent permitted by law, with the Administrative Agent or such Arranger, as the
case may be, before issuing such press release or other public disclosure. Each
Credit Party consents to the publication by the Administrative Agent, any
Arranger or Lender of advertising material relating to the financing
transactions contemplated by this Agreement using Borrower’s name, product
photographs, logo or trademark. The Administrative Agent, any Arranger or any
Lender shall provide a draft of any advertising material to each Credit Party
for review and comment at least two (2) Business Days prior to the publication
thereof. Each of the Administrative Agent and the Arrangers reserves the right
to provide to industry trade organizations information necessary and customary
for inclusion in league table measurements.
 
13.15  [Reserved].
 
13.16  Advice of Counsel.
 
Each of the parties represents to each other party hereto that it has discussed
this Agreement and, specifically, the provisions of Sections 13.9 and 13.13,
with its counsel.
 
13.17  No Strict Construction.
 
The parties hereto have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
 
94

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

 
[The remainder of this page is intentionally left blank.]
 
95

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

 
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
 

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

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

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

 

       
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent and Lender
 
   
   
    By:   /s/ Douglas A. Kelly  

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

  Name: Douglas A. Kelly   Title: Duly Authorized Signatory

 
Signature Page to Credit Agreement

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

 
The following Persons are signatories to this Agreement in their capacity as
Credit Parties and not as Borrower.
 

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

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

  Name: Paul A. Jacobson   Title: President

 

       
COMAIR HOLDINGS, LLC
 
   
   
    By:   /s/ Donald T. Bornhorst  

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

  Name: Donald T. Bornhorst   Title: Treasurer

 

       
COMAIR, INC.
 
   
   
    By:   /s/ Donald T. Bornhorst  

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

  Name: Donald T. Bornhorst   Title: Chief Financial Officer

       
COMAIR SERVICES, INC.
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Treasurer

  

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

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

  Name: Mona Warwar   Title: Assistant Treasurer

 
Signature Page to Credit Agreement

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

 

       
DAL AIRCRAFT TRADING, INC.
 
   
   
    By:   /s/ Kenneth W. Morge  

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

  Name: Kenneth W. Morge   Title: Treasurer

 

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

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

  Name: Mona Warwar   Title: Assistant Treasurer

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

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

  Name: Mona Warwar   Title: Treasurer

     

       
DELTA AIRELITE BUSINESS JETS, INC.
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Assistant Treasurer

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

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

  Name: Michael O. Randolfi   Title: Treasurer

 

       
DELTA CONNECTION ACADEMY, INC.
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Treasurer

 
Signature Page to Credit Agreement 

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

 

       
DELTA CORPORATE IDENTITY, INC.
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Assistant Treasurer

 

       
DELTA LOYALTY MANAGEMENT SERVICES, LLC
 
   
   
    By:   /s/ J. Scott McClain  

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

  Name: J. Scott McClain   Title: Vice President

 

       
DELTA TECHNOLOGY, LLC
 
   
   
    By:   /s/ David S. Cartee  

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

  Name: David S. Cartee   Title: Assistant Secretary

 

       
DELTA VENTURES III, LLC
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Vice President – Tax

 

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

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

  Name: Edward M. Smith   Title: Treasurer and Controller

 
Signature Page to Credit Agreement 

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

 

       
KAPPA CAPITAL MANAGEMENT, INC.
 
   
   
    By:   /s/ Mona Warwar  

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

  Name: Mona Warwar   Title: Vice President and Treasurer

 

       
SONG, LLC
 
   
   
    By:   /s/ Kenneth W. Morge  

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

  Name: Kenneth W. Morge   Title: Assistant Treasurer

 
Signature Page to Credit Agreement

 

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

ANNEX A (Recitals)
to
CREDIT AGREEMENT
 
DEFINITIONS
 
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
 
“Account Debtor” means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).
 
“Accounting Changes” has the meaning ascribed thereto in Annex G.
 
“Accounts” means all “accounts,” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the Code), (b) all of each Credit Party’s rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party’s rights to any goods represented by any of the foregoing (including
unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all
healthcare insurance receivables, and (e) all collateral security of any kind,
now or hereafter in existence, given by any Account Debtor or other Person with
respect to any of the foregoing.
 
“Additional Aircraft” shall have the meaning ascribed to it in the Aircraft
Mortgage.
 
“Additional Engine” shall have the meaning ascribed to it in the Aircraft
Mortgage.
 
“Administrative Agent” has the meaning ascribed to it in the Preamble.
 
“Affected Lender” has the meaning ascribed to it in Section 1.14(e).
 
“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, 20% or more of the Stock having ordinary voting power in the
election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, and (c) each of such
Person’s joint venturers and partners who are Affiliates under clause (a)
hereof. For the purposes of this definition, “control” of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, that the term “Affiliate,” when
used with reference to a Credit Party, shall specifically exclude the
Administrative Agent and each Lender.
 
A-1

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

 
“Aggregate Cash On Hand” means the amount of cash and Cash Equivalents of the
Delta Companies that may be classified, in accordance with GAAP, as
“unrestricted” on the consolidated balance sheets of Borrower.
 
“Agreement” means this Agreement, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
 
“Air Carrier” means each of Borrower and Comair, Inc.
 
“Aircraft” shall have the meaning ascribed to it in the Aircraft Mortgage.
 
“Aircraft Mortgage” means the Aircraft Mortgage and Security Agreement in the
form of Exhibit B hereto entered into by and among the Administrative Agent for
the benefit of the Secured Parties and each Credit Party that is a signatory
thereto, as amended, modified or supplemented from time to time.
 
“Airport Authority” shall have the meaning ascribed to it in the SGR Security
Agreement.
 
“Allocated Amount” means, with respect to any asset, the amount allocated to
such asset in the most recent Borrowing Base Certificate delivered by Borrower
to the Administrative Agent in accordance with Annex F.
 
“Amended and Restated Arrangement Fee Letter” means the Amended and Restated Fee
Letter, dated March 15, 2006, between GE Capital and Borrower.
 
“Amex” means American Express Travel Related Services Company, Inc. and each of
its affiliates party to the Post-Petition Skymiles Facility Documents.
 
“Appendices” has the meaning ascribed to it in the recitals to the Agreement.
 
“Applicable Term A Index Margin” means the per annum interest rate from time to
time in effect and payable in addition to the Index Rate applicable to the Term
Loan A, as determined by reference to Section 1.5(a).
 
“Applicable Term A LIBOR Margin” means the per annum interest rate from time to
time in effect and payable in addition to the LIBOR Rate applicable to the Term
Loan A, as determined by reference to Section 1.5(a).
 
“Applicable Term B Index Margin” means the per annum interest rate from time to
time in effect and payable in addition to the Index Rate applicable to the Term
Loan B, as determined by reference to Section 1.5(a).
 
A-2

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

 
“Applicable Term B LIBOR Margin” means the per annum interest rate from time to
time in effect and payable in addition to the LIBOR Rate applicable to the Term
Loan B, as determined by reference to Section 1.5(a).
 
“Applicable Term C Index Margin” means the per annum interest rate from time to
time in effect and payable in addition to the Index Rate applicable to the Term
Loan C, as determined by reference to Section 1.5(a).
 
“Applicable Term C LIBOR Margin” means the per annum interest rate from time to
time in effect and payable in addition to the LIBOR Rate applicable to the Term
Loan C, as determined by reference to Section 1.5(a).
 
“Appraisers” shall mean Simat, Helliesen & Eichner, Inc., Sage Popovich and
Cushman & Wakefield (with respect to the Owned Real Estate appraised on or
before the Closing Date), or such other appraisers acceptable to the
Administrative Agent.
 
“Approved Fund” means, with respect to any Lender, any Person (other than a
natural Person) that (a) is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business and (b) is advised or managed by (i) such
Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an
individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.
 
“ARB Indebtedness” means, with respect to any Delta Company, without
duplication, all Indebtedness or obligations of such Delta Company 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 such bonds exempt from certain
federal or state taxes.
 
“Arrangers” shall mean, collectively, (a) with respect to Term Loan A and Term
Loan B, GE Capital Markets, Inc. and (b) with respect to Term Loan C, GE Capital
Markets, Inc. and Morgan Stanley Senior Funding, Inc.
 
“Asset Sale” has the meaning ascribed to it in Section 6.8.
 
“Assignment Agreement” has the meaning ascribed to it in Section 11.1(a).
 
“Aviation Authority” means 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 Credit Parties
including, without limitation, the FAA or DOT.
 
“Avoidance Actions” shall mean the Credit Parties’ claims and causes of action
arising under Section 502(d), 544, 545, 547, 548 or 550 of the Bankruptcy Code
or any other avoidance action under the Bankruptcy Code; provided, that
“Avoidance Actions” shall not include any Proceeds of such property.
 
A-3

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

 
“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§ 101 et seq.
 
“Bankruptcy Court” has the meaning ascribed to it in the Preamble or shall mean
any other court having competent jurisdiction over the Cases.
 
“Blocked Account” means any account of any Credit Party that is subject to a
Blocked Account Agreement or a Control Letter pursuant to Annex C.
 
“Blocked Account Agreement” means a control agreement, in form and substance
satisfactory to the Administrative Agent, among any Credit Party, the
Administrative Agent for the benefit of Secured Parties and the applicable bank
or financial institution. Any Blocked Account Agreement substantially in the
form of any Blocked Account Agreement in effect on the Closing Date shall be
deemed to be satisfactory to the Administrative Agent.
 
“Books and Records” means books and records of the Credit Parties, including
financial, corporate, operations and sales books, records, books of account,
sales and purchase records, lists of suppliers and customers, formulae, business
reports, plans and projections and all other documents, logs, surveys, plans,
files, records, assessments, correspondence, and other data and information,
financial or otherwise, and all aircraft manuals, log books and other documents
and records, including all data and information stored on computer-related or
other electronic media.
 
“Borrower” has the meaning ascribed thereto in the preamble to the Agreement.
 
“Borrowing Base Certificate” means a certificate to be executed and delivered
from time to time by Borrower in the form attached to the Agreement as Exhibit
4.1(b).
 
“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of New York and in
reference to LIBOR Loans shall mean any such day that is also a LIBOR Business
Day.
 
“Capital Expenditures” means, with respect to any Person, all expenditures (by
the expenditure of cash or the incurrence of Indebtedness) by such Person during
any measuring period, net of cash amounts received by Borrower and its
Subsidiaries from other Persons during such period in reimbursement of Capital
Expenditures made by Borrower and its Subsidiaries and excluding interest
capitalized during construction, for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP (including
equipment which in the ordinary course of business is purchased simultaneously
with the trade-in or exchange of existing equipment owned by Borrower or any of
its Subsidiaries to the extent of the gross amount of such purchase price less
the book value of the equipment being traded in or exchanged at such time), but
excluding expenditures made in connection with the replacement or restoration of
assets to the extent reimbursed or financed from (x) insurance proceeds paid on
account of the loss of or the damage to the assets being replaced or restored,
or (y) awards of compensation arising from the taking by condemnation or eminent
domain of such assets being replaced.
 
A-4

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

 
“Capital Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
 
“Capital Lease Obligation” means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
 
“Carve-Out” means claims of the following parties for the following amounts: (i)
the unpaid fees of the U.S. Trustee or the Clerk of the Bankruptcy Court
pursuant to 28 U.S.C. § 1930(a) and (ii) after the occurrence and during the
continuance of an Event of Default, the aggregate allowed unpaid fees and
expenses payable under sections 330 and 331 of the Bankruptcy Code to
professional persons retained pursuant to an order of the Bankruptcy Court by
any Credit Party or any Committee not to exceed $35,000,000 (plus all unpaid
professional fees and disbursements accrued or incurred prior to the occurrence
of an Event of Default and reflected on the most recent Borrowing Base
Certificate and reserved against the Term A Borrowing Base, or otherwise
reported in writing to the Administrative Agent, to the extent allowed by the
Bankruptcy Court at any time) in the aggregate; provided, that the Carve-Out
shall not include, apply to or be available for any fees or expenses incurred by
any party, including any Credit Party or any Committee, in connection with the
initiation or prosecution of any claims, causes of action, adversary proceedings
or other litigation against the Administrative Agent, the Lenders or the L/C
Issuers, including challenging the amount, validity, perfection, priority or
enforceability of or asserting any defense, counterclaim or offset to, the
Obligations or the security interests and Liens of the Secured Parties in
respect thereof; provided, further, that (a) as long as no Event of Default
shall have occurred and be continuing, the Credit Parties shall be permitted to
pay compensation and reimbursement of expenses allowed and payable under
sections 330 and 331 of the Bankruptcy Code, as the same may be due and payable,
and the same shall not reduce the Carve-Out and (b) in the event the Carve-Out
is reduced by any amount during an Event of Default, upon the effectiveness of
any cure or waiver of such Event of Default pursuant to the terms of this
Agreement, the Carve-Out shall be increased by such amount.
 
“Cases” has the meaning ascribed to it in the Preamble.
 
“Cash Collateral Account” means a cash collateral account in the name of
Borrower and subject to a Blocked Account Agreement, into which the Net Cash
Proceeds of the Collateral, including Collateral included in the Term A
Borrowing Base and, at the election of Borrower, cash or Cash Equivalents are
deposited pursuant to the Agreement, the Collateral Documents and any other Loan
Document.
 
“Cash Equivalents” means Permitted Investments and such other cash and cash
equivalents acceptable to the Administrative Agent.
 
A-5

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

 
“Cash Management Systems” has the meaning ascribed to it in Section 1.7.
 
“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.).
 
“Certificated Air Carrier” shall mean an “air carrier” within the meaning of
Section 40102 of Title 49, holding a certificate of public convenience and
necessity under Section 41102 of Title 49 and an air carrier certificate under
Section 44705 of Title 49 and Subpart C of 14 C.F.R. Part 119 of the Federal
Aviation Regulations authorizing its operations to/from/within the United States
under 14 C.F.R. Part 121 of the Federal Aviation Regulations.
 
“Change of Control” means any of the following: (a) any person or group of
persons (within the meaning of the Securities Exchange Act of 1934) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 40% or more of the issued and outstanding shares of capital Stock of
Borrower having the right to vote for the election of directors of Borrower
under ordinary circumstances other than any employee benefit plan of Borrower or
any of its Subsidiaries or any Person organized, appointed or established by
borrower or any of its Subsidiaries for, or pursuant to, the terms of any such
employee benefit plan; or (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors of Borrower (together with any new directors whose election by the
board of directors of Borrower or whose nomination for election by the
Stockholders of Borrower was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office.
 
“Charges” means all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances (including
interest and penalties relating thereto) upon or relating to (a) the Collateral,
(b) the Obligations, (c) the employees, payroll, income or gross receipts of any
Credit Party, (d) any Credit Party’s ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party’s business.
 
“Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Credit Party, wherever located.
 
“Citibank Cash Collateral Account” means the Cash Collateral Account as defined
in the Security Agreement dated as of September 1, 2004 between Borrower and
Citibank, N.A. and the cash, cash equivalents and other investment property and
financial assets credited thereto, and all proceeds thereof, in an amount not to
exceed $20,000,000.
 
“Claim” has the meaning ascribed to such term in Section 101(5) of the
Bankruptcy Code.
 
“Closing Date” means September 16, 2005.
 
A-6

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

 
“Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex D.
 
“Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided, further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Administrative Agent’s or Lender’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
 
“Collateral” means all property and interests in property and proceeds thereof
now owned or hereafter acquired by any Credit Party in or upon which a Lien is
granted under this Agreement or any Collateral Documents.
 
“Collateral Documents” means this Agreement, the Mortgage, the Aircraft
Mortgage, the SGR Security Agreement, the Spare Parts Mortgage and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
 
“Collateral Reports” means the reports with respect to the Collateral referred
to in Annex F.
 
“Collection Account” means that certain account of the Administrative Agent,
account number 502-328-54 in the name of the Administrative Agent at
DeutscheBank Trust Company Americas in New York, New York ABA No. 021 001 033,
Account Name: GECC/CAF Depository, Reference: CFN5803/Term Loan, or such other
account as may be specified in writing by the Administrative Agent as the
“Collection Account.”
 
“Commitments” means (a) as to any Lender, the aggregate of such Lender’s Term A
Commitment, Term B Commitment and Term C Commitment as set forth on Annex J to
the Agreement or in the most recent Assignment Agreement executed by such Lender
and (b) as to all Lenders, the aggregate of all Lenders’ Term A Commitments,
Term B Commitments and Term C Commitments, as to each of clauses (a) and (b), as
such Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.
 
“Committee” means the official statutory committee of unsecured creditors
approved in the Cases pursuant to section 1102 of the Bankruptcy Code.
 
“Compliance Certificate” has the meaning ascribed to it in Section (b) of Annex
E.
 
A-7

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

 
“Concentration Account” has the meaning ascribed to it in Section (c) of Annex
C.
 
“Contracts” means all “contracts,” as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
 
“Control Letter” means a letter agreement, in form and substance satisfactory to
the Administrative Agent, between Administrative Agent and (i) the issuer of
uncertificated securities with respect to uncertificated securities in the name
of any Credit Party, (ii) a securities intermediary with respect to securities,
whether certificated or uncertificated, securities entitlements and other
financial assets held in a securities account in the name of any Credit Party,
(iii) a futures commission merchant or clearinghouse, as applicable, with
respect to commodity accounts and commodity contracts held by any Credit Party,
whereby, among other things, the issuer, securities intermediary or futures
commission merchant limits any security interest in the applicable financial
assets in a manner reasonably satisfactory to the Administrative Agent,
acknowledges the Lien of Administrative Agent for the benefit of Secured Parties
on such financial assets, and agrees to follow the instructions or entitlement
orders of the Administrative Agent without further consent by the affected
Credit Party. Any Control Letter substantially in the form of any Control Letter
in effect on the Closing Date shall be deemed to be satisfactory to the
Administrative Agent.
 
“Copyright License” means any and all rights now owned or hereafter acquired by
any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
 
“Copyright Security Agreements” means the Copyright Security Agreements made in
favor of Administrative Agent for the benefit of the Secured Parties, by each
applicable Credit Party substantially in the form of Exhibit C hereto.
 
“Copyrights” means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
 
“Credit Card” means any agreement or plan relating to a credit card, debit card,
charge card or other similar system, including but not limited to the American
Express Card, Diners Club, MasterCard, Visa Card, Carte Blanche and Discover
Card.
 
A-8

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

 
“Credit Card Receivables” means any right to payment in Dollars (including, but
not limited to, rights to payment for goods, services, insurance, fees, taxes,
prepayment penalties and finance charges) from (i) any issuer of a Credit Card
arising from goods or services provided or to be provided by a Credit Party or
(ii) to the extent that the right to such payment described in clause (i) has
been transferred in whole or part to U.S. Bank, National Association (“USB”) or
any other settlement and/or processing system, or, alternatively, to the extent
USB or any other settlement and/or processing system has received any
collections with respect to such right of payment, any right to payment from USB
or any other settlement and/or processing system arising from the transfer to or
by USB or any other settlement and/or processing system of such claims against
an issuer of a Credit Card.
 
“Credit Parties” means Borrower and each of the Guarantors.
 
“Default” means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
 
“Default Rate” has the meaning ascribed to it in Section 1.5(d).
 
“Delta Company” means Borrower and each of its Subsidiaries.
 
“Deposit Accounts” means all “deposit accounts” as such term is defined in the
Code, now or hereafter held in the name of any Credit Party.
 
“Designated Spare Parts Locations” means the locations set out in Disclosure
Schedule 3.26 and such other locations as are permitted by the Spare Parts
Mortgage.
 
“Desk-top Aircraft Appraisal Methodology” means, in determining an opinion as to
the Net Orderly Liquidation Value of Eligible Aircraft or Eligible Engines,
including but not limited to, taking at least the following actions: (i)
reviewing the most recent Collateral Report; (ii) reviewing the Appraiser’s
internal value database for values applicable to such Aircraft or Engines; and
(iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Aircraft or
Engines.
 
“Desk-top Ground Service Equipment Appraisal Methodology” means, in determining
an opinion as to the Net Orderly Liquidation Value of Eligible Ground Service
Equipment, including but not limited to, taking at least the following actions:
(i) reviewing the most recent Collateral Report; (ii) reviewing the Appraiser’s
internal value database for values applicable to such Ground Service Equipment;
and (iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Ground
Service Equipment.
 
“Desk-top Spare Parts Appraisal Methodology” means, in determining an opinion as
to the Net Orderly Liquidation Value of Eligible Spare Parts, including but not
limited to, taking at least the following actions: (i) reviewing the most recent
Collateral Report; (ii) reviewing the Appraiser’s internal value database for
values applicable to Spare Parts; (iii) developing a representative sampling of
a reasonable number of the different Spare Parts for which a market check will
be conducted; (iv) checking other sources, such as manufacturers, other
airlines, U.S. government procurement data and airline parts pooling price
lists, for orderly liquidation prices of the sample parts referred to in clause
(iii); (v) conducting a limited review of the inventory reporting system
applicable to the Spare Parts, including checking information reported in such
system against information determined through physical inspection; and (vi)
reviewing a sampling of the Spare Parts’ serviceability tags, books and records
(including tear-down reports).
 
A-9

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

 
“Desk-top Tooling Appraisal Methodology” means, in determining an opinion as to
the Net Orderly Liquidation Value of Eligible Tooling, including but not limited
to, taking at least the following actions: (i) reviewing the most recent
Collateral Report; (ii) reviewing the Appraiser’s internal value database for
values applicable to such Tooling; and (iii) checking other sources, such as
manufacturers, other airlines and U.S. government procurement data, for orderly
liquidation prices of such Tooling.
 
“DFW Assets” means assets located at the Dallas/Fort Worth hub facilities which
are disposed of in connection with the closing of such hub facilities as
disclosed in Borrower’s public disclosures on or prior to the Closing Date.
 
“DIP Fee Letter” means the Fee Letter, dated September 14, 2005, among GE
Capital, Morgan Stanley Senior Funding, Inc. and Borrower.
 
“DLMS” means Delta Loyalty Management Services, Inc.
 
“Documents” means any “documents,” as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
 
“Dollars” or “$” means lawful currency of the United States of America.
 
“Domestic Subsidiary” means a Subsidiary of Borrower organized under the laws of
any jurisdiction within the United States of America.
 
“DOT” shall mean the United States Department of Transportation or any analogous
successor agency.
 
“E-Fax” means any system used to receive or transmit faxes electronically.
 
“E-Signature” means the process of attaching to or logically associating with an
Electronic Transmission an electronic symbol, encryption, digital signature or
process (including the name or an abbreviation of the name of the party
transmitting the Electronic Transmission) with the intent to sign, authenticate
or accept such Electronic Transmission.
 
“E-System” means any electronic system, including Intralinks® and any other
Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Administrative Agent, any of its Related Persons or
any other Person, providing for access to data protected by passcodes or other
security system.
 
A-10

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

 
“EBITDAR” means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period, determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain during such period arising from the sale,
exchange or other disposition of capital assets by such Person (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”), and (v) 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 such Person for such period in accordance with
GAAP, but without duplication, plus (c) the sum of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items 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 such Person of any Stock,
(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 such Person for such period in accordance with GAAP, (viii) any aggregate net
loss during such period arising from a Capital Asset Sale, (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 and (xi) expenses incurred with respect to the
Chapter 11 reorganization as set forth on the Parent’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. For
purposes of this definition, the following items shall be excluded in
determining consolidated net income of a Person: (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, such Person or any of such Person’s Subsidiaries;
(2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such
income has actually been received by such Person 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 such Person; (7) in the case of a successor to
such Person 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 of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
 
“Effective Date” has the meaning ascribed to it in Section 2.2.
 
“Electronic Transmission” means each notice, request, instruction, demand,
report, authorization, agreement, document, file, information and any other
communication transmitted, posted or otherwise made or communicated by e-mail,
E-Fax, Internet or extranet-based site or any other equivalent electronic
service, whether owned, operated or hosted by the Administrative Agent, any
Affiliate of the Administrative Agent or any other Person.
 
A-11

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

 
“Eligible Accounts” means all of the Accounts owned by the Credit Parties and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to
the Administrative Agent shall be “Eligible Accounts” for purposes of this
Agreement, except, without duplication, any Account of the Credit Parties:
 
(a)     that does not arise from the air transportation of passengers, freight
and cargo or the sale of goods or performance of services by the Credit Parties
in the ordinary course of its business;
 
(b)     (i) upon which any Credit Party’s right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which any Credit Party is not able to bring suit or otherwise enforce
its remedies against the Account Debtor through judicial process, or (iii) if
the Account represents a progress billing consisting of an invoice for goods
sold or used or services rendered pursuant to a contract under which the Account
Debtor’s obligation to pay that invoice is subject to any Credit Party’s
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer; provided, that clauses (i) and (iii)
above shall not apply to receivables in respect of the transportation of
passengers in the ordinary course of business;
 
(c)     to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account;
 
(d)     that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for goods and services sold to or services
rendered, or to be rendered with respect to receivables in respect of the
transportation of passengers, and goods accepted by the applicable Account
Debtor;
 
(e)     Eligible Unbilled Accounts;
 
(f)      that is owed by any director, officer, other employee or Affiliate of
any Credit Party;
 
(g)     that is the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless the Credit
Party, if necessary or desirable, has complied with respect to such obligation
with the Federal Assignment of Claims Act of 1940, or any applicable state,
county or municipal law restricting the assignment thereof with respect to such
obligation and such assignment has been accepted and acknowledged by the
appropriate governmental officers;
 
(h)     that is the obligation of an Account Debtor located in (x) with respect
to Credit Card Receivables, Korea or Brazil and (y) with respect to all other
receivables, a foreign country other than Canada unless payment thereof is
assured by a letter of credit assigned and delivered to the Administrative
Agent, satisfactory to the Administrative Agent as to form, amount and issuer;
 
(i)      with respect to receivables in respect of the transportation of
passengers, to the extent any Credit Party owed the applicable Account Debtor
for services sold or rendered by such Account Debtor to such Credit Party but
only to the extent of the potential offset, including, without limitation under
code share arrangements, interline agreements or other agreements between
airlines in which tickets may be purchased on one airline and honored by another
airline;
 
A-12

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

 
(j)      that is in default and such default is reasonably likely to result in
such Account Debtor’s failure to make payment with respect to such Account;
provided, that, without limiting the generality of the foregoing, an Account
shall be deemed in default upon the occurrence of any of the following:
 

 
(i)
the Account is not paid within ninety (90) days following its original invoice
date;

 

 
(ii)
the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

 

 
(iii)
a petition is filed by or against any Account Debtor obligated upon such Account
under any bankruptcy law or any other federal, state or foreign (including any
provincial) receivership, insolvency relief or other law or laws for the relief
of debtors;

 
(k)     that is the obligation of an Account Debtor if fifty percent (50%) or
more of the Dollar amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth in clause (j) above;
 
(l)     as to which the Lien of the Administrative Agent for the benefit of the
Secured Parties is not a first priority perfected Lien;
 
(m)   as to which any of the representations or warranties in the Loan Documents
with respect to such specific Account are untrue;
 
(n)    to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper;
 
(o)    to the extent such Account exceeds any credit limit established by the
Administrative Agent, in its reasonable credit judgment;
 
(p)    except with respect to Credit Card Receivables, to the extent that such
Account, together with all other Accounts owing by such Account Debtor and its
Affiliates as of any date of determination exceed 10% of all Eligible Accounts;
 
(q)    that is payable in any currency other than Dollars;
 
(r)     that arises from interline activity including services and billings
performed between airlines (but excluding the transportation of passengers) and
the payment of which is handled through third party domestic or foreign clearing
houses;
 
A-13

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

 
(s)    that arises from the sale of Delta Skymiles through DLMS to Amex;
 
(t)     that are Ineligible Refundable Ticket Accounts or Eligible Refundable
Ticket Accounts; or
 
(u)    of any Credit Party which Credit Party has not been subject to a field
examination.
 
“Eligible Aircraft” means all of the Aircraft, except any Ineligible Term A
Borrowing Base Collateral, owned by the Credit Parties; provided, that (i) a
valid and enforceable first priority Lien on such Aircraft (subject only to
Permitted Encumbrances and other Liens approved by the Administrative Agent)
shall have been granted by the applicable Credit Party in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to the
Aircraft Mortgage and (ii) the Liens described in clause (i) above shall be in
full force and effect in favor of Administrative Agent for the benefit of the
Secured Parties at such time.
 
“Eligible Engines” means all of the Engines, except any Ineligible Term A
Borrowing Base Collateral, owned by the Credit Parties; provided, that (i) a
valid and enforceable first priority Lien on such Engine (subject only to
Permitted Encumbrances and other Liens approved by the Administrative Agent)
shall have been granted by the applicable Credit Party in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to the
Aircraft Mortgage and (ii) the Liens described in clause (i) above shall be in
full force and effect in favor of Administrative Agent for the benefit of the
Secured Parties at such time.
 
“Eligible Flight Simulators” means all of the Flight Simulators, except any
Ineligible Term A Borrowing Base Collateral, owned by the Credit Parties;
provided that (i) a valid and enforceable first priority Lien on such Flight
Simulators (subject only to Permitted Encumbrances and other Liens approved by
the Administrative Agent) shall have been granted by the applicable Credit
Parties in favor of Administrative Agent for the benefit of the Secured Parties
pursuant to the Loan Documents and (ii) the Liens described in clause (i) above
shall be in full force and effect in favor of Administrative Agent for the
benefit of the Secured Parties at such time.
 
“Eligible Ground Service Equipment” means all Ground Service Equipment owned by
Credit Parties and reflected in the most recent Term A Borrowing Base
Certificate delivered by Borrower to the Administrative Agent, except any
Ineligible Term A Borrowing Base Collateral.
 
“Eligible Real Estate” means any parcel of Owned Real Estate, except any
Ineligible Term A Borrowing Base Collateral, in the United States owned in fee
simple by the Credit Parties as to which each of the following conditions has
been satisfied at such time:
 
(a)     a valid and enforceable first priority Lien on such parcel of Real
Estate (subject only to Permitted Encumbrances and other Liens approved by the
Administrative Agent) shall have been granted by Borrower in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to a
Mortgage;
 
A-14

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

 
(b)     except as otherwise permitted by the Administrative Agent and, where
applicable, the relevant title insurance company shall have received in form and
substance satisfactory to the Administrative Agent, all Mortgage Supporting
Documents in respect of such parcel;
 
(c)     the Administrative Agent shall have received a FIRREA appraisal with
respect to such parcel of Real Estate in form and substance satisfactory to the
Administrative Agent and performed by an appraiser that is satisfactory to the
Administrative Agent;
 
(d)     no casualty shall have occurred affecting the use, operation or value of
such parcel of Real Estate if such casualty has not been restored or repaired by
the mortgagor under the Mortgage encumbering such parcel of Real Estate;
 
(e)     no condemnation or taking by eminent domain shall have occurred nor
shall any notice of any pending or threatened condemnation or other proceeding
against such parcel of Real Estate have been delivered to the owner or lessee of
such parcel of Real Estate that would materially affect the use, operation or
value of such parcel of Real Estate;
 
(f)     the mortgagor under the relevant Mortgage encumbering such parcel of
Real Estate shall comply in all material respects with the terms of such
Mortgage;
 
(g)     each written lease, license or other use or occupancy agreement, other
than the lease between Borrower and Worldspan L.P. and the lease between
Borrower and Verizon Airfone Inc. f/k/a GTE Airfone Incorporated (both of which
leases are disclosed on Part 3 of Disclosure Schedule 3.6), now or hereafter
affecting all or any portion of such parcel of Real Estate shall, by its express
terms, be subject and subordinate to the relevant Mortgage; and
 
(h)     each lease, license, or other use or occupancy agreement between a
Credit Party, as landlord, and its Affiliate, as tenant, now or hereafter
affecting all or any portion of such parcel of Real Estate shall be subject and
subordinate to the relevant Mortgage or shall be terminable (without fee) on 60
days’ prior written notice by the owner of such Real Estate.
 
“Eligible Refundable Ticket Accounts” means Eligible Accounts arising from the
sale of refundable tickets that are to be used within 30 days from the date of
issuance of such ticket.
 
“Eligible Spare Parts” means all of the Pledged Spare Parts owned by Credit
Parties and reflected in the most recent Term A Borrowing Base Certificate
delivered by Borrower to the Administrative Agent, except for any Ineligible
Term A Borrowing Base Collateral.
 
A-15

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

 
“Eligible Tooling” means all of the Tooling owned by Credit Parties and
reflected in the most recent Term A Borrowing Base Certificate delivered by
Borrower to the Administrative Agent, except any Ineligible Term A Borrowing
Base Collateral.
 
“Eligible Unbilled Accounts” means Eligible Accounts with respect to which an
invoice, reasonably acceptable to the Administrative Agent in form and
substance, (it being understood that the form of invoice customarily used by the
applicable Credit Party on the Closing Date shall be deemed to be satisfactory
to the Administrative Agent) has not been sent to the applicable Account Debtor.
 
“Engines” shall have the meaning ascribed to it in the Aircraft Mortgage.
 
“Environmental Laws” means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include CERCLA; the
Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101
et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§
136 et seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the
Toxic Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean Air Act (42
U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. §§
1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. §§ 651 et
seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any
and all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
 
“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, arising under or related to
any Environmental Laws, Environmental Permits, or in connection with any Release
or threatened Release or presence of a Hazardous Material whether on, at, in,
under, from or about or in the vicinity of any real or personal property.
 
“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
 
A-16

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

 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any regulations promulgated thereunder.
 
“ERISA Affiliate” means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of
the IRC.
 
“ERISA Event” means, with respect to any Credit Party or any ERISA Affiliate,
(a) any “reportable event” described in Section 4043 of ERISA with respect to a
Title IV Plan (other than a “reportable event” to which the 30-day notice is
waived under PBGC Regulation Section 4043); (b) the withdrawal of any Credit
Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Credit Party
or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice
of intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by
any Credit Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within thirty
(30) days; (g) any other event or condition that 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 Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan’s qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
 
“Escrow Accounts” shall mean (1) accounts of Borrower or any Subsidiary, solely
to the extent any such accounts hold funds set aside by Borrower or any
Subsidiary to manage the collection and payment of amounts collected, withheld
or incurred by 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; and (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); in each case, held in escrow accounts, trust funds or other segregated
accounts in an aggregate amount for all of such escrow accounts, trust funds and
other segregated accounts not in excess of $300,000,000, plus accrued interest;
provided, that such amount may be increased upon an increase in any of the
foregoing taxes, fees and charges for which Borrower’s or any Subsidiary’s
officers and directors may have personal liability if not paid; or (2) accounts,
capitalized interest accounts, debt service reserve accounts and other similar
accounts or funds established in connection with the ARB Indebtedness.
 
A-17

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

 
“ESOP” means a Pension Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
 
“Event of Default” has the meaning ascribed to it in Section 8.1.
 
“Excess Aggregate Cash On Hand” means, as of any date, the amount by which the
actual Aggregate Cash On Hand as of such date exceeds the minimum Aggregate Cash
On Hand required to be maintained on such date by Section (c) of Annex G.
 
“Excluded Accounts” shall mean (i) the Escrow Accounts, (ii) Restricted
Accounts; and (iii) accounts located outside the United States; provided, that
the aggregate amount held in all such accounts under this clause (iii) at any
time does not exceed $100,000,000.
 
“Excluded Collateral” means, collectively, (i) Excluded Accounts (other than the
Credit Parties’ rights to receive any excess funds remaining in the Escrow
Accounts following the payment in full of the taxes, fees and charges payable
from such Escrow Accounts and other than the Credit Parties’ rights to receive
any excess funds remaining in the Restricted Accounts), (ii) Excluded Equity,
(iii) JV Interests, (iv) Excluded Equipment, (v) Section 1110 Assets,
(vi) Avoidance Actions, (vii) any asset subject to the restrictions on Liens set
forth in Section 5.12(b), (viii) any asset excluded as Collateral in the SGR
Security Agreement (other than any Proceeds thereof that any Credit Party is
entitled to receive) and, to the extent the Administrative Agent has otherwise
consented in writing, in any other Collateral Documents.
 
“Excluded Equipment” means Equipment financed, in whole or in part, by ARB
Indebtedness or otherwise to the extent the granting of a security interest in
such Equipment would constitute a breach or violation of a valid and effective
restriction in favor of a third party or give rise to any indemnification
obligations or any right to terminate or commence the exercise of remedies under
such restrictions, in each case, to the extent not subject to the automatic
stay; provided, that “Excluded Equipment” shall not include Proceeds,
substitutions or replacements of Excluded Equipment (unless such Proceeds,
substitutions or replacements would constitute Excluded Equipment), but only to
the extent, and for so long as, such restriction is not terminated or rendered
unenforceable or otherwise deemed ineffective by the Code or any other
applicable law.
 
“Excluded Equity” means, collectively, (i) equity interests in the Excluded
Issuers and in any public company and (ii) any Voting Stock in excess of 65% of
the total outstanding Voting Stock of any Foreign Subsidiary of any Credit
Party. For purposes of this definition, “Voting Stock” means, as to any issuer,
the issued and outstanding shares of each class of capital stock or other
membership interests of such issuer entitled to vote (within the meaning of
Treasury Regulations § 1.956-2(c)(2)).
 
“Excluded Issuer” means (i) Delta Air Lines, Inc. and Pan American World
Airways, Inc., GMBH, (ii) Guardant, Inc., (iii) Delta Air Technology, Ltd., (iv)
Aero Assurance Ltd. and (v) New Sky, Ltd.
 
“Excluded Obligations” means contingent indemnification and expense
reimbursement obligations.
 
A-18

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

 
“Excluded Properties” means the three real properties set forth on Part 1 of
Disclosure Schedule 3.6, the sale of which is permitted in accordance with the
Agreement.
 
“Excluded Sales” means (i) the sales of spare engines and related inventory with
respect to the MD-11 aircraft sold prior to the Closing Date, (ii) the sale of
the business of DAL Global Services LLC, Delta Technology, LLC, Delta AirElite
Business Jets, Inc., Delta Connection Academy, Inc. and the technical operations
(aircraft maintenance) division of Borrower, (iii) the disposition of any
Skymiles Collateral, (iv) the sale of the reservation operations of Borrower,
(v) the sale or other disposition of Permitted Investments for cash or in
exchange for Permitted Investments and (vi) the sale of Inventory in the
ordinary course of business.
 
“Excluded Subsidiaries” means (i) Aero Assurance, Ltd. and its subsidiaries and
(ii) Guardant, Inc.
 
“Existing Credit Agreement” has the meaning ascribed to it in the recitals
hereto.
 
“Existing Letters of Credit” has the meaning ascribed to it in paragraph
(b)(iii) of Annex B.
 
“Existing Secured Indebtedness” has the meaning ascribed to it in Section
6.3(a)(v) hereof.
 
“FAA” means the Federal Aviation Administration of the United States of America,
and any successor Governmental Authority.
 
“FAA Slots” has the meaning ascribed to it in the SGR Security Agreement.
 
“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.
 
“Fair Market Value” means (a) with respect to any asset or group of assets
(other than a marketable Security) at any date, the value of the consideration
obtainable in a sale of such asset at such date assuming a sale by a willing
seller to a willing purchaser dealing at arm’s length and arranged in an orderly
manner over a reasonable period of time having regard to the nature and
characteristics of such asset, as reasonably determined by the Chief Financial
Officer or Treasurer or, if such asset shall have been the subject of an
appraisal within the last twelve months by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected by
the Administrative Agent.
 
“Federal Funds Rate” means, for any day, a floating rate equal to the weighted
average of the rates on overnight federal funds transactions among members of
the Federal Reserve System, as determined by the Administrative Agent in its
sole discretion, which determination shall be final, binding and conclusive
(absent manifest error).
 
A-19

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

 
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.
 
“Fee Letters” means, collectively, the Amended and Restated Arrangement Fee
Letter and the DIP Fee Letter.
 
“Fees” means any and all fees payable to the Administrative Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
 
“Final Order” means an order, approving or authorizing this Agreement and the
other Loan Documents and the incurrence by the Credit Parties hereunder of
post-petition secured and super-priority Indebtedness in an aggregate principal
amount of not less than $1,900,000,000 in accordance with this Agreement, issued
by the Bankruptcy Court in form and substance satisfactory to the Administrative
Agent, the Arrangers and the Requisite Lenders.
 
“Financial Covenants” means the financial covenants set forth in Annex G.
 
“Financial Statements” means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Section 3.4 and Annex E.
 
“First Day Orders” means all orders entered by the Bankruptcy Court in respect
of motions filed on the Petition Date or within five Business Days thereafter.
 
“Fiscal Month” means any of the monthly accounting periods of Borrower.
 
“Fiscal Quarter” means any of the quarterly accounting periods of Borrower,
ending on March 31, June 30, September 30 and December 31 of each year.
 
“Fiscal Year” means any of the annual accounting periods of Borrower ending on
December 31 of each year.
 
“Fixtures” means all “fixtures” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party.
 
“Flight Simulators” means the flight simulators and flight training devices of
Borrower or any Subsidiary.
 
“Foreign Aviation Authority” shall have the meaning ascribed to it in the SGR
Security Agreement.
 
“Foreign Subsidiary” means any Subsidiary which is a “controlled foreign
corporation” within the meaning of the Internal Revenue Code of 1986, as amended
from time to time.
 
A-20

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

 
“Foreign Slots” has the meaning ascribed to it in the SGR Security Agreement.
 
“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied, as such term is further defined in Annex G to the
Agreement.
 
“Gates” shall have the meaning ascribed to it in the SGR Security Agreement.
 
“GECAS Facilities” means, collectively, (i) the Reimbursement Agreement, dated
as of May 1, 2003, among Borrower, GE Capital (or its subsidiary, affiliate,
associated company, owner, trustee or permitted assignee) and the lenders
signatory thereto, as the same may be amended, restated, supplemented or
otherwise modified from time to time, and each of the Operative Documents
referred to therein, as the same may be amended, restated, supplemented or
otherwise modified from time to time; (ii) the Amended and Restated Credit
Agreement (Spare Parts), dated as of July 7, 2004, among Borrower, GE Capital
(or its subsidiary, affiliate, associated company, owner, trustee or permitted
assignee) and U.S. Bank, as the same may be amended, restated, supplemented or
otherwise modified from time to time, and each of the Operative Documents
referred to therein, as the same may be amended, restated, supplemented or
otherwise modified from time to time; (iii) the Amended and Restated Loan
Agreement (Engines), dated as of July 7, 2004, among GE Capital (or its
subsidiary, affiliate, associated company, owner, trustee or permitted
assignee), Borrower and U.S. Bank, as the same may be amended, restated,
supplemented or otherwise modified from time to time, and each of the Operative
Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (iv) the Amended and
Restated Loan Agreement (Aircraft), dated as of July 7, 2004, among Borrower, GE
Capital (or its subsidiary, affiliate, associated company, owner, trustee or
permitted assignee) and U.S. Bank, as the same may be amended, restated,
supplemented or otherwise modified from time to time, and each of the Operative
Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (v) the Amended and
Restated Payment and Indemnity Agreement, dated as of November 30, 2004, between
Borrower and the Beneficiaries identified therein, as the same may be amended,
restated, supplemented or otherwise modified from time to time, and each of the
Operative Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (vi) the CRJ Put
Agreement, dated as of November 30, 2004, between GE Capital (or its subsidiary,
affiliate, associated company, owner, trustee or permitted assignee) and
Borrower and the twelve leases and related agreements to which Borrower is a
party, as each may be amended, restated, supplemented or otherwise modified from
time to time; (vii) the CRJ Put Agreement II, to be entered into by Aviation
Financial Services Inc. and Borrower pursuant to the Letter of Intent, and the
leases and related agreements to be entered into by Borrower pursuant to the CRJ
Put Agreement II, as each may be amended, restated, supplemented or otherwise
modified from time to time; and (viii) the Second Restructuring Agreement to be
entered into by GE Capital (or its subsidiary, affiliate, associated company,
owner, trustee or permitted assignee), Borrower and U.S. Bank in connection with
the Letter of Intent, as the same may be amended or otherwise modified from time
to time.
 
“GE Capital” means General Electric Capital Corporation, a Delaware corporation.
 
A-21

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

 
“GE Capital Commitment Letter” means the Commitment Letter, dated September 10,
2005, between GE Capital and Borrower.
 
“General Intangibles” means “general intangibles,” as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including all
right, title and interest that such Credit Party may now or hereafter have in or
under any Contract, all payment intangibles, customer lists, Licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, Software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all Books and Records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
 
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including but not limited to, any
Aviation Authority.
 
“Granting Lender” has the meaning ascribed to it in Section 11.1(e).
 
“Ground Service Equipment” means ground service equipment, de-icers, ground
support equipment, aircraft cleaning devices, materials handling equipment and
other similar equipment used to service equipment.
 
“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness
(“primary obligation”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person to (a) purchase
or repurchase any such primary obligation, (b) advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, (d) protect the
beneficiary of such arrangement from loss (other than product warranties given
in the ordinary course of business) or (e) indemnify the owner of such primary
obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
 
A-22

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

 
“Guarantors” means each Domestic Subsidiary of Borrower, other than the Excluded
Subsidiaries, and each other Person, if any, that executes a guaranty or other
similar agreement in favor of Administrative Agent for the benefit of the
Secured Parties in connection with the transactions contemplated by the
Agreement and the other Loan Documents.
 
“Hazardous Material” means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s),
or any radioactive substance.
 
“IATA” means International Air Transport Association.
 
“Indebtedness” means, with respect to any Person, without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers’ acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations, but
excluding any claims arising upon the rejection of unexpired leases and other
executory contracts.
 
“Indemnified Liabilities” has the meaning ascribed to it in Section 1.11(a).
 
A-23

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

 
“Indemnified Person” has the meaning ascribed to it in Section 1.11(a).
 
“Index Rate” means, for any day, a floating rate equal to the higher of (i) the
rate publicly quoted from time to time by The Wall Street Journal as the “prime
rate” (or, if The Wall Street Journal ceases quoting a prime rate, the highest
per annum rate of interest published by the Federal Reserve Board in Federal
Reserve statistical release H.15 (519) entitled “Selected Interest Rates” as the
Bank prime loan rate or its equivalent), and (ii) the Federal Funds Rate plus 50
basis points per annum. Each change in any interest rate provided for in the
Agreement based upon the Index Rate shall take effect at the time of such change
in the Index Rate.
 
“Index Rate Loan” means a Loan or portion thereof bearing interest by reference
to the Index Rate.
 
“Ineligible Refundable Ticket Accounts” means Accounts arising from the sale of
refundable tickets that are to be used later than 30 days from the date of
issuance of such ticket.
 
“Ineligible Term A Borrowing Base Collateral” means any Aircraft, Engines,
Tooling, Flight Simulators, Ground Service Equipment and Spare Parts that:
 
(a)    is not subject to a valid and enforceable first priority Lien on such
Collateral (subject only to Permitted Encumbrances and other Liens approved by
the Administrative Agent) granted by the applicable Credit Party in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to a
Collateral Document;
 
(b)    is not located on premises (i) leased by Credit Party or (ii) owned by
Credit Party and subject to a valid and enforceable first priority Mortgage in
favor of Administrative Agent for the benefit of the Secured Parties pursuant to
a Collateral Document;
 
(c)    is placed on consignment, is in transit or out for repair, except for
Collateral (other than Spare Parts) in transit between domestic locations of
Credit Parties as to which Liens of Administrative Agent for the benefit of the
Secured Parties have been perfected at origin and destination; 
 
(d)    is covered by a negotiable document of title, unless such document has
been delivered to the Administrative Agent with all necessary endorsements,
 
(e)    is not of a type used in the ordinary course of Credit Parties’ business;
 
(f)     as to which any of the representations or warranties pertaining to
Collateral set forth in the Loan Documents are untrue;
 
(g)    consists of Hazardous Materials or goods that can be transported or sold
only with licenses that are not readily available;
 
(h)    is not covered by casualty insurance required to be maintained under the
Collateral Documents;
 
A-24

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

 
(i)     is subject to any patent or trademark license requiring the payment of
royalties or fees or requiring the consent of the licensor for a sale thereof by
the Administrative Agent;
 
(j)     constitutes Technology Equipment;
 
(k)    has not been appraised in accordance with Section 5.20 of the Agreement;
or
 
(l)     with respect to any Aircraft or Engine, as to which Borrower fails to
cure a Maintenance Default during the Maintenance Cure Period.
 
“Instruments” means all “instruments,” as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and, in any
event, including all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
 
“Intellectual Property” means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks, and Technology.
 
“Intercompany Notes” has the meaning ascribed to it in Section 6.3(a)(vii).
 
“Interest Expense” means, with respect to any Person for any fiscal period,
interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date.
 
“Interest Payment Date” means (a) as to any Index Rate Loan, the first Business
Day of each month to occur while such Loan is outstanding, and (b) as to any
LIBOR Loan, the last day of the applicable LIBOR Period; provided, that in the
case of any LIBOR Period greater than three months in duration, interest shall
be payable at three month intervals and on the last day of such LIBOR Period;
and provided, further that, in addition to the foregoing, each of (x) the date
upon which all of the Commitments have been terminated and the Loans have been
paid in full and (y) the Maturity Date shall be deemed to be an “Interest
Payment Date” with respect to any interest that has then accrued under the
Agreement.
 
“Inventory” means any “inventory,” as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party’s business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded Software.
 
“Investment Property” means all “investment property” as such term is defined in
the Code now owned or hereafter acquired by any Credit Party, wherever located,
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of such Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit Party.
 
A-25

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

 
“Investments” has the meaning ascribed to it in Section 6.2.
 
“IRC” means the Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder.
 
“IRS” means the Internal Revenue Service.
 
“JV Interests” means any joint venture interest held by any Credit Party to the
extent such Credit Party is restricted from assigning or pledging such interest
pursuant to legally binding arrangements between the joint venture parties;
provided, that “JV Interests” shall not include any Proceeds of such property.
 
“L/C Cash Collateral” means the cash and Cash Equivalents deposited from time to
time by the Borrower in the L/C Cash Collateral Account.
 
“L/C Cash Collateral Account” means a cash collateral account maintained at a
bank or financial institution acceptable to the Administrative Agent, subject to
a Blocked Account Agreement, into which cash or Cash Equivalents are deposited
pursuant to Section 1.1(a)(i).
 
“L/C Issuer” has the meaning ascribed to it in Annex B.
 
“L/C Reimbursement Amount” has the meaning ascribed to it in Annex B.
 
“L/C Subfacility” has the meaning ascribed to it in Section 1.1(a)(iv).
 
“Letter of Credit” means each documentary or standby letters of credit issued
under the Loan Documents for the account of Borrower or any of the Credit
Parties by any L/C Issuer.
 
“Letter of Credit Obligations” means the sum, without duplication, of (i) the
amount available for drawing under all outstanding Letters of Credit and (ii)
the aggregate unpaid amount of all outstanding reimbursement obligations in
respect of previous drawings under Letters of Credit.
 
“Letter of Credit Rights” means “letter-of-credit rights” as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
 
A-26

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

 
“Letter of Intent” means the Letter of Intent, dated as of December 14, 2005,
between GE Capital and Borrower, as amended or otherwise modified from time to
time.
 
“Lenders” means GE Capital, the other Lenders named on the signature pages of
the Agreement and, if any such Lender shall decide to assign all or any portion
of the Obligations in accordance with Section 11.1(a), such term shall include
any assignee of such Lender.
 
“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a result thereto
and fees, charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
 
“LIBOR Business Day” means a Business Day on which banks in the City of London
are generally open for interbank or foreign exchange transactions.
 
“LIBOR Loan” means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.
 
“LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day selected by Borrower pursuant to the Agreement and ending
one, two, three or six months thereafter, as selected by Borrower’s irrevocable
notice to the Administrative Agent as set forth in Section 1.5(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
 
(a)     if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding LIBOR Business Day;
 
(b)     any LIBOR Period that would otherwise extend beyond the Maturity Date
shall end on or prior to such date;
 
(c)     any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month; and
 
(e)     Borrower shall select LIBOR Periods so that there shall be no more than
5 separate LIBOR Loans in existence at any one time.
 
“LIBOR Rate” means for each LIBOR Period, a rate of interest determined by the
Administrative Agent equal to the offered rate for deposits in United States
Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 as of
11:00 a.m. (London time), on the second full LIBOR Business Day next preceding
the first day of such LIBOR Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used). If such interest
rates shall cease to be available from Telerate News Service, the LIBOR Rate
shall be determined from such financial reporting service or other information
as shall be mutually acceptable to the Administrative Agent and Borrower.
 
A-27

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

 
“License” means any Copyright License, Patent License, Trademark License or
other similar license of rights or interests now held or hereafter acquired by
any Credit Party.
 
“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any capital lease or
conditional sale agreement, and any financing lease having substantially the
same economic effect as any of the foregoing).
 
“Litigation” has the meaning ascribed to it in Section 3.13.
 
“Loan” means any loan made by any Lender pursuant to this Agreement.
 
“Loan Account” has the meaning ascribed to it in Section 1.10.
 
“Loan Documents” means the Agreement, the Notes, the Collateral Documents, the
Fee Letters, Borrowing Base Certificates and all other agreements, instruments,
documents and certificates executed and delivered to, or in favor of, the
Administrative Agent or any Lender in connection with the Agreement and the
transactions contemplated thereby and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, letter of credit agreements
and all other written agreements whether heretofore, now or hereafter executed
by or on behalf of any Credit Party and delivered to the Administrative Agent or
any Lender in connection with the Agreement or the transactions contemplated
thereby. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to the Agreement or such Loan Document as the same may be in effect at any
and all times such reference becomes operative.
 
“Maintenance Cure Period” has the meaning ascribed to it in Section 8.1(d).
 
“Maintenance Default” has the meaning ascribed to it in Section 8.1(d).
 
“Margin Stock” has the meaning ascribed to it in Section 3.10.
 
“Master Documentary Agreement” means the Master Agreement for Documentary
Letters of Credit between Borrower, as Applicant, and GE Capital, as L/C Issuer,
to be executed prior to issuance of any Letter of Credit, in form and substance
reasonably satisfactory to the Administrative Agent.
 
“Master Standby Agreement” means the Master Agreement for Standby Letters of
Credit between Borrower, as Applicant, and GE Capital, as L/C Issuer, to be
executed prior to issuance of any Letter of Credit, in form and substance
reasonably satisfactory to the Administrative Agent.
 
A-28

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

 
“Material Adverse Effect” means a material adverse effect on (i) the business,
assets, operations or financial or other condition or prospects of (x) Borrower
or (y) the Credit Parties taken as a whole (other than the commencement of the
Cases and events customarily leading up to and following the commencement of the
Cases or otherwise reflected in the operating budget dated September 9, 2005
provided to the Administrative Agent), (ii) the ability of Borrower or
Guarantors to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (iii) the Collateral, the Liens of
Administrative Agent for the benefit of the Secured Parties on the Collateral,
or the priority of such Liens, or (iv) the Administrative Agent’s or Lender’s
rights and remedies under the Agreement and the other Loan Documents.
 
“Material Location” has the meaning ascribed to it in Section 5.8.
 
“Material Real Estate Contracts” means (for purposes of the Agreement only) any
lease, usufruct, use agreement, license, permit or other occupancy or facility
use agreement under which a Credit Party is a tenant or counterparty, that has a
remaining term of three (3) years or more as of the Closing Date and (i) subject
to receipt of any necessary consents, could be assigned to another user for a
cash payment in excess $10,000,000 with a novation of such Credit Party, or (ii)
relates to major facilities required for a Credit Party’s operations, the loss
of the lease, usufruct, use agreement, license, permit or other occupancy or
facility use agreement with respect thereto would materially and adversely
affect a Credit Party’s ability to conduct its business as now being conducted.
 
“Maturity Date” the earliest of (a) Scheduled Maturity Date, (b) the effective
date of a Plan of Reorganization and (c) the date of termination of Lenders’
obligations to permit existing Loans to remain outstanding pursuant to Section
8.2(b).
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Mortgage” means each of the mortgages, deeds to secured debt, deeds of trust or
other real estate security documents delivered by any Credit Party to the
Administrative Agent on behalf of itself and Lenders with respect to the Owned
Real Estate, substantially in the form attached as Exhibit D hereto.
 
“Mortgage Supporting Documents” means, with respect to a Mortgage for a parcel
of Real Estate, each of the following:
 
(a)     (i) evidence in form and substance reasonably satisfactory to the
Administrative Agent that the recording of counterparts of such Mortgage in the
recording offices specified in such Mortgage will create a valid, perfected and
enforceable first priority lien on property described therein in favor of
Administrative Agent for the benefit of the Secured Parties (or in favor of such
other trustee as may be required or desired under local law) subject only to
(A) Permitted Encumbrances and (B) such other Liens as the Administrative Agent
may reasonably approve and (ii) an opinion of counsel in each state in which any
such Mortgage is to be recorded in form and substance and from counsel
reasonably satisfactory to the Administrative Agent;
 
A-29

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

 
(b)   if requested by the Administrative Agent in its reasonable discretion,
(i) a mortgagee’s title policy (or policies) or marked-up unconditional binder
(or binders) for such insurance (or other evidence reasonably acceptable to the
Administrative Agent proving ownership thereof) (“Mortgagee’s Title Insurance
Policy”), dated a date satisfactory to the Administrative Agent, and shall
(A) be in an amount equal to 110% of the appraised value (determined by
reference to the initial FIRREA appraisals) of such parcel of Real Estate,
(B) be issued at ordinary rates, (C) insure that the Lien granted pursuant to
the Mortgage insured thereby creates a valid first priority Lien on such parcel
of Real Estate free and clear of all defects and encumbrances, except for
Permitted Encumbrances and for such defects and encumbrances as may be approved
by the Administrative Agent, (D) name Administrative Agent for the benefit of
the Secured Parties as the insured thereunder, (E) be in the form of ALTA Loan
Policy - 1992 (or such local equivalent thereof as is reasonably satisfactory to
the Administrative Agent), (F) contain such endorsements and affirmative
coverage as the Administrative Agent may request to the extent available in the
applicable jurisdictions (including but not limited to a comprehensive lender’s
endorsement, a zoning endorsement and a floating rate endorsement), (G) be
issued by Lawyers Title Insurance Corporation, Chicago Title Insurance Company
or any other title company reasonably satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers),
(H) delete the general survey exception, and (I) be otherwise in form and
substance reasonably satisfactory to the Administrative Agent and (ii) a copy of
all documents referred to, or listed as exceptions to title, in such title
policy (or policies) in each case in form and substance reasonably satisfactory
to the Administrative Agent;
 
(c)   as-built surveys of such parcel of Real Estate certified to and received
by (in a manner reasonably satisfactory to each of them) Administrative Agent
for the benefit of the Secured Parties and, if the Administrative Agent requires
a Mortgage Title Insurance Policy pursuant to clause (a) above, the title
insurance company issuing the Mortgagee’s Title Insurance Policy for such
Mortgage, dated a date reasonably satisfactory to the Administrative Agent and
such title insurance company, by an independent professional licensed land
surveyor reasonably satisfactory to the Administrative Agent and such title
insurance company, which maps or plats and the surveys on which they are based
shall be made in form and substance reasonably satisfactory to the
Administrative Agent;
 
(d)   evidence in form and substance reasonably satisfactory to the
Administrative Agent that all premiums in respect of each Mortgagee’s Title
Insurance Policy, all recording fees and stamp, documentary, intangible or
mortgage taxes, if any, in connection with the Mortgage have been paid;
 
(e)   a Phase I environmental report with respect to such parcel of Real Estate,
dated a date not more than one year prior to November 30, 2004, showing no
material condition of environmental concern and otherwise in form and substance
reasonably satisfactory to the Administrative Agent; and
 
A-30

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

 
(f)    such other agreements, documents and instruments in form and substance
reasonably satisfactory to the Administrative Agent as the Administrative Agent
deems necessary or appropriate to create, register or otherwise perfect,
maintain, evidence the existence, substance, form or validity of, or enforce a
valid and enforceable first priority lien on such parcel of Real Estate in favor
of Administrative Agent for the benefit of the Secured Parties (or in favor of
such other trustee as may be required or desired under local law) subject only
to Permitted Encumbrances.
 
“Mortgagee’s Title Insurance Policy” has the meaning ascribed to it in the
definition of “Mortgage Supporting Documents”.
 
“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making,
is obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
 
“Net Capital Expenditures” means, for any period, Capital Expenditures for such
period plus (without duplication) (i) any increases in the aggregate amount of
advances or deposits made in connection with Capital Expenditures during such
period, and (ii) the amount by which the aggregate principal amount of any
Indebtedness incurred pursuant to Section 6.3(a)(i) (“Purchase Money Debt”) was
reduced in connection with any refinancing of interim Purchase Money Debt during
such period, minus (without duplication) (x) the aggregate principal amount of
any Purchase Money Debt incurred during such period, including without
limitation in connection with any increase in Purchase Money Debt incurred in
connection with any refinancing of interim Purchase Money Debt, and (y) any
decreases in advances or deposits made in connection with Capital Expenditures
during such period.
 
“Net Cash Proceeds” means proceeds received by any Credit Party after the
Closing Date in cash or Cash Equivalents from:
 
(a)    (i) Asset Sales permitted under Section 6.8(a) in excess of $5,000,000,
individually or in the aggregate, for any Fiscal Year (other than (x) Asset
Sales of Aircraft and (y) any single Asset Sale resulting in gross proceeds not
exceeding $5,000), (ii) Asset Sales of any Collateral included in the Term A
Borrowing Base permitted under Section 6.8(c)(ii), (iii) any Excluded Sales
permitted under Section 6.8(d) and of the type described in clause (ii) or (iv)
of the definition thereof, to the extent resulting in gross proceeds in excess
of $50,000,000, individually or in the aggregate, and (iv) any other Asset Sale
(other than (A) any Asset Sale permitted under Sections 6.8(c)(i), (d) (except,
for the avoidance of doubt, to the extent required by clause (iii) above), (e),
(f), (g), (i), (j), (k), (l), (n) (other than sales of Section 1110 Assets or
Non-1110 Aviation Assets) or (o) or (B) any single Asset Sale resulting in gross
proceeds not exceeding $5,000), in excess of $5,000,000, individually or in the
aggregate, for any Fiscal Year for all such Asset Sales, in each case, net of
(1) the reasonable cash costs of sale, assignment or other disposition,
(2) taxes paid or reasonably estimated to be payable as a result thereof, (3)
reserves provided, to the extent required by GAAP, against any liabilities that
are directly attributed to such Asset Sale (clauses (1), (2) and (3)
collectively referred to herein as the “Sale Costs”) and (4) any amount required
to be paid or prepaid on Indebtedness or other obligations (other than the
Obligations) secured by the assets subject to such Asset Sale, or otherwise
required to be repaid as a result of such Asset Sale; provided, 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; and
 
A-31

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

 
(b)   Property Loss Event, net of (1) the costs of collection (the “Collection
Costs” and, together with the Sale Costs, “Costs”), (2) the amounts required to
be applied pursuant to the terms of any ARB Indebtedness in respect of any asset
subject thereto, (3) any amounts required to be applied as described in Section
5.4(d) and (4) any amount required to be paid or prepaid on Indebtedness or
other obligations (other than the Obligations) secured by the assets subject to
such Property Loss Event, or otherwise required to be repaid as a result of such
Property Loss Event;
 
provided, that, if the aggregate Costs related to any Asset Sale or any Property
Loss Event exceeds $500,000, evidence of each such Costs shall be provided to
the Administrative Agent, in form and substance reasonably satisfactory to them.
 
“Net Orderly Liquidation Value” shall mean with regard to any Eligible Aircraft,
Eligible Engines, Eligible Spare Parts, Eligible Ground Service Equipment,
Eligible Flight Simulators or Eligible Tooling, the net orderly liquidation
value of such Eligible Aircraft, Eligible Spare Parts, Eligible Ground Service
Equipment, Eligible Flight Simulators or Eligible Tooling, as the case may be,
as determined by reference to the most recent appraisal of the applicable Credit
Party.
 
“Non-Funding Lender” has the meaning ascribed to it in Section 11.9(a).
 
“Non-1110 Agreement” shall mean any agreement related to property that would
have qualified as “equipment,” as such term is used in Section 1110(a)(3) of the
Bankruptcy Code if it had been placed in service on or prior to October 22,
1994, including, without limitation, security agreements, mortgages, trusts,
leases, conditional sale agreements or other instruments applicable to such
property.
 
“Non-1110 Aviation Assets” shall mean (a) property that would have qualified as
“equipment,” as such term is used in Section 1110(a)(3) of the Bankruptcy Code
if it had been placed in service on or prior to October 22, 1994 and all
Non-1110 Agreements, to the extent that the Credit Parties are prohibited from
granting liens thereon or assignments thereof under the terms of any such
agreements in effect at the commencement of the Cases (and to the extent
permitted by this Agreement, as such Non-1110 Agreement may be amended,
modified, refinanced or restructured), (b) any other asset with respect to which
the granting of any lien would cause a default, directly or indirectly, of any
such Non-1110 Agreements, (c) any deposits and reserves held or maintained
pursuant to such agreement or (d) property referred to in the previous clauses
that the Borrower or any of the Guarantors elects to return to the party
providing financing therefor in exchange for a discharge of the related
indebtedness; provided, that Non-1110 Aviation Assets shall not include any
Proceeds of such property (but only to the extent that the Credit Parties are
entitled to such Proceeds).
 
A-32

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

 
“Non-Stayed Order” means an order of the Bankruptcy Court which is in full force
and effect, as to which no stay has been entered and which has not been
reversed, modified, vacated or overturned.
 
“Note” has the meaning assigned to it in Section 1.1(a).
 
“Notice of Actionable Default” has the meaning ascribed to it in the Skymiles
Intercreditor Agreement.
 
“Notice of Conversion/Continuation” has the meaning ascribed to it in Section
1.5(e).
 
“Obligations” means all loans, advances, debts, liabilities and obligations, for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by any Credit Party to the Administrative
Agent or any Lender, and all covenants and duties regarding such amounts, of any
kind or nature, present or future, whether or not evidenced by any note,
agreement, letter of credit agreement or other instrument, arising under the
Agreement or any of the other Loan Documents. This term includes all principal,
interest (including all interest that accrues after the commencement of any case
or proceeding by or against any Credit Party in bankruptcy, whether or not
allowed in such case or proceeding), Fees, expenses, attorneys’ fees and any
other sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
 
“Op Specs” means Operating Specifications issued by the FAA under Part 121 of
the Federal Aviation Regulations authorizing an air carrier’s operations
to/from/within the United States.
 
“Original Borrowing Base Assets” has the meaning ascribed to it in Section
1.2(c)(i).
 
“Owned Real Estate” has the meaning ascribed to it in Section 3.6(b) and Section
5.12(a)(iv).
 
“Patent License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on
which a Patent is in existence.
 
“Patent Security Agreements” means the Patent Security Agreements made in favor
of Administrative Agent for the benefit of the Secured Parties by each
applicable Credit Party.
 
“Patents” means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
 
A-33

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

 
“PBGC” means the Pension Benefit Guaranty Corporation.
 
“Pension Plan” means a Plan which is an “employee pension benefit plan”
described in Section 3(2) of ERISA.
 
“Permits” has the meaning ascribed to it in Section 3.24.
 
“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes
or assessments or other governmental Charges not yet due and payable or which
are being contested in accordance with Section 5.2(b); (b) pledges or deposits
of money securing statutory obligations under workmen’s compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases (other than leases of aircraft) to which any Credit Party is a
party as lessee made in the ordinary course of business; (d) workers’,
mechanics’ or similar liens arising in the ordinary course of business, so long
as such Liens are inchoate and unperfected and attach only to Tooling, Fixtures
and/or real estate or being contested in accordance with Section 5.2(b); (e)
carriers’, warehousemen’s, suppliers’ or other similar possessory liens arising
in the ordinary course of business so long as such Liens are inchoate and
unperfected and attach only to Inventory or being contested in accordance with
Section 5.2(b); (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(i); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any real estate or interests of any Credit Party in real estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use or the value of any parcel of Owned Real
Estate; (i) presently existing or hereafter created Liens in favor of
Administrative Agent for the benefit of the Secured Parties; (j) statutory and
common law landlords’ liens under leases to which any Credit Party is a party
(subject to the requirements of Section 5.8); (k) (i) leases, subleases,
licenses, permits and similar use rights, entered into in the ordinary course of
business with respect to the Owned Real Estate, that are by their express terms
subject and subordinate to Administrative Agent’s Liens, for the benefit of
Secured Parties, in the Owned Real Estate, and do not, in the aggregate,
materially detract from the value of the any parcel of Owned Real Estate and
(ii) leases, subleases, licenses, permits and similar use rights, entered into
in the ordinary course of business with respect to any leased real estate, to
the extent they are not prohibited by the Collateral Documents and would not
have a Material Adverse Effect and would not materially and adversely affect the
Administrative Agent’s Liens, for the benefit of Secured Parties, in Collateral
stored or located at such location; (l) with respect to Real Estate, other
defects and encumbrances as may be approved by the Administrative Agent,
including, with respect to the Eligible Real Estate, any matters shown as title
exceptions in the Mortgagee’s Title Insurance Policy, (m) liens imposed by
applicable law on the assets of any Credit Party located at an airport for the
benefit of an Aviation Authority; (n) Liens (including leases) permitted
pursuant to the Aircraft Mortgage and (o) subject, with respect to Blocked
Accounts, to the Blocked Account Agreements, Liens in favor of depositary banks
(including set-off rights) arising as a matter of law.
 
“Permitted Investments” means Investments made in accordance with the Investment
Guidelines set forth on Annex K.
 
A-34

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

 
“Permitted Liens” means (i) Liens granted by the Credit Parties under the
Collateral Documents and (ii) any other Liens permitted to be created or assumed
or to exist pursuant to Section 6.7 of this Agreement.
 
“Permitted Prepetition Payment” means a payment (as adequate protection or
otherwise) on account of any Claim against any Credit Party arising or deemed to
have arisen prior to the Petition Date, which payments are (i) authorized by the
Bankruptcy Court pursuant to First Day Orders or other Non-Stayed Orders
reasonably satisfactory to the Administrative Agent in amounts approved by the
Bankruptcy Court and the Administrative Agent, (ii) made pursuant to Section
1110 Agreements or Non-1110 Agreements, (iii) made in connection with the
assumption of executory contracts and unexpired leases or (iv) made in respect
of accrued payroll and related expenses and employee benefits as of the Petition
Date.
 
“Permitted Refinancing” means, with respect to any Person, any modification,
refinancing, refunding, renewal, extension or replacement (collectively, a
“refinancing”) of any Indebtedness of such Person; provided, that (a) the
principal amount (or accreted value, if applicable) thereof does not exceed 100%
(or, to the extent no payment of principal thereof (except upon acceleration) is
required on or prior to the Scheduled Maturity Date, 105%) of the principal
amount (or accreted value, if applicable) of the Indebtedness so refinanced,
except by an amount equal to the unpaid accrued interest and premium thereon;
(b) such refinancing has a final maturity date equal to or later than the final
maturity of the Indebtedness being refinanced, (c) such refinancing does not
reduce the weighted average life to maturity of the Indebtedness being
refinanced, (d) if the Indebtedness being refinanced is subordinated in right of
payment to the Obligations, such refinancing is subordinated in right of payment
to the Obligations on terms at least as favorable to Lenders as those contained
in the documentation governing the Indebtedness being refinanced. Permitted
Refinancings shall include any refinancing financed with proceeds from or
exchanges into Stock issued by Borrower.
 
“Permitted Reinvestment Collateral” means, with respect to any Collateral, (i)
replacement assets useful in Borrower’s (or, in the case of any asset owned by
any Subsidiary, such Subsidiary’s) business or, in the case of any Property Loss
Event, repairs to the applicable Collateral, (ii) in the case of any Property
Loss Event with respect to any Collateral included in the Term A Borrowing Base
(other than Aircraft or Engines), replacement assets consisting of like-kind
assets and the Allocated Amount for which exceeds the Allocated Amount for the
Original Borrowing Base Assets after replacement or repair, as the case may be,
and (iii) in the case of Aircraft or Engines, Replacement Aircraft or
Replacement Engines, as the case may be; provided, that, in each case, any
replacement asset shall be subject to a first priority Lien of Administrative
Agent for the benefit of Secured Parties to the extent that the original asset
was subject to a first priority Lien of Administrative Agent for the benefit of
Secured Parties.
 
“Permitted Secured Financing” has the meaning ascribed to it in Section
6.3(a)(v) hereof.
 
“Permitted Subordinated Indebtedness” means any unsecured Indebtedness of any
Delta Company that (a) is expressly subordinated to the prior payment in full in
cash of the Obligations on terms reasonably acceptable to the Administrative
Agent, (b) will not mature prior to the date that is ninety-one (91) days after
the Scheduled Maturity Date, and (c) does not require payments of principal
prior to the date which is ninety-one (91) days after the Scheduled Maturity
Date, except pursuant to acceleration.
 
A-35

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

 
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
“Petition Date” has the meaning ascribed to it in the Preamble.
 
“Physical Aircraft Appraisal Methodology” means, in determining an opinion as to
the Net Orderly Liquidation Value of Eligible Aircraft or Eligible Engines,
including but not limited to, taking at least the following actions: (i)
reviewing the most recent Collateral Report; (ii) reviewing the Appraiser’s
internal value database for values applicable to such Aircraft or Engines; and
(iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Aircraft or
Engines.
 
“Physical Ground Service Equipment Appraisal Methodology” means, in determining
an opinion as to the Net Orderly Liquidation Value of Eligible Ground Service
Equipment, including but not limited to, taking at least the following actions:
(i) reviewing the most recent Collateral Report; (ii) reviewing the Appraiser’s
internal value database for values applicable to such Ground Service Equipment;
(iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Ground
Service Equipment and (iv) physical inspection of such Ground Service Equipment.
 
“Physical Flight Simulator Appraisal Methodology” means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Flight Simulators,
including but not limited to, taking at least the following actions: (i)
reviewing the most recent Collateral Report; (ii) reviewing the Appraiser’s
internal value database for values applicable to such Flight Simulators; (iii)
checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Flight
Simulators and (iv) physical inspection of such Flight Simulators.
 
“Physical Spare Parts Appraisal Methodology” means, in determining an opinion as
to the Net Orderly Liquidation Value of Eligible Spare Parts, including but not
limited to, taking at least the following actions: (i) reviewing the most recent
Collateral Report; (ii) reviewing the Appraiser’s internal value database for
values applicable to Spare Parts; (iii) developing a representative sampling of
a reasonable number of the different Spare Parts for which a market check will
be conducted; (iv) checking other sources, such as manufacturers, other
airlines, U.S. government procurement data and airline parts pooling price
lists, for orderly liquidation prices of the sample parts referred to in clause
(iii); (v) visiting the Designated Spare Parts Locations selected by the
Appraiser where the Spare Parts are kept by any Credit Party; (vi) conducting a
limited review of the inventory reporting system applicable to the Spare Parts,
including checking information reported in such system against information
determined through physical inspection pursuant to the preceding clause (v); and
(vii) reviewing a sampling of the Spare Parts serviceability tags, books and
records (including tear-down reports). The physical sampling will be completed
at the necessary Designated Spare Parts Locations where in the aggregate up to
80% (by measure of appraised NOLV) of the Pledged Spare Parts are kept by the
Credit Parties.
 
A-36

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

 
“Physical Tooling Appraisal Methodology” means, in determining an opinion as to
the Net Orderly Liquidation Value of Eligible Tooling, including but not limited
to, taking at least the following actions: (i) reviewing the most recent
Collateral Report; (ii) reviewing the Appraiser’s internal value database for
values applicable to such Tooling; (iii) checking other sources, such as
manufacturers, other airlines and U.S. government procurement data, for orderly
liquidation prices of such Tooling and (iv) physical inspection of such Tooling.
 
“Plan” means, at any time, a Pension Plan, ESOP, Multiemployer Plan, Qualified
Plan, Title IV Plan or Retiree Welfare Plan that any Credit Party or ERISA
Affiliate maintains or to which such Credit Party contributes or has an
obligation to contribute.
 
“Plan of Reorganization” means a plan of reorganization in the Cases under
chapter 11 of the Bankruptcy Code.
 
“Pledged Collateral” means all of the following property now owned or at anytime
acquired by a Credit Party or in which such Credit Party now has or at any time
in the future may acquire any right, title or interest:
 
(a)   the Pledged Shares and the certificates representing the Pledged Shares,
and all dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
 
(b)   such portion, as determined by Administrative Agent as provided in Section
10.4(i)(v) of this Agreement, of any additional shares of stock of a Pledged
Entity from time to time acquired by Credit Party in any manner (which shares
shall be deemed to be part of the Pledged Shares), and the certificates
representing such additional shares, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such stock; and
 
(c)   the Pledged Indebtedness and the promissory notes or instruments
evidencing the Pledged Indebtedness, and all interest, cash, instruments and
other property and assets from time to time received, receivable or otherwise
distributed in respect of the Pledged Indebtedness; and
 
(d)   all additional Indebtedness arising after the Closing Date and owing to
Credit Party and evidenced by promissory notes or other instruments, together
with such promissory notes and instruments, and all interest, cash, instruments
and other property and assets from time to time received, receivable or
otherwise distributed in respect of that Indebtedness.
 
“Pledged Entity” means an issuer of Pledged Shares or Pledged Indebtedness.
 
A-37

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

 
“Pledged Indebtedness” means the Indebtedness evidenced by promissory notes and
instruments listed on Part 2 of Disclosure Schedule 10.4 hereto.
 
“Pledged Shares” means those shares listed on Part 1 of Disclosure Schedule 10.4
hereto.
 
“Pledged Spare Parts” shall have the meaning ascribed to it in the Spare Parts
Mortgage.
 
“Post-Petition Skymiles Facility” means the provisions related to the Advance
Payments (as defined in the Post-Petition Skymiles Facility Documents) in the
Post-Petition Skymiles Facility Documents.
 
“Post-Petition Skymiles Facility Documents” means the “SkyMiles Documents” as
defined in the Skymiles Intercreditor Agreement and includes the Skymiles
Collateral Documents.
 
“Power of Attorney” shall have the meaning ascribed to it in Section 10.8.
 
“Prepayment Date” means, with respect to any Net Cash Proceeds from any
Collateral, the earlier of (i) the date occurring 180 days after the date on
which such Net Cash Proceeds were deposited into the Cash Collateral Account
(unless, prior to such date, the applicable Credit Party has (A) acquired any
Replacement Borrowing Base Asset, (B) entered into an agreement for such
acquisition or (C) commenced the construction of the Replacement Borrowing Base
Assets or the repair of the Original Borrowing Base Assets) and (ii) the date
that is five (5) Business Days after the date on which Borrower shall have
notified the Administrative Agent of Borrower’s determination not to acquire
replacement assets useful in any Credit Party’s business (or, in the case of a
Property Loss Event, not to effect repairs).
 
“Primary Gates” shall have the meaning ascribed to it in the SGR Security
Agreement.
 
“Primary Routes” shall have the meaning ascribed to it in the SGR Security
Agreement.
 
“Primary Slots” shall have the meaning ascribed to it in the SGR Security
Agreement.
 
“Proceeds” means “proceeds,” as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party from time to time with respect to any asset, (b) any
and all payments (in any form whatsoever) made or due and payable to any Credit
Party from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of such property by any
Governmental Authority (or any Person acting under color of governmental
authority), (c) any claim of any Credit Party against third parties (i) for
past, present or future infringement of any Patent or Patent License, or (ii)
for past, present or future infringement or dilution of any Copyright, Copyright
License, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any
Credit Party against third parties with respect to any litigation or dispute
concerning such property including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of
rights in, or damage to, such property, (e) all amounts collected on, or
distributed on account of, other property, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock, and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of such
property and all rights arising out of such property.
 
A-38

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

 
“Projections” means Borrower’s forecasted consolidated (a) balance sheets, (b)
profit and loss statements and (c) cash flow statements consistent with the
historical Financial Statements of Borrower (other than adjustments related to
the impact of the Cases), together with appropriate supporting details and a
statement of underlying assumptions.
 
“Property Loss Event” means (a) any loss of or damage to property of any Credit
Party that results in the receipt by such Person of proceeds of insurance in
excess of $5,000,000, individually or in the aggregate, (b) any taking of
property of any Credit Party that results in the receipt by such Person of a
compensation payment in respect thereof that exceeds $5,000,000, individually or
in the aggregate, or (c) an “Event of Loss” (as such term is defined in the
Aircraft Mortgage or the Spare Parts Mortgage).
 
“Proposed Change” has the meaning ascribed to it in Section 13.2(c).
 
“Pro Rata Share” means with respect to all matters relating to any Lender (a)
with respect to the Term Loan A, the percentage obtained by dividing (i) the
Term A Commitment of that Lender by (ii) the aggregate Term A Commitments of all
Lenders, as such percentage may be adjusted by assignments permitted pursuant to
Section 11.1, (b) with respect to the Term Loan B, the percentage obtained by
dividing (i) the Term B Commitment of that Lender by (ii) the aggregate Term B
Commitments of all Lenders as such percentage may be adjusted by assignments
permitted pursuant to Section 11.1, (c) with respect to the Term Loan C, the
percentage obtained by dividing (i) the Term C Commitment of that Lender by (ii)
the aggregate Term C Commitments of all Lenders as such percentage may be
adjusted by assignments permitted pursuant to Section 11.1, (d) with respect to
all Loans, the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of all Lenders and, on and after
the Maturity Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of all Loans held by that Lender by (ii) the
outstanding principal balance of all Loans held by all Lenders, in each case, as
any such percentages may be adjusted by assignments permitted pursuant to
Section 11.1.
 
“Purchase Amount” has the meaning ascribed to it in Section 13.2(c).
 
“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.
 
“Real Estate” has the meaning ascribed to it in Section 3.6(b).
 
“Regulated Subsidiary” means each of Comair Holdings, LLC and Crown Rooms, Inc.
 
A-39

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

 
“Reinvestment Deferred Amount” has the meaning ascribed to it in Section
1.2(c)(ii).
 
“Reinvestment Event” means the date on which the Net Cash Proceeds of (x) any
Asset Sale of assets not included in the Term A Borrowing Base or (y) any
Property Loss Event, which in each case are deposited in the Cash Collateral
Account.
 
“Reinvestment Notice” means a written notice executed by the Chief Financial
Officer of Borrower stating that no Event of Default has occurred and is
continuing and that Borrower (directly or indirectly through one of the
Guarantors or the applicable Subsidiary) intends and expects to use the
Reinvestment Deferred Amount for Permitted Reinvestment Collateral as specified
therein.
 
“Reinvestment Prepayment Date” means, with respect to any Net Cash Proceeds of
any Reinvestment Event, (i) involving any Collateral (other than in respect of
Collateral subject to the Aircraft Mortgage), the earliest of (a) the date
occurring 180 days after such Reinvestment Event, unless, prior to any such
date, Borrower or the applicable Subsidiary has (x) entered into an agreement
for the acquisition of Permitted Reinvestment Collateral or (y) commenced the
construction of Permitted Reinvestment Collateral or the repair of the original
assets constituting Permitted Reinvestment Collateral, (b) the date that is five
(5) Business Days after the date on which Borrower shall have notified the
Administrative Agent of Borrower’s determination not to acquire Permitted
Reinvestment Collateral with all or any portion of the relevant Reinvestment
Deferred Amount for such Net Cash Proceeds and (c) the occurrence of any Event
of Default, (ii) arising from a Property Loss Event involving any Aircraft or
Engine, the Loss Payment Date (as defined in the Aircraft Mortgage), or (iii)
arising from a Property Loss Event involving any Engine (not involving the
related Airframe (as defined in the Aircraft Mortgage)), the date upon which
such Engine is required to be replaced in accordance with Section 7.05(b) of the
Aircraft Mortgage.
 
“Reinvestment Release Request” means a written notice executed by the Chief
Financial Officer of Borrower stating that no Event of Default has occurred and
is continuing and that Borrower (directly or indirectly through one of the
Guarantors or the applicable Subsidiary) requests the release of the
Reinvestment Deferred Amount from the Cash Collateral Account for Permitted
Reinvestment Collateral as specified therein.
 
“Related Person” means, with respect to any Person, any Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with such
Person.
 
“Relationship Bank” has the meaning ascribed to it in Section (b) of Annex C.
 
“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
 
“Replacement Aircraft” shall have the meaning ascribed to it in the Aircraft
Mortgage.
 
A-40

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

 
“Replacement Borrowing Base Assets” has the meaning ascribed to it in Section
1.2(c)(i).
 
“Replacement Engine” shall have the meaning ascribed to it in the Aircraft
Mortgage.
 
“Replacement Lender” has the meaning ascribed to it in Section 1.14(e).
 
“Requirement of Law” means, with respect to any Person, the common law and all
federal, state, local and foreign laws, treaties, rules and regulations, orders,
judgments, decrees and other legal requirements or determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
 
“Requisite Lenders” means Lenders having 51% or more of the aggregate
outstanding amount of all Loans.
 
“Requisite Term A Lenders” means Lenders having 51% or more of the aggregate
outstanding amount of the Term Loan A.
 
“Requisite Term B Lenders” means Lenders having 51% or more of the aggregate
outstanding amount of the Term Loan B.
 
“Requisite Term C Lenders” means Lenders having 51% or more of the aggregate
outstanding amount of the Term Loan C.
 
“Reserves” means (a) reserves established by the Administrative Agent from time
to time in its reasonable credit judgment, against Eligible Tooling, Eligible
Aircraft, Eligible Engines, Eligible Real Estate, Eligible Spare Parts, Eligible
Flight Simulators and Eligible Ground Service Equipment, including, but not
limited to, pursuant to Section 5.8, and (b) reserves established by the
Administrative Agent from time to time in its reasonable credit judgment against
Eligible Accounts, Eligible Unbilled Accounts and Eligible Refundable Ticket
Accounts including, but not limited to, a reserve in the amount of Fifty Million
Dollars ($50,000,000) for maintenance of Collateral and liquidation expenses and
for the Carve-Out. Without limiting the generality of the foregoing, Reserves
established to ensure the payment of accrued Interest Expenses or Indebtedness
shall be deemed to be a reasonable exercise of the Administrative Agent’s credit
judgment.
 
“Restricted Accounts” means (i) the Citibank Cash Collateral Account; (ii) the
accounts identified as Restricted Accounts on Disclosure Schedule 3.19; and
(iii) any deposit account holding cash and cash equivalents subject to Liens
permitted under Section 6.7(j) (except to the extent securing any obligations
under the Post-Petition Skymiles Facility), Section 6.7(k) or Section 6.7(l) or
securing surety or appeal bonds permitted under Section 6.3(a)(xiv).
 
“Restricted Payment” means, with respect to any Credit Party (a) the declaration
or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Stock;
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of such Credit Party’s Stock or any other payment or
distribution made in respect thereof, either directly or indirectly; (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Permitted Subordinated Indebtedness or the Post-Petition
Skymiles Facility; and (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of such Credit Party now or hereafter outstanding.
 
A-41

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

 
“Retiree Welfare Plan” means, at any time, a Plan which is an “employee welfare
benefit plan” as described in Section 3(1) of ERISA that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant’s termination of employment, other than continuation
coverage provided pursuant to Section 4980B of the IRC and at the sole expense
of the participant or the beneficiary of the participant.
 
“Routes” has the meaning ascribed to it in the SGR Security Agreement.
 
“S&P” means Standard & Poor’s Ratings Group.
 
“Scheduled Maturity Date” means March 16, 2008.
 
“Sell” means, with respect to any property, to sell, convey, transfer, assign,
license, lease or otherwise dispose of, any interest therein or to permit any
Person to acquire any such interest, including, in each case, through a Sale and
Leaseback Transaction or through a sale, factoring at maturity, collection of or
other disposal, with or without recourse, of any notes or accounts receivable.
Conjugated forms thereof and the noun “Sale” have correlative meanings.
 
“Section 1110 Agreement” means any agreement related to property that qualifies
as “equipment,” as such term is used in Section 1110(a)(3) of the Bankruptcy
Code, including, without limitation, security agreements, mortgages, trusts,
leases, conditional sale agreements or other instruments applicable to such
property.
 
“Section 1110 Assets” shall mean (a) property that qualifies as “equipment,” as
such term is used in Section 1110(a)(3) of the Bankruptcy Code and all Section
1110 Agreements, to the extent that the Credit Parties are prohibited from
granting liens thereon or assignments thereof under the terms of any Section
1110 Agreement in effect at the commencement of the Cases (and, to the extent
permitted by this Agreement), as such Section 1110 Agreement may be amended,
modified, refinanced or restructured) under which the applicable secured party,
lessor or seller is entitled to the protections afforded under Section 1110 of
the Bankruptcy Code with respect to such property or agreements, (b) any other
asset with respect to which the granting of any lien would cause a default,
directly or indirectly, of any Section 1110 Agreement, (c) any deposits and
reserves held or maintained pursuant to such agreement or (d) property referred
to in the previous clauses that the Borrower or any of the Guarantors elects to
return to the party providing financing therefor in exchange for a discharge of
the related indebtedness; provided, that Section 1110 Assets shall not include
any Proceeds of such property (but only to the extent that the Credit Parties
are entitled to such Proceeds).
 
A-42

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

 
“Secured Obligations” means, in the case of Borrower, the Obligations and, in
the case of any other Credit Party, the obligations of such Credit Party under
the Guaranties and the other Loan Documents to which it is a party.
 
“Secured Parties” means the Lenders, the Administrative Agent, any L/C Issuer
and any other holder of any Secured Obligation.
 
“Security” means any Stock, voting trust certificate, bond, debenture, note or
other evidence of Indebtedness, whether secured, unsecured, convertible or
subordinated, or any certificate of interest, share or participation in, any
temporary or interim certificate for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing, but shall not
include any evidence of the Obligations.
 
“Settlement Date” has the meaning ascribed to it in Section 11.9(a).
 
“SGR Cash Collateral Account” means a cash collateral account maintained at a
bank or financial institution acceptable to the Administrative Agent, subject to
a Blocked Account Agreement, into which cash or Cash Equivalents are deposited
pursuant to Section 8.1(m).
 
“SGR Security Agreement” means the Slot, Gate and Route Security and Pledge
Agreement from Borrower in favor of the Administrative Agent for the benefit of
the Secured Parties substantially in the form of Exhibit E hereto, as amended,
modified or supplemented from time to time.
 
“Skymiles Agent” has the meaning ascribed to it in the Skymiles Intercreditor
Agreement.
 
“Skymiles Collateral” has the meaning ascribed to it in the Skymiles
Intercreditor Agreement.
 
“Skymiles Collateral Documents” has the meaning ascribed to it in the Skymiles
Intercreditor Agreement.
 
“Skymiles Intercreditor Agreement” means the Intercreditor Agreement of even
date herewith entered into by and among Amex and the Administrative Agent in
form and substance satisfactory to the Arrangers.
 
“Slots” has the meaning ascribed to it in the SGR Security Agreement.
 
“Slot Utilization” means, with respect to any Slot, (a) a Slot which is used for
a take-off or landing operation; (b) if, by regulation or other regulatory
notice, the FAA considers such Slot as “used” for purposes of the Slot
Utilization Regulations, regardless whether or not such Slot was, in fact, used
(e.g., holidays, labor actions); (c) if, by waiver, the FAA considers such Slot
as “used” for purposes of the Slot Utilization Regulations; or (d) if the FAA
otherwise waives the utilization requirement of the Slot Utilization
Regulations.
 
“Slot Utilization Regulations” has the meaning ascribed to it in Section
5.14(a).
 
A-43

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

 
“Software” shall mean computer programs whether in source code or object code
form, together with all related documentation.
 
“Spare Parts” means all of the Spare Parts as defined in the Spare Parts
Mortgage.
 
“Spare Parts Mortgage” means the Spare Parts Security Agreement substantially in
the form of Exhibit F entered into by and among the Administrative Agent for the
benefit of the Secured Parties and each Credit Party that is a signatory
thereto, in each case, as amended, modified or supplemented from time to time.
 
“SPC” has the meaning ascribed to it in Section 11.1(e).
 
“SPV” means any special purpose funding vehicle identified as such in a writing
by any Lender to the Administrative Agent.
 
“Stock” means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
 
“Stockholder” means, with respect to any Person, each holder of Stock of such
Person.
 
“Subsidiary” means, with respect to any Person, (a) any domestic corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of more than 50% of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any domestic partnership or limited
liability company in which such Person and/or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of Borrower.
 
“Supermajority Term A Lenders” means Lenders having (a) 66-2/3% or more of the
Term A Commitments of all Lenders, or (b) if the Term A Commitments have been
terminated, 66-2/3% or more of the aggregate outstanding amount of the Term Loan
A.
 
“Super-Priority Claim” shall mean a claim against any Credit Party in any of the
Cases which is an administrative expense claim having priority over any or all
administrative expenses of the kind specified in sections 503(b) or 507(b) of
the Bankruptcy Code.
 
A-44

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

 
“Supporting Route Facilities” has the meaning ascribed to it in the SGR Security
Agreement.
 
“Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on or measured by
the net income of the Administrative Agent or a Lender by the jurisdictions
under the laws of which the Administrative Agent and Lenders are organized or
conduct business or any political subdivision thereof.
 
“Technology” means, collectively, all designs, formulas, algorithms, procedures,
methods, techniques, ideas, know-how, programs, subroutines, tools, inventions,
creations, improvements, works of authorship, Software, other similar materials,
and all recordings, graphs, drawings, reports, analyses, other writings, and any
other embodiment of the above, in any form whether or not specifically listed
herein, and all related technology, that are used in, incorporated in, embodied
in or displayed by any of the foregoing, or used or useful in the design,
development, reproduction, maintenance or modification of any of the foregoing.
 
“Technology Equipment” means technology assets including mainframe computers,
servers, general computer equipment, printers, monitors, hard drives, memory,
storage devices and call centers/ACD systems but excluding Flight Simulators, as
more fully described in the appraisal with respect thereto prepared as of July
14, 2004 by American Appraisal Associates.
 
“Term A Borrowing Base” means, as of any date of determination by the
Administrative Agent, from time to time, an amount equal to the sum at such time
of:
 

 
(a)
up to 80% of the book value of the Credit Parties’ Eligible Accounts as of the
date set forth in the most recently delivered Borrowing Base Certificate; plus

 

 
(b)
up to 50% of the book value of the Credit Parties’ Eligible Unbilled Accounts as
of the date set forth in the most recently delivered Borrowing Base Certificate;
plus

 

 
(c)
the lesser of 50% of the book value of the Credit Parties’ Eligible Refundable
Ticket Accounts as of the date set forth in the most recently delivered
Borrowing Base Certificate and $30,000,000; plus

 

 
(d)
the lesser of 50% of the Fair Market Value of Eligible Real Estate and
$100,000,000, plus

 

 
(e)
the lesser of 50% of the Net Orderly Liquidation Value of Eligible Aircraft
(other than the Aircraft described in clause (f) below) and $250,000,000, plus

 

 
(f)
the lesser of 30% of the Net Orderly Liquidation Value of Eligible Aircraft
consisting of Comair CRJ-100ERs aircraft and $13,500,000; plus

 
A-45

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

 

 
(g)
the lesser of 40% of the half life Net Orderly Liquidation Value of Eligible
Engines consisting of the Comair CF34-3A1 engines and CF34-3B1 engines and
$13,500,000; plus

 

 
(h)
the lesser of 65% of the half life Net Orderly Liquidation Value of Eligible
Engines consisting of the Comair CF34-8C1 engines and $5,100,000; plus

 

 
(i)
the lesser of 50% of the Net Orderly Liquidation Value of Eligible Flight
Simulators and $25,000,000, plus

 

 
(j)
the lesser of 25% of the Net Orderly Liquidation Value of Eligible Spare Parts
and $7,000,000, plus

 

 
(k)
the lesser of 25% of the Net Orderly Liquidation Value of Eligible Ground
Service Equipment and $25,000,000, plus

 

 
(l)
the lesser of 25% of the Net Orderly Liquidation Value of Eligible Tooling
(excluding Technology Equipment) and $25,000,000, plus

 

 
(m)
the aggregate amount held in the Cash Collateral Account and the LC Cash
Collateral Account minus 100% of the aggregate face amount of all outstanding
Letters of Credit,

 
in each case, less any Reserves established by the Administrative Agent at such
time and provided, that the availability from the sum of clauses (a), (b) and
(c) above shall not exceed $400,000,000 at any time.
 
“Term A Commitment” means (a) as to any Lender with a Term A Commitment, the
commitment of such Lender to make its Pro Rata Share of the Term Loan A as set
forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders with a Term A Commitment, the
aggregate commitment of all Lenders to make the Term Loan A, which aggregate
commitment shall be Six Hundred Million Dollars ($600,000,000) on the Effective
Date. After advancing the Term Loan A, each reference to a Lender’s Term A
Commitment shall refer to that Lender’s Pro Rata Share of the outstanding Term
Loan A.
 
“Term A Lenders” means, as of the date of determination, those Lenders having
Term A Commitments.
 
“Term A Termination Date” means the date on which (a) the Term Loan A has been
repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan A pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term A
Commitment shall have expired or irrevocably been terminated under the
Agreement.
 
“Term B Commitment” means (a) as to any Lender with a Term B Commitment, the
commitment of such Lender to make its Pro Rata Share of the Term Loan B as set
forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders with a Term B Commitment, the
aggregate commitment of all Lenders to make the Term Loan B, which aggregate
commitment shall be Seven Hundred Million Dollars ($700,000,000) on the
Effective Date. After advancing the aggregate amount of the Term B Commitment,
each reference to a Lender’s Term B Commitment shall refer to that Lender’s Pro
Rata Share of the outstanding Term Loan B.
 
A-46

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

 
“Term B Lenders” means, as of the date of determination, those Lenders having
Term B Commitments.
 
“Term B Termination Date” means the date on which (a) the Term Loan B has been
repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan B pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term B
Commitment shall have expired or irrevocably been terminated under the
Agreement.
 
“Term C Commitment” means (a) as to any Lender with a Term C Commitment, the
commitment of such Lender to make its Pro Rata Share of the Term Loan C as set
forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders with a Term C Commitment, the
aggregate commitment of all Lenders to make the Term Loan C, which aggregate
commitment shall be Six Hundred Million Dollars ($600,000,000) on the Effective
Date. After advancing the aggregate amount of the Term C Commitment, each
reference to a Lender’s Term C Commitment shall refer to that Lender’s Pro Rata
Share of the outstanding Term Loan C.
 
“Term C Lenders” means, as of the date of determination, those Lenders having
Term C Commitments.
 
“Term C Termination Date” means the date on which (a) the Term Loan C has been
repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan C pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term C
Commitment shall have expired or irrevocably been terminated under the
Agreement.
 
“Term Loan” means the collective reference to the Term Loan A, the Term Loan B
and the Term Loan C.
 
“Term Loan A” has the meaning assigned to it in Section 1.1(a).
 
“Term Loan B” has the meaning assigned to it in Section 1.1(b).
 
“Term Loan C” has the meaning assigned to it in Section 1.1(c).
 
“Term Loan Commitment” means each of the Term A Commitments, the Term B
Commitments and the Term C Commitments.
 
“Termination Date” means the date on which (a) the Loans have been repaid in
full, (b) all other monetary Obligations (other than Letter of Credit
Obligations and Excluded Obligations) pursuant to the Agreement and the other
Loan Documents have been completely discharged, (c) all Letter of Credit
Obligations have been cash collateralized (after repayment in full of any
amounts of the Term Loan A that may theretofore have been used as L/C Cash
Collateral), cancelled or backed by standby letters of credit in accordance with
this Agreement (including Annex B), and (d) Borrower shall not have any further
right to borrow any monies under the Agreement.
 
A-47

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

 
“Title 49” means Title 49 of the United States Code, which, among other things,
recodified and replaced the Aviation Act of 1958, as amended, and the
regulations promulgated pursuant thereto or any subsequent legislation that
amends, supplements, or supersedes such provisions.
 
“Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is
covered by Title IV of ERISA, and that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
 
“Tooling” means 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).
 
“Trademark Security Agreements” means the Trademark Security Agreements made in
favor of Administrative Agent for the benefit of the Secured Parties by each
applicable Credit Party substantially in the form of Exhibit G.
 
“Trademark License” means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
 
“Trademarks” means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.
 
“Two-Month FAA Reporting Period” means the period for which air carriers provide
slot utilization reports to the FAA pursuant to 14 C.F.R. § 93.227(i).
 
“Unfunded Pension Liability” means, at any time, the aggregate amount, if any,
of the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
all determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five (5) years following a transaction which
might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
 
A-48

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

 
“Uniform Commercial Code jurisdiction” means any jurisdiction that has adopted
all or substantially all of Article 9 as contained in the 2000 Official Text of
the Uniform Commercial Code, as recommended by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modifications to the Official Text.
 
“U.S. Bank” means U.S. Bank Trust National Association as trustee under certain
of the GECAS Facilities.
 
“Vehicles” means all vehicles covered by a certificate of title law of any
state.
 
Rules of construction with respect to accounting terms used in the Agreement or
the other Loan Documents shall be as set forth in Annex G. All other undefined
terms contained in any of the Loan Documents shall, unless the context indicates
otherwise, have the meanings provided for by the Code to the extent the same are
used or defined therein; in the event that any term is defined differently in
different Articles or Divisions of the Code, the definition contained in Article
or Division 9 shall control. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.
 
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the word “or”
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
 
A-49

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

 
ANNEX B (Section 1.1(a)(iv))
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
B-1

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

 
ANNEX C (Section 5.19)
to
CREDIT AGREEMENT
 
[Intentionally Omitted]

C-1

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

ANNEX D (Section 2.2(c))
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
D-1

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

ANNEX E (Section 4.1(a))
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
E-1

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

ANNEX F (Section 4.1(b))
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
F-1

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

ANNEX G (Section 6.10)
to
CREDIT AGREEMENT
 
FINANCIAL COVENANTS
 
Borrower shall not breach or fail to comply with any of the following financial
covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
 
(a)   Maximum Net Capital Expenditures. Borrower and its Subsidiaries on a
consolidated basis shall not make Net Capital Expenditures during the any Fiscal
Quarter that exceed in the aggregate the amounts set forth opposite each such
Fiscal Quarter below:
 
Fiscal Quarter
 
Net Capital Expenditures
   
(in millions) 
October - December 
2005  
145
January - March 
2006  
131
April - June  
2006  
138
July - September 
2006  
108
October - December 
2006  
121
January - March 
2007  
152
April - June 
2007  
132
July - September 
2007  
108
October - December  
2007  
106
January - March 
2008  
106

 
; provided, however, that the amount of Net Capital Expenditures referenced
above will be increased in any period by the positive amount (if any), equal to
the difference obtained by taking the Net Capital Expenditures limits specified
above for all prior periods minus the actual amount of any Net Capital
Expenditures expended during all such prior periods (the “Carry Over Amount”).
 
(b)   Minimum EBITDAR. At the end of each Fiscal Month set forth below, the
amount equal to the sum of (i) EBITDAR for the 12-month period then ended of
Borrower and its Subsidiaries on a consolidated basis plus (ii) the lesser of
(A) 100% of the Excess Aggregate Cash On Hand as of such date and (B)
$250,000,000 shall not be less than the amount set forth below opposite such
Fiscal Month (the “Required EBITDAR”).
 
G-1

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

 
Fiscal Month
 
EBITDAR
   
(in millions) 
October  
2005  
571
November  
2005  
628
December  
2005  
644
January  
2006  
672
February  
2006  
681
March  
2006  
704
April  
2006  
745
May  
2006  
779
June  
2006  
830
July  
2006  
907
August  
2006  
1,015
September  
2006  
1,104
October  
2006  
1,210
November  
2006  
1,290
December  
2006  
1,372
January
2007  
1,560
February  
2007  
1,625
March  
2007  
1,691
April  
2007  
1,731
May  
2007  
1,769
June  
2007  
1,806
July  
2007  
1,843
August  
2007  
1,875
September  
2007  
1,903
October  
2007  
1,935
November 
2007  
1,963
December 
2007  
1,988
January 
2008  
2,000
February 
2008  
2,000
March 
2008  
2,000

 
(c)   Aggregate Cash On Hand. The Delta Companies shall maintain Aggregate Cash
On Hand of at least:
 
(i)     at all times from the Closing Date through May 31, 2006, $750,000,000;
 
(ii)    at all times from June 1, 2006 through November 30, 2006,
$1,000,000,000;
 
(iii)   at all times from December 1, 2006 through February 28, 2007,
$750,000,000; and
 
(iv)   at all times thereafter until the Termination Date, $1,000,000,000.
 
G-2

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

 
If on any date of determination of Aggregate Cash On Hand, any Delta Company has
contractually agreed (i) to post cash collateral for the benefit of any third
party or (ii) that payments otherwise owing to it by a third party shall be
subject to a holdback, in each case in an amount exceeding $125,000,000, such
amount shall not be included in any calculation of Aggregate Cash On Hand on
such date of determination to the extent such obligation to post cash collateral
or such holdback will become effective within ninety (90) days of such date of
determination; provided, that in no event shall any determination of Aggregate
Cash On Hand exclude the amount of cash collateral or any holdback to be
provided (x) in connection with any aircraft or equipment financing or lease or
(y) pursuant to any other agreement with GE Capital or any of its affiliates
until, in each case, actually so provided.
 
Unless otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied. That certain items or computations are
explicitly modified by the phrase “in accordance with GAAP” shall in no way be
construed to limit the foregoing. If any “Accounting Changes” (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Borrower, Administrative Agent and Lenders agree to enter into negotiations
in order to amend such provisions of the Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for evaluating
Borrower’s and its Subsidiaries’ financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
“Accounting Changes” means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Borrower’s certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDAR in such period. If
Administrative Agent, Borrower and Requisite Lenders agree upon the required
amendments, then after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Administrative Agent, Borrower and Requisite Lenders cannot agree upon the
required amendments within thirty (30) days following the date of implementation
of any Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in accordance
with the Agreement and the other Loan Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change. For purposes of Section
8.1, a breach of a Financial Covenant contained in this Annex G shall be deemed
to have occurred as of any date of determination by Administrative Agent or as
of the last day of any specified measurement period, regardless of when the
Financial Statements reflecting such breach are delivered to Administrative
Agent.
 
G-3

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

ANNEX H (Section 1.1(d))
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
H-1

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

ANNEX I (Section 13.10)
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
I-1

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

 
ANNEX J (from Annex A - Commitments definition)
to
CREDIT AGREEMENT
 
[Intentionally Omitted]
 
J-1

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

 
ANNEX K (from Annex A - Permitted Investments definition)
to
CREDIT AGREEMENT

[Intentionally Omitted]
 
K-1

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

ANNEX L (from Annex B - Paragraph (b)(iii))

[Intentionally Omitted]
 
K-2

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