Document:

Exhibit 10.14

 

AAR Corp

AAR Receivables Corporation II

1100 North Wood Dale Road

Wood Dale, IL 60191

 

Re:                               Amendment
No. 5 to Receivables Purchase Agreement (this “Amendment”) dated as of March 21,
2003 

 

Gentlemen:

 

AAR Receivables Corporation II, an Illinois
corporation (“Seller”), AAR Corp., a Delaware corporation in its
individual capacity (in such capacity, “AAR”) and as initial servicer
(in such capacity, together with its successors and permitted assigns in such
capacity, “Servicer”), have entered into a certain Receivables Purchase
Agreement dated as of March 21, 2003 (as heretofore amended or otherwise
modified, the “Agreement”; capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement) with
LaSalle Business Credit, LLC, a Delaware limited liability company
(individually, “LaSalle”), as agent for itself and the Purchasers
referred to below (in such capacity, together with its successors and assigns
in such capacity, “Agent”), and the financial institutions from time to
time parties thereto as “Purchasers.” 
Seller, Servicer, Agent and the Purchasers now desire to further amend
the Agreement as provided herein, subject to the terms and conditions
hereinafter set forth.

 

In addition, AAR executed and delivered a
certain Performance Guaranty dated as of March 21, 2003 (the “Performance
Guaranty”), which Agent and Purchasers require to be reaffirmed as a
condition to the effectiveness hereof.

 

NOW, THEREFORE, in consideration of the
foregoing recitals, the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

1.                                       Amendments to
the Agreement.

 

1.1.                              Section 1.1(d) of
the Agreement is hereby deleted in its entirety and is replaced by “[Reserved]”
and all references to Section 1.1(d) of the Agreement in the
Agreement or in any of the other Transaction Documents shall be deemed to be of
no further force or effect.

 

 

1.2.                              Section 4.4(b) of
the Agreement is hereby amended and restated in its entirety to read as
follows:

 

“On or prior
to 11:00 a.m. (Chicago time) on the fourteenth (14th) Business Day of each
month and at such other times as is requested by the Agent or required
hereunder, the Seller and the Servicer shall deliver to the Agent an
Information Package substantially in the form of that attached hereto as Annex
A (certified therein as true and correct by Chief Financial Officer or
other financial officer of the Servicer) reflecting the information required
therein as of the close of business of the Seller on the last Business Day of
the immediately preceding month (and containing such additional information as
from time to time may be requested by the Agent).”

 

1.3                                 The following
definitions set forth in Exhibit 1 of the Agreement are hereby
amended and restated in their entirety to read as follows:

 

(a)                                  “‘Alternate
Rate’ for any Settlement Period for any Portion of Capital of the Purchased
Interest means an interest rate per annum equal to (a) the sum of (x) the
Applicable Margin plus (y) the Euro-Rate for such Settlement Period; provided,
however, that if (x) it shall become unlawful for any Purchaser to
obtain funds in the London interbank eurodollar market in order to make, fund
or maintain any Purchased Interest, or if such funds shall not be reasonably
available to any Purchaser, or (y) there shall not be at least two (2) Business
Days prior to the commencement of an applicable Settlement Period to determine
Euro-Rate in accordance with its terms, then the “Alternate Rate” shall be
equal to the Base Rate in effect for each day during the remainder of such
Settlement Period or (b) if requested by that Seller the Base Rate for
such Settlement Period; provided, however, that the “Alternate
Rate” for any day while a Termination Event exists shall be an interest rate
equal to 2.00% per annum above the Base Rate otherwise in effect on such day.”

 

(b)                                 “‘Facility
Termination Date’ means the earlier to occur of: (a) March 20, 2009, (b) the
occurrence or declaration of the “Facility Termination Date” pursuant to Section 2.2
of the Agreement and (c) the date the Purchase Limit is terminated or
permanently reduced to zero pursuant to Section 1.1(b) of the
Agreement.”

 

(c)                                  “‘Servicing
Fee’ shall mean the fee referred to in Section 4.8 of  the Agreement.”

 

(d)                                 “‘Servicing
Fee Rate’ shall mean the rate referred to in Section 4.8            of the Agreement.”

 

1.4                                 Exhibit 1
of the Agreement is hereby amended by inserting the following definitions
therein in applicable order:

 

2

 

(a)                                  “‘Applicable
Margin’ means, for any Settlement Period, the rate per annum set forth below
opposite the corresponding level (the ‘Level’) then in effect.

 

	
  Level

  	
   

  	
  Total Debt to EBITDA Ratio

  	
   

  	
  Applicable

  Margin

  	
   

  
	
  I

  	
   

  	
  Greater than or equal to 3.25:1

  	
   

  	
  2.00

  	
  %

  
	
  II

  	
   

  	
  Greater than or equal to 2.25:1 but less
  than 3.25:1

  	
   

  	
  1.75

  	
  %

  
	
  III

  	
   

  	
  Less than 2.25:1

  	
   

  	
  1.50

  	
  %

  

 

The Applicable Margin shall be adjusted, to the extent
applicable, on the fifth (5th) Business Day after the Seller and AAR provide
annual and quarterly financial statements and other information pursuant to Section m(1) or
(m)(2) of Exhibit IV, as applicable, and the related
Officer’s Certificates, pursuant to Section m(3) of Exhibit IV.  Notwithstanding anything contained in this
paragraph to the contrary, (a) if the Seller and/or AAR fail to deliver
such financial statements and Officer’s Certificates in accordance with the
provisions of Sections m(1), m(2) or m(3) of Exhibit IV,
as applicable, the Applicable Margin shall be based upon Level I above
beginning on the date such financial statements and Officer’s Certificates were
required to be delivered until the fifth (5th) Business Day after such
financial statements and/or Officer’s Certificates are actually delivered,
whereupon the Applicable Margin shall be determined by the then applicable
Level; and (b) no reduction to any Applicable Margin shall become
effective at any time when any Termination Event or Unmatured Termination Event
has occurred and is continuing. 
Notwithstanding the foregoing, the initial Applicable Margin from the
date of this Amendment until delivery of the financial statements and related
Officer’s Certificates for the Fiscal Quarter ending May 31, 2006, shall
be based on Level II, whereupon the Applicable Margin shall thereafter be
determined in accordance with the grid as set forth above.”

 

(b)                                 “‘Computation
Period’ means each period of four consecutive fiscal quarters of AAR ending on
the last day of a fiscal quarter of AAR.”

 

(c)                                  “‘Level’
- see the definition of ‘Applicable Margin.’”

 

(d)           “‘Total
Debt’ means the outstanding principal amount of all Debt of AAR and its
consolidated Subsidiaries on a consolidated basis.”

 

3

 

(e)                                  “‘Total
Debt to EBITDA Ratio’ means, as of the last day of any fiscal quarter of AAR,
the ratio of (a) Total Debt as of such day to (b) EBITDA for the
Computation Period ending on such day.”

 

1.5  Clause
(ii) of Section (q) of Exhibit V is hereby
amended and restated in its entirety to read as follows:

 

“(ii)                            Capital
Expenditures of AAR and its Subsidiaries, on a consolidated basis, as
determined as of the last day of each fiscal quarter of AAR for the twelve
fiscal month period ending as of the last day of such fiscal quarter then ended
exceeds $20,000,000; or”

 

2.                                       Reaffirmations
and Representations:

 

2.1.                              AAR expressly hereby
reaffirms, ratifies and assumes all of its obligations and liabilities to Agent
as set forth in the Performance Guaranty. 
AAR further agrees to be bound by and abide by and operate and perform
under and pursuant to and comply fully with all of the terms, conditions,
provisions, agreements, representations, undertakings, warranties, obligations
and covenants contained in the Performance Guaranty, in so far as such
obligations and liabilities may be modified by this Amendment, as though such
Performance Guaranty were being re-executed on the date hereof, except to the
extent that such terms expressly relate to an earlier date.

 

2.2.                              Except as expressly
amended hereby and by any other supplemental documents or instruments executed
by either party hereto in order to effectuate the transactions contemplated
hereby, the Agreement, the Exhibits thereto and other Transaction Documents are
hereby reaffirmed, ratified and confirmed by Seller, AAR and Servicer and
remain in full force and effect in accordance with the terms thereof. Seller,
AAR and Servicer expressly ratify, confirm and reaffirm without condition, all
liens and security interests granted to Agent pursuant to the Agreement and the
other Transaction Documents and to all extensions, renewals, refinancings,
amendments or modifications of any of the foregoing.

 

3.                                       The
effectiveness of this Amendment is subject to the satisfaction of the following
conditions precedent (unless specifically waived in writing by Agent):

 

3.1.                              Agent shall have received
(a) fully executed copies of this Amendment and (b) fully executed
copies of that certain letter agreement dated as of the date hereof (the “Fee
Letter”), by and among Agent, Seller and Servicer, executed by all parties
thereto, together with payment of all fees required to be paid by Seller and/or
AAR on or prior to the date of this Amendment thereunder;

 

3.2.                              All proceedings taken in
connection with the transactions contemplated by this Amendment and all
documents, instruments and other legal matters incident thereto shall be
reasonably satisfactory to Agent;

 

4

 

3.3.                              The representations and
warranties set forth herein and in the Agreement are true and correct in all
material respects with the same effect as if such representations and
warranties had been made on the date hereof; and

 

3.4.                              No event has occurred, is
continuing or would result herefrom that constitutes (a) a Termination
Event or (b) an Unmatured Termination Event.

 

4.                                       This Amendment
may be executed in one or more counterparts, each of which shall constitute an
original, but all of which taken together shall be one and the same instrument.
This Amendment may also be executed by facsimile and each facsimile signature
hereto shall be deemed for all purposes to be an original signatory page.

 

5.                                       This Amendment
shall be construed in accordance with and governed by the internal laws (as
distinguished from the conflicts of law provisions) of the State of Illinois.

 

6.                                       In addition to
the fees payable under the Fee Letter, Seller, AAR and Servicer hereby jointly
and severally agree to reimburse Agent for all of its out-of-pocket legal fees
and expenses incurred in the preparation and documentation of this Amendment
and related documents.

 

7.             On
or after the effective date hereof, each reference in the Agreement to this
Agreement and any reference to the Agreement in any of the other Transaction
Documents shall unless the context otherwise requires, be deemed to refer to
the Agreement as amended hereby.

 

5

 

EXECUTION COPY

 

IN WITNESS WHEREOF, the Parties hereto have
caused this Consent to be executed by their respective officers thereunto as of
the date first written above.

 

 

	
   

  	
  LASALLE BUSINESS CREDIT, LLC,
  as

  Purchaser and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ STEVEN FRIEDLANDER

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,
  as

  Purchaser

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. MICHAEL NEWTON

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

 

	
  ACKNOWLEDGED AND AGREED TO

  as of the date and year first above written

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AAR RECEIVABLES CORPORATION II,

  as Seller

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ MICHAEL K. CARR

  	
   

  	
   

  
	
  Title:

  	
  Assistant Treasurer

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AAR CORP., as
  Servicer and

  Performance Guarantor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ MICHAEL K. CARR

  	
   

  	
   

  
	
  Title:

  	
  Vice PresidentExhibit 4.1

 

 

REVOLVING
CREDIT, TERM LOAN AND GUARANTY AGREEMENT

 

 

Among

 

UNITED AIR
LINES, INC.,

 

as
Borrower,

 

 

and

 

 

UAL
CORPORATION,

 

the Parent,

 

 

and

 

 

THE
SUBSIDIARIES OF THE BORROWER AND THE PARENT NAMED HEREIN,

 

as
Guarantors

 

 

and

 

 

THE
LENDERS PARTY HERETO,

 

 

and

 

 

JPMORGAN
CHASE BANK, N.A.,

as Co-Administrative Agent, Co-Collateral Agent and Paying Agent

 

CITICORP
USA, INC.,

as
Co-Administrative Agent and Co-Collateral Agent

 

J.P.
MORGAN SECURITIES INC.,

as Joint
Lead Arranger and Joint Bookrunner

 

CITIGROUP
GLOBAL MARKETS, INC.,

as Joint Lead Arranger and Joint Bookrunner 

 

GENERAL
ELECTRIC CAPITAL CORPORATION,

as
Syndication Agent

 

 

Dated as
of February 1, 2006

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.01

  	
  Defined Terms

  	
  2

  
	
   

  	
  SECTION 1.02

  	
  Terms Generally

  	
  30

  
	
   

  	
  SECTION 1.03

  	
  Accounting Terms; GAAP

  	
  30

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF CREDIT

  	
  31

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.01

  	
  Commitments of the
  Lenders

  	
  31

  
	
   

  	
  SECTION 2.02

  	
  Letters of Credit

  	
  32

  
	
   

  	
  SECTION 2.03

  	
  Requests for Borrowings

  	
  37

  
	
   

  	
  SECTION 2.04

  	
  Funding of Borrowings

  	
  38

  
	
   

  	
  SECTION 2.05

  	
  Interest Elections

  	
  39

  
	
   

  	
  SECTION 2.06

  	
  Interest on Loans

  	
  40

  
	
   

  	
  SECTION 2.07

  	
  Default Interest

  	
  40

  
	
   

  	
  SECTION 2.08

  	
  Alternate Rate of
  Interest

  	
  41

  
	
   

  	
  SECTION 2.09

  	
  Amortization of Tranche
  B Loan; Repayment of Loans; Evidence of Debt

  	
  41

  
	
   

  	
  SECTION 2.10

  	
  Optional Termination or
  Reduction of Commitment

  	
  43

  
	
   

  	
  SECTION 2.11

  	
  Mandatory Prepayment;
  Commitment Termination

  	
  44

  
	
   

  	
  SECTION 2.12

  	
  Optional Prepayment of
  Loans

  	
  46

  
	
   

  	
  SECTION 2.13

  	
  Increased Costs

  	
  47

  
	
   

  	
  SECTION 2.14

  	
  Break Funding Payments

  	
  48

  
	
   

  	
  SECTION 2.15

  	
  Taxes

  	
  49

  
	
   

  	
  SECTION 2.16

  	
  Payments
  Generally; Pro Rata Treatment

  	
  50

  
	
   

  	
  SECTION 2.17

  	
  Mitigation Obligations;
  Replacement of Lenders

  	
  51

  
	
   

  	
  SECTION 2.18

  	
  Certain Fees

  	
  52

  
	
   

  	
  SECTION 2.19

  	
  Commitment Fee

  	
  52

  
	
   

  	
  SECTION 2.20

  	
  Letter of Credit Fees

  	
  52

  
	
   

  	
  SECTION 2.21

  	
  Nature of Fees

  	
  52

  
	
   

  	
  SECTION 2.22

  	
  Right of Set-Off

  	
  53

  
	
   

  	
  SECTION 2.23

  	
  Security Interest in
  Letter of Credit Account

  	
  53

  
	
   

  	
  SECTION 2.24

  	
  Payment of Obligations

  	
  53

  
	
   

  	
  SECTION 2.25

  	
  Defaulting Lenders

  	
  53

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  54

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.01

  	
  Organization and
  Authority

  	
  54

  
	
   

  	
  SECTION 3.02

  	
  Air Carrier Status

  	
  54

  
	
   

  	
  SECTION 3.03

  	
  Due Execution

  	
  54

  
	
   

  	
  SECTION 3.04

  	
  Statements Made

  	
  55

  
	
   

  	
  SECTION 3.05

  	
  Financial Statements;
  Material Adverse Change

  	
  56

  
	
   

  	
  SECTION 3.06

  	
  Ownership

  	
  56

  
	
   

  	
  SECTION 3.07

  	
  Liens

  	
  56

  
					

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.08

  	
  Compliance with Laws
  and Agreements

  	
  56

  
	
   

  	
  SECTION 3.09

  	
  Insurance

  	
  57

  
	
   

  	
  SECTION 3.10

  	
  Use of Proceeds

  	
  57

  
	
   

  	
  SECTION 3.11

  	
  Litigation and
  Environmental Matters

  	
  57

  
	
   

  	
  SECTION 3.12

  	
  Slot Utilization

  	
  58

  
	
   

  	
  SECTION 3.13

  	
  Primary Foreign Slot
  Utilization

  	
  58

  
	
   

  	
  SECTION 3.14

  	
  Primary Route
  Utilization

  	
  58

  
	
   

  	
  SECTION 3.15

  	
  Margin Regulations;
  Investment Company Act

  	
  58

  
	
   

  	
  SECTION 3.16

  	
  Ownership Interest in
  Slots, Routes and Gates

  	
  59

  
	
   

  	
  SECTION 3.17

  	
  ERISA

  	
  59

  
	
   

  	
  SECTION 3.18

  	
  Indebtedness;
  Off-Balance Sheet Transactions

  	
  59

  
	
   

  	
  SECTION 3.19

  	
  Properties

  	
  59

  
	
   

  	
  SECTION 3.20

  	
  Perfected Security
  Interests

  	
  60

  
	
   

  	
  SECTION 3.21

  	
  Payment of Taxes

  	
  60

  
	
   

  	
  SECTION 3.22

  	
  Solvency

  	
  60

  
	
   

  	
  SECTION 3.23

  	
  Section 1110

  	
  61

  
	
   

  	
  SECTION 3.24

  	
  Labor Matters

  	
  61

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  CONDITIONS OF LENDING

  	
  61

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.01

  	
  Conditions Precedent to
  Initial Loans and Initial Letters of Credit

  	
  61

  
	
   

  	
  SECTION 4.02

  	
  Conditions Precedent to
  Each Loan and Each Letter of Credit

  	
  67

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  AFFIRMATIVE COVENANTS

  	
  69

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.01

  	
  Financial Statements,
  Reports, etc

  	
  69

  
	
   

  	
  SECTION 5.02

  	
  Existence

  	
  73

  
	
   

  	
  SECTION 5.03

  	
  Insurance

  	
  73

  
	
   

  	
  SECTION 5.04

  	
  Maintenance of
  Properties

  	
  75

  
	
   

  	
  SECTION 5.05

  	
  Obligations and Taxes

  	
  75

  
	
   

  	
  SECTION 5.06

  	
  Notice of Event of
  Default, etc

  	
  75

  
	
   

  	
  SECTION 5.07

  	
  Access to Books and
  Records

  	
  75

  
	
   

  	
  SECTION 5.08

  	
  Compliance with Laws

  	
  76

  
	
   

  	
  SECTION 5.09

  	
  Appraisal Reports and
  Field Audits

  	
  77

  
	
   

  	
  SECTION 5.10

  	
  FAA and DOT Matters;
  Citizenship

  	
  77

  
	
   

  	
  SECTION 5.11

  	
  Gate Interests

  	
  78

  
	
   

  	
  SECTION 5.12

  	
  Slot Utilization

  	
  78

  
	
   

  	
  SECTION 5.13

  	
  Primary Foreign Slot
  Utilization

  	
  78

  
	
   

  	
  SECTION 5.14

  	
  Primary Route
  Utilization; Route Reporting

  	
  79

  
	
   

  	
  SECTION 5.15

  	
  Additional Subsidiaries

  	
  80

  
	
   

  	
  SECTION 5.16

  	
  Concentration Account

  	
  80

  
	
   

  	
  SECTION 5.17

  	
  Operational Matters

  	
  80

  
					

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.18

  	
  Additional Collateral;
  Updated Schedules; Additional Grantors

  	
  80

  
	
   

  	
  SECTION 5.19

  	
  Non-Primary Route
  Flight Operations

  	
  81

  
	
   

  	
  SECTION 5.20

  	
  Further Assurances

  	
  81

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  NEGATIVE COVENANTS

  	
  82

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.01

  	
  Liens

  	
  82

  
	
   

  	
  SECTION 6.02

  	
  Merger, etc

  	
  84

  
	
   

  	
  SECTION 6.03

  	
  Indebtedness

  	
  84

  
	
   

  	
  SECTION 6.04

  	
  Fixed Charge Coverage

  	
  86

  
	
   

  	
  SECTION 6.05

  	
  Unrestricted Cash
  Reserve

  	
  86

  
	
   

  	
  SECTION 6.06

  	
  Coverage Ratio

  	
  86

  
	
   

  	
  SECTION 6.07

  	
  Guarantees and Other
  Liabilities

  	
  87

  
	
   

  	
  SECTION 6.08

  	
  Dividends; Capital
  Stock

  	
  87

  
	
   

  	
  SECTION 6.09

  	
  Transactions with
  Affiliates

  	
  88

  
	
   

  	
  SECTION 6.10

  	
  Investments, Loans and
  Advances

  	
  88

  
	
   

  	
  SECTION 6.11

  	
  Disposition of Assets

  	
  89

  
	
   

  	
  SECTION 6.12

  	
  Nature of Business

  	
  89

  
	
   

  	
  SECTION 6.13

  	
  Changes to Corporate
  Documents

  	
  89

  
	
   

  	
  SECTION 6.14

  	
  Restricted Prepayments

  	
  89

  
	
   

  	
  SECTION 6.15

  	
  Restrictive Agreements

  	
  90

  
	
   

  	
  SECTION 6.16

  	
  Fiscal Year

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  EVENTS OF DEFAULT

  	
  90

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.01

  	
  Events of Default

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  THE AGENTS

  	
  94

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.01

  	
  Administration by
  Agents

  	
  94

  
	
   

  	
  SECTION 8.02

  	
  Rights of Agent, Paying
  Agent and Collateral Agents

  	
  95

  
	
   

  	
  SECTION 8.03

  	
  Liability of Agents

  	
  95

  
	
   

  	
  SECTION 8.04

  	
  Reimbursement and
  Indemnification

  	
  96

  
	
   

  	
  SECTION 8.05

  	
  Successor Agents

  	
  96

  
	
   

  	
  SECTION 8.06

  	
  Independent Lenders

  	
  97

  
	
   

  	
  SECTION 8.07

  	
  Advances and Payments

  	
  97

  
	
   

  	
  SECTION 8.08

  	
  Sharing of Setoffs

  	
  97

  
	
   

  	
  SECTION 8.09

  	
  Other Agents

  	
  98

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  GUARANTY

  	
  98

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.01

  	
  Guaranty

  	
  98

  
	
   

  	
  SECTION 9.02

  	
  No Impairment of
  Guaranty

  	
  99

  
						

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.03

  	
  Continuation and
  Reinstatement, etc

  	
  100

  
	
   

  	
  SECTION 9.04

  	
  Subrogation

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  100

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 10.01

  	
  Notices

  	
  100

  
	
   

  	
  SECTION 10.02

  	
  Successors and Assigns

  	
  100

  
	
   

  	
  SECTION 10.03

  	
  Confidentiality

  	
  105

  
	
   

  	
  SECTION 10.04

  	
  Expenses; Indemnity;
  Damage Waiver

  	
  105

  
	
   

  	
  SECTION 10.05

  	
  Governing Law;
  Jurisdiction; Consent to Service of Process

  	
  107

  
	
   

  	
  SECTION 10.06

  	
  No Waiver

  	
  107

  
	
   

  	
  SECTION 10.07

  	
  Extension of Maturity

  	
  107

  
	
   

  	
  SECTION 10.08

  	
  Amendments, etc

  	
  107

  
	
   

  	
  SECTION 10.09

  	
  Severability

  	
  109

  
	
   

  	
  SECTION 10.10

  	
  Headings

  	
  109

  
	
   

  	
  SECTION 10.11

  	
  Survival

  	
  109

  
	
   

  	
  SECTION 10.12

  	
  Execution in
  Counterparts; Integration; Effectiveness

  	
  109

  
	
   

  	
  SECTION 10.13

  	
  Prior Agreements

  	
  110

  
	
   

  	
  SECTION 10.14

  	
  Further Assurances

  	
  110

  
	
   

  	
  SECTION 10.15

  	
  USA Patriot Act

  	
  110

  
	
   

  	
  SECTION 10.16

  	
  WAIVER OF JURY TRIAL

  	
  110

  
					

 

iv

 

	
   

  	
   

  	
   

  
	
   

  	
  ANNEX A

  	
  –

  	
  Commitment Amounts

  
	
   

  	
  EXHIBIT A

  	
  –

  	
  Form of Real Estate Mortgage

  
	
   

  	
  EXHIBIT B

  	
  –

  	
  Form of Security Agreement

  
	
   

  	
  EXHIBIT C

  	
  –

  	
  Form of Pledge Agreement

  
	
   

  	
  EXHIBIT D

  	
  –

  	
  Form of Slot, Gate and Route Security
  and Pledge Agreement

  
	
   

  	
  EXHIBIT E

  	
  –

  	
  Form of Aircraft Mortgage

  
	
   

  	
  EXHIBIT F-1

  	
  –

  	
  Form of Trademark Security Agreement

  
	
   

  	
  EXHIBIT F-2

  	
  –

  	
  Form of Patent Security Agreement

  
	
   

  	
  EXHIBIT F-3

  	
  –

  	
  Form of Copyright Security Agreement

  
	
   

  	
  EXHIBIT G-1

  	
  –

  	
  Form of Opinion of Kirkland &
  Ellis

  
	
   

  	
  EXHIBIT G-2

  	
  –

  	
  Form of Opinion of Vedder, Price,
  Kaufman & Kammholz

  
	
   

  	
  EXHIBIT G-3

  	
  –

  	
  Form of Opinion of McAfee &
  Taft

  
	
   

  	
  EXHIBIT H

  	
  –

  	
  Form of Instrument of Assumption and
  Joinder

  
	
   

  	
  EXHIBIT I

  	
  –

  	
  Form of Intercreditor Agreement

  
	
   

  	
  EXHIBIT J

  	
  –

  	
  Form of Assignment and Acceptance

  
	
   

  	
  EXHIBIT K

  	
  –

  	
  Form of Contribution Agreement

  
	
   

  	
  EXHIBIT L

  	
  –

  	
  Form of Deposit Account Control
  Agreement

  
	
   

  	
  EXHIBIT M

  	
  –

  	
  Form of Investment Property Control
  Agreement

  
	
   

  	
   

  
	
   

  	
  SCHEDULE 1.01(a)

  	
  –

  	
  Excluded Flight Simulators

  
	
   

  	
  SCHEDULE 1.01(b)

  	
  –

  	
  Primary Foreign Slots

  
	
   

  	
  SCHEDULE 1.01(c)

  	
  –

  	
  Primary Routes

  
	
   

  	
  SCHEDULE 1.01(d)

  	
  –

  	
  Intentionally omitted

  
	
   

  	
  SCHEDULE 1.01(e)

  	
  –

  	
  Primary Gate Interests

  
	
   

  	
  SCHEDULE 1.01(f)

  	
  –

  	
  Primary Supporting Route Facilities

  
	
   

  	
  SCHEDULE 1.01(g)

  	
  –

  	
  Immaterial Subsidiaries

  
	
   

  	
  SCHEDULE 1.01(h)

  	
  –

  	
  Primary Slots

  
	
   

  	
  SCHEDULE 3.06

  	
  –

  	
  Subsidiaries

  
	
   

  	
  SCHEDULE 3.07

  	
  –

  	
  Existing Liens

  
	
   

  	
  SCHEDULE 3.08

  	
  –

  	
  Material Agreements

  
	
   

  	
  SCHEDULE 3.11

  	
  –

  	
  Litigation

  
	
   

  	
  SCHEDULE 3.17

  	
  –

  	
  ERISA

  
	
   

  	
  SCHEDULE 3.18

  	
  –

  	
  Indebtedness

  
	
   

  	
  SCHEDULE 3.19(a)

  	
  –

  	
  Real Property Interests

  
	
   

  	
  SCHEDULE 3.23

  	
  –

  	
  Section 1110 Collateral

  
	
   

  	
  SCHEDULE 5.21

  	
  –

  	
  Post Closing Items

  
	
   

  	
  SCHEDULE 6.09

  	
  –

  	
  Transactions with Affiliates

  
	
   

  	
  SCHEDULE 6.10

  	
  –

  	
  Existing Investments

  
	
   

  	
  SCHEDULE 6.15

  	
  –

  	
  Restrictive Agreements

  
						

 

v

 

REVOLVING
CREDIT, TERM LOAN AND GUARANTY AGREEMENT

Dated as of February 1, 2006

 

REVOLVING CREDIT, TERM LOAN AND GUARANTY
AGREEMENT, dated as of February 1, 2006, among UNITED AIR LINES, INC., a
Delaware corporation (the “Borrower”), UAL CORPORATION, a Delaware
corporation and the parent company of the Borrower (the “Parent”) and
the direct and indirect domestic subsidiaries of the Parent other than
Immaterial Subsidiaries signatory hereto (the “Subsidiaries” and
together with the Parent, each a “Guarantor” and collectively the “Guarantors”),
JPMORGAN CHASE BANK, N.A., a national banking corporation (“JPMCB”),
CITICORP USA, INC., a Delaware corporation (“CITI”), GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation (“GE Capital”), each of the
Lenders from time to time party hereto, JPMCB and CITI, as co-administrative
agents (each, an “Agent” and together, the “Agents”) and
co-collateral agents for the Lenders (each, a “Collateral Agent” and
together, the “Collateral Agents”), JPMCB, as paying agent (in such
capacity, the “Paying Agent”) for the Lenders, J.P. MORGAN SECURITIES
INC. (“JPMSI”) and CITIGROUP GLOBAL MARKETS, INC. (“CGMI”), as
joint lead arrangers and joint bookrunners, and GE Capital, as syndication
agent.

 

INTRODUCTORY
STATEMENT

 

The Borrower has applied to the Lenders for a
loan facility of up to $3,000,000,000 comprised of (a) a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$200,000,000 as set forth herein and (b) a term loan in an aggregate
principal amount up to $2,800,000,000 as set forth herein ($350,000,000 of
which shall be available as a Delayed Draw Tranche B Loan (as defined below)),
all of the Borrower’s obligations under each of which are to be guaranteed by
the Guarantors.

 

The proceeds of the Loans will be used to
repay in full all of the obligations of the Borrower and the Guarantors under
and in connection with the Existing DIP Facility, for working capital and other
general corporate purposes of the Borrower and the Guarantors and for the other
purposes described in Section 3.10.

 

To provide guarantees and security for the
repayment of the Loans, the reimbursement of any draft drawn under a Letter of
Credit and the payment of the other Obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents, the Borrower and the
Guarantors will, among other things, provide to the Agents, the Collateral
Agents and the Lenders the following (each as more fully described herein):

 

(a)           a
guaranty from each of the Guarantors of the due and punctual payment and
performance of the Obligations of the Borrower hereunder pursuant to Section 9
hereof; and

 

(b)           a
security interest on or mortgages (or comparable Liens) with respect to the
Collateral from the Borrower and each of the Guarantors pursuant to the
Collateral Documents.

 

Accordingly, the parties hereto hereby agree
as follows:

 

 

SECTION 1.           DEFINITIONS

 

SECTION 1.01       Defined Terms.

 

“1997 EETC Facility” shall mean that
certain multiple tranche enhanced equipment pass through trust certificate
financing commonly referred to as the “1997-1 EETC Transaction,” the purpose of
which was to finance 14 aircraft in the Borrower’s fleet, which the Borrower
entered into in December, 1997.

 

“ABR”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.

 

“Account”
shall mean any right to payment for goods sold or leased or for services
rendered, whether or not earned by performance.

 

“Account
Debtor” shall mean the Person obligated on an Account.

 

“Adjusted LIBO Rate” shall mean, with
respect to any Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory
Reserve Rate.

 

“Affiliate” shall mean, as to any
Person, any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.  For purposes of this definition, a Person (a “Controlled
Person”) shall be deemed to be “controlled by” another Person (a “Controlling
Person”) if the Controlling Person possesses, directly or indirectly, power
to direct or cause the direction of the management and policies of the
Controlled Person whether by contract or otherwise; provided, that neither the
trustees under the Indentures nor the PBGC shall be Affiliates of the Borrower
or any Guarantor.

 

“Agents” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Agreement” shall mean this Revolving
Credit, Term Loan and Guaranty Agreement, as the same may be amended, restated,
modified, supplemented, extended or amended and restated from time to time.

 

“Air Transportation Stabilization Act and
Regulations” shall mean the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time,
and the regulations promulgated thereunder (14 C.F.R. Part 1310) and
related OMB Regulations, 14 C.F.R. Part 1300.

 

“Aircraft” shall have the meaning set
forth in the Aircraft Mortgage.

 

“Aircraft Mortgage” shall mean that “Aircraft
Mortgage” as defined in Section 4.01(e), as the same may be amended,
restated, modified, supplemented, extended or amended and restated from time to
time.

 

“Aircraft Protocol” shall mean the
Protocol to the Convention on International Interests in Mobile Equipment on
Matters Specific to Aircraft Equipment, as the same may be amended from time to
time, available at:
http://www.unidroit.org/english/conventions/mobile-equipment/aircraftprotocol.pdf,
or any successor URL.

 

2

 

“Airport Authority” shall mean any
public or private board or other body or organization chartered or otherwise
established for the purpose of administering, operating or managing airports or
related facilities.

 

“Alternate Base Rate” shall mean, for
any day, a rate per annum equal to the greater of (a) the Prime Rate in
effect on such day and (b) the sum of the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%. 
Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.

 

“Appraisal Report” shall mean an
appraisal in form and substance reasonably satisfactory to the Agents and
prepared by the Appraisers or the Real Estate Appraiser, which certifies, at
the time of determination, the Appraised Value of the applicable Appraised
Collateral, Eligible Collateral or Cure Collateral, as the case may be.

 

“Appraised Collateral” shall mean
Collateral that is Mortgaged Collateral, Primary Routes, Primary Slots, Primary
Foreign Slots, Flight Simulators, Ground Support Equipment, Real Property
Assets, the Denver Training Facility or any other individual asset that is
included in an Appraisal Report.

 

“Appraised Value” shall mean (a) in
the case of such Appraised Collateral (excluding the Denver Training Facility
but including Primary Slots and Ground Support Equipment), Eligible Collateral
or assets, the fair market value thereof as reflected in the most recent
Appraisal Report obtained in respect of such Collateral or assets in accordance
with this Agreement, (b) in the case of the Denver Training Facility, the
in-use value thereof as reflected in the most recent Appraisal Report obtained
in respect of the Denver Training Facility in accordance with this Agreement (less
(i) the amount attributed to the Real Property Assets associated with the
Denver Training Facility, as set forth in the most current Appraisal Report
prepared by the Appraiser in accordance with this Agreement, and (ii) the
amount attributed to the Flight Simulators located at the Denver Training
Facility, as set forth in the most current Appraisal Report prepared by the
applicable Appraiser in accordance with this Agreement) and (c) in the
case of Eligible Accounts Receivable, Eligible Accounts Receivable, as
reflected in the most recent Officer’s Certificate delivered pursuant to Section 5.01(q),
each such value referred to in this definition to be (A) determined in a
manner satisfactory to the Agents and (B) subject to reserves and other
criteria established by the Agents in their commercially reasonable discretion.

 

 “Appraisers”
shall mean (a) Simat, Helliesen & Eichner, Inc., as to the
Mortgaged Collateral, Primary Slots, Primary Routes, Primary Foreign Slots,
Ground Support Equipment, Flight Simulators and Denver Training Facility and (b) such
other appraisal firm or firms as may be retained by the Agents, in consultation
with the Borrower, from time to time.

 

“Approved Fund” shall have the meaning
given such term in Section 10.02(b).

 

“Assignment and Acceptance” shall mean
an assignment and acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 10.02), and
accepted by the Paying Agent, substantially in the form of Exhibit J.

 

3

 

“Availability Period” shall mean the
period from and including the Closing Date to but excluding the Termination
Date.

 

“Bankruptcy Code” shall mean The
Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and
codified as 11 U.S.C. Section 101 et  seq.

 

“Bankruptcy Court” shall mean the
United States Bankruptcy Court for the Northern District of Illinois.

 

“Board” shall mean the Board of
Governors of the Federal Reserve System of the United States.

 

“Borrower” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Borrowing” shall mean the incurrence,
conversion or continuation of Loans of a single Type made from all the Tranche
A Lenders or the Tranche B Lenders, as the case may be, on a single date and
having, in the case of Eurodollar Loans, a single Interest Period.

 

“Borrowing Request”
shall mean a request by the Borrower for a Borrowing in accordance with Section 2.03.

 

“Business Day” shall mean any day
other than a Saturday, Sunday or other day on which commercial banks in New
York City are required or authorized to remain closed (and, for a Letter of
Credit, other than a day on which the Issuing Lender issuing such Letter of
Credit is closed); provided, however, that when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits on the
London interbank market.

 

“Cape Town Treaty” shall mean,
collectively, the Aircraft Protocol and the Convention, as the same may be
amended from time to time.

 

“Capitalized Lease” shall mean, as
applied to any Person, any lease of property by such Person as lessee which
would be capitalized on a balance sheet of such Person prepared in accordance
with GAAP.  The
amount of obligations of such Person under a Capitalized Lease shall be the
capitalized amount thereof determined in accordance with GAAP.

 

“Cash Collateralization” shall have
the meaning given such term in Section 2.02(j).

 

“CERCLA” shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as heretofore
and hereafter amended.

 

“CGMI” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Change in Law” shall mean, after the
date hereof, (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority, Airport Authority, or Foreign Aviation Authorities after the date of
this Agreement applicable to the Borrower or any of the Guarantors or (c) compliance
by any Lender or the Issuing Lender (or, for purposes of Section 2.13(b),
by any lending office of such Lender or by such Lender’s or the Issuing

 

4

 

Lender’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

 

“Change of Control” shall mean (a) the
acquisition after the Closing Date of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 35% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Parent; (b) during
any period of up to 12 consecutive months, the occupation of a majority of the
seats (other than vacant seats) on the Board of Directors of the Parent by
Persons who were neither (i) directors at the time of the Consummation of
the Plan of Reorganization nor (ii) nominated by the Board of Directors of
the Parent or the Borrower nor (iii) appointed by directors so nominated;
or (c) the Parent at any time owning less than 100% of the Equity
Interests in the Borrower.

 

“Chase Bank” shall mean Chase Bank
USA, N.A.

 

“CITI” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Closing Date” shall mean the date on
which this Agreement has been executed and the conditions precedent to the
making of the initial Loans or the issuance of the initial Letter of Credit
(whichever may occur first) set forth in Section 4.01 have been satisfied
or waived.

 

“Co-Branded Agreement” shall mean that
certain Co-Branded Card Marketing Services Agreement, effective July 1,
2001, among the Borrower, the Parent, UAL Loyalty Services, LLC and Chase Bank,
as heretofore amended and as may be further amended, restated, modified,
supplemented, extended or amended and restated from time to time.

 

“Co-Branded Obligations” shall mean
the obligations of the Borrower, the Parent and UAL Loyalty Services, LLC to
Chase Bank under the Co-Branded Agreement.

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.

 

“Collateral” shall mean all of the “Collateral”
referred to in the Collateral Documents, which shall not include (a) the
Escrow Accounts, (b) the Payroll Accounts, (c) Petty Cash Accounts,
and (d) other items as set forth in the Collateral Documents.

 

“Collateral Agents” shall have the
meaning set forth in the first paragraph of this Agreement.

 

“Collateral Documents” shall mean,
collectively, the Security Agreement, the Pledge Agreement, the Aircraft
Mortgage (including, without limitation, any Mortgage Supplement), the Real
Estate Mortgages, the SGR Security Agreement, the Trademark Security Agreement,
the Patent Security Agreement, the Copyright Security Agreement, any Control 

 

5

 

Agreements and other agreements, instruments or documents that create
or purport to create a Lien in favor of the Collateral Agents for the benefit
of the Secured Parties.

 

“Commitment Fee” shall have the
meaning set forth in Section 2.19.

 

“Confirmation Order” shall mean the
order of the Bankruptcy Court confirming the Plan of Reorganization pursuant to
Section 1129 of the Bankruptcy Code, together with all schedules and
exhibits thereto.

 

“Consummation of the Plan of Reorganization”
shall mean the occurrence of the Effective Date (as defined in the Plan of
Reorganization) and the substantial consummation of the Plan of Reorganization
within the meaning of Section 1101(2) of the Bankruptcy Code.

 

“Contribution Agreement” shall mean a
contribution agreement among the Borrower and each of the Guarantors,
substantially in the form of Exhibit K hereto, as such agreement may be
amended, restated, amended and restated, supplemented or otherwise modified,
renewed or replaced from time to time.

 

“Control Agreements” shall mean the
Deposit Account Control Agreements and the Investment Property Control
Agreements.

 

“Convention” shall mean the Convention
on International Interests in Mobile Equipment (Cape Town, 2001), as the same
may be amended from time to time, available at: http://www.unidroit.org/english/conventions/mobile-equipment/mobile-equipment.pdf,
or any successor URL.

 

“Copyright Security Agreement” shall
mean that certain Copyright Security Agreement as defined in Section 4.01(f),
as the same may be amended, restated, modified, supplemented, extended or
amended and restated from time to time.

 

“Cure Collateral” shall mean (a) cash
collateral pledged to the Collateral Agents (and held in a segregated account
over which the Collateral Agents have sole and exclusive control), (b) the
Ground Support Equipment (to the extent landlord lien waivers have been
delivered to the Collateral Agents as required by Section 4.04(b) of the
Security Agreement), (c) the Primary Slots, (d) the Eligible Accounts
Receivable or (e) other assets of the Borrower or any Guarantor which
shall be reasonably satisfactory to the Required Lenders, and all of which
Ground Support Equipment, Primary Slots, Eligible Accounts Receivable or other
assets shall (i) be valued by a new Appraisal Report or Field Audit, as
the case may be, at the time the Borrower designates such assets as Eligible
Collateral and (ii) be subject to a perfected first priority lien and/or
mortgage (or comparable lien) in favor of the Collateral Agents (subject to
junior liens permitted hereunder).

 

“DCA” shall mean Ronald Reagan
Washington National Airport.

 

“Defaulting Lender” shall mean any
Lender that (a) has failed to fund any portion of the Loans or
participations in any Letter of Credit required to be funded hereunder within
one (1) Business Day of the date required to be funded by it hereunder,
unless the subject of a good faith dispute or subsequently cured, (b) has
otherwise failed to pay over to the Agents or any Lender (or its banking
Affiliates) any other amount required to be paid by it hereunder within one (1) Business
Day of the date when due, unless the subject of a good faith dispute or

 

6

 

subsequently cured, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

 

“Delayed Draw Tranche B Loan” shall
have the meaning given to such term in

Section 2.01(c) hereof.

 

“Delayed Draw Tranche B Loan Availability
Period” shall mean the period commencing on the Closing Date and ending on
the Delayed Draw Tranche B Loan Commitment Termination Date.

 

“Delayed Draw Tranche B Loan Commitment”
shall mean the commitment of the Tranche B Lenders to make Delayed Draw Tranche
B Loans to the Borrower up to an aggregate principal amount, at any one time,
not in excess of the amount set forth opposite such Lender’s name under the
column entitled “Delayed Draw Tranche B Loan Commitment” on Annex A attached
hereto or as may be subsequently set forth in the Register from time to time,
as the case may be, and as may be reduced from time to time pursuant to Section 2.10
and 2.11.

 

“Delayed Draw Tranche B Loan Commitment
Percentage” shall mean, at any time, with respect to each Tranche B Lender,
the percentage obtained by dividing its Delayed Draw Tranche B Loan Commitment
at such time by the Total Delayed Draw Tranche B Loan Commitment.

 

“Delayed Draw Tranche B Loan Commitment
Termination Date” shall mean the earliest to occur of (i) the five
month anniversary of the Closing Date, (ii) the date on which the full
amount of the Delayed Draw Tranche B Loan Commitment has been borrowed and (iii) the
date on which the Delayed Draw Tranche B Loan Commitment shall terminate in
accordance with Section 2.10 or Article 7 hereof.

 

“Denver Training Facility” shall mean
that certain parcel of real property owned in fee by the Borrower and located
at 7401 Martin Luther King Boulevard, Denver, Colorado 80207 (as such real
property is more particularly described in the applicable Real Estate Mortgage,
together with all Collateral described in such Real Estate Mortgage) and all
assets located on or used in conjunction with such property (including, without
limitation, all Flight Simulators located at such location, training program
contracts for training programs conducted at such location, but excluding
assets located at the above address not owned by the Borrower or otherwise
encumbered identified on Schedule 1.01(a)), taken as a whole.

 

“Deposit Account Control Agreement”
shall mean an agreement in writing substantially in the form of Exhibit L
attached hereto or in form and substance reasonably satisfactory to the
Collateral Agents, by and among the Borrower or any Guarantor, as the case may
be, the Collateral Agents, and any bank at which any deposit account of the
Borrower or any Guarantor, as the case may be, is at any time maintained (other
than Escrow Accounts, Payroll Accounts, Petty Cash Accounts and any accounts
maintained at the Agents).

 

“Dollars” and “$” shall mean
lawful money of the United States of America.

 

“DOT” shall mean the United States
Department of Transportation and any successor thereto.

 

7

 

“Earned Revenue Percentage” shall
mean, a percentage, representing the estimated portion of credit revenue which
has been earned at any point in time, based on a rolling twelve-month analysis
of ticket sales versus “load levels” (i.e. tickets used for actual flights)
experienced by the Borrower during the most recent Rolling Twelve Month period
for which such information is available at the time of such determination.  The Earned Revenue Percentage shall initially
be set at 46% and shall be subject to re-determination by either of the Agents
based upon the results of each field audit of the Borrower conducted after the
Closing Date.

 

“EBITDAR” shall mean, for any period,
all as determined in accordance with GAAP, the consolidated net income (or net
loss) of the Parent and its Subsidiaries for such period, plus (a) the
sum of (i) depreciation expense; (ii) amortization expense; (iii) other
non-cash charges; (iv) consolidated federal, state and local income tax
expense; (v) gross interest expense for such period less gross interest
income for such period; (vi) aircraft rent expense; (vii) extraordinary,
non-recurring or unusual losses; (viii) any non-cash non-recurring charge
or non-cash restructuring charge; (ix) the cumulative effect (whether
positive or negative) of any change in accounting principles; (x) cash
restructuring charges not to exceed $75,000,000 paid in fiscal year 2006 and
(xi) any other cash restructuring charges in an amount not to exceed
$15,000,000 in any fiscal year (other than fiscal year 2006) less (b) extraordinary,
non-recurring or unusual gains plus or minus (c) the amount
of cash received or expended in such period in respect of any amount which,
under clause (a)(viii) above, was taken into account in determining
EBITDAR for such or any prior period.

 

“EETC Deposit” shall mean certain
funds that may be segregated or otherwise set aside in connection with any
potential dispute concerning the amount of accrued interest that may be owed by
the Borrower with respect to Tranche A of the 1997 EETC Facility.

 

“EETC Transaction” shall mean an
enhanced equipment trust certificate or other similar refinancing transaction
solely with respect to up to nineteen (19) aircraft (which may include the
fourteen (14) aircraft that are subject to the 1997 EETC Facility) having a
current market value pursuant to an Appraisal Report not in excess of
$600,000,000 in the aggregate.

 

“Eligible Accounts” means, at the time of any determination thereof, each
Account with respect to (i) balances owed to the Borrower for revenues
associated with the Borrower’s performance of cargo shipments for various
freight brokers, freight forwarders and other airlines, (ii) balances owed
to the Borrower from customers utilizing credit cards issued by the Borrower
under the Universal Air Travel Plan utilized by the Borrower, (iii) balances
owed to the Borrower from travel agencies for amounts charged back by the
Borrower for additional passenger fares not properly charged at the time of the
initial ticketing and other violations and (iv) balances owed to the
Borrower from corporate customers generated from the sale of parts and the
leasing of various airport ground equipment and gates and other
non-transportation goods and services, in each case where such Account is not
ineligible for inclusion in the calculation of Eligible Accounts pursuant to
any of clauses (a) through (o) below. 
Without limiting the foregoing, to qualify as Eligible Accounts, an
Account shall indicate no person other than the Borrower or a Guarantor as
payee or remittance party.  Criteria and
eligibility standards used in determining Eligible Accounts may be fixed and
revised from time to time by the Agents, in their reasonable discretion, and in
the Agents’ reasonable exclusive judgment, with any changes in such criteria to
be effective upon the date of the next Field Audit to be conducted pursuant to
the terms herein.

 

8

 

Unless otherwise approved from time to time in writing by the Agents,
no Account shall be an Eligible Account if, without duplication:

 

(a)           the
Borrower or a Guarantor does not have sole lawful and absolute title to such
Account; or

 

(b)           it
is not subject to a valid and perfected first priority Lien in favor of the
Collateral Agents for the benefit of the Secured Parties, subject to no other
Liens other than Liens permitted by the Agreement; or

 

(c)           (i) it
is unpaid more than 90 days from the original date of invoice or 60 days from
the original due date or (ii) it has been written off the books of the
Borrower or a Guarantor or has been otherwise designated on such books as
uncollectible; or

 

(d)           the
Account Debtor is insolvent or the subject of any bankruptcy case or insolvency
proceeding of any kind (other than postpetition accounts payable of an Account
Debtor that is a debtor-in-possession under the Bankruptcy Code and reasonably
acceptable to the Agents); or

 

(e)           the
Account is not payable in Dollars or the Account Debtor is either not organized
under the laws of the United States of America, any state of the United States
of America or the District of Columbia or is located outside or has its
principal place of business or substantially all of its assets outside the
United States; or

 

(f)            the
Account Debtor is the United States of America or any department, agency or
instrumentality thereof, unless the relevant Borrower duly assigns its rights
to payment of such Account to the Agent pursuant to the Assignment of Claims
Act of 1940, as amended, which assignment and related documents and filings
shall be in form and substance reasonably satisfactory to the Agents; or

 

(g)           the
associated revenue from such Account has not been earned by the Borrower or the
Guarantor; or

 

(h)           to
the extent the Account is classified as a note receivable by the Borrower or a
Guarantor; or

 

(i)            the
Account is a non-trade Account, or relates to payments for interest; or

 

(j)            it
arises out of a sale made by the Borrower or a Guarantor to an employee,
officer, agent, director, stockholder, Subsidiary or Affiliate of the Borrower
or a Guarantor; or

 

(k)           such
Account was not paid in full, and the Borrower or a Guarantor created a new
receivable for the unpaid portion of the Account, and other Accounts
constituting chargebacks, debit memos (other than debit memos reflecting
balances owed to the Borrower referred to in clause (iii) of the first 

 

9

 

sentence of this definition of Eligible
Accounts) and other adjustments for unauthorized deductions; or

 

(l)            such Account is subject to any
counterclaim, deduction, defense, setoff or dispute, but only to the extent of
the amount of such counterclaim, deduction, defense, setoff or dispute, unless
the Agents, in their sole discretion, have established an appropriate reserve
and determine to include such Account as an Eligible Account; or

 

(m)          the
Account does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local; or

 

(n)           as
to any Account, to the extent that a check, promissory note, draft, trade
acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason (other than bank
error prior to the correction thereof); or

 

(o)           the
Account is due from another airline.

 

“Eligible Accounts Receivable” shall
mean, at the time of determination thereof, the sum of Eligible Accounts plus
Estimated Credit Card Receivables Component.

 

“Eligible Assignee” shall mean (a) a
commercial bank having total assets in excess of $1,000,000,000, (b) a
finance company, insurance company or other financial institution or fund, in
each case reasonably acceptable to the Agents, which in the ordinary course of
business extends credit of the type contemplated herein and has total assets in
excess of $200,000,000 and whose becoming an assignee would not constitute a
prohibited transaction under Section 4975 of the Code or Section 406
of ERISA, (c) an Affiliate of the assignor Lender, (d) an Approved
Fund and (e) any other financial institution reasonably satisfactory to
the Agents.

 

“Eligible Collateral” shall mean (a) all
Mortgaged Collateral (including, without limitation, aircraft, spare parts,
spare engines and QEC Kits), Flight Simulators, Primary Routes and the Real
Property Assets, in each case to the extent owned or held by the Borrower or a
Guarantor and on which the Collateral Agents shall have a valid and perfected
first priority lien and/or mortgage (or comparable lien), provided that
if an Aircraft is (i) Parked, then 50% of the Appraised Value of such
Aircraft as set forth in the most recent Appraisal Report shall be excluded
from Eligible Collateral provided that an Appraisal Report establishing the
current Appraised Value of such Aircraft in its Parked condition is delivered
to the Agents within ninety (90) days of such Aircraft being Parked, and if no
such Appraisal Report shall have been delivered within such period, then such
Parked Aircraft shall be excluded from Eligible Collateral or (ii) Stored,
then such Aircraft shall be excluded from Eligible Collateral, and (b) any
Cure Collateral designated by the Borrower at its discretion.

 

“Engine” shall have the meaning set
forth in the Aircraft Mortgage.

 

“Environmental Laws” shall mean all
laws (including common law), rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions or legally binding

 

10

 

agreements issued, promulgated or entered into by or with any
Governmental Authority, relating to the environment, preservation or
reclamation of natural resources, the handling, treatment, storage, disposal,
Release or threatened Release of any Hazardous Material or the exposure of any
Person (including employees) to any Hazardous Materials.

 

“Environmental Liability” shall mean
any liability (including any liability for damages, natural resource damage,
costs of environmental remediation, administrative oversight, costs, fines or
penalties) directly resulting from or based upon (a) violation of any
Environmental Law or requirement of any Airport Authority relating to
environmental matters, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the Release or threatened Release of any
Hazardous Materials into the environment or (e) any contract, agreement,
lease or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

 

“Equity Interests” shall mean shares
of capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a Person (whether direct or indirect), and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

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

 

“ERISA Affiliate” shall mean any trade
or business (whether or not incorporated) that, together with the Borrower, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“Escrow Accounts” shall mean certain
funds set aside by the Borrower or any Guarantor to manage the collection and
payment of amounts collected by the Borrower or such Guarantor for the benefit
of third party beneficiaries relating to: (a) federal income tax
withholding and backup withholding tax, employment taxes, transportation excise
taxes and security related charges, including, without limitation, (i) federal
payroll withholding taxes, as described in Sections 3101, 3111 and 3402 of the
Code, (ii) federal Unemployment Tax Act taxes, as described in Chapter 23
of Subtitle C of the Code, (iii) federal air transportation excise taxes,
as described in Sections 4261 and 4271 of the Code, (iv) federal security
charges, as described in Title 49 of the Code of Federal Regulations of 2002
(referred to in this definition as the “CFR”), Chapter XII, Part 1510,
(v) federal Animal and Plant Health Inspection Service of the United
States Department of Agriculture (APHIS) user fees, as described in Title 21 of
the United States Code (2002) (referred to in this definition as “U.S.C.”)
Section 136a and 7 CFR Section 354.3, (vi) federal Immigration
and Naturalization Service (INS) fees, as described in 8 CFR Part 286, (vii) federal
customs taxes as described in 19 U.S.C. Section 58c, and (viii) federal
jet fuel taxes as described in Sections 4091 and 4092 of the Code collected on
behalf of and owed to the federal government; (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 

 

11

 

charges and fees that are analogous to those described in Subtitle C of
the Code and that are described in or are analogous to Chapter 23 of Title 19
Delaware Code Annotated (2002) collected on behalf of and owed to state and
local authorities, agencies and entities; (c) passenger facility fees and
charges as described in 49 U.S.C. Section 40117 (2005) and Title 14 of the
CFR, Subchapter 1, Part 158 collected on behalf of and owed to various
Airport Authorities or other applicable Governmental Authorities; (d) taxes,
fees and charges similar to any of the foregoing set aside or collected on
behalf of, or owed to, Foreign Aviation Authorities, Governmental Authorities
or Airport Authorities; and (e) other funds held in trust for an
identified beneficiary; in each case held in escrow accounts or trust funds in
an aggregate amount for all of such Escrow Accounts not in excess of
$250,000,000.

 

“Estimated Credit Card Receivables
Component” shall mean an amount representing the estimated earned but outstanding
portion of retail credit card receivables due from major credit card providers
(including, without limitation, Visa, MasterCard, American Express, Discover
and Carte Blanche) in connection with ticket purchases from the Borrower, as
determined semi-annually in accordance with the following formula and set forth
in the most recent Officer’s Certificate delivered to the Agents pursuant to Section 5.01(q).
Such amount shall be equal to three (3) times the average daily adjusted
credit card sales (i.e., the product of (a) three (3) multiplied
by (b) the gross retail credit card sales for the most recent fiscal month
available at the time of determination multiplied by (c) the Earned
Revenue Percentage divided by (d) the number of days in such
month), subject to such adjustments as may be deemed appropriate by either of
the Agents based upon the results of each Field Audit of the Borrower conducted
after the Closing Date.

 

“Eurodollar”, when used in reference
to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

 

“Eurodollar Borrowing” shall mean a
Borrowing comprised of Eurodollar Loans.

 

“Event of Default” shall have the
meaning given such term in Section 7.

 

“Excluded Taxes” shall mean, with
respect to the Paying Agent, Agents, Collateral Agents, any Lender, any Issuing
Lender or any other recipient of any payment to be made by or on account of any
Obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender, any withholding tax that is imposed by any jurisdiction other
than the United States of America or any state thereof or is imposed by the
United States of America on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section 2.15(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.15(a).

 

12

 

“Existing DIP Facility” shall mean
that certain Revolving Credit, Term Loan and Guaranty Agreement (as amended,
restated, amended and restated, supplemented, extended or otherwise modified to
the date hereof), dated as of December 24, 2002, among the Borrower, the
Parent, the direct and indirect subsidiaries of the Borrower and Parent party
thereto, the lenders from time to time party thereto, JPMCB and CITI, as
co-administrative agents and co-collateral agents, and JPMCB, as paying agent.

 

“Existing DIP Facility Letter of Credit”
shall mean each letter of credit that was issued under the Existing DIP
Facility and remains outstanding as of the Closing Date.

 

“FAA” shall mean the Federal Aviation
Administration of the United States of America and any successor thereto.

 

“Federal
Funds Effective Rate” shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agents from three Federal funds brokers of
recognized standing selected by it.

 

“Fees” shall collectively mean the
Commitment Fees, Letter of Credit Fees and other fees referred to in Sections
2.18, 2.19 and 2.20.

 

“Field Audit” shall mean a field examination
conducted by a Field Auditor of the Borrower’s and the Guarantors’ accounts
receivable and books and records related thereto, and the results of such field
examination shall be reasonably satisfactory to the Agents in all respects.

 

“Field Auditor” shall mean the Agents
or their respective Affiliates, appraisers or other advisors who may be
retained by the Agents to conduct a Field Audit.

 

“Fifth-Freedom Rights” shall mean the
operational right to enplane passenger traffic and cargo in a foreign country
and deplane it in another foreign country.

 

“Fixed Charge Coverage Ratio” shall
mean, at any date for which such ratio is to be determined, the ratio of
EBITDAR for the Rolling Twelve Month period ended on such date to the sum of
the following for such period: (a) Interest Expense, plus (b) the
aggregate cash aircraft rental expense of the Parent and its Subsidiaries on a
consolidated basis for such period payable in cash in respect of any aircraft
leases (other than Capitalized Leases), all as determined in accordance with
GAAP, plus (c) scheduled principal payments on all Indebtedness
(including Capitalized Leases) of the Parent and its Subsidiaries on a
consolidated basis.

 

“Flight Simulators” shall mean the
flight simulators and flight training devices of the Borrower or any applicable
Guarantor (including, without limitation, any such simulators or training
devices located on a Real Property Asset) other than the flight simulators
listed on Schedule 1.01(a) (as such Schedule may be amended from
time to time with the consent of the Agents to remove one or more flight
simulators from such Schedule).

 

13

 

“Foreign Aviation Authorities” shall
mean any foreign governmental, quasi-governmental, regulatory or other
agencies, public corporations or private entities that exercise jurisdiction
over the issuance or authorization (a) to serve any foreign point on each
of the Routes and/or to conduct operations related to the Routes and Supporting
Route Facilities and/or (b) to hold and operate any Foreign Slots.

 

“Foreign Lender” shall mean any Lender
that is organized under the laws of a jurisdiction other than that in which the
Borrower is located.  For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Slot” shall mean all of the
rights and operational authority, now held or hereafter acquired, of Borrower
and, if applicable, a Guarantor, to conduct one landing or takeoff at a
specific time or in a specific time period on a specific day of the week at
each non-U.S. airport served in conjunction with Borrower’s, or, if applicable,
a Guarantor’s operations over a Route.

 

“GAAP” shall mean generally accepted
accounting principles applied in accordance with Section 1.03.

 

“Gate Interests” shall mean all of the
right, title, privilege, interest, and authority now or hereafter acquired or
held by the Borrower or, if applicable, a Guarantor in connection with the
right to use or occupy space in any airport terminal located in the United
States at which the Borrower conducts scheduled operations.

 

 “GE
Capital” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Governmental Authority” shall mean
the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank organization,
or other entity exercising executive, legislative, judicial, taxing or
regulatory powers or functions of or pertaining to government.  Governmental Authority shall not include any
Airport Authority.

 

“Ground Support Equipment” shall mean
the equipment owned by the Borrower or, if applicable, a Guarantor for crew and
passenger ground transportation, cargo, mail and luggage handling, catering,
fuel/oil servicing, de-icing, aircraft maintenance and servicing, dispatching,
security and motor vehicles.

 

“Guarantee” of or by any Person (the “guarantor”)
shall mean any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement 

 

14

 

condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation or (d) as an
account party in respect of any letter of credit or letter of guaranty issued
to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include (i) endorsements for collection or deposits or
(ii) customary contractual indemnities in commercial agreements, in each
case in the ordinary course of business and consistent with past practice.  The amount of any obligation relating to a
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made
(or, if less, the maximum reasonably anticipated liability for which such
Person may be liable pursuant to the terms of the instrument evidencing such
Guarantee) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform) as determined by the guaranteeing Person in good faith.

 

“Guarantor” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Hazardous Materials” shall mean all
explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreement” shall mean any
agreement with respect to any swap, forward, future or derivative transaction
or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions.

 

“Immaterial Subsidiaries” shall mean
one or more Subsidiaries of the Parent, for which, (a) the assets of all
such designated Subsidiaries constitute, in the aggregate, less than or equal
to 21⁄2% of the total assets of the Parent and its Subsidiaries on a consolidated
basis, and (b) the revenues of such Subsidiaries account for less than or
equal to 21⁄2% of the total revenues of the Parent and its Subsidiaries on a
consolidated basis.  The Immaterial
Subsidiaries as of the Closing Date shall be listed on Schedule 1.01(g).

 

“Indebtedness” of any Person shall
mean, without duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding current accrued
expenses incurred and current accounts payable, in each case in the ordinary
course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all Obligations
of such Person in respect of Capitalized Leases, (i) all 

 

15

 

obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (j) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances, (k) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, and (l) all obligations in respect of
Hedging Agreements valued at the amount equal to what would be payable by such
Person to its counterparty to such Hedging Agreements if such Hedging Agreement
was terminated early on such date of determination.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

 

“Indemnified Taxes” shall mean Taxes
other than Excluded Taxes.

 

“Indemnitee” shall have the meaning
given such term in Section 10.04(b).

 

“Indentures” shall mean, collectively,
the (a) Senior Convertible Note Indenture, (b) Senior Convertible
Note Indenture-2 and (c) the Senior Note Indenture.

 

“Intercreditor Agreement” shall mean
that certain Intercreditor Agreement dated the date hereof between the Agents,
the Collateral Agents, Chase Bank, the Borrower and the Guarantors party
thereto in substantially the form attached as Exhibit I.

 

“Interest Election Request” shall mean
a request by the Borrower to convert or continue a Borrowing in accordance with
Section 2.05.

 

“Interest Expense” shall mean, for any
period, the gross cash interest expense (including the interest component of
Capitalized Leases), of the Parent and its Subsidiaries on a consolidated basis
for such period, including, without limitation or duplication, (a) cash
interest expense in respect of the Loans and all other outstanding
Indebtedness, (b) commissions, discounts and other fees and charges
payable in connection with letters of credit, and (c) net payments payable
in connection with all Hedging Agreements involving interest rates (including
amortization of any discount), all as determined in accordance with GAAP.

 

“Interest Payment Date” shall mean (a) as
to any Eurodollar Loan having an Interest Period of two weeks or one, two or
three months, the last day of such Interest Period, (b) as to any
Eurodollar Loan having an Interest Period of more than three months, the last
day of such Interest Period and, in addition, each date during such Interest
Period that would be the last day of an Interest Period commencing on the same
day as the first day of such Interest Period but having a duration of three months
or any integral multiple thereof and (c) with respect to ABR Loans, the
last Business Day of each March, June, September and December.

 

“Interest Period” shall mean, as to
any Borrowing of Eurodollar Loans, the period commencing on the date of such Borrowing
(including as a result of a conversion from ABR Loans) or on the last day of
the preceding Interest Period applicable to such Borrowing and ending two weeks
thereafter or on the numerically corresponding day (or if there is no
corresponding day, the last day) in the calendar month that is one, three, six,
nine or twelve months thereafter, as the Borrower may elect in the related
notice delivered pursuant to 

 

16

 

Sections 2.03 or 2.05; provided, however, that, to be
available as an Interest Period hereunder, any two week, nine month or twelve
month Interest Period requested by the Borrower must be available to all of the
Lenders; provided, further, that (a) if any Interest Period
would end on a day which shall not be a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (b) no
Interest Period shall end later than the Termination Date.

 

“Investment Property” shall mean all
of the Borrower’s and Guarantors’ investment property, as such term is defined
in the New York Uniform Commercial Code, whether now owned or hereafter
acquired, including, but not limited to, all securities, security entitlements,
securities accounts, commodity contracts, commodity accounts, stocks, bonds,
mutual fund shares, money market shares and U.S. Government securities.

 

“Investment Property Control Agreement”
shall mean an agreement in writing substantially in the form of Exhibit M
attached hereto or in form and substance reasonably satisfactory to the
Collateral Agents, by and among the Borrower or any Guarantor, as the case may
be, and any securities intermediary, commodity intermediary or other Person who
has custody, control or possession of any Investment Property.

 

“Investments” shall mean any stock,
evidence of indebtedness or other security of any Person, any loan, advance, contribution
of capital, extension of credit or commitment therefor (including, without
limitation, the Guarantee of loans made to others, but excluding current trade
and customer accounts receivable arising in the ordinary course of business and
payable in accordance with customary trading terms in the ordinary course of
business), and any purchase or acquisition of (a) any security of another
Person or (b) a line of business, or all or substantially all of the
assets, of any Person.

 

“Issuing Lender” shall mean JPMCB or
CITI (or any of their banking affiliates), each in its capacity as the issuer
of Letters of Credit hereunder, and their successors in such capacity as
provided in Section 2.02(i), and one or more other Lenders, which other
Lenders shall be reasonably satisfactory to the Borrower and the Agents.  The Issuing Lender may, in its reasonable
discretion, in consultation with the Borrower, arrange for one or more Letters
of Credit to be issued by Affiliates of the Issuing Lender, in which case the term
“Issuing Lender” shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.

 

“Jet Fuel Supply Agreement” shall mean
that certain Jet Fuel Supply Agreement, entered into effective as of October 21,
2003, as amended from time to time, among the Borrower, UAFC and MSCG, pursuant
to which MSCG will supply jet fuel for the Borrower’s domestic operations, will
assume certain of the Borrower’s and UAFC’s existing supply and third-party
sale agreements and will sublease certain of the Borrower’s and UAFC’s existing
infrastructure agreements.

 

“JFK” shall mean New York’s John F.
Kennedy (JFK) International Airport.

 

17

 

“Joint Commitment Letter” shall mean
that certain Amended and Restated Joint Commitment Letter dated as of November 16,
2005 among the Agents, JPMSI, CGMI, GE Capital and the Borrower.

 

“Joint Lead Arrangers” shall mean
JPMSI and CGMI.

 

“JPMCB” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“JPMSI” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“LC Disbursement” shall mean a payment
made by the Issuing Lender pursuant to a Letter of Credit.

 

“LC Exposure” shall mean, at any time,
the sum of (a) the aggregate maximum undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all
LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure
of any Tranche A Lender at any time shall be its Tranche A Commitment
Percentage of the LC Exposure at such time.

 

“Lenders” shall mean the Tranche A
Lenders and the Tranche B Lenders.

 

“Letter of Credit” shall mean (a) any
irrevocable letter of credit issued pursuant to Section 2.02, which letter
of credit shall be (i) a standby letter of credit, (ii) issued for
purposes that are consistent with the ordinary course of business of the
Borrower or any Guarantor, (iii) denominated in Dollars and (iv) otherwise
in such form as may be reasonably approved from time to time by the Agents and
the applicable Issuing Lender and (b) each Existing DIP Facility Letter of
Credit.  On the Closing Date, each
Existing DIP Facility Letter of Credit shall be deemed for all purposes herein
to be a Letter of Credit issued pursuant to Section 2.02 and to constitute
usage of the Total Tranche A Commitment.

 

“Letter of Credit Account” shall mean
the account established by the Borrower under the sole and exclusive control of
the Paying Agent maintained at the office of the Paying Agent at 270 Park
Avenue, New York, New York 10017 designated as the “United Airlines LC Account”
that shall be used solely for the purposes set forth herein.

 

“Letter of Credit Fees” shall mean the
fees payable in respect of Letters of Credit pursuant to Section 2.20.

 

“LGA” shall mean New York’s LaGuardia
Airport.

 

“LIBO Rate” shall mean, with respect
to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750
of the Dow Jones Market Service (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such page of
such service, as determined by the Paying Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, 

 

18

 

as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such
rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Paying
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” shall mean (a) any
mortgage, deed of trust, pledge, hypothecation, security interest, easement
(including, without limitation, reciprocal easement agreements and utility
agreements), rights-of-ways, reservations, encroachments, zoning and other land
use restrictions, claim or any other title defect, lease, encumbrance,
restriction, lien or charge of any kind whatsoever, (b) the interest of a
vendor or a lessor under any conditional sale, capital lease or other title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) and (c) in the case of
securities, any purchase option, call or similar right or interest of a third
party with respect to such securities (other than employee stock option plans).

 

“Loan” shall mean, collectively, the
Tranche A Loans and the Tranche B Loans.

 

“Loan Documents” shall mean this
Agreement, the Letters of Credit (including applications for Letters of Credit
and related reimbursement agreements), the Collateral Documents, the
Intercreditor Agreement and any other instrument or agreement (which is
designated as a Loan Document therein) executed and delivered to the Paying
Agent, the Agents, the Collateral Agents or any Lender, in each case, as the
same may be amended, restated, modified, supplemented, extended or amended and
restated from time to time.

 

“Material Adverse Change” shall mean
any event, development or circumstance that has had or could reasonably be
expected to have a Material Adverse Effect.

 

“Material Adverse Effect” shall mean a
material adverse effect on (a) the business, property, operations or
condition (financial or otherwise) of the Borrower and the Guarantors, taken as
a whole, (b) the validity or enforceability of any of the Loan Documents
or the rights or remedies of the Agents and the Lenders thereunder, or (c) the
ability of the Borrower or any Guarantor to perform its respective obligations
under the Loan Documents.

 

“Material Agreement” shall mean any
credit agreement, indenture, or other agreement related to indebtedness of the
Borrower or any Guarantor for borrowed money in excess of $40,000,000 (other
than this Credit Agreement and the other Loan Documents).

 

“Material Indebtedness”
shall mean Indebtedness (other than the Loans and Letters of Credit), of any
one or more of the Borrower and Guarantors in an aggregate principal amount
exceeding $40,000,000.

 

“Maturity Date” shall mean February 1,
2012.

 

“Minority Lenders” shall have the
meaning given such term in Section 10.08(b).

 

19

 

“Moody’s” shall mean Moody’s Investors
Service, Inc.

 

“Morgan Lewis” shall have the meaning
given such term in Section 10.04(a).

 

“Mortgaged Collateral” shall mean all
of the “Collateral” as defined in the Aircraft Mortgage (including any Mortgage
Supplement), defined to include, without limitation, all aircraft, spare
engines, spare parts inventory and QEC Kits included within the Collateral.

 

“Mortgage Supplement” shall have the
meaning set forth in the Aircraft Mortgage.

 

“MSCG” shall mean Morgan Stanley
Capital Group Inc.

 

“Multiemployer Plan” shall mean a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA, which is maintained
or contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, and each such
plan for the five-year period immediately following the latest date on which
the Borrower, or a Subsidiary of the Borrower or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.

 

“Multiple Employer Plan” shall mean a
Single Employer Plan, which (a) is maintained for employees of the
Borrower or an ERISA Affiliate and at least one person (as defined in Section 3(9) of
ERISA) other than the Borrower and its ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such Plan
has been or were to be terminated.

 

“Non-Primary Routes” shall mean all of
the Routes other than the Primary Routes.

 

“Obligations” shall mean the unpaid
principal of and interest on (including interest, reasonable fees and reasonable
out-of-pocket costs accruing after the maturity of the Loans and interest,
reasonable fees and reasonable out-of-pocket costs accruing after the filing of
any petition of bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest, fees or costs is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to any Agent or Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
arise under, out of, or in connection with, this Agreement, any other Loan
Document, any treasury, depository and cash management services and automated clearing
house transfers of funds services provided by a Lender or any of its banking
Affiliates, but not any other Person, as permitted by Section 6.03(g), any
foreign exchange contracts, currency swap agreements, currency future or option
contracts and other similar agreements designed to hedge against fluctuations
in foreign exchange rates and currency values and any interest rate swap, cap
or collar agreements, interest rate future or option contracts and other
similar agreements designed to hedge against fluctuations in interest rates, in
each case to the extent that the Indebtedness related to such contract or
agreement is owing to a Lender or any of its banking Affiliates and is
permitted to be secured pursuant to Section 6.01(dd), or any other document
made, delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement 

 

20

 

obligations, reasonable fees, indemnities, reasonable out-of-pocket
costs, reasonable out-of-pocket expenses (including all reasonable fees,
charges and disbursements of counsel to any Agent or Lender that are required
to be paid by the Borrower pursuant hereto) or otherwise.

 

“Officer’s Certificate” shall mean, as
applied to the Borrower or any Guarantor, a certificate executed by a
Responsible Officer of such Person in his/her capacity as such.

 

“Other Taxes” shall mean any and all
present or future stamp, mortgage, intangible or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement.

 

“Parent” shall have the meaning set
forth in the first paragraph of this Agreement.

 

“Parked” shall mean, as to any
Aircraft, that such Aircraft has been removed from service and is not intended
to be used for scheduled service for a period in excess of thirty (30) days,
including, without limitation, those Aircraft that have been Stored, other than
Aircraft temporarily grounded for maintenance being actively conducted.

 

“Patent Security Agreement” shall mean
that certain Patent Security Agreement as defined in Section 4.01(f), as
the same may be amended, restated, modified, supplemented, extended or amended
and restated from time to time.

 

“Participant” shall have the meaning
given such term in Section 10.02(d).

 

“Patriot Act” shall mean the USA
Patriot Act, Title III of Pub. L. 107-56, signed into law on October 26,
2001 or any subsequent legislation that amends, supplements or supersedes such
Act.

 

“Paying Agent” shall have the meaning
set forth in the first paragraph of this Agreement.

 

“Payroll Accounts” shall mean
depository accounts used only for payroll.

 

“PBGC” shall mean the Pension Benefit
Guaranty Corporation, or any successor agency or entity performing
substantially the same functions.

 

“Permitted Acquisition” shall mean any
acquisition, whether by purchase, merger, consolidation or otherwise, by the
Parent, the Borrower or any Guarantor (other than the Parent) of all or
substantially all the assets of, or all the Equity Interests in, a Person or a
division, line of business or other business unit of a Person but only so long
as:

 

(a)           (i) no
Event of Default has occurred and is continuing immediately prior or
immediately after giving effect to the Transactions and (ii) all
transactions related thereto are consummated in all material respects in
accordance with applicable laws;

 

21

 

(b)           the
Borrower has delivered to the Agents an Officer’s Certificate to the effect set
forth in clause (a) above, together with the relevant financial
information for the Person or assets to be acquired;

 

(c)           the
Borrower has provided the Agents with written notice ten (10) days prior
to a Permitted Acquisition and copies of the material acquisition documents
promptly after consummation of such acquisition; and

 

(d)           the
aggregate amount extended for such acquisition is in compliance with Section 6.10(u).

 

“Permitted Investments” shall mean:

 

(a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from
the date of acquisition thereof;

 

(b)           direct
obligations of state and local government entities in each case maturing within
one year from the date of acquisition thereof, which have a rating of at least
A- (or the equivalent thereof) from S&P or A-3 (or the equivalent thereof)
from Moody’s;

 

(c)           obligations
of domestic or foreign companies and their subsidiaries (including, without
limitation, agencies, sponsored enterprises or instrumentalities chartered by
an Act of Congress, which are not backed by the full faith and credit of the
United States of America), including, without limitation, bills, notes, bonds,
debentures, and mortgage-backed securities, in each case maturing within one
year from the date of acquisition thereof;

 

(d)           investments
in commercial paper maturing within 365 days from the date of acquisition
thereof and having, at such date of acquisition, which have a rating of at
least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent
thereof) from Moody’s;

 

(e)           investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within one year from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any other commercial bank of recognized standing organized
under the laws of the United States of America or any State thereof that has a
combined capital and surplus and undivided profits of not less than
$250,000,000 and which has a long term unsecured debt rating
of at least A from S&P and A-2 from Moody’s (or is the principal banking
Subsidiary of a bank holding company that has such ratings);

 

(f)            fully
collateralized repurchase agreements with a term of not more than six (6) months
for underlying securities that would otherwise be eligible for investment;

 

(g)           Investments
of money in an investment company organized under the Investment Company Act of
1940, as amended, or in pooled accounts or funds offered through mutual funds,
investment advisors, banks and brokerage houses which invest its assets in
obligations of the type described in (a) through (f) above.  This could include, but not be limited 

 

22

 

to, money market funds or
short-term and intermediate bonds funds; and

 

(h)           money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA (or the equivalent thereof) by S&P and Aaa (or the equivalent
thereof) by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.

 

“Permitted Liens” shall mean: (a) Liens
imposed by law (other than Liens imposed under Environmental Laws and any Lien
imposed under ERISA) for taxes, assessments, levies or charges of any
Governmental Authority for claims not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with GAAP; (b) Liens
of landlords, carriers, warehousemen, consignors, mechanics, materialmen and
other Liens (other than Liens imposed under Environmental Laws and any Lien
imposed under ERISA) in existence on the Closing Date (which, in the case of
Real Property Assets, are specified in the applicable Real Estate Mortgage) or
thereafter imposed by law and created in the ordinary course of business and
securing obligations that are not overdue or are being contested in compliance
with Section 5.05; (c) Liens (other than any Lien imposed under
ERISA) incurred or deposits made (including, without limitation, surety bonds
and appeal bonds) in connection with workers’ compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the repayment
of Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts; (d) easements
(including, without limitation, reciprocal easement agreements and utility
agreements), rights-of-way, covenants, reservations, encroachments, land use
restrictions or encumbrances, which (i) do not interfere materially with
the ordinary conduct of the business of the Borrower or any Guarantor, as the
case may be, (ii) do not materially detract from the value of the property
to which they attach or materially impair the use thereof to the Borrower or
any Guarantor, as the case may be and (iii) do not materially adversely
affect the marketability of the applicable property; (e) letters of credit
or deposits in the ordinary course to secure leases; (f) in the case of
Real Property Assets, those Liens specified in the applicable Real Estate
Mortgage; and (g) extensions, renewals or replacements of any Lien
referred to in paragraphs (a) through (e) above, provided,
that the principal amount of the obligation secured thereby is not increased
and that any such extension, renewal or replacement is limited to the property
originally encumbered thereby.

 

“Person” shall mean any natural
person, corporation, division of a corporation, partnership, limited liability
company, trust, joint venture, association, company, estate, unincorporated
organization or Governmental Authority or any agency or political subdivision
thereof.

 

“Petty Cash Accounts” shall mean
domestic or foreign deposit accounts of the Borrower and Guarantors holding
aggregate balances in an amount not to exceed $25,000,000 at any one time.

 

“Plan” shall mean a Single Employer
Plan or a Multiple Employer Plan that is a pension plan subject to the
provisions of Title IV of ERISA, Section 412 of the Code or Section 302
of ERISA.

 

23

 

“Plan of Reorganization” shall mean
the Debtors’ First Amended Joint Plan of Reorganization pursuant to Chapter 11
of the United States Bankruptcy Code, dated October 20, 2005, together
with all schedules and exhibits thereto, as confirmed by the Confirmation
Order, together with any amendments, supplements or modifications thereto that
have been approved or authorized by the Bankruptcy Court prior to the Closing
Date.

 

“Pledge Agreement” shall mean that
certain Pledge Agreement as defined in Section 4.01(c), as the same may be
amended, restated, modified, supplemented, extended or amended and restated
from time to time.

 

“Primary Foreign Slots” shall mean the
Foreign Slots set forth on Schedule 1.01(b), as such Schedule may be
amended from time to time pursuant to Section 5.13(c).

 

“Primary Gate Interests” shall mean
the Gate Interests used by the Borrower to conduct scheduled nonstop operations
from the points listed on Schedule 1.01(e) servicing the Primary Routes,
to the extent such space is used for the operation of such flights.

 

“Primary Routes” shall mean the Routes
set forth on Schedule 1.01(c), as such Schedule may be amended from
time to time pursuant to Section 5.18(b).

 

“Primary Slots” shall mean those
certain Slots located at LGA, DCA, JFK and any other Slots that may be
transferred for consideration, all as set forth on Schedule 1.01(h), as
such schedule may be amended from time to time pursuant to Section 5.12(c);
provided that those certain Slots at LGA and JFK shall be excluded from Primary
Slots if no Slot regulations apply at such airports.

 

“Primary Supporting Route Facilities”
shall mean the Supporting Route Facilities of the Borrower and, if applicable,
a Guarantor, at the airports listed on Schedule 1.01(f), necessary to
operate, or otherwise used in support of, the operation of scheduled service
over the applicable Primary Route.

 

“Prime Rate” shall mean the rate of
interest per annum publicly announced from time to time by JPMCB as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

 

“QEC Kits” shall mean the quick engine
change kits of the Borrower and any applicable Guarantor.

 

“Real Estate Appraiser” shall mean, in
the case of the Real Property Assets, (a) CB Richard Ellis Inc., with
respect to that certain parcel of real property located at 1200 Algonquin Road,
Elk Grove Village, Illinois 60007, (b) National Valuation Consultants, Inc.,
with respect to the Denver Training Facility, or (c) such other appraisal
firms as may be retained by the Agents, in consultation with the Borrower, from
time to time.

 

“Real Estate Mortgages” shall mean,
collectively, (a) that certain Real Estate Mortgage, Assignment of Leases
and Rents, Security Agreement, Fixture Filing and Financing Statement and that
certain Deed of Trust, Assignment of Leases and Rents, Security Agreement,
Fixture Filing and Financing Statement, each dated the date hereof, by the
Borrower to the Collateral Agents, in substantially the form of Exhibit A
and (b) each other mortgage granted pursuant to the terms

 

24

 

hereof, as the
same may be amended, restated, modified, supplemented, extended or amended and
restated from time to time.

 

“Real Property Assets” shall mean those certain
parcels of real property owned in fee by the Borrower and located at (i) 1200
Algonquin Road, Elk Grove Village, Illinois 60007 and (ii) the Denver
Training Facility and together with, in each case, all buildings, improvements,
facilities, appurtenant fixtures and equipment, easements and other property
and rights incidental or appurtenant to the ownership of such parcel of real
property (as each such real property is more particularly described in the
applicable Real Estate Mortgage) (including, without limitation, all Collateral
described in the applicable Real Estate Mortgage), and, from time to time, all
Collateral identified in a Real Estate Mortgage granted pursuant to Section 5.15,
Section 5.18 or any other provision of this Agreement, or designated as
Cure Collateral.

 

“Redeemable Stock” shall mean any class or
series of Equity Interests of any Person that by its terms or otherwise (a) is
required to be redeemed prior to the Maturity Date, (b) may be required to
be redeemed at the option of the holder of such class or series of Equity
Interests at any time prior to the Maturity Date or (c) is convertible
into or exchangeable for (i) Equity Interests referred to in clause (a) or
(b) above or (ii) Indebtedness having a scheduled maturity prior to
the Maturity Date.

 

“Register” shall
have the meaning set forth in Section 10.02(b)(iv).

 

“Related Parties”
shall mean, with respect to any specified Person, such Person’s Affiliates and
the respective directors, officers, employees, agents and advisors of such
Person and such Person’s Affiliates.

 

“Release” shall
have the meaning specified in Section 101(22) of CERCLA.

 

“Required Lenders”
shall mean, at any time, Lenders having Tranche A Commitments at such time (or,
if the Total Tranche A Commitment has been terminated, Lenders holding Tranche
A Loans and LC Exposure at such time), Lenders having a Delayed Draw Tranche B
Loan Commitment at such time and Lenders holding a portion of the Tranche B
Loan at such time collectively representing in excess of 50% of the Total
Commitment.

 

“Responsible Officer”
shall mean the chief executive officer, president, chief financial officer,
treasurer, vice president, controller or chief accounting officer of the
Borrower or the Guarantor, if applicable, but in any event, with respect to
financial matters, the chief financial officer, treasurer, controller or chief
accounting officer of the Borrower or the Guarantor, if applicable.

 

“Restricted Payment”
shall mean any dividend or other distribution (whether in cash, securities or
other property) with respect to any Equity Interests in the Borrower or any
Guarantor, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Borrower or any option, warrant or other right to
acquire any such Equity Interests in the Borrower.

 

25

 

“Restricted
Prepayments” shall mean, with respect to any Person, any repayment,
redemption, repurchase, defeasance (including, but not limited to, in substance
or legal defeasance) or other acquisition or retirement for value (other than
through the issuance solely of Equity Interests (other than Redeemable Stock)
or warrants, rights or options to acquire Equity Interests (other than
Redeemable Stock)) of subordinated Indebtedness (or any transaction that has a
substantially similar effect) of such Person or any Subsidiary of such Person,
directly or indirectly (including by way of setoff or amendment of the terms of
any subordinated Indebtedness in connection with any retirement or acquisition
of such Indebtedness), which is made other than at any scheduled maturity
thereof or by any scheduled repayment or scheduled sinking fund payment
(collectively for this definition, a “prepayment”); provided that
prepayment of the Loans shall not constitute a Restricted Prepayment.

 

“Rolling Twelve Months”
shall mean, with respect to any date of determination, the month then ended and
the eleven (11) immediately preceding months considered as a single period.

 

“Routes” shall
mean the routes for which the Borrower or, if applicable, a Guarantor, holds or
hereafter acquires the requisite authority to operate foreign air
transportation pursuant to Title 49 including, without limitation, applicable
frequencies, exemption and certificate authorities, Fifth-Freedom Rights and “behind/beyond
rights”.

 

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

 

“SEC” shall mean
the United States Securities and Exchange Commission.

 

“Secured Parties”
shall mean the Agents, the Collateral Agents, the Paying Agent, the Lenders and
each of their respective successors and assigns.

 

“Security Agreement”
shall mean that certain Security Agreement as defined in Section 4.01(c),
as the same may be amended, restated, modified, supplemented, extended or
amended and restated from time to time.

 

“Senior Convertible
Note Indenture” shall mean that certain Indenture to be entered into by and
among the Parent as issuer, the Borrower as guarantor and The Bank of New York
Trust Company, N.A. as Trustee, for the issuance of $726,424,000 principal
amount of Senior Convertible Notes, the form of which has heretofore been
furnished to the Agents, or such other indenture on terms not materially
adverse to the Lenders, as determined in the reasonable judgment of the Agents.

 

“Senior Convertible
Note Indenture-2” shall mean that certain Indenture dated as of February 1,
2006 by and among the Parent as issuer, the Borrower as guarantor and The Bank
of New York Trust Company, N.A., as Trustee, for the issuance of $149,646,114
principal amount of Senior Convertible Notes or such other indenture on terms
not materially adverse to the Lenders, as determined in the reasonable judgment
of the Agents.

 

“Senior Note Indenture”
shall mean that certain Indenture, dated as of February 1, 2006 for the
issuance of up to $1,000,000,000 (or, as may be adjusted pursuant to the terms
of

 

26

 

the Indenture) principal amount of Senior Notes or such other indenture
on terms not materially adverse to the Lenders, as determined in the reasonable
judgment of the Agents.

 

“SGR Security
Agreement” shall mean that certain Slot, Gate and Route Security and Pledge
Agreement as defined in Section 4.01(d), as the same may be amended,
restated, modified, supplemented, extended or amended and restated from time to
time.

 

“Single Employer Plan”
shall mean a single employer plan, as defined in Section 4001(a)(15) of
ERISA, that (a) is maintained for employees of the Borrower or an ERISA
Affiliate or (b) was so maintained and in respect of which the Borrower
could reasonably be expected to have liability under Title IV of ERISA in the
event such Plan has been or were to be terminated.

 

“Slot” shall mean
all of the rights and operational authority of the Borrower and, if applicable,
a Guarantor, now held or hereafter acquired, to conduct one Instrument Flight Rule (as
defined under the FAA regulations) or scheduled landing or takeoff operation at
a specific time or during a specific time period at any airport in the United
States at which landing or takeoff operations are restricted, including, but
not limited to, slots, arrival authorizations, and other similar landing or
takeoff authorities, whether pursuant to FAA, DOT or local airport regulations,
including Title 14, federal or local statute or otherwise, now or hereinafter
in effect; so long as such restrictions shall be or remain in effect at such
airport.

 

“Spare Engine”
shall have the meaning set forth in the Aircraft Mortgage.

 

“Spare Parts”
shall have the meaning set forth in the Aircraft Mortgage.

 

“Statutory Reserve
Rate” shall mean a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Paying Agent is subject with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those
imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Stored” shall
mean, as to any Aircraft, Engine or Spare Engine (as each is defined in the
Aircraft Mortgage), that such Aircraft, Engine or Spare Engine has been stored (a) with
a low expectation of a return to service and (b) in a manner intended to
minimize the rate of environmental degradation of the structure and components
of such Aircraft, Engine or Spare Engine (as the case may be) during such
period.

 

“Subsidiary” shall
mean, with respect to any Person (in this definition referred to as the “parent”),
any corporation, association or other business entity (whether now existing or
hereafter organized) of which at least a majority of the securities or other
ownership or

 

27

 

membership interests having ordinary voting power for the election of
directors is, at the time as of which any determination is being made, owned or
controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

“Supporting Route
Facilities” shall mean gates, ticket counters and other facilities
assigned, allocated, leased, or made available to the Borrower at non-U.S.
airports used in the operation of scheduled service over a Route.

 

“Swap Termination
Value” means, in respect of any contract or agreement relating to
Indebtedness permitted by 6.03(f), after taking into account the effect of any
legally enforceable netting agreement relating to such contract or agreement, (a) for
any date on or after the date such contract or agreement has been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a),
the amount(s) determined as the mark-to-market value(s) for such contract or
agreement, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such contract or
agreement (which may include a Lender or any Affiliate of a Lender).

 

“Tax Sharing Agreement”
shall mean an agreement among the Parent and certain of its Subsidiaries
providing for tax sharing and/or tax allocation between the parties thereto
which agreement shall be reasonably satisfactory to the Agents.

 

“Taxes” shall mean
any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

 

“Termination Date”
shall mean the earlier to occur of (a) the Maturity Date and (b) the
acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.

 

“Termination Event”
shall mean (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived), (b) an event
described in Section 4068 of ERISA, (c) the withdrawal of the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan
year in which it was a “substantial employer,” as such term is defined in Section 4001(a)(2) of
ERISA, (d) the incurrence of liability by the Borrower or any ERISA
Affiliate under Section 4064 of ERISA upon the termination of a Multiple
Employer Plan, (e) the imposition of Withdrawal Liability or receipt of
notice from a Multiemployer Plan that such liability may be imposed, (f) a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA, (g) providing
notice of intent to terminate a Plan pursuant to Section 4041(c) of
ERISA or the treatment of a Plan amendment as a termination under Section 4041
of ERISA, if such amendment requires the provision of security, (h) the
institution of proceedings to terminate a Plan by the PBGC under Section 4042
of ERISA, (i) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302
of ERISA), whether or not

 

28

 

waived, (j) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan, or (k) any other event or
condition which would reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the imposition of any liability under Title IV of ERISA (other
than for the payment of premiums to the PBGC in the ordinary course).

 

“Title 14” shall
mean Title 14 of the United States Code of Federal Regulations, including Part 93,
Subparts K and S thereof, as amended from time to time or any successor or recodified
regulation.

 

“Title 49” shall
mean Title 49 of the United States Code, which, among other things, recodified
and replaced the U.S. Federal Aviation Act of 1958, and the rules and
regulations promulgated pursuant thereto or any subsequent legislation that
amends, supplements or supersedes such provisions.

 

“Total Commitment”
shall mean, at any time, the sum of the Total Tranche A Commitment (or, if the
Total Tranche A Commitment has been terminated, the Tranche A Total Commitment
Usage at such time), the Total Delayed Draw Tranche B Loan Commitment (only
until the Delayed Draw Tranche B Loan Commitment Termination Date shall have
occurred) and the Total Tranche B Commitment at such time.

 

“Total Commitment
Percentage” shall mean, at any time, with respect to each Tranche A Lender
or Tranche B Lender, the percentage obtained by dividing such Lender’s Tranche
A Commitment, Delayed Draw Tranche B Loan Commitment and/or Tranche B
Commitment, as the case may be, by the Total Commitment at such time.

 

“Total Delayed Draw
Tranche B Loan Commitment” shall mean, at any time, the sum of the Delayed
Draw Tranche B Commitments at such time.

 

“Total Tranche A
Commitment” shall mean, at any time, the sum of the Tranche A Commitments
at such time.

 

 “Total Tranche B Commitment” shall
mean, at any time, the outstanding amount of the Tranche B Loan at such time.

 

“Trademark Security
Agreement” shall mean that certain Trademark Security Agreement as defined
in Section 4.01(f), as the same may be amended, restated, modified,
supplemented, extended or amended and restated from time to time.

 

“Tranche A Commitment”
shall mean the commitment of each Tranche A Lender to make Tranche A Loans
hereunder in the amount set forth opposite its name in Annex A hereto or as may
be subsequently set forth in the Register from time to time, as the case may
be, and as may be reduced from time to time pursuant to Section 2.10 and Section 2.11.

 

29

 

“Tranche A
Commitment Percentage” shall mean, at any time, with respect to each
Tranche A Lender, the percentage obtained by dividing its Tranche A
Commitment at such time by the Total Tranche A Commitment or, if the
Tranche A Commitments have been terminated, the Tranche A Commitment
Percentage of each Tranche A Lender that existed immediately prior to such
termination.

 

“Tranche A Lender”
shall mean each Lender having a Tranche A Commitment.

 

“Tranche A Loan”
shall have the meaning set forth in Section 2.01(a).

 

“Tranche A Total
Commitment Usage” shall mean at any time, the sum of (a) the aggregate
outstanding principal amount of all Tranche A Loans and (b) the aggregate
LC Exposure at such time.

 

“Tranche B Commitment”
shall mean the commitment of each Tranche B Lender to make such amount of the
Tranche B Loan hereunder in the amount set forth opposite its name in Annex A
hereto or as may be subsequently set forth in the Register from time to time,
as the case may be.

 

“Tranche B Commitment
Percentage” shall mean, at any time, with respect to each Tranche B Lender,
the percentage obtained by dividing its Tranche B Commitment at such time by
the Total Tranche B Commitment.

 

“Tranche B Lender”
shall mean each Lender having a Tranche B Commitment and/or a Delayed Draw
Tranche B Loan Commitment.

 

“Tranche B Loan”
shall have the meaning set forth in Section 2.01(b).

 

“Transactions”
shall mean the execution, delivery and performance by the Borrower and
Guarantors of this Agreement and the other Loan Documents to which they may be
a party, the creation of the Liens in the Collateral in favor of the Collateral
Agents, the borrowing of Loans, the use of the proceeds thereof and the request
for and issuance of Letters of Credit hereunder.

 

“Type”, when used
in reference to any Loan or Borrowing, refers to whether the rate of interest
on such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“UAFC” shall mean
United Aviation Fuels Corporation.

 

“United States Citizen”
shall have the meaning set forth in Section 3.02.

 

“Unrestricted Cash”
shall mean all cash and Permitted Investments of the Borrower or any Guarantor
held in an account (other than Escrow Accounts, Payroll Accounts, Petty Cash
Accounts and proceeds of insurance claims temporarily held pursuant to Section 2.11(b))
maintained at one of the Agents or an account at another bank or financial
institution which account is the subject of a Control Agreement that has been
executed and delivered to the Collateral Agents.

 

30

 

“Unused Total Tranche
A Commitment” shall mean, at any time, (a) the Total Tranche A
Commitment less (b) the Tranche A Total Commitment Usage.

 

“Use or Lose Rule”
shall mean with respect to Slots or Foreign Slots, as the case may be, the
terms of 14 C.F.R. Section 93.227 or other applicable utilization
requirements issued by the FAA, other Governmental Authorities, any Foreign
Aviation Authorities or any Airport Authorities.

 

“Withdrawal Liability”
shall have the meaning given such term under Part I of Subtitle E of
Title IV of ERISA and shall include liability that results from either a
complete or partial withdrawal.

 

SECTION 1.02       Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, restated, supplemented, extended,
amended and restated or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
permitted successors and assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement, (e) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights
and (f) ”knowledge” or “aware” or words of similar import shall mean, when
used in reference to the Borrower or the Guarantors, the actual knowledge of
any Responsible Officer.

 

SECTION 1.03       Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
the Borrower notifies the Agents that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if either Agent (in consultation with the other Agent) notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.  Upon any such request for an amendment,
Borrower, the Required Lenders and the Agents agree to consider in good faith
any such amendment in order to amend the provisions of this Agreement so as to
reflect equitably such accounting changes so that the criteria for evaluating
the Borrower’s financial

 

31

 

condition shall be the same after such accounting changes as if such accounting
changes had not occurred.

 

SECTION 2.           AMOUNT AND TERMS OF CREDIT

 

SECTION 2.01       Commitments of the Lenders.

 

(a)           Tranche
A Revolving Commitment.  (i) Each
Tranche A Lender severally, and not jointly with the other Tranche A Lenders,
agrees, upon the terms and subject to the conditions herein set forth, to make
revolving credit loans (each a “Tranche A Loan” and collectively, the “Tranche
A Loans”) to the Borrower at any time and from time to time during the
Availability Period in an aggregate principal amount not to exceed, when added
to such Tranche A Lender’s Tranche A Commitment Percentage of its LC Exposure,
the Tranche A Commitment of such Lender, which Tranche A Loans may be repaid
and reborrowed in accordance with the provisions of this Agreement.  At no time shall the sum of the then
outstanding aggregate principal amount of the Tranche A Loans plus the
LC Exposure exceed the Total Tranche A Commitment of $200,000,000 as the same may be reduced from time to time pursuant to Section 2.10
and Section 2.11.

 

(ii)           Each
Borrowing of a Tranche A Loan shall be made from the Tranche A Lenders pro rata in accordance with their respective
Tranche A Commitments; provided, however, that the failure of any
Tranche A Lender to make any Tranche A Loan shall not in itself relieve the
other Tranche A Lenders of their obligations to lend.

 

(b)           Tranche
B Term Loan Commitment.  (i) 
Each Tranche B Lender, severally and not jointly with the other Tranche B
Lenders, agrees, upon the terms and subject to the conditions herein set forth,
to make available to the Borrower a term loan in an aggregate principal amount
equal to such Tranche B Lender’s Tranche B Commitment (collectively and
together with the Delayed Draw Tranche B Loan, if made, as set forth in Section 2.01(c),
the “Tranche B Loan”).  Upon the
satisfaction (or waiver) of the conditions set forth in Section 4.01, each
Tranche B Lender shall make its portion of the Tranche B Loan to the Borrower
in the amount equal to such Tranche B Lender’s Tranche B Commitment Percentage
of $2,450,000,000.  Once repaid, the
Tranche B Loan may not be reborrowed and the Total Tranche B Commitment shall
be automatically and permanently reduced by an amount equal to the amount so
repaid.

 

(ii)           The
Tranche B Loan shall be made by the Tranche B Lenders pro  rata in
accordance with their respective Tranche B Commitment; provided, however,
that the failure of any Tranche B Lender to make its Tranche B Loan shall not
in itself relieve the other Tranche B Lenders of their obligations to lend.

 

(c)           Delayed
Tranche B Loan Availability. (i)  Each Tranche B Lender, severally and
not jointly with the other Tranche B Lenders, agrees, upon the terms and
subject to the conditions hereinafter set forth, to make available to the
Borrower an additional Tranche B Loan (the “Delayed Draw Tranche B Loan”)
on any Business Day during the Delayed Draw Tranche B Loan Availability
Period.  Upon the satisfaction (or
waiver) of the conditions set forth in Section 4.03, each Tranche B Lender
shall make its portion of the Delayed Draw Tranche B

 

32

 

Loan to the Borrower in the amount equal to such Tranche B Lender’s
Delayed Draw Tranche B Loan Commitment Percentage of $350,000,000.  Once repaid, the Delayed Draw Tranche B Loan
may not be reborrowed and the Total Delayed Draw Tranche B Loan Commitment
shall be automatically and permanently reduced by an amount equal to the amount
so repaid.  Once made, the Delayed Draw
Tranche B Loan shall be a “Tranche B Loan” and a “Loan” for all purposes
hereunder and shall be pari  passu with all other Loans made
hereunder.

 

(ii)           The
Delayed Draw Tranche B Loan shall be made by the Tranche B Lenders holding a
Delayed Draw Tranche B Loan Commitment pro  rata in accordance
with their respective Delayed Draw Tranche B Loan Commitments; provided,
however, that the failure of any such Tranche B Lender to make its
Delayed Draw Tranche B Loan shall not in itself relieve the other Tranche B
Lenders of their obligations to lend.

 

(d)           Type of
Borrowing.  Other than as otherwise
provided in Section 2.03(b), each Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith.  Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

 

(e)           Amount
of Borrowing.  At the commencement of
each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in
an aggregate amount that is in an integral multiple of $1,000,000 and not less
than $5,000,000.  At the time that each
ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is
an integral multiple of $100,000 and not less than $1,000,000 provided,
that an ABR Borrowing may be in an aggregate amount that is equal to the entire
Unused Total Tranche A Commitment or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.02(f).  Borrowings of more than one Type may be
outstanding at the same time.

 

(f)            Limitation
on Interest Period.  Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.

 

SECTION 2.02       Letters of Credit.  (a) General.  Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of one or more Letters of Credit
for its own account, in a form reasonably acceptable to the Agents, the Issuing
Lender and the Borrower at any time and from time to time during the Availability
Period.  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Lender relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.  At no time
shall a Letter of Credit be issued if the sum of the then outstanding aggregate
principal amount of the Tranche A Loans plus the LC Exposure (inclusive of the
amount of such proposed Letter of Credit) would exceed the Total Tranche A
Commitment of $200,000,000, as the same may be reduced from time to time
pursuant to Sections 2.10 and 2.11.

 

33

 

(b)           Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Borrower shall either provide (i) telephonic notice promptly followed
by written notice or (ii) hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
the Issuing Lender (which approval shall not be unreasonably withheld, delayed
or conditioned)) to the Issuing Lender and the Paying Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit,
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of
Credit.  If requested by the Issuing
Lender, the Borrower also shall submit a letter of credit application on the
Issuing Lender’s standard form in connection with any request for a Letter of
Credit; provided, that to the extent such standard form is inconsistent
with the Loan Documents, the Loan Documents shall control.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension
the LC Exposure (together with the then outstanding aggregate principal amount
of the Tranche A Loans) shall not exceed $200,000,000.  No Issuing Lender (other than the Paying
Agent or an Affiliate thereof) shall permit any such issuance, renewal,
extension or amendment resulting in an increase in the amount of any Letter of
Credit to occur without first obtaining written confirmation from either Agent
(in consultation with the other Agent) that it is then permitted under this
Agreement.

 

(c)           Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or extension)
and (ii) the Maturity Date.

 

(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment, renewal or extension of a Letter of Credit including any amendment
increasing the amount thereof), including, without limitation, each Existing DIP
Facility Letter of Credit that is deemed to be a Letter of Credit hereunder,
and without any further action on the part of the Issuing Lender or the
Tranche A Lenders, the Issuing Lender hereby grants to each Tranche A
Lender, and each Tranche A Lender hereby acquires from the Issuing Lender,
a participation in such Letter of Credit equal to such Tranche A Lender’s
Tranche A Commitment Percentage of the aggregate amount available to be
drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Tranche A Lender
hereby absolutely and unconditionally agrees to pay to the Paying Agent, for
the account of the Issuing Lender, such Tranche A Lender’s Tranche A
Commitment Percentage of each LC Disbursement made by the Issuing Lender and
not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason.  Each
Tranche A Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any

 

34

 

amendment, renewal or extension of any Letter of Credit or the
occurrence of an Event of Default or reduction or termination of the
Tranche A Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Paying Agent an amount equal to such LC
Disbursement not later than the first Business Day following the date the
Borrower receives notice of such LC Disbursement; provided, that, to the
extent not reimbursed and, subject to the satisfaction (or waiver) of the
conditions to borrowing set forth herein, including, without limitation, making
a request in accordance with Section 2.03(a) that such payment shall
be financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged
and replaced by the resulting ABR Borrowing. 
If the Borrower fails to make such payment when due (including by a
Borrowing), the Paying Agent shall notify each Tranche A Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Tranche A Lender’s Tranche A Commitment Percentage
thereof.  Promptly following receipt of
such notice, each Tranche A Lender shall pay to the Paying Agent its
Tranche A Commitment Percentage of the payment then due from the Borrower,
in the same manner as provided in Section 2.04 with respect to
Tranche A Loans made by such Tranche A Lender (and Section 2.04
shall apply, mutatis  mutandis, to the payment obligations of the
Tranche A Lenders), and the Paying Agent shall promptly pay to the Issuing
Lender the amounts so received by it from the Tranche A Lenders.  Promptly following receipt by the Paying
Agent of any payment from the Borrower pursuant to this paragraph, the Paying
Agent shall distribute such payment to the Issuing Lender or, to the extent
that Tranche A Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Lender, then to such Tranche A Lenders and the
Issuing Lender as their interests may appear. 
Any payment made by a Tranche A Lender pursuant to this paragraph
to reimburse the Issuing Lender for any LC Disbursement (other than the funding
of ABR Loans as contemplated above) shall not constitute a Tranche A Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

 

(f)            Obligations
Absolute.  The Borrower’s obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein or
herein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Lender under a Letter of Credit against presentation of a draft
or other document that does not comply with the terms of such Letter of Credit,
or (iv) any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. 
Neither the Paying Agent, the Agents, the Tranche A Lenders nor the
Issuing Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or

 

35

 

delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
the Issuing Lender; provided, that the foregoing shall not be construed
to excuse the Issuing Lender from liability to the Borrower to the extent of
any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Lender’s failure
to exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence, bad faith or willful misconduct on the part of
the Issuing Lender (as finally determined by a court of competent jurisdiction),
the Issuing Lender shall be deemed to have exercised care in each such
determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Lender
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(g)           Disbursement
Procedures.  The Issuing Lender
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit.  The Issuing Lender shall promptly notify the
Paying Agent and the Borrower by telephone (confirmed by telecopy) of such
demand for payment and whether the Issuing Lender has made or will make an LC
Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Lender and the Tranche A Lenders with respect to any
such LC Disbursement in accordance with the terms herein.

 

(h)           Interim
Interest.  If the Issuing Lender
shall make any LC Disbursement, then, unless the Borrower shall reimburse
(including by a Borrowing) such LC Disbursement in full not later than the
first Business Day following the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans; provided, that, if the Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.07 shall apply.  Interest
accrued pursuant to this paragraph shall be for the account of the Issuing
Lender, except that interest accrued on and after the date of payment by any
Tranche A Lender pursuant to paragraph (e) of this Section to
reimburse the Issuing Lender shall be for the account of such Tranche A Lender
to the extent of such payment.

 

(i)            Replacement
of the Issuing Lender.  Any Issuing
Lender may be replaced at any time by written agreement among the Borrower, the
Agents, the replaced Issuing Lender and the successor Issuing Lender.  The Agents shall notify the Tranche A
Lenders of any such replacement of the Issuing Lender.  At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Lender pursuant to Section 2.20.  From and after the effective date of any such
replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the Issuing Lender under this

 

36

 

Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to
the term “Issuing Lender” shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require.  After the
replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Lender under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.

 

(j)            Replacement
of Letters of Credit; Cash Collateralization.  Upon or prior to the occurrence of the
Termination Date the Borrower shall (i) cause all Letters of Credit which
expire after the Termination Date to be returned to the Issuing Lender undrawn
and marked “cancelled” or (ii) if the Borrower is unable to do so in whole
or in part either (A) provide one or more “back-to-back” letters of credit
to one or more Issuing Lenders in a form reasonably satisfactory to each such
Issuing Lender that is a beneficiary of such “back-to-back” letter of credit
and the Agents, issued by a bank reasonably satisfactory to each such Issuing
Lender and the Agents, and/or (B) deposit cash in the Letter of Credit
Account, the sum of (A) and (B) of the foregoing sentence to be in an
aggregate amount equal to 102% of the then undrawn stated amount of all LC
Exposure (less the amount, if any, then on deposit in the Letter of
Credit Account) as collateral security for the Borrower’s reimbursement
obligations in connection therewith, such cash to be promptly remitted to the
Borrower upon the expiration, cancellation or other termination or satisfaction
of such reimbursement obligations in whole or in part (“Cash
Collateralization”). The Paying Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Paying Agent (in accordance with its usual and customary
practices for investments of this type) and at the Borrower’s risk and
reasonable expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Paying Agent to reimburse
the Issuing Lender for LC Disbursements for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time and
paid over to the Borrower when such Letters of Credit are terminated or
cancelled or when the reimbursement obligations have been satisfied, provided
no Event of Default or event which upon notice or lapse of time or both would
constitute an Event of Default has occurred or is continuing.

 

(k)           Issuing
Lender Agreements.  Unless otherwise
requested by the Paying Agent, each Issuing Lender shall report in writing to
the Paying Agent (i) on the first Business Day of each week, the daily
activity (set forth by day) in respect of Letters of Credit during the
immediately preceding week, including all issuances, extensions, amendments and
renewals, all expirations and cancellations and all disbursements and
reimbursements, (ii) on or prior to each Business Day on which such
Issuing Lender expects to issue, amend, renew or extend any Letter of Credit,
the date of such issuance, amendment, renewal or extension, and the aggregate
face amount of the Letters of Credit to be issued, amended, renewed, or
extended by it and outstanding after giving effect to such issuance, amendment,
renewal or extension occurred (and whether the amount thereof changed), it being
understood that such Issuing Lender shall not permit any issuance, renewal,
extension or amendment resulting in an increase in the amount of any Letter of
Credit to occur without first obtaining written confirmation from either Agent
(in

 

37

 

consultation with the other Agent) that it is then permitted under this
Agreement, (iii) on each Business Day on which such Issuing Lender makes
any LC Disbursement, the date of such LC Disbursement and the amount of such LC
Disbursement, (iv) on any Business Day on which a Borrower fails to
reimburse an LC Disbursement required to be reimbursed to such Issuing Lender
on such day, the date of such failure, and the amount and currency of such LC
Disbursement and (v) on any other Business Day, such other information as
the Paying Agent shall reasonably request.

 

SECTION 2.03       Requests for Borrowings.

 

(a)           Tranche A
Loans.  Unless otherwise agreed to by
the Agents in connection with making the initial Loans, to request a Borrowing
of Tranche A Loans, the Borrower shall notify the Paying Agent of such
request by telephone (i) in the case of a Eurodollar Borrowing, not later
than 2:00 p.m., New York City time, three (3) Business Days
before the date of the proposed Borrowing and (ii) in the case of an ABR
Borrowing, not later than 2:00 p.m., New York City time, one (1) Business
Day before the date of the proposed Borrowing (subject, in the case of an ABR
Borrowing, to the last sentence of this Section 2.03(a)); provided,
that any such notice of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.02(e) may be given not
later than 12:00 noon, New York City time, on the date of the proposed
Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Paying Agent of a written Borrowing Request in a
form approved by the Paying Agent and signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.01(a):

 

(i)            the
aggregate amount of the requested Borrowing (which shall not be less than
$5,000,000 (and integral multiples of $1,000,000) in the case of a Eurodollar
Borrowing and $1,000,000 (and integral multiples of $100,000) in the case of an
ABR Borrowing);

 

(ii)           the
date of such Borrowing, which shall be a Business Day;

 

(iii)          whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv)          in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”.

 

If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. 
If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. 
Promptly following receipt of a Borrowing Request in accordance with
this Section 2.03(a), the Paying Agent shall advise each Tranche A
Lender of the details thereof and of the amount of such Tranche A Lender’s
Loan to be made as part of the requested Borrowing. Notwithstanding anything to
the contrary contained herein, with respect to an ABR Borrowing in an aggregate
amount of $20,000,000 or less, the Lenders shall make such Borrowings available

 

38

 

to the Paying Agent and the Paying Agent shall disburse such Borrowings
in accordance with the Borrower’s instructions consistent with this Agreement
by 3:00 p.m., New York City time, on the same Business Day that the
Borrower gives notice to the Paying Agent of such Borrowing by 12:00 p.m.,
New York City time.

 

(b)           Tranche B
Loan.  To request the initial
Borrowing of the Tranche B Loan or the Delayed Draw Tranche B Loan, the
Borrower shall notify the Paying Agent of such request by telephone (i) in
the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York
City time, three (3) Business Days before the date of the proposed
Borrowing and (ii) in the case of an ABR Borrowing, not later than 2:00 p.m.,
New York City time, one (1) Business Day before the date of the
proposed Borrowing (subject, in the case of an ABR Borrowing, to the last
sentence of this Section 2.03(b)). 
Such telephonic notice shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Paying Agent of a written
Borrowing Request in a form approved by the Paying Agent and signed by the
Borrower.  Such telephone and written
Borrowing Request shall specify the following information in compliance with Section 2.01:

 

(i)            the
aggregate amount of the requested Borrowing (which shall not be less than
$5,000,000 (and integral multiples of $1,000,000) in the case of a Eurodollar
Borrowing and $1,000,000 (and integral multiples of $100,000) in the case of an
ABR Borrowing);

 

(ii)           the
date of such Borrowing, which shall be a Business Day;

 

(iii)          the
portion of the Borrowing that is to be an ABR Borrowing and that is to be a
Eurodollar Borrowing; and

 

(iv)          in
the case of such portion of the Borrowing that is a Eurodollar Borrowing, the
initial Interest Period applicable thereto, which shall be a period
contemplated by the definition of the term “Interest Period”.

 

If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing.  If no
Interest Period is specified with respect to any portion of the requested
Borrowing that is to be a Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of the Borrowing
Request in accordance with this Section 2.03(b), the Paying Agent shall
advise each Tranche B Lender of the details thereof and of the amount of
such Tranche B Lender’s Loan to be made as part of the requested
Borrowing.

 

SECTION 2.04       Funding of Borrowings.  (a)  Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 3:00 p.m., New York City time, or such
earlier time as may be reasonably practicable, to the account of the Paying
Agent most recently designated by it for such purpose by notice to the
Lenders.  The Paying Agent will make such
Loans available to the Borrower by promptly crediting the amounts so received,
in like funds, to an account of the Borrower maintained with the Paying Agent
and designated by the Borrower in the applicable Borrowing

 

39

 

Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.02(e) shall
be remitted by the Paying Agent to the Issuing Lender.

 

(b)           Unless the
Paying Agent shall have received notice from a Lender prior to the proposed
date of any Borrowing that such Lender will not make available to the Paying
Agent such Lender’s share of such Borrowing, the Paying Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Paying Agent, then
the applicable Lender and the Borrower severally agree to pay to the Paying
Agent forthwith upon written demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Paying Agent, at (i) in
the case of such Lender, the greater of the Federal Funds Effective Rate and a
rate determined by the Paying Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans.  If such
Lender pays such amount to the Paying Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

 

SECTION 2.05       Interest Elections.  (a)  Each Borrowing of Tranche A
Loans and the Borrowing of the Tranche B Loan initially shall be of the
Type or, in the case of the Tranche B Loan, Types specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert
such Borrowings to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section.  The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Tranche A Loans or Tranche B Loan, as the case
may be, comprising such Borrowing, and the Tranche A Loans and
Tranche B Loan, as the case may be, comprising each such Type shall be
considered a separate Borrowing. No more than ten (10) Borrowings of
Eurodollar Loans may be outstanding at any one time.

 

(b)           To make an
Interest Election Request pursuant to this Section, the Borrower shall notify
the Paying Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03(a) or Section 2.03(b) if
the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Paying Agent of a written Interest Election Request in a
form approved by the Paying Agent and signed by the Borrower.

 

(c)           Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.01:

 

(i)            the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the

 

40

 

information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);

 

(ii)           the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

 

(iii)          whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

 

(iv)          if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

 

If any such
Interest Election Request requests a Eurodollar Borrowing but does not specify
an Interest Period, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration.

 

(d)           Promptly
following receipt of an Interest Election Request, the Paying Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.

 

(e)           If the
Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end
of such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing, then,
so long as an Event of Default is continuing (i) no outstanding Borrowing
may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.

 

SECTION 2.06       Interest on Loans.

 

(a)           Subject to
the provisions of Section 2.07, each ABR Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days or, when the Alternate Base Rate is based on the Prime Rate, a year with
365 days or 366 days in a leap year) at a rate per annum equal to the Alternate
Base Rate plus 2.75%.

 

(b)           Subject to
the provisions of Section 2.07, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal, during each Interest Period applicable
thereto, to the Adjusted LIBO Rate for such Interest Period in effect for such
Borrowing plus 3.75%.

 

(c)           Accrued
interest on all Loans shall be payable in arrears on each Interest Payment Date
applicable thereto, on the Termination Date and after the Termination Date on
written demand and (with respect to Eurodollar Loans) upon any repayment or
prepayment thereof (on the amount prepaid); provided that in the event
of any conversion of any Eurodollar Loan to an ABR Loan, accrued interest on
such Loan shall be payable on the effective date of such conversion.

 

41

 

SECTION 2.07       Default Interest.  If the Borrower or any Guarantor, as the case
may be, shall default in the payment of the principal of or interest on any
Loan or in the payment of any other amount becoming due hereunder (including,
without limitation, the reimbursement pursuant to Section 2.02(e) of
any LC Disbursements), whether at stated maturity, by acceleration or otherwise,
the Borrower or such Guarantor, as the case may be, shall on written demand of
the Paying Agent from time to time pay interest, to the extent permitted by
law, on all Loans and overdue amounts up to (but not including) the date of
actual payment (after as well as before judgment) at a rate per annum (computed
on the basis of the actual number of days elapsed over a year of 360 days or
when the Alternate Base Rate is applicable and is based on the Prime Rate, a
year with 365 days or 366 days in a leap year) equal to (a) the rate then
applicable for such Borrowings plus 2.0%
and (b) in the case of all other amounts, the rate applicable for ABR
Loans plus 2.0%.

 

SECTION 2.08       Alternate Rate of Interest.  In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any Interest Period for
a Eurodollar Loan, the Paying Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that reasonable means do not exist for ascertaining the applicable
Adjusted LIBO Rate, the Paying Agent shall, as soon as practicable thereafter,
give written, facsimile or telegraphic notice of such determination to the
Borrower and the Lenders, and any request by the Borrower for a Borrowing of
Eurodollar Loans (including pursuant to a refinancing with Eurodollar Loans)
pursuant to Section 2.03 shall be deemed a request for a Borrowing of ABR
Loans.  After such notice shall have been
given and until the circumstances giving rise to such notice no longer exist,
each request for a Borrowing of Eurodollar Loans shall be deemed to be a
request for a Borrowing of ABR Loans.

 

SECTION 2.09       Amortization of Tranche B Loan; Repayment of
Loans; Evidence of Debt.

 

(a)           The
Borrower shall repay principal of the Tranche B Loan on each semi-annual date
set forth below in the aggregate principal amount set forth opposite such date
(it being understood that each such amount shall be reduced proportionately if
the Delayed Draw Tranche B Loan referred to in Section 2.01(c) is not
made or, if made, is in an aggregate principal amount that is less than
$350,000,000):

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
  August 1, 2006

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2007

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  August 1, 2007

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2008

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  August 1, 2008

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2009

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  August 1, 2009

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2010

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  August 1, 2010

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2011

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  August 1, 2011

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  February 1, 2012

  	
  unpaid
  principal amount of Tranche B Loan

  	
   

  
						

 

42

 

Once repaid, no portion of the Tranche B Loan may be reborrowed.

 

(b)           The
Borrower hereby unconditionally promises to pay to the Paying Agent for the
ratable account of each Lender the then unpaid principal amount of each Loan on
the Termination Date.

 

(c)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

(d)           The Paying
Agent shall maintain accounts in which it shall record (i) the amount of
each Loan made hereunder, the Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Paying Agent hereunder for the account of the
Lenders and each Lender’s share thereof. The Borrower shall have the right,
upon reasonable notice, to request information regarding the accounts referred
to in the preceding sentence.

 

(e)           The
entries made in the accounts maintained pursuant to paragraph (c) or (d) of
this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein; provided
that the failure of any Lender or the Paying Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(f)            Any
Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the Borrower shall
promptly execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in a form furnished by the Paying Agent and reasonably
acceptable to the Borrower.  Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 10.02) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).

 

SECTION 2.10       Optional Termination or Reduction of Commitment.

 

(a)           Upon at
least one (1) Business Day prior written notice to the Paying Agent, the Borrower
may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Unused Total Tranche A Commitment or the Total
Delayed Draw Tranche B Loan Commitment; provided that each such notice
shall be revocable to the extent such termination or reduction would have
resulted from a refinancing of the Obligations, which refinancing shall not be
consummated or shall otherwise be delayed. 
Each such reduction of the Unused Total Tranche A Commitment or the
Total Delayed Draw Tranche B Loan Commitment

 

43

 

shall be in the principal amount not less than $5,000,000 and in an
integral multiple of $1,000,000. 
Simultaneously with each reduction or termination of the Tranche A
Commitment or the Total Delayed Draw Tranche B Loan Commitment, the Borrower
shall pay to the Paying Agent for the account of (i) each Tranche A Lender
the Commitment Fee accrued and unpaid on the amount of the Tranche A
Commitment of such Tranche A Lender so terminated or reduced through the date
thereof and (ii) each Tranche B Lender the Commitment Fee accrued and
unpaid on the amount of the Delayed Draw Tranche B Loan Commitment of such
Tranche B Lender so terminated or reduced through the date thereof.  Any reduction of the Total Tranche A
Commitment or the Delayed Draw Tranche B Loan Commitment pursuant to this
Section, as the case may be, shall be applied to reduce the Tranche A
Commitment of each Tranche A Lender or the Delayed Draw Tranche B Loan
Commitment of each Tranche B Lender, as the case may be.

 

(b)           The Total
Delayed Draw Tranche B Loan Commitment shall automatically terminate on the
last day of the Delayed Draw Tranche B Loan Availability Period.

 

SECTION 2.11       Mandatory Prepayment; Commitment Termination.

 

(a)           Within
three (3) Business Days of the Borrower or any Guarantor receiving any net
cash proceeds of an insurance claim, indemnity payments or other amounts
received as the result of an Event of Loss (as defined in the Aircraft
Mortgage) concerning an Airframe (as defined in the Aircraft Mortgage), the
Borrower or such Guarantor shall deposit an amount equal to 100% of such net
cash proceeds into an account that is maintained with the Paying Agent which
the Borrower may use to replace such Airframe in accordance with the
requirements of the Aircraft Mortgage, provided that upon the occurrence
of an Event of Default prior to the use of such deposit for such purpose, such
deposit may be applied by the Paying Agent to the prepayment of the Loans.

 

(b)           Within
three (3) Business Days of the Borrower or any Guarantor receiving any net
cash proceeds of an insurance claim, indemnity payments or other amounts
received as the result of an Event of Loss (as defined in the Aircraft
Mortgage) concerning an Engine, Spare Engine or, to the extent the value
thereof exceeds $5,000,000 for such Event of Loss, Spare Parts (each as defined
in the Aircraft Mortgage), the Borrower or such Guarantor shall deposit an
amount equal to 100% of such net cash proceeds into an account that is
maintained with the Paying Agent for such purpose which the Borrower may use to
replace such Engine, Spare Engine or Spare Parts in accordance with the
requirements of the Aircraft Mortgage, provided that no Event of
Default, or an event which upon notice or lapse of time or both would
constitute an Event of Default has occurred and is continuing and such party
has (i) within 45 days after the receipt of such net cash proceeds,
determined to apply such net cash proceeds to replace such Engine, Spare Engine
or Spare Parts and (ii) as soon as commercially reasonable (A) and in
any event within 180 days after the receipt of such net cash proceeds, has so
applied such net cash proceeds or has entered into a binding contractual
arrangement for such application, the amount of net cash proceeds necessary to
replace such Spare Parts or (B) and in any event with 365 days after the
receipt of such net cash proceeds, has so applied such net cash proceeds or has
entered into a binding contractual arrangement for such application, the amount
of net cash proceeds necessary to replace such Engine or Spare Engine;
provided  further that the Borrower shall have complied with Section 5.18(a) with
respect to any such replacement.  In the
event that (i) such determination or application described in the

 

44

 

immediately preceding sentence shall not have occurred within the time
periods provided, such net cash proceeds shall be applied to prepay the Loans
in accordance with Section 2.11(g) or (ii) an Event of Default
shall have occurred and be continuing prior to the use of such deposits for
such purposes, such deposits may be applied by the Paying Agent to the
prepayment of the Loans in accordance with Section 2.11(g).

 

(c)           Within
three (3) Business Days of a Change of Control, the Borrower shall prepay
the Loans in an amount equal to 100% of the then outstanding principal amount
thereof.

 

(d)           Within
three (3) Business Days of receipt by the Borrower of any proceeds of any
EETC Transaction, the Borrower shall prepay the Tranche B Loans in an amount
equal to the first $250,000,000 of such EETC Transaction proceeds. Each such
prepayment of Tranche B Loans shall be applied pro  rata among the
Tranche B Lenders in accordance with each Tranche B Lender’s Tranche B
Commitment Percentage.

 

(e)           Within
three (3) Business Days of receipt by the Borrower or any Guarantor of any
proceeds of a refinancing, refunding, renewal or extension which are required
to be applied to prepay the Loans pursuant to the proviso to Section 6.03(t),
the Borrower shall prepay the Loans in accordance with Section 2.11(g).

 

(f)            Within
three (3) Business Days of receipt by the Borrower or any Guarantor of any
proceeds from the issuance of additional Equity Interests or subordinated
Indebtedness which are required to be applied to prepay the Loans pursuant to
the proviso to Section 6.08(f), the Borrower shall prepay the Loans in
accordance with Section 2.11(g).

 

(g)           Each
prepayment of Loans pursuant to paragraphs (a), (b), (e) or (f) of
this Section 2.11 or pursuant to Section 6.06(a) or (b) shall
be applied to the Loans and to collateralization of the LC Exposure, pro
rata based on the Total Commitment Percentages of the Tranche A Lenders
and the Tranche B Lenders. Upon any such prepayment, the Total Tranche B
Commitment and the Total Delayed Draw Tranche B Loan Commitment shall be
automatically and permanently reduced in an amount equal to the amount so
prepaid, provided, that if, at the time of any prepayment pursuant to
this Section 2.11, the amounts to be applied to prepay the Tranche A
Loans and collateralize the LC Exposure shall exceed the Tranche A Loans
and the LC Exposure at such time, then such excess portion of such prepayment
shall be held as Collateral for additional Tranche A Loans made hereunder, and
Letters of Credit issued hereunder, subsequent to the application of such
prepayment.

 

(h)           Upon the
Termination Date, the Total Commitment shall be terminated in full and the
Borrower shall repay the Loans in full and, except as the Agents may otherwise
agree in writing, if any Letter of Credit remains outstanding, provide Cash
Collateralization for such Letter of Credit.

 

(i)            All
prepayments under this Section 2.11 shall be accompanied by accrued but
unpaid interest on the principal amount being prepaid to (but not including)
the date of prepayment, plus any Fees and any losses, costs and expenses, as
more fully described in Sections 2.14 and 2.18 hereof.  Any prepayments of the Tranche B Loan under
this Section 2.11

 

45

 

shall be applied pro  rata to the remaining scheduled
amortization payments set forth in Section 2.09(a).

 

SECTION 2.12       Optional Prepayment of Loans.

 

(a)           Subject to
Section 2.12(d) below, the Borrower shall have the right at any time
and from time to time to prepay any Loans, in whole or in part, (i) with
respect to Eurodollar Loans, upon (A) telephonic notice followed promptly
by written or facsimile notice or (B) written or facsimile notice received
by 1:00 p.m., New York City
time, three Business Days prior to the proposed date of prepayment and (ii) with
respect to ABR Loans, upon written or facsimile notice received by 1:00 p.m., New York City time, one Business Day prior to the proposed
date of prepayment; provided that ABR Loans may be prepaid on the same
day notice is given if such notice is received by the Agents by 12:00 noon, New
York City time; provided  further, however, that (A) each
such partial prepayment shall be in an amount not less than $5,000,000 and in
integral multiples of $1,000,000, (B) no prepayment of Eurodollar Loans
shall be permitted pursuant to this Section 2.12(a) other than on the
last day of an Interest Period applicable thereto unless such prepayment is
accompanied by the payment of the amounts described in Section 2.14, and (C) no
partial prepayment of a Borrowing of Eurodollar Loans shall result in the
aggregate principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $10,000,000.

 

(b)           Any
prepayments under Section 2.12(a) shall be applied at the Borrower’s
option, to (i) repay the outstanding Tranche A Loans of the Tranche A
Lenders (without any reduction in the Total Tranche A Commitment) until
the Total Tranche A Commitment shall have been wholly and permanently
terminated, all Tranche A Loans shall have been paid in full (plus any
accrued but unpaid interest and fees thereon) and no Letters of Credit shall be
outstanding, or, if outstanding, then backed by Cash Collateralization, and/or (ii) the
Tranche B Loan of the Tranche B Lenders.  All prepayments under Section 2.12(a) shall
be accompanied by accrued but unpaid interest on the principal amount being
prepaid to (but not including) the date of prepayment, plus any Fees and any
losses, costs and expenses, as more fully described in Sections 2.14 and 2.18
hereof.  Any partial prepayments of the
Tranche B Loan shall be applied at the direction of the Borrower.

 

(c)           Each
notice of prepayment shall specify the prepayment date, the principal amount of
the Loans to be prepaid and in the case of Eurodollar Loans, the Borrowing or
Borrowings pursuant to which made, shall be irrevocable and shall commit the
Borrower to prepay such Loan by the amount and on the date stated therein;
provided, that the Borrower may revoke any notice of prepayment under this Section 2.12
if such prepayment would have resulted from a refinancing of the Obligations
hereunder, which refinancing shall not be consummated or shall otherwise be
delayed.  The Paying Agent shall,
promptly after receiving notice from the Borrower hereunder, notify each Lender
of the principal amount of the Loans held by such Lender which are to be
prepaid, the prepayment date and the manner of application of the prepayment.

 

(d)           All
voluntary prepayments of the Tranche B Loans, in whole or in part, effected on
or prior to the first anniversary of the Closing Date with the proceeds of a
substantially concurrent issuance or incurrence of new term loans under a new
facility shall be

 

46

 

accompanied by a prepayment fee equal to 1.00% of the aggregate
principal amount of such prepayments if the applicable rate (or similar
interest rate spread) applicable to such new term loans is or, upon the
satisfaction of certain conditions, could be less than the applicable rate
applicable to the Tranche B Loans on the Closing Date.

 

SECTION 2.13       Increased Costs.  (a)  If any
Change in Law shall:

 

(i)            impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the Issuing Lender;

 

(ii)           change
the basis of taxation of payments to any Lender or the Issuing Lender of the
principal of or interest on any Eurodollar Loan or any Letter of Credit or
participation therein, or any fees or other amounts payable hereunder (other
than changes in respect of Taxes imposed on, or measured by, the net income or
overall gross receipts or franchise taxes of such Lender by the national
jurisdiction in which such Lender has its principal office or in which the
applicable lending office for such Eurodollar Loan is located or by any
political subdivision or taxing authority therein, or by any other jurisdiction
or by any political subdivision or taxing authority); or

 

(iii)          impose
on any Lender or the Issuing Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or the Issuing Lender, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.

 

(b)           If any
Lender or the Issuing Lender reasonably determines in good faith that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Lender’s capital or
on the capital of such Lender’s or the Issuing Lender’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations
in Letters of Credit held by, such Lender, or the Letters of Credit issued by
the Issuing Lender, to a level below that which such Lender or the Issuing
Lender or such Lender’s or the Issuing Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the Issuing Lender’s policies and the policies of such Lender’s or the Issuing
Lender’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or the Issuing Lender, as the case
may be, such additional amount or amounts, in each case as documented by such
Lender or Issuing Lender to the Borrower as will compensate such Lender or the
Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any
such reduction

 

47

 

suffered; it being understood that to the extent duplicative of the
provisions in Section 2.15, this Section 2.13(b) shall not apply
to Taxes.

 

(c)           A
certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its
holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
Borrower shall pay such Lender or the Issuing Lender, as the case may be, the
amount shown as due on any such certificate within fifteen (15) days after
receipt thereof.

 

(d)           Failure or
delay on the part of any Lender or the Issuing Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or
the Issuing Lender’s right to demand such compensation; provided, that
the Borrower shall not be required to compensate a Lender or the Issuing Lender
pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Lender, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Lender’s
intention to claim compensation therefor; provided  further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof. The protection of this Section shall
be available to each Lender regardless of any possible contention as to the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.

 

SECTION 2.14       Break Funding Payments.  In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of the occurrence
and continuance an Event of Default), (b) the conversion of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto
(including as a result of the occurrence and continuance an Event of Default), (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto, or (d) the assignment
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.16,
then, in any such event, at the request of such Lender the Borrower shall
compensate such Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount
reasonably determined in good faith by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from
other banks in the eurodollar market.  A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount
shown as due on any such certificate within fifteen (15) days after receipt
thereof.

 

48

 

SECTION 2.15       Taxes.  (a)  Any and all payments by or on account
of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided,
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Paying Agent,
Lender or Issuing Lender (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)           In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)           The
Borrower shall indemnify the Paying Agent, each Lender and the Issuing Lender,
within thirty (30) days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Paying Agent, such Lender or
the Issuing Lender, as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as
to the amount of such payment or liability delivered to the Borrower by a
Lender or the Issuing Lender, or by the Paying Agent on its own behalf or on
behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest
error.

 

(d)           As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Paying
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment to the extent available, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Paying Agent.

 

(e)           Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Paying Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or requested
by the Borrower as will permit such payments to be made without withholding or
at a reduced rate.

 

(f)            If the Paying Agent or a Lender determines,
in its reasonable discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 2.15,
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.15 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Paying Agent or such Lender and without interest (other
than any interest paid by the

 

49

 

relevant Governmental Authority with respect
to such refund); provided, that the Borrower, upon the request of the Paying Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Paying Agent or such
Lender in the event the Paying Agent
or such Lender is required to repay such refund to such Governmental Authority.
This Section shall not be construed to require the Paying Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

SECTION 2.16       Payments Generally; Pro Rata Treatment.

 

(a)           The
Borrower shall make each payment or prepayment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.13 or 2.14, or
otherwise) prior to 1:00 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any
date may, in the reasonable discretion of the Paying Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments
shall be made to the Paying Agent at its offices at 270 Park Avenue, New York,
New York, pursuant to wire instructions to be provided by the Paying Agent,
except payments to be made directly to the Issuing Lender as expressly provided
herein and except that payments pursuant to Sections 2.13, 2.14 and 10.04 shall
be made directly to the Persons entitled thereto.  The Paying Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. 
If any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. 
All payments hereunder shall be made in dollars.

 

(b)           If at any
time insufficient funds are received by and available to the Paying Agent to
pay fully all Obligations then due hereunder, such funds shall be applied (i) first,
towards payment of Fees and expenses then due under Sections 2.18 and 10.04
payable to the Agents, the Collateral Agents and the Paying Agent, in their
respective capacities as such, ratably among the parties entitled thereto in
accordance with the amounts of Fees and expenses then due to such parties, (ii) second,
towards payment of Fees and expenses then due under Sections 2.19, 2.20 and
10.04 payable to the Lenders and the Issuing Lender and towards payment of
interest then due on account of the Tranche A Loans, Letters of Credit and
Tranche B Loans, ratably among the parties entitled thereto in accordance with
the amounts of such Fees and expenses and interest then due to such parties,
and (iii) third, towards payment of (A) principal of the
Tranche A Loans, unreimbursed LC Disbursements and Tranche B Loans then due
hereunder, and (B) any obligations owing to any Lender or its banking
Affiliates in connection with any Indebtedness permitted under Section 6.03(g) and
any Indebtedness permitted pursuant to Section 6.03(f) to the extent
such Indebtedness is secured as permitted by Section 6.01(dd) (pro  rata
among the holders of such Indebtedness that is secured as permitted by Section 6.01(dd)),
ratably among the parties entitled thereto in accordance with the amounts of
principal, unreimbursed LC Disbursements, cash management obligations and

 

50

 

Indebtedness permitted pursuant to Section 6.03(f) (but only to
the extent such Indebtedness is secured as permitted by Section 6.01(dd))
then due to such parties.

 

(c)           Unless the
Paying Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Paying Agent for the account of the Lenders or
the Issuing Lender hereunder that the Borrower will not make such payment, the
Paying Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the Issuing Lender, as the case may be, the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Lender, as the
case may be, severally agrees to repay to the Paying Agent forthwith on demand
the amount so distributed to such Lender or Issuing Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Paying Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Paying Agent in
accordance with banking industry rules on interbank compensation.

 

(d)           If any
Lender shall fail to make any payment required to be made by it pursuant to Section
2.02(e), 2.04(a) or (b) 10.04(c), then the Paying Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Paying Agent for the account of such Lender to
satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

 

SECTION 2.17       Mitigation Obligations; Replacement of Lenders.  (a)  If the Borrower is required to pay
any additional amount to any Lender under Section 2.13 or to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder, to assign its rights and
obligations hereunder to another of its offices, branches or affiliates or to
file any certificate or document reasonably requested by the Borrower, if, in
the judgment of such Lender, such designation, assignment or filing (i) would
eliminate or reduce amounts payable pursuant to Section 2.13
or 2.15, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

(b)           If, after
the date hereof, any Lender requests compensation under Section 2.13 or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Agents, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 10.02),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, that (i) the Borrower
shall have received the prior written consent of the Agents (and if a Tranche A
Commitment is being assigned, the Issuing Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements, accrued interest

 

51

 

thereon, accrued fees and all other amounts due, owing and payable to
it hereunder at such time, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in
such compensation or payments.  A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.

 

SECTION 2.18       Certain Fees.  The Borrower shall pay to the Agents, for the
respective accounts of the Paying Agent and the Lenders, the fees set forth in
that certain Amended and Restated Joint Fee Letter dated as of November 16,
2005 among the Agents, JPMSI, CGMI, GE Capital and the Borrower, at the times
set forth therein, and as otherwise heretofore agreed.

 

SECTION 2.19       Commitment Fee.  The Borrower shall pay to the Paying Agent
for the accounts of the Tranche A Lenders and the Tranche B Lenders a
commitment fee (the “Commitment Fee”) (i) in the case of the
Tranche A Commitment, for the period commencing on the Closing Date to the
Termination Date or the earlier date of termination of the Tranche A
Commitment and (ii) in the case of the Delayed Draw Tranche B Loan
Commitment, for the period commencing on the Closing Date to the Delayed Draw
Tranche B Loan Commitment Termination Date, in each case computed (on the basis
of the actual number of days elapsed over a year of 360 days) at the rate of
one-half of one percent (1/2%) per annum on the average daily Unused Total
Tranche A Commitment or the Delayed Draw Tranche B Loan Commitment, as the
case may be.  Such Commitment Fee, to the
extent then accrued, shall be payable (a) on the last Business Day of each
March, June, September and December, (b) on the Termination Date with
respect to the Tranche A Commitment or the Delayed Draw Tranche B Loan
Commitment Termination Date with respect to the Delayed Draw Tranche B Loan
Commitment, and (c) as provided in Section 2.10 hereof, upon any
reduction or termination in whole or in part of the Total Tranche A
Commitment or Total Delayed Draw Tranche B Loan Commitment.

 

SECTION 2.20       Letter of Credit Fees.  The Borrower shall pay with respect to each
Letter of Credit (a) to the Paying Agent on behalf of the Tranche A
Lenders a fee calculated (on the basis of the actual number of days elapsed
over a year of 360 days) at the rate of four and one-half percent (41⁄2%)
per annum on the daily average LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) and (b) to the Issuing
Lender such Issuing Lender’s customary fees for issuance, amendments and
processing referred to in Section 2.02. 
In addition, the Borrower agrees to pay each Issuing Lender for its
account a fronting fee of one quarter of one percent (1⁄4%) per annum in respect
of each Letter of Credit issued by such Issuing Lender, for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination of such Letter of Credit. 
Accrued fees described in this paragraph in respect of each Letter of
Credit shall be due and payable quarterly in arrears on the last Business Day
of each March, June, September and December and on the Termination
Date.

 

SECTION 2.21       Nature of Fees.  All Fees shall be paid on the dates due, in
immediately available funds, to the Paying Agent, as provided herein and in the
fee letter described in Section 2.18. 
Once paid, none of the Fees shall be refundable under any circumstances.

 

52

 

SECTION 2.22       Right of Set-Off.  Upon the occurrence and during the
continuance of any Event of Default, each of the Agents and each Lender (and
their respective banking Affiliates) is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final but
excluding Escrow Accounts, Payroll Accounts and other accounts held in trust
for an identified beneficiary) at any time held and other indebtedness at any
time owing by such Agent and each such Lender (or any of such banking
Affiliates) to or for the credit or the account of the Borrower or any
Guarantor against any and all of the obligations of such Borrower or Guarantor
now or hereafter existing under the Loan Documents, irrespective of whether or
not such Agent or Lender shall have made any demand under any Loan Document and
although such obligations may not have been accelerated.  Each Lender and Agent agree promptly to
notify the Borrower and Guarantors after any such set-off and application made
by such Lender or Agent (or any of such banking Affiliates), as the case may
be, provided that the failure to give such notice shall not affect the validity
of such set-off and application.  The
rights of each Lender and the Agents under this Section are in addition to
other rights and remedies which such Lender and the Agents may have upon the
occurrence and during the continuance of any Event of Default.

 

SECTION 2.23       Security Interest in Letter of Credit Account.  The Borrower and the Guarantors hereby pledge
to the Collateral Agents, for their benefit and for the ratable benefit of the
other Secured Parties, and hereby grant to the Collateral Agents, for their
benefit and for the ratable benefit of the other Secured Parties, a first
priority security interest, senior to all other Liens, if any, in all of the
Borrower’s and the Guarantors’ right, title and interest in and to the Letter
of Credit Account and any direct investment of the funds contained
therein.  Cash held in the Letter of
Credit Account shall not be available for use by the Borrower, and shall be
released to the Borrower only as described in clause (ii)(B) of Section 2.02(j).

 

SECTION 2.24       Payment of Obligations.  Subject to the provisions of Section 7.01,
upon the maturity (whether by acceleration or otherwise) of any of the
Obligations under this Agreement or any of the other Loan Documents of the
Borrower and the Guarantors, the Lenders shall be entitled to immediate payment
of such Obligations.

 

SECTION 2.25       Defaulting Lenders.  (a)  If at any time any Lender becomes a
Defaulting Lender, then the Borrower may, on ten (10) Business Days’ prior
written notice to the Agents and such Lender, replace such Lender by causing
such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.02(b) (with
the assignment fee to be paid by the Borrower in such instance) all of its
rights and obligations under this Agreement to one or more assignees; provided
that neither the Agents nor any Lender shall have any obligation to the
Borrower to find a replacement Lender or other such Person.

 

(b)           Any Lender
being replaced pursuant to Section 2.25(a) above shall (i) execute
and deliver an Assignment and Acceptance with respect to such Lender’s
outstanding Loans and participations in Letters of Credit, and (ii) deliver
any documentation evidencing such Loans to the Borrower or the Agents.  Pursuant to such Assignment and Acceptance, (A) the
assignee Lender shall acquire all or a portion, as the case may be, of the
assigning Lender’s outstanding Loans and participations in Letters of Credit, (B) all
obligations of the Borrower owing to the assigning Lender relating to the Loans
and participations so assigned shall be paid

 

53

 

in full by the assignee Lender
to such assigning Lender concurrently with such assignment and acceptance and (C) upon
such payment and, if so requested by the assignee Lender, delivery to the
assignee Lender of the appropriate documentation executed by the Borrower in
connection with previous Borrowings, the assignee Lender shall become a Lender
hereunder and the assigning Lender shall cease to constitute a Lender hereunder
with respect to such assigned Loans and participations, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
assigning Lender.

 

(c)           Notwithstanding
anything to the contrary contained above, any Lender that is an Issuing Lender
hereunder may not be replaced at any time that it has a Letter of Credit
outstanding hereunder unless arrangements reasonably satisfactory to such
Issuing Lender have been made with respect to each such outstanding Letter of
Credit and the Agents may not be replaced hereunder except in accordance with
the terms of Section 8.05.

 

SECTION 3.           REPRESENTATIONS AND WARRANTIES

 

In order to induce the
Lenders to make Loans and issue and/or participate in Letters of Credit
hereunder, the Borrower and each of the Guarantors jointly and severally
represent and warrant as follows:

 

SECTION 3.01       Organization and Authority.  Each of the Borrower and the Guarantors (a) is
duly organized, validly existing and in good standing (to the extent such
concept is applicable in the applicable jurisdiction) under the laws of the
jurisdiction of its organization and is duly qualified and in good standing in
each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect, (b) has the requisite corporate or limited liability
company power and authority to effect the Transactions, and (c) has all
requisite power and authority and the legal right to own or lease and operate
its properties and pledge or mortgage Collateral, and to conduct its business
as now or currently proposed to be conducted.

 

SECTION 3.02       Air Carrier Status.  (a)  The Borrower
is an “air carrier” within the meaning of Section 40102 of Title 49 and
holds a certificate under Section 41102 of Title 49.  The Borrower holds an air carrier operating
certificate issued pursuant to Chapter 447 of Title 49.  The Borrower and the Parent are each a “citizen
of the United States” as defined in Section 40102(a)(15) of Title 49 and
as that statutory provision has been interpreted by the DOT pursuant to its
policies (a “United States Citizen”). 
The Borrower possesses all necessary certificates, franchises, licenses,
permits, rights, designations, authorizations, exemptions, concessions,
frequencies and consents which relate to the operation of the routes flown by
it and the conduct of its business and operations as currently conducted except
where failure to so possess would not, in the aggregate, have a Material
Adverse Effect.

(b)           No
Guarantor is an “air carrier” within the meaning of Section 40102(a)(2) of
Title 49, and no Guarantor holds a certificate under Section 41102 of
Title 49 (other than as a result of a Guarantor becoming an “air carrier” or
holding such certificate in connection with a Permitted Acquisition).

 

SECTION 3.03       Due Execution.  The execution, delivery and performance by
each of the Borrower and the Guarantors of each of the Loan Documents to which
it is a party (a) are

 

54

 

within the respective corporate
or limited liability company powers of each of the Borrower and the Guarantors,
have been duly authorized by all necessary corporate or limited liability
company action, including the consent of shareholders or members where
required, and do not (i) contravene the charter, by-laws or limited
liability company agreement (or equivalent documentation) of any of the
Borrower or the Guarantors, (ii) violate any applicable law (including,
without limitation, the Securities Exchange Act of 1934) or regulation
(including, without limitation, Regulations T, U or X of the Board), or any
order or decree of any court or Governmental Authority, (iii) conflict
with or result in a breach of, constitute a default under, or create an adverse
liability or rights under, any material indenture, mortgage or deed of trust or
any material lease, agreement or other instrument binding on the Borrower or
the Guarantors or any of their properties, which, in the aggregate, would have
a Material Adverse Effect, or (iv) result in or require the creation or
imposition of any Lien upon any of the property of any of the Borrower or the
Guarantors other than the Liens granted pursuant to this Agreement, the other
Loan Documents or in connection with the Co-Branded Agreement; and (b) do
not require the consent, authorization by or approval of or notice to or filing
or registration with any Governmental Authority other than (i) the filing
of financing statements under the New York Uniform Commercial Code, (ii) the
filings and consents contemplated by the Collateral Documents, (iii) approval
of the Bankruptcy Court which approval shall have been obtained prior to the
Closing Date, (iv) approvals, consents and exemptions that have been
obtained prior to the Closing Date and (v) consents, approvals and
exemptions that the failure to do so in the aggregate would not be reasonably
expected to result in a Material Adverse Effect.  This Agreement has been duly executed and
delivered by each of the Borrower and the Guarantors.  This Agreement is, and each of the other Loan
Documents to which the Borrower and each of the Guarantors is or will be a
party, when delivered hereunder or thereunder, will be, a legal, valid and
binding obligation of the Borrower and each Guarantor, as the case may be,
enforceable against the Borrower and the Guarantors, as the case may be, in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.

 

SECTION 3.04       Statements Made.  No representation or warranty or
certification of the Borrower or any Guarantor contained in writing in this
Agreement, any other Loan Document or in any other document, report, public or
private confidential information memorandum, financial statement, certificate
or other written information furnished by or on behalf of the Borrower to the
Agents or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished, other than to the extent that any such statements constitute
projections, budgets, estimates or other forward looking statements), taken as
a whole and in light of the circumstances in which made, contains any untrue
statement of a material fact or omits to state a material fact necessary to
make such statements not materially misleading; and, to the extent that any
such information constitutes projections, budgets, estimates or other forward
looking statements, such projections, budgets, estimates or other forward
looking statements were prepared in good faith on the basis of assumptions,
methods, data, tests and information believed by the Borrower or such Guarantor
to be reasonable at the time such projections, budgets, estimates or other
forward looking statements were furnished (it being understood that
projections, budgets, estimates or other forward looking statements by their
nature are inherently uncertain, that no assurances can be given that projections,
budgets, estimates or other forward

 

55

 

looking statements will
be realized and that actual results in fact may differ materially from any
projections, budgets, estimates or other forward looking statements provided to
the Agents or the Lenders).

 

SECTION 3.05       Financial Statements; Material Adverse Change.

 

(a)           The
Borrower has furnished the Agents on behalf of the Lenders with copies of (i) the
audited consolidated financial statement and schedules of the Parent and its
Subsidiaries for the fiscal year ended December 31, 2004, and (ii) the
unaudited consolidated financial statements for the Parent and its Subsidiaries
for the fiscal quarter ended September 30, 2005, certified by its chief
financial officer.  Such financial
statements present fairly, in all material respects, in accordance with GAAP
(subject to year end adjustments and the absence of footnotes with respect to
unaudited financial statements), the financial condition and results of operations
of the Parent and its Subsidiaries on a consolidated basis as of such date and
for such period; such balance sheets and the notes thereto disclose all
liabilities, direct or contingent, of the Parent and its Subsidiaries as of the
date thereof required to be disclosed by GAAP and such financial statements
were prepared in a manner consistent with GAAP in all material respects.

 

(b)           Since December 31,
2004 there has been no Material Adverse Change.

 

SECTION 3.06       Ownership.  The Borrower is a direct wholly-owned
Subsidiary of the Parent and on the Closing Date the Parent owns no other
Subsidiaries, whether directly or indirectly, other than the Borrower, the
Guarantors (other than the Parent) and as of the Closing Date other
subsidiaries as listed on Schedule 3.06. 
As of the Closing Date, other than as set forth on Schedule 3.06, (a) each
of the Persons listed on Schedule 3.06 is a wholly-owned, direct or
indirect Subsidiary of the Borrower, and (b) the Borrower owns no other
Subsidiaries, whether directly or indirectly.

 

SECTION 3.07       Liens.  Except for the Liens existing on the Closing
Date as reflected on Schedule 3.07, there are no Liens of any nature
whatsoever on any assets of the Borrower or any of the Guarantors other than: (a) Permitted
Liens; (b) other Liens permitted pursuant to Section 6.01 (including
any waiver or amendment thereto subsequent to the Closing Date); and (c) Liens
in favor of the Collateral Agents and the Lenders pursuant to the Loan
Documents.  Neither the Borrower nor the
Guarantors are parties to any contract, agreement, lease or instrument the
performance of which, either unconditionally or upon the happening of an event,
will result in or require the creation of a Lien on any assets of the Borrower
or any Guarantor (other than Liens permitted pursuant to Section 6.01
(including any waiver or amendment thereto subsequent to the Closing Date))
other than (i) the Liens granted to the Collateral Agents and the other
Secured Parties as provided for in this Agreement and (ii) to the extent
that the terms of any mortgage or security agreement extends any Lien over an
airframe or engine for parts which are subsequently installed on such airframe
or engine (to the extent permitted by law).

 

SECTION 3.08       Compliance with Laws and Agreements.

 

(a)           Except for
matters which could not reasonably be expected to have a Material Adverse
Effect, the operations of the Borrower and the Guarantors comply in all

 

56

 

material respects with all
applicable aviation, transportation, and health and safety statutes and
regulations.

 

(b)           To the
Borrower’s and each of the Guarantor’s knowledge, neither the Borrower nor any
Guarantor (nor any of its respective property or asset) is in violation of any (i) law,
rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority or Foreign Aviation
Authorities or (ii) obligation, covenant or condition contained in any
Material Agreement to which it is a party or by which it or any of its property
or assets is bound in any respect, which in each case, the violation of which,
or a default with respect to which, would have a Material Adverse Effect.

 

(c)           Schedule 3.08
hereto is a true and complete listing as of the Closing Date of the Material
Agreements.

 

SECTION 3.09       Insurance.  All policies of insurance of any kind or
nature owned by or issued to the Borrower and the Guarantors, including,
without limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers’ compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage, including,
without limitation, war risk and terrorism liability insurance, that is in an
amount that is no less than the amount as is customarily carried by major
United States air carriers in the United States domestic airline industry; and
the Borrower and the Guarantors maintain other insurance in such amounts as is
customary in the United States domestic airline industry for major United
States air carriers having both substantial domestic and international
operations.  In addition, the Borrower
shall maintain all insurance coverage on the Mortgaged Collateral as required
pursuant to the Aircraft Mortgage.

 

SECTION 3.10       Use of Proceeds.  The proceeds of the Loans and Letters of
Credit shall be used for working capital and for other general corporate
purposes of the Borrower and the Guarantors (including for the payment of fees
and transaction costs as contemplated hereby and as referred to in Section 2.18).

 

SECTION 3.11       Litigation and Environmental Matters.  Other than as set forth on Schedule 3.11:

 

(a)           There are
no actions, suits, proceedings or investigations pending or, to the knowledge
of the Borrower or the Guarantors, threatened against or affecting the Borrower
or the Guarantors or any of their respective properties, before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (i) that are reasonably likely to be determined
adversely to the Borrower or the Guarantors and, if so determined adversely to
the Borrower or the Guarantors, would have a Material Adverse Effect or (ii) that
purport to, or could reasonably be expected to, affect the legality, validity,
binding effect or enforceability of the Loan Documents or, in any material
respect, the rights and remedies of the Agents, the Collateral Agents or the
Lenders thereunder or in connection with the Transactions.

 

57

 

(b)           Except
with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, none of the
Borrower or the Guarantors (i) is currently not in compliance with any
Environmental Law or requirement of any Airport Authority with respect to
environmental matters or does not maintain or comply with any permit, license
or other approval required under any Environmental Law or by any Airport
Authority with respect to environmental matters, (ii) has become subject
to any Environmental Liability, or (iii) has received written notice of
any claim with respect to any Environmental Liability.

 

SECTION 3.12       Slot Utilization.  Except for matters which could not reasonably
be expected to have a Material Adverse Effect, the Borrower and, if applicable,
a Guarantor, are utilizing the Slots in a manner consistent with applicable
rules, regulations, laws and contracts in order to preserve both their
respective right to hold and operate the Slots, taking into account any waivers
or other relief granted to the Borrower and, if applicable, a Guarantor, by the
FAA, other applicable Governmental Authority or Airport Authority.  The Borrower and, if applicable, a Guarantor,
have not received any written notice from the FAA, other applicable
Governmental Authority or Airport Authority, and are not aware of any other
event or circumstance, that would be reasonably likely to impair in any
material respect their respective right to hold and operate any Slot; provided
that the Borrower is aware, and has informed the Agents, that the Slot regime
in place at LGA and JFK pursuant to Title 14 as of the Closing Date is set to
expire on January 1, 2007, under Section 41715(a) of Title 49.

 

SECTION 3.13       Primary Foreign Slot Utilization.  The Borrower and, if applicable, a Guarantor,
are utilizing the Primary Foreign Slots in a manner consistent with applicable
regulations, foreign laws and contracts in order to preserve their respective
right to hold and operate the Primary Foreign Slots.  The Borrower and, if applicable, a Guarantor,
have not received any written notice from any applicable Foreign Aviation
Authorities, nor are the Borrower and, if applicable, a Guarantor, aware of any
other event or circumstance, that would be reasonably likely to impair in any
material respect their respective right to hold and operate any Primary Foreign
Slot.

 

SECTION 3.14       Primary Route Utilization.  The Borrower and, if applicable, a Guarantor,
hold the requisite authority to operate each of the Primary Routes pursuant to
Title 49, applicable foreign law, and the applicable rules and regulations
of any applicable Foreign Aviation Authorities, and have, at all times after
being awarded each such Primary Route, complied in all material respects with
all of the terms, conditions and limitations of each such certificate or order
issued by the DOT and the applicable Foreign Aviation Authorities regarding
such Primary Route and with all applicable provisions of Title 49, applicable
foreign law, and the applicable rules and regulations of any Foreign
Aviation Authorities.  There exists no
violation of such terms, conditions or limitations that gives the FAA, DOT or
any applicable Foreign Aviation Authorities the right to terminate, cancel,
withdraw or modify in any material adverse respect the rights of the Borrower
and, if applicable, a Guarantor, in any such Primary Route.

 

58

 

SECTION 3.15       Margin Regulations; Investment Company Act.

 

(a)           The
Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board), or extending credit
for the purpose of purchasing or carrying margin stock and no proceeds of any
Loans or proceeds from any Letter of Credit will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.

 

(b)           Neither
the Borrower nor any Guarantor is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.  Neither the making of any Loan, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.

 

SECTION 3.16       Ownership Interest in Slots, Routes and Gates.  No Guarantor (other than assets of a
Guarantor acquired in connection with a Permitted Acquisition) has any right,
title or interest in any of the Slots, Foreign Slots, Routes, Supporting Route
Facilities or Gate Interests.

 

SECTION 3.17       ERISA.  Except as set forth on Schedule 3.17
and other than in connection with the
bankruptcy proceedings of the Borrower, the Parent and certain of the direct
and indirect subsidiaries of the Parent in the Bankruptcy Court, no Termination
Event has occurred or is reasonably expected to occur.  The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed by
more than $10,000,000 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $10,000,000 the fair market value of the assets of
all such underfunded Plans.

 

SECTION 3.18       Indebtedness; Off-Balance Sheet
Transactions.  Schedule 3.18 correctly sets forth the
consolidated Indebtedness of the Borrower and the Guarantors as of the Closing
Date.  Other than as disclosed in the
notes to the financial statements described in Section 3.05, as of the
Closing Date, there are no transactions, arrangements or other relationships
between and/or among the Borrower, the Parent, or any of their respective
affiliates (as such term is described in Rule 405 under the Securities Act
of 1933, as amended) and any unconsolidated entity, including but not limited
to, any structured finance, special purpose or limited purpose entity.

 

SECTION 3.19       Properties.

 

(a)           The
Borrower and the Guarantors have good title to (and with respect to Real
Property Assets, good and marketable title to) each of the properties and
assets reflected on the financial statements referred to in Section 3.05
hereof, including, without limitation, the Real Property Assets (other than
such properties or assets disposed of in the ordinary course of

 

59

 

business since the date of such
financial statements or as permitted hereunder).  As of the Closing Date, Schedule 3.19(a) is
a true and complete description of (i) each parcel of real property owned
or leased by the Borrower or any Guarantor and (ii) the entity who owns or
leases such real property.

 

(b)           Each of
the Borrower and the Guarantors owns, or is licensed to use, all trademarks,
trade names, copyrights, patents and other intellectual property material to
its business and the use thereof by such Borrower or Guarantor, to such
Borrower’s or Guarantor’s knowledge, does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect.

 

(c)           Neither
the Borrower nor any Guarantor has received any written notice of a pending or
contemplated condemnation proceeding affecting any Real Property Asset.

 

SECTION 3.20       Perfected Security Interests.  The Collateral
Documents, taken as a whole, are effective to create in favor of the Collateral
Agents, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in all of the Collateral subject as to enforceability to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law.  At such time as (a) financing
statements in appropriate form are filed in the appropriate offices (and the
appropriate fees are paid), (b) the Aircraft Mortgage (including, without
limitation, any Mortgage Supplement) is filed for recordation with the FAA (and
the appropriate fees are paid), (c) with respect to identified
intellectual property registered in the United States, the Trademark Security
Agreement and the Patent Security Agreement are filed in the appropriate
divisions of the United States Patent and Trademark Office (and the appropriate
fees are paid) and the Copyright Security Agreement is filed in the United
States Copyright Office (and the appropriate fees are paid), (d) the Real
Estate Mortgages are filed in the appropriate recording office (and the
appropriate fees are paid), (e) execution of the Control Agreements and (f) delivery
of pledged securities under the Pledge Agreement (together with appropriate
stock powers) to the Agents, the Collateral Agents, for the benefit of the
Secured Parties, shall have a first priority perfected security interest and/or
mortgage (or comparable Lien) in all of the Collateral, subject in each case
only to Liens permitted by Section 6.01 (or, in the case of the Real
Property Assets, subject only to the Permitted Liens and other Liens specified
in the applicable Real Estate Mortgage).

 

SECTION 3.21       Payment of Taxes.  Each
of the Borrower and the Guarantors has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to
be paid all Taxes required to have been paid by it, except to the extent in
each case (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Guarantor, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 3.22       Solvency.  Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of the initial Loans or the issuing of the initial Letter of Credit, whichever
may occur first, and after giving

 

60

 

effect to the application of
the proceeds thereof, (a) the fair market value of the assets of the
Borrower and the Guarantors, taken as a whole, will exceed their debts and
liabilities, subordinated, contingent or otherwise, (b) the present fair
saleable value of the property (on a going concern basis) of the Borrower and
the Guarantors, taken as a whole, will be greater than the amount that will be
required to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured, (c) the Borrower and the Guarantors, taken as
a whole, will be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured, and (d) the Borrower and the Guarantors, taken as a whole, will
not have unreasonably small capital with which to conduct the business in which
they are engaged as such business is now conducted and is proposed to be
conducted following the Closing Date. 
The amount of any contingent liability at any time shall be computed as
the amount that, in light of all facts and circumstances existing at the time,
represents the amount that could reasonably be expected to become an actual
liability.

 

SECTION 3.23       Section 1110.  The Aircraft, Engines and Spare Engines
listed on Schedule 3.23 represent each of the Aircraft, Engine or Spare
Engines constituting Mortgaged Collateral that were first placed in service
prior to October 22, 1994.

 

SECTION 3.24       Labor Matters.  There are no strikes, lockouts or slowdowns
against the Borrower or any Guarantor (or, to the knowledge of the Borrower or
the Parent, threatened) that could reasonably be expected to have a Material
Adverse Effect.

 

SECTION 4.           CONDITIONS OF LENDING

 

SECTION 4.01       Conditions Precedent to Initial Loans and Initial
Letters of Credit.  The
obligation of the Lenders to make the initial Loans or the Issuing Lender to
issue the initial Letter of Credit, whichever may occur first, is subject to
the satisfaction (or waiver in accordance with Section 10.08) of the
following conditions precedent:

 

(a)           Supporting
Documents.  The Agents shall have
received for each of the Borrower and the Guarantors:

 

(i)            a
copy of such entity’s certificate of incorporation or formation, as amended,
certified as of a recent date by the Secretary of State of the state of its
incorporation or formation;

 

(ii)           a
certificate of the Secretary of State of the state of such entity’s
incorporation or formation, dated as of a recent date, as to the good standing
of and payment of taxes by that entity (to the extent available in the
applicable jurisdiction) and as to the charter documents on file in the office
of such Secretary of State;

 

(iii)          a
certificate of the Secretary or an Assistant Secretary of that entity dated the
date of the initial Loans or the initial Letter of Credit hereunder, whichever
first occurs, and certifying (A) that attached thereto is a true and
complete copy of the by-laws or limited liability company agreement of that
entity as in effect on the date of such certification, (B) that attached
thereto is a true and complete copy of resolutions adopted by the Board of
Directors, Board of Managers or Members of that entity authorizing the

 

61

 

Borrowings and Letter of Credit
extensions hereunder (to the extent applicable), the execution, delivery and
performance in accordance with their respective terms of this Agreement, the
Loan Documents and any other documents required or contemplated hereunder or
thereunder and the granting of the security interest in the Letter of Credit
Account and other Liens contemplated hereby or the other Loan Documents, (C) that
the certificate of incorporation or formation of that entity has not been
amended since the date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished pursuant to clause (i) above,
and (D) as to the incumbency and specimen signature of each officer of
that entity executing this Agreement and the Loan Documents or any other
document delivered by it in connection herewith or therewith (such certificate
to contain a certification by another officer of that entity as to the
incumbency and signature of the officer signing the certificate referred to in
this clause (iii)); and

 

(iv)          an
Officer’s Certificate from the Borrower certifying (A) as to the truth in
all material respects of the representations and warranties contained in the
Loan Documents as though made on and as of the date of the initial Loans or
initial Letter of Credit, whichever first occurs, except to the extent that any
such representation or warranty relates to a specified date, in which case such
representation or warranty shall be or was true and correct in all material
respects as of such date after giving effect to the Consummation of the Plan of
Reorganization and to the Transactions and (B) the absence of any event
occurring and continuing, or resulting from the initial Loans or initial Letter
of Credit, whichever first occurs, that constitutes an Event of Default or
event which, with giving of notice or passage of time or both, would be an
Event of Default.

 

(b)           Credit
Agreement.  The Borrower and each of
the Guarantors shall have duly executed and delivered to the Agents this
Agreement.

 

(c)           Security
Agreement, Pledge Agreement and Perfection Certificate.  The Borrower and each of the Guarantors shall
have duly executed and delivered to the Collateral Agents a Security Agreement
in substantially the form of Exhibit B (the “Security Agreement”)
and a Pledge Agreement in substantially the form of Exhibit C (the “Pledge
Agreement”), together with (i) any pledged Collateral (together with
undated stock powers executed in blank) required to be delivered thereunder, (ii) all
documents, certificates, forms and filing fees that the Collateral Agents may
deem necessary to perfect and protect the liens and security interests created
under the Security Agreement and Pledge Agreement, including, without
limitation, financing statements in form and substance reasonably acceptable to
the Collateral Agents, as may be required to grant, continue and maintain an
enforceable security interest in the Collateral (subject to the terms hereof
and of the other Loan Documents) in accordance with the Uniform Commercial Code
as enacted in all relevant jurisdictions and (iii) the perfection
certificate attached as an exhibit to the Security Agreement.

 

(d)           SGR
Security Agreement.  The Borrower
shall have duly executed and delivered to the Collateral Agents a slot, gate
and route security and pledge agreement, in substantially the form of Exhibit D
(the “SGR Security Agreement”), together with (i) in respect of
each of the Primary Slots (except the Primary Slots at Westchester County
Airport located in White Plains, New York), undated slot transfer documents,
executed in blank to be held in escrow by the Collateral Agents and (ii) all
documents, certificates, forms and filing fees that the

 

62

 

Collateral Agents may deem
reasonably necessary to perfect (to the extent provided in the SGR Security
Agreement) and protect the liens and security interests created under the SGR
Security Agreement, including, without limitation, financing statements in form
and substance reasonably acceptable to the Collateral Agents, as may be
required to grant, continue and maintain an enforceable security interest in
the applicable Collateral (subject to the terms hereof and of the other Loan
Documents) in accordance with the Uniform Commercial Code as enacted in all
relevant jurisdictions.

 

(e)           Aircraft
Mortgage.  The Borrower shall have
duly executed and delivered to the Collateral Agents an aircraft mortgage, in
substantially the form of Exhibit E (the “Aircraft Mortgage”), and
a Mortgage Supplement with respect to the Mortgaged Collateral in substantially
the form annexed to the Aircraft Mortgage, together with (i) evidence of
the filing for recordation with the FAA of the Aircraft Mortgage and the
Mortgage Supplement (together with any other necessary documents, instruments,
affidavits or certificates) as the Collateral Agent may deem reasonably
necessary to perfect and protect the Liens created thereby, including, without
limitation, recordings and filings with the FAA, and all filings and recording
fees and taxes in respect thereof shall have been duly paid and (ii) 
evidence that all other action that the Collateral Agents may deem reasonably
necessary to perfect and protect the liens and security interests created under
the Aircraft Mortgage and the Mortgage Supplement has been taken.  The parties hereto acknowledge and agree that
any Lien described in this Agreement on the Mortgaged Collateral is a Lien in
favor of the Collateral Agents for the ratable benefit of the Secured Parties.

 

(f)            Intellectual
Property Security Agreements.  The
Borrower and each applicable Guarantor shall have duly executed and delivered
to the Collateral Agent a (i) Trademark Security Agreement in
substantially the form of Exhibit F-1 (the “Trademark Security
Agreement”), (ii) Patent Security Agreement in substantially the form
of Exhibit F-2 (the “Patent Security Agreement”) and (iii) Copyright
Security Agreement, in substantially the form of Exhibit F-3 (the “Copyright
Security Agreement”), together with all documents, certificates, forms and
filing fees that the Collateral Agent may deem reasonably necessary to perfect
and protect the liens and security interests created in the identified
intellectual property in the Trademark Security Agreement, the Patent Security
Agreement and the Copyright Security Agreement.

 

(g)           Real
Estate Mortgages.  The Borrower or the applicable
Guarantor (as the case may be) shall have duly executed and delivered to the
Collateral Agents the Real Estate Mortgages, together with (i) evidence
that Real Estate Mortgages shall be recorded in all places to the extent that
the Collateral Agents may deem reasonably necessary to perfect and protect the
Liens created thereby, including, without limitation, recordings and filings
with the appropriate agencies, and all filings and recording fees and taxes in
respect thereof shall have been duly paid and (ii) evidence that all other
action that the Collateral Agents may deem reasonably necessary to perfect and
protect the liens and security interests created under the Real Estate
Mortgages has been taken.

 

(h)           Appraisals
and Field Audits.  The Agents shall
have received, in form and substance reasonably satisfactory to them, (i) appraisals
from (1) the Appraisers in respect of the Appraised Collateral (other than
the Real Property Assets) and (2) the Real Estate Appraiser in

 

63

 

respect of the Real Property
Assets and (ii) a Field Audit in respect of the Eligible Accounts
Receivable.

 

(i)            Opinions
of Counsel.  The Agents, the Lenders
and the Collateral Agents shall have received:

 

(i)            a
written opinion of Kirkland & Ellis LLP, counsel to the Borrower and
the Guarantors, dated the date of the initial Loans or the issuance of the
initial Letters of Credit, whichever first occurs, substantially in the form of
Exhibit G-1;

 

(ii)           a
written opinion of Vedder, Price, Kaufman & Kammholz, special counsel
to the Borrower and the Guarantors, dated the date of the initial Loans or the
issuance of the initial Letters of Credit, whichever first occurs,
substantially in the form of Exhibit G-2;

 

(iii)          a
written opinion of McAfee & Taft, special counsel to the Agents, dated
the date of the initial Loans or the issuance of the initial Letters of Credit,
whichever first occurs, substantially in the form of Exhibit G-3; and

 

(iv)          a
written opinion with respect to each Real Estate Mortgage reasonably
satisfactory to the Agents of such other local real estate counsel as the
Agents may reasonably request.

 

(j)            Payment
of Fees and Expenses.  The Borrower
shall have paid to the Paying Agent the then unpaid balance of all accrued and
unpaid Fees due, owing and payable under and pursuant to this Agreement, as
referred to in Section 2.18 and as heretofore agreed upon by the Borrower
and the Agents, and all reasonable fees and reasonable out-of-pocket expenses
of the Agents, the Lead Arrangers and the Collateral Agents (including the
reasonable fees and reasonable out-of-pocket expenses of counsel to the Agents)
as to which invoices have been issued and presented.

 

(k)           Corporate
and Judicial Proceedings.  All
corporate and judicial proceedings and all instruments and agreements in
connection with the transactions among the Borrower, the Guarantors, the Agents
and the Lenders contemplated by this Agreement shall be reasonably satisfactory
in form and substance to the Agents, and the Agents shall have received all
information and copies of all documents and papers, including records of
corporate and judicial proceedings, which the Agents may have reasonably
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate, governmental or judicial authorities.

 

(l)            Access;
Compliance with Laws.  The Borrower
and the Guarantors shall have granted the Agents access to and the right to
inspect all reports, audits and other internal information of the Borrower and
the Guarantors relating to environmental matters, and any third party
verification of certain matters relating to compliance with Environmental Laws
and regulations reasonably requested by the Agents, and the Agents shall be
reasonably satisfied that the Borrower and the Guarantors are in compliance in
all material respects with all applicable Environmental Laws and any
requirements of Airport Authorities with respect to environmental matters; provided
that each of the Borrower and the Guarantors shall not be required to disclose

 

64

 

reports, audits or other
internal information that is privileged and would materially adversely effect
the Borrower’s or such Guarantor’s ability to defend against any claims brought
against it.

 

(m)          Lien
Searches.  The Agents shall have
received UCC searches (including tax liens and judgments) conducted in the
jurisdictions in which the Borrower and the Guarantors are incorporated or such
other jurisdictions as the Agents may reasonably require and Lien searches
conducted in the recording office of the Federal Aviation Administration as may
be reasonably satisfactory to the Agents (dated as of a date reasonably
satisfactory to the Agents), reflecting the absence of Liens and encumbrances
on the assets of the Borrower and the Guarantors other than Liens permitted
hereunder and as may be reasonably satisfactory to the Agents and (in the case
of the searches conducted at the recording office of the FAA) indicating that
the Borrower (or a Guarantor) is the registered owner of each of the aircraft
which is intended to be covered by the Aircraft Mortgage.

 

(n)           Insurance.  (i) The Collateral Agents shall have
received original certificates of insurance with respect to insurance
maintained by the Borrower or any Guarantor, as the case may be, which
certificates evidence compliance by the Borrower and the Guarantors with the
insurance requirements set forth herein and in the Collateral Documents as of
the Closing Date and contain signatures of duly authorized representatives of AON
Risk Services or such other insurance broker as may be reasonably acceptable to
the Collateral Agents.

 

(ii)           The
Collateral Agents shall have been named as loss payees with respect to the
Mortgaged Collateral and Real Property Assets, and additional insureds (as their
interests may appear), on such policies of insurance of the Borrower and the
Guarantors as the Collateral Agents may have reasonably requested (or as
otherwise specified in the Collateral Documents).

 

(o)           Title/Survey.  The Collateral Agents shall have received
title insurance policies with respect to each Real Property Asset from Chicago
Title Insurance Company and real
property surveys with respect to (i) that certain parcel of real property
located at 1200 Algonquin Road, Elk Grove Village, Illinois 60007 from V3
Companies of Illinois Ltd. and (ii) the Denver Training Facility from
Yistra Aker Surveying, all in form and substance reasonably satisfactory to the
Collateral Agents.

 

(p)           Order;
Plan of Reorganization.  (i) The
Confirmation Order shall have been entered in accordance with the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, any applicable orders of
the Bankruptcy Court and any applicable local rules and shall be
reasonably satisfactory to the Agents, (ii) the Plan of Reorganization
shall, in a manner reasonably satisfactory to the Agents, contemplate and
authorize this Agreement, the Transactions and all actions to be taken,
undertakings to be made and obligations to be incurred by the Borrower and the
Guarantors in connection herewith and therewith (including, without limitation,
the payment of all of the Fees and performance of the obligations set forth in Section 10.04
hereof) and shall not have been amended or modified unless reasonably
satisfactory to the Agents, (iii) the Confirmation Order shall be in full
force and effect and not subject to stay and, unless otherwise waived by the
Agents (provided, that such waiver shall not be unreasonably withheld,
delayed or conditioned and that prior notice to other parties in interest shall
not be required with respect to any such waiver), (A) the time to appeal
the Confirmation Order or to

 

65

 

seek review, rehearing or
certiorari with respect to the Confirmation Order shall have expired and (B) no
appeal or petition for review, rehearing or certiorari with respect to the
Confirmation Order shall be pending, and (iv) all conditions to the
effectiveness of the Plan of Reorganization shall have been satisfied (or, with
the prior written consent of the Agents, which written consent shall not be
unreasonably withheld, delayed or conditioned, waived in accordance with the
terms of the Plan of Reorganization, in the reasonable judgment of the Agents)
and the Consummation of the Plan of Reorganization shall have occurred
simultaneously with the Closing Date.

 

(q)           Repayment
of Existing DIP Facility.  Upon
Consummation of the Plan of Reorganization and the making of the initial Loans
or the initial Letter of Credit, the Existing DIP Facility shall have been
repaid in full and terminated, and all action necessary to release all
collateral pledged to secure the Loans shall have been taken, in form and
substance reasonably satisfactory to the Agents.

 

(r)            Consents.  All governmental and third party consents and
approvals necessary or, in the reasonably discretion of the Agents, advisable
in connection with the financing contemplated hereby and the continuing
operations of the Borrower and the Guarantors shall have been obtained, in form
and substance reasonably satisfactory to the Agents, and be in full force and
effect.

 

(s)           Financial
Statements.  The Lenders shall have
received (i) audited consolidated financial statements of the Parent and
the Borrower for the two most recent fiscal years ended prior to the Closing
Date as to which such audited financial statements are available and (ii) unaudited
interim consolidated financial statements of the Parent and the Borrower for
each quarterly period ended subsequent to the date of the latest financial
statements delivered pursuant to clause (i) of this Section 4.01(s)
as to which such financial statements are available.

 

(t)            No
Illegality.  No law or regulation
shall be applicable in the reasonable judgment of the Agents or the Lenders
that restrains, prevents or imposes materially adverse conditions upon the
Transactions.

 

(u)           Representations
and Warranties.  All representations
and warranties set forth in Section 3 hereof shall be true and correct in
all material respects on and as of the Closing Date, after giving effect to the
Consummation of the Plan of Reorganization and to the Transactions, as though
made on and as of such date (except to the extent any such representation or
warranty by its terms is made as of a different specified date, in which event such
representation or warranty shall be true and correct in all material respects
as of such specified date).

 

(v)           No
Event of Default.  After giving
effect to the Consummation of the Plan of Reorganization and the Transactions,
no Event of Default or event which, with the giving of notice or passage of
time or both, would be an Event of Default shall have occurred and be
continuing on the Closing Date.

 

(w)          Borrowing
Request.  The Paying Agent shall have
received a Borrowing Request pursuant to Section 2.03.

 

66

 

(x)            Projections.  The Agents and the Lenders shall have
received reasonably satisfactory projections for the fiscal years 2006 through
and including 2010 reflecting, among other things, transactions to be effected
pursuant to the Plan of Reorganization.

 

(y)           Intercreditor
Agreement.  The Borrower, the Agents
and Chase Bank shall have executed the Intercreditor Agreement.

 

(z)            Eligible
Collateral.  At the time the Lenders
make the initial Loans or the Issuing Lender issues the initial Letter of
Credit, whichever may occur first, and after giving effect thereto, the
Appraised Value of the Eligible Collateral shall not be less than 165% of the
sum of the aggregate outstanding amount of the Loans plus the undrawn amount of
outstanding Letters of Credit issued for the account of the Borrower and the
unreimbursed amount of drawings under such Letters of Credit.

 

(aa)         Control
Agreements.  The Borrower or any
Guarantor, as the case may be, shall use commercially reasonable efforts to
deliver to the Collateral Agents a Control Agreement, properly executed by the
Borrower or any Guarantor, as the case may be, and each bank or other financial
institution (as may be specified by the Collateral Agents) at which the Borrower
or any Guarantor, as the case may be, maintains deposit accounts (other than
Escrow Accounts, Payroll Accounts, Petty Cash Accounts and accounts with the
Agents) or has Investment Property, as the case may be.

 

(bb)         Environmental
Due Diligence.  The Agents shall have
received an ASTM compliant Phase I environmental assessment, which report shall
include a visual inspection for the presence of suspect asbestos containing
materials and a due diligence-level compliance assessment identifying any material
non-compliances with Environmental Laws, for each Real Property Asset as they
shall direct, which assessment shall be prepared by Environmental Resources
Management (ERM) or other environmental consultant reasonably acceptable to the
Agents and shall otherwise be in form and substance reasonably acceptable to
the Agents.

 

(cc)         Flights.  The Agents shall have received an Officer’s
Certificate of the Borrower showing the total number of nonstop flights the
Borrower operated during the fiscal quarter ended December 31, 2005
serving any point in China, London’s Heathrow Airport, Osaka’s Kansai
International Airport, Tokyo’s Narita Airport, Nagoya Airport, or Hong Kong
International Airport from a gateway in the United States and between Hong Kong
and Singapore, Hong Kong and Ho Chi Minh, Tokyo and Seoul, Tokyo and Bangkok,
Tokyo and Hong Kong, Tokyo and Singapore, Tokyo and Taipei, and Nagoya and
Taipei.

 

(dd)         Other
Documentation and Information.  The
Agents shall have received (i) such documents and certificates as the
Agents or their counsel may reasonably request relating to the organization,
existence and good standing of the Borrower, the authorization of the
Transactions and any other legal matters relating to the Borrower or any
Guarantor, this Agreement or the Transactions and (ii) fully executed
originals of the Contribution Agreement, all in form and substance reasonably
satisfactory to the Agents and their counsel.

 

SECTION 4.02       Conditions Precedent to Each Loan and Each Letter
of Credit.  The obligation
of the Lenders to make each Loan and of the Issuing Lender to issue each Letter

 

67

 

of Credit, including the
initial Loan and the initial Letter of Credit, is subject to the satisfaction
(or waiver in accordance with Section 10.08) of the following conditions
precedent:

 

(a)           Notice.  The Paying Agent shall have received a
Borrowing Request pursuant to Section 2.03 with respect to such borrowing
or issuance, as the case may be.

 

(b)           Representations
and Warranties.  All representations
and warranties contained in this Agreement and the other Loan Documents shall
be true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date and in such
case, such representations and warranties shall be true and correct in all
material respects as of such date.

 

(c)           No
Default.  On the date of each
Borrowing hereunder or the issuance of each Letter of Credit, no Event of
Default or event which upon notice or lapse of time or both would constitute an
Event of Default shall have occurred and be continuing nor shall any such event
occur by reason of the making of the requested Borrowing or the issuance of the
requested Letter of Credit.

 

The request by the Borrower for, and the acceptance by the Borrower of,
each extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have
been satisfied or waived at that time.

 

SECTION 4.03               Conditions Precedent to Delayed Draw Tranche B
Loan.  The obligation of
the Tranche B Lenders to make the Delayed Draw Tranche B Loan is subject to the
satisfaction (or waiver by Tranche B Lenders in accordance with Section 10.08)
of the following conditions precedent:

 

(a)           Additional
Collateral.  The Borrower shall have
obtained unencumbered title to the airframes and engines that currently secure
the 1997 EETC Facility.

 

(b)           Supplement
or Modification to Aircraft Mortgage. 
The Borrower shall have duly executed and delivered to the Collateral
Agents with respect to the additional Collateral referred to in Section 4.03(a) above,
a Mortgage Supplement or, if requested by the Collateral Agents, an amended and
restated Aircraft Mortgage that will comply with Section 5.20 hereof and
be substantially consistent with the Aircraft Mortgage, and the Collateral
Agent shall have received evidence that the Mortgage Supplement or such amended
and restated Aircraft Mortgage has been recorded with the FAA and any other
registry as may be required in accordance with Section 5.20 hereof.

 

(c)           Opinions
of Counsel.  The Agents and the
Collateral Agents shall have received:

 

(i)            a written
opinion of counsel to the Borrower and the Guarantors reasonably satisfactory
to the Agents, dated the date of the making of the Delayed Draw Tranche B Loan,
reasonably satisfactory in form and substance to the Agents; and

 

68

 

(ii)           a written
opinion of McAfee & Taft, special counsel to the Agents, dated the
date of the making of the Delayed Draw Tranche B Loan, reasonably satisfactory
in form and substance to the Agents.

 

(d)           Insurance
Designation.  The Collateral Agents
shall have been named as loss payee with respect to the additional Collateral
referred to in Section 4.03(a) above, and additional insured (as its
interests may appear), on such policies of insurance of the Borrower and the
Guarantors as the Collateral Agents may have reasonably requested with respect
to such additional Collateral.

 

(e)           Notice.  The Paying Agent shall have received a notice
with respect to the borrowing of the Delayed Draw Tranche B Loan, as required
by Section 2.

 

(f)            Representations
and Warranties.  All representations
and warranties contained in this Agreement and the other Loan Documents shall
be true and correct in all material respects on and as of the date of the
Borrowing of the Delayed Draw Tranche B Loan hereunder with the same effect as
if made on and as of such date except to the extent such representations and
warranties expressly relate to an earlier date in which case they shall have
been true and correct in all material respects as of such date.

 

(g)           No
Default.  On the date of the
Borrowing of the Delayed Draw Tranche B Loan hereunder, no Event of Default or
event which upon notice or lapse of time or both would constitute an Event of
Default shall have occurred and be continuing.

 

The request by the Borrower for, and the acceptance by the Borrower of,
each extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have
been satisfied or waived at that time.

 

SECTION 5.           AFFIRMATIVE COVENANTS

 

From the date hereof and
for so long as any Tranche A Commitment or Tranche B Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back Letters of Credit delivered, in each
case pursuant to Section 2.02(c)), or any amount shall remain outstanding
or unpaid under this Agreement (other than contingent indemnification
obligations not due and payable), the Borrower and each of the Guarantors agree
that, unless the Required Lenders shall otherwise consent in writing, the
Borrower and each of the Guarantors will:

 

SECTION 5.01       Financial Statements, Reports, etc.  Deliver to the Agents on behalf of the
Lenders:

 

(a)           Within 90
days after the end of each fiscal year, the Parent’s consolidated balance sheet
and related statement of income and cash flows, showing the financial condition
of the Parent and its Subsidiaries on a consolidated basis as of the close of
such fiscal year and the results of their respective operations during such
year, the consolidated statement of the Parent to be audited for the Parent by
Deloitte and Touche LP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (without a

 

69

 

“going concern” or like
qualification or exception and without any qualification or exception (other
than with respect to the 2004 audit and the 2005 audit) as to the scope of such
audit) and to be certified by a Responsible Officer of the Parent to the effect
that such consolidated financial statements fairly present in all material
respects the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis in accordance
with GAAP; provided that documents required to be delivered pursuant to
this clause (a) which are made available via EDGAR, or any successor
system of the SEC, on the Parent’s Annual Report on Form 10-K shall be
deemed delivered when made so available and the Agents shall have received
notice that such documents have been made so available;

 

(b)           Within 45
days after the end of each of the first three fiscal quarters, the Parent’s
consolidated balance sheets and related statements of income and cash flows,
showing the financial condition of the Parent and its Subsidiaries on a
consolidated basis as of the close of such fiscal quarter and the results of
their operations during such fiscal quarter and the then elapsed portion of the
fiscal year, each certified by a Responsible Officer of the Parent as fairly
presenting in all material respects the financial condition and results of
operations of the Parent and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes; provided that
documents required to be delivered pursuant to this clause (b) which are
made available via EDGAR, or any successor system of the SEC, on the Parent’s
Annual Report on Form 10-K shall be deemed delivered when made so
available and the Agents shall have received notice that such documents have
been made so available;

 

(c)           (i) concurrently
with any delivery of financial statements under (a) and (b) above, a
certificate of a Responsible Officer of the Parent (A) certifying that no
Event of Default or event which upon notice or lapse of time or both would
constitute an Event of Default has occurred, or, if such an Event of Default or
event has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto, (B) setting
forth computations in reasonable detail satisfactory to the Agents
demonstrating compliance with the provisions of Sections 6.03, 6.04, 6.05, 6.06
and 6.10 and (C) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 3.05 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such
certificate; (ii) concurrently with any delivery of financial statements
under (a) above, a certificate of a Responsible Officer of the Parent
setting forth a list of the direct and indirect Subsidiaries (other than
Immaterial Subsidiaries) of the Parent as of such date; and (iii) concurrently
with any delivery of financial statements under (a) above, a certificate
(which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) of the accountants auditing the
consolidated financial statements delivered under (a) above certifying
that, in the course of the regular audit of the business of the Borrower, the
Parent and its Subsidiaries, such accountants have obtained no knowledge that
an Event of Default under Sections 6.04, 6.05 or 6.06 has occurred and is
continuing or if, in the opinion of such accountants, such an Event of Default
has occurred and is continuing, specifying the nature thereof and all relevant
facts with respect thereto;

 

(d)           promptly
after the same become publicly available, copies of all registration statements
and all periodic and other reports, proxy statements and other materials filed
by it with the Securities and Exchange Commission, or any governmental
authority

 

70

 

succeeding to any of or all the
functions of said commission, or with any national securities exchange, as the
case may be; provided that documents required to be delivered pursuant
to this clause (d) which are made available via EDGAR, or any successor
system of the SEC, shall be deemed delivered when made so available and the
Agents shall have received notice that such documents have been made so
available.

 

(e)           Within sixty (60) days from the last Business
Day of the immediately preceding fiscal year, a detailed consolidated budget
for the following 12-month period (including a projected consolidated balance
sheet and related statements of projected operations and cash flow for such
period) and, promptly when available, any significant revisions of such budget;

 

(f)            as soon
as available and in any event within fifteen (15) Business Days after the
Borrower or any of its ERISA Affiliates knows or has reason to know that any
Termination Event has occurred, a statement of a Responsible Officer of the
Borrower describing the full details of such Termination Event and the action,
if any, which the Borrower or such ERISA Affiliate is required or proposes to
take with respect thereto, together with any notices required or proposed to be
given to or filed with or by the Borrower, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto;

 

(g)           promptly
and in any event within fifteen (15) Business Days after receipt thereof by the
Borrower or any of its ERISA Affiliates from the PBGC copies of each notice
received by the Borrower or any such ERISA Affiliate of the PBGC’s intention to
terminate any Single Employer Plan of the Borrower or such ERISA Affiliate or
to have a trustee appointed to administer any such Plan;

 

(h)           if
requested by either Agent (in consultation with the other Agent), promptly and
in any event within 30 days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan of the Borrower or any
of its ERISA Affiliates;

 

(i)            within
fifteen (15) Business Days after notice is given or required to be given to the
PBGC under Section 302(f)(4)(A) of ERISA of the failure of the
Borrower or any of its ERISA Affiliates to make timely payments to a Plan, a
copy of any such notice filed and a statement of a Responsible Officer of the
Borrower setting forth (i) sufficient information necessary to determine
the amount of the lien under Section 302(f)(3), (ii) the reason for
the failure to make the required payments and (iii) the action, if any,
which the Borrower or any of its ERISA Affiliates proposed to take with respect
thereto;

 

(j)            promptly
and in any event within fifteen (15) Business Days after receipt thereof by the
Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of
each notice received by the Borrower or any ERISA Affiliate concerning (i) the
imposition of Withdrawal Liability by a Multiemployer Plan, (ii) the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (iii) the
termination of a Multiemployer Plan within the meaning of Title IV of ERISA, or
(iv) the amount of liability incurred, or which may be incurred, by the
Borrower or any ERISA Affiliate in connection with any event described in
clause (i), (ii) or (iii) above;

 

71

 

(k)           promptly
after any Responsible Officer of the Borrower obtains knowledge thereof, notice
of any taxes, assessments and governmental charges or Liens imposed upon the
Borrower or any of the Guarantors or any of its or their properties, or any
action, suit, investigation or proceeding in respect thereof that has the
reasonable likelihood of adverse determination, as to which the Borrower or
such Guarantor has obtained written notice and which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;

 

(l)            promptly
after a Responsible Officer obtains knowledge of (i) the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or affecting the Parent or any Subsidiary that
has a reasonable likelihood of adverse determination and such adverse
determination could reasonably be expected to result in a Material Adverse
Effect; (ii) the receipt of any environmental audits and reports, whether
prepared by personnel of the Borrower or any Guarantor or by independent
consultants, with respect to significant environmental matters or which relate
to an Environmental Liability which could be expected to have a Material
Adverse Effect, together with copies of such audits and reports; or (iii) any
other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect; each notice delivered under this sub-paragraph
shall be accompanied by a statement of a Responsible Officer of the Parent and
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto;

 

(m)          promptly,
from time to time, such other information regarding the operations (including,
without limitation, any information regarding Slot utilization), business
affairs and financial condition of the Borrower or any Guarantor as either of
the Agents, at the request of any Lender, may reasonably request;

 

(n)           on the
fifth Business Day following the end of each calendar month in which the
Borrower and, if applicable, a Guarantor, file with the FAA, other applicable
Governmental Authority or Airport Authority a report on Primary Slot
utilization pursuant to 14 C.F.R. Part 93 or other applicable regulations
or law regarding Primary Slot utilization, a copy of such report, and a summary
thereof, in a format reasonably acceptable to the Agents;

 

(o)           on the
fifth Business Day following the end of each calendar month, a Primary Foreign
Slot Utilization Report, in a format reasonably acceptable to the Agents,
showing by day of week the number of times the Borrower and, if applicable, a
Guarantor, canceled or otherwise did not operate a flight utilizing each such
Primary Foreign Slot in the just ended calendar month;

 

(p)           on the
fifth Business Day following the end of each calendar month, a certificate of a
Responsible Officer of the Borrower and, if applicable, a Guarantor, (i) stating
that at all times since the last certificate delivered under this Section 5.01(p)
(or, in the case of the first certificate to be delivered after the Closing
Date, at all times since the Closing Date) the Borrower and, if applicable, a Guarantor,
are utilizing the Primary Routes and the Primary Foreign Slots in a manner
consistent in all material respects with applicable regulations, rules, law,
foreign law and contracts in order to preserve their respective rights in and
to use each of the Primary Routes and Primary Foreign Slots and whether the
Borrower and, if applicable, a

 

72

 

Guarantor, has satisfied all
applicable utilization requirements set forth in any such regulation, rule,
law, foreign law and contract and (ii) stating whether the Borrower and,
if applicable, a Guarantor, has discontinued, suspended or otherwise not
operated nonstop service between Hong Kong and Singapore, Hong Kong and Ho Chi
Minh, Tokyo and Seoul, Tokyo and Bangkok, Tokyo and Hong Kong, Tokyo and
Singapore, Tokyo and Taipei, Nagoya and Taipei, or to points in China, Tokyo’s
Narita Airport, Osaka’s Kansai International Airport, Nagoya Airport, Hong Kong
International Airport or London’s Heathrow Airport from any gateway in the
United States from which the Borrower and, if applicable, a Guarantor, operated
nonstop service during the previous month, for more than fifteen (15)
consecutive days;

 

(q)           from and
after Eligible Accounts Receivable being designated as Eligible Collateral,
promptly and in any event within forty-five (45) days of each six (6) month
anniversary of the Closing Date, an Officer’s Certificate from the Parent
setting forth the amount of Eligible Accounts Receivable as of such date,
together with all supporting documents and additional reports with respect to
Eligible Accounts Receivable as the Agents may reasonably request.

 

Subject to the next succeeding sentence, information delivered pursuant
to this Section 5.01 to the Agents may be made available by the Agents to
the Lenders by posting such information on the Intralinks website on the
Internet at http://www.intralinks.com. 
Information delivered pursuant to this Section 5.01 may also be
delivered by electronic communication pursuant to procedures approved by the
Agents pursuant to Section 10.01 hereto. 
Information required to be delivered pursuant to this Section 5.01
(to the extent not made available as set forth above) shall be deemed to have
been delivered to the Agents on the date on which the Borrower provides written
notice to the Agents that such information has been posted on the Borrower’s
website on the Internet at http://www.united.com (to the extent such
information has been posted or is available as described in such notice).  Information required to be delivered pursuant
to this Section 5.01 shall be in a format which is suitable for
transmission.

 

Unless (i) expressly marked by the Borrower as “PUBLIC” or (ii) copies
of its public filings with the SEC, any notice or other communication delivered
pursuant to this Section 5.01, or otherwise pursuant to this Agreement,
shall be deemed to contain material non-public information.

 

SECTION 5.02       Existence.  Preserve and maintain in full force and
effect all governmental rights, privileges, qualifications, permits, licenses
and franchises necessary in the normal conduct of its business except (a)(i) if
in the reasonable business judgment of the Borrower it is no longer necessary
for the Borrower and the Guarantors to preserve and maintain such rights,
privileges, qualifications, permits, licenses and franchises, and (ii) such
failure to preserve the same could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (b) as otherwise permitted
in connection with (i) sales of assets permitted by Section 6.11 or (ii) mergers,
liquidations and dissolutions permitted by Section 6.02.

 

SECTION 5.03       Insurance.

 

(a)           In
addition to the requirements of Sections 5.03(b) and (c) or as set
forth in each Real Property Mortgage and the Aircraft Mortgage, (i) keep
its properties insured at all

 

73

 

times, against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies of the same or similar size in the same or similar
businesses and otherwise on terms and conditions and with insurance carriers
which are reasonably satisfactory to the Collateral Agents; (ii) maintain
in full force and effect public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by the Borrower or
any Guarantor, as the case may be, in such amounts and with such deductibles as
are customary with companies of the same or similar size in the same or similar
businesses and in the same geographic area; and (iii) maintain such other
insurance or self insurance as may be required by law.

 

(b)           Maintain
in full force and effect war risk and terrorism insurance on all its property
in an amount that is no less than the maximum amount available to the Borrower
and the Guarantors from the DOT under the Federal Aviation Insurance Program,
as amended by the Air Transportation Stabilization Act and Regulations and
further amended by the Homeland Security Act of 2002, and as further amended by
the Vision–100 Century of Aviation Reauthorization Act.

 

(c)           Maintain
business interruption insurance in amounts that are reasonably satisfactory to
the Agents and as is customary in the United States domestic airline industry
for major United States air carriers having both substantial domestic and
international operations.

 

(d)           All such
insurance referred to in this Section 5.03 shall (i) contain a Lender’s
Loss Payable Endorsement in favor of the Collateral Agents, on behalf of the
Secured Parties, in all loss or damage insurance policies, (ii) provide
that no cancellation, material reduction in an amount or material change in
coverage thereof shall be effective until at least thirty (30) days (or such
shorter period as may be set forth in the Aircraft Mortgage) after written
notice thereof to the Collateral Agents, on behalf of the Secured Parties,
permitting the Collateral Agents to cure any default with respect to applicable
outstanding premiums, (iii) name the Collateral Agents, for the benefit of
the Secured Parties, as loss payees for physical damage insurance with respect
to property which constitutes Collateral or a Real Property Asset as to which a
Lien has been granted to the Collateral Agents, and as additional insureds for
liability insurance, (iv) provide
that once the Collateral Agents have given notice of the occurrence of an Event
of Default, no loss shall be adjusted or otherwise settled without the prior
written consent of the Collateral Agents, (v) state that none of the
Collateral Agents, any of the Lenders, nor any other Secured Party shall be
responsible for premiums, commissions, club calls, assessments or advances, and
(vi) otherwise be reasonably satisfactory in all respects (including
deductibles) to the Collateral Agents.

 

(e)           Promptly
deliver to the Collateral Agents copies of any notices received from its
insurers with respect to insurance programs required by the Terrorism Risk
Insurance Act of 2002 (as extended by the Terrorism Risk Insurance Extension
Act of 2005) and, if so requested by the Collateral Agents, procure and
maintain in force the insurance that is offered in such programs to the same
extent maintained by companies of the same or similar size in the same or
similar businesses.

 

(f)            No less
frequently than annually, but in any event prior to expiration of any insurance
policy maintained in connection herewith or in connection with any Collateral

 

74

 

Document, furnish to the
Collateral Agents original certificates of insurance with respect to insurance
maintained by the Borrower or any Guarantor, as the case may be, which
certificates evidence compliance by the Borrower and the Guarantors with the
insurance requirements set forth herein and in any of the Collateral Documents
and contain signatures of duly authorized representatives of AON Risk Services or
such other insurance broker as may be reasonably acceptable to the Collateral
Agents, at all times prior to policy termination, cessation or cancellation.

 

(g)           Make
available, upon the reasonable request of the Collateral Agents and upon
reasonable prior notice, copies of all insurance policies maintained by the
Borrower and the Guarantors for the review of the Collateral Agents and any
agents or representatives thereof.

 

SECTION 5.04       Maintenance of Properties.  Except to the extent otherwise permitted
hereunder, each of the Parent and the Borrower, in its reasonable business
judgment, will, and will cause each of its respective Subsidiaries to, keep and
maintain all property material to the conduct of its business (and all Real
Property Assets) in good working order and condition (ordinary wear and tear
and damage by casualty and condemnation excepted), except where the failure to
keep such property in good working order and condition would not have a
Material Adverse Effect.

 

SECTION 5.05       Obligations and Taxes.  With respect to the Borrower and each
Guarantor, pay all its material obligations promptly and in accordance with
their terms and pay and discharge promptly all material taxes, assessments and
governmental charges, levies or claims imposed upon it or upon its income or
profits or in respect of its property, before the same shall become more than
ninety (90) days delinquent; provided, however, that the Borrower
and each Guarantor shall not be required to pay and discharge or to cause to be
paid and discharged any such obligation, tax, assessment, charge, levy or claim
so long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings (if the Borrower and the Guarantors shall have set
aside on their books adequate reserves therefor in accordance with GAAP).

 

SECTION 5.06       Notice of Event of Default, etc.  Promptly upon the Borrower’s knowledge
thereof give to the Agents notice in writing of any Event of Default or the
occurrence of any event or circumstance which with the passage of time or
giving of notice or both would constitute an Event of Default.

 

SECTION 5.07       Access to Books and Records.  (a) Maintain or cause to be maintained
at all times true and complete books and records in all material respects in a
manner consistent with GAAP in all material respects of the financial
operations of the Borrower and the Guarantors; and provide the Agents, the
Collateral Agents and their respective representatives and advisors reasonable
access to all such books and records, as well as any appraisals of the
Collateral, during regular business hours, in order that the Agents and the
Collateral Agents may upon reasonable prior notice and with reasonable
frequency examine and make abstracts from such books, accounts, records,
appraisals and other papers, and permit the Agents, the Collateral Agents and
their respective representatives and advisors to confer with the officers of
the Borrower and the Guarantors and representatives (provided that the Borrower
shall be given the right to participate in such discussions with such
representatives) of the Borrower and the Guarantors, all for the purpose of
verifying the accuracy of the various reports delivered by the

 

75

 

Borrower or the Guarantors to
the Agents or the Lenders pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement; and at any reasonable time and from time to
time during regular business hours, upon reasonable notice to the Borrower,
permit the Agents, the Collateral Agents, and any agents or representatives
(including, without limitation, appraisers) thereof to visit the properties of
the Borrower and the Guarantors and to conduct examinations of and to monitor
the Collateral held by the Collateral Agents, in each case at the expense of
the Borrower (provided, that the Borrower shall not be required to pay
the expenses of more than one such visit a year unless an Event of Default has
occurred and is continuing).

 

(b)           Grant access to and the right to inspect all
final reports, final audits (and draft reports and audits where no final
reports or audits are available) and other similar internal information of the
Borrower relating to the Real Property Assets with respect to environmental
matters upon reasonable notice, and obtain any third party verification of matters relating to the Release
or alleged Release of Hazardous Materials at the Real Property Assets and
compliance with Environmental Laws and requirements of Airport Authorities with
respect to environmental matters (for matters that would impact the value of
the Real Property Assets) reasonably requested by the Agents at any time and
from time to time.

 

SECTION 5.08       Compliance with Laws.

 

(a)           Each of
the Borrower and the Parent will, and will cause each of its respective
Subsidiaries to, comply with all applicable laws, rules, regulations and orders
of any Airport Authority (with respect to environmental matters) or
Governmental Authority applicable to it or its property (including
Environmental Laws), except where such noncompliance, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

(b)           To the
extent the following are required by Environmental Laws or any requirements of
an Airport Authority relating to environmental matters, each of the Parent and
the Borrower will conduct, and will cause each of their Subsidiaries to
conduct, any and all investigations, studies, sampling and testing and will
take, and will cause each of their Subsidiaries to take, any and all necessary
remedial action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials for which the Borrower or
the Guarantors or their respective Subsidiaries is, or could be, liable.  The foregoing shall not apply if, and only to
the extent that (i) the Borrower’s or the Guarantors’ or their respective
Subsidiaries’ liability for or any requirement of an Airport Authority with
respect to such presence, storage, use, disposal, transportation or Release of
any Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Persons, (ii) such remedial
action is taken by other Persons responsible for such remedial action through
an indemnification of the Borrower or the Guarantors or Subsidiary thereof or (iii) such
non-compliance would not in any case or in the aggregate reasonably be expected
to have a Material Adverse Effect.  In
the event that the Borrower or the Guarantors or any of their respective
Subsidiaries undertakes any such investigation, study, sampling, testing or
remedial action with respect to any Hazardous Materials, the Borrower or such
Guarantors will, and will cause any such Subsidiary to, conduct and complete
such action in compliance in all material respects with all applicable
Environmental Laws and (if the failure to do so could reasonably be

 

76

 

expected to result in a
Material Adverse Effect) applicable requirements of Airport Authorities
relating to environmental matters.

 

(c)           If an
Event of Default has occurred and is continuing or upon a reasonable belief
that the Borrower has breached any representation, warranty or covenant
hereunder with regard to environmental matters, at the request of the Agents
from time to time, the Borrower will provide to the Agents within sixty (60)
days after such request, or such longer time period as is reasonably necessary
to secure any required governmental or third party authorizations for soil or
groundwater investigations or other invasive samplings, at the expense of the
Borrower, an environmental site assessment report for any properties of the
Borrower, Guarantors or any of their Subsidiaries described in such request,
prepared by an environmental consulting firm reasonably acceptable to the
Agents, reasonable in scope based upon the circumstances of the request,
indicating, where relevant under the circumstances of the request, the presence
or absence of Hazardous Materials and the estimated cost of any compliance,
removal or remedial action in connection with any Hazardous Materials on such
properties; without limiting the generality of the foregoing, if the Agents
reasonably determine at any time that a material risk exists that any such
report will not be provided in the time referred to above, the Agents reasonably
may retain an environmental consulting firm to prepare such report at the
expense of the Borrower, and the Borrower and the Guarantors hereby grant, and
agree to cause any Subsidiary that owns property described in such a request to
grant, at the time of such request to the Agents, such firm and any agents or
representatives thereof a right, subject to the rights of tenants, to enter
into their respective properties to undertake such an assessment.

 

SECTION 5.09       Appraisal Reports and Field Audits.  Cooperate with the Appraiser, Real Estate
Appraiser or Field Auditor, as the case may be, such that the Agents shall
receive one or more Appraisal Reports or Field Audits, as the case may be,
establishing the value of the Appraised Collateral or Eligible Accounts
Receivable, as the case may be, (a) by no later than thirty (30) days
prior to each anniversary of the Closing Date, (b) on the date upon which
any additional property or assets that constitutes Appraised Collateral
(including, without limitation, applicable Cure Collateral) is pledged as
Collateral to the Collateral Agents to secure the Obligations, but only with
respect to such additional Collateral, and (c) promptly at the request of
either Agent (in consultation with the other Agent) upon the occurrence and
during the continuation of an Event of Default.

 

SECTION 5.10       FAA and DOT Matters; Citizenship.  In the case of the Borrower, (a) maintain
at all times its status as an “air carrier” within the meaning of Section 40102(a)(2) of
Title 49, and hold a certificate under Section 41102(a)(1) of Title
49; (b) at all times hereunder be a United States Citizen; (c) maintain
at all times its status at the FAA as an air carrier and hold an air carrier
operating certificate and other operating authorizations issued by the FAA
pursuant to 14 C.F.R. Parts 119 and 121 as currently in effect or as may be
amended or recodified from time to time; and (d) possess and maintain all
necessary certificates, exemptions, franchises, licenses, permits,
designations, rights, concessions, authorizations, frequencies and consents
which are material to the operation of the Slots, the Primary Routes and
Primary Foreign Slots flown by it and the conduct of its business and
operations as currently conducted except in any case described in this clause
(d), where the failure to do so, either individually or in the aggregate, could
not be reasonably likely to have a Material Adverse Effect.

 

77

 

SECTION 5.11       Gate Interests.  Maintain Primary Gate Interests sufficient to
ensure its ability to retain its right in and to the Primary Routes and to
preserve its right in and to the Primary Foreign Slots.

 

SECTION 5.12       Slot Utilization; Updated Schedule.

 

(a)           Utilize (i) the
Primary Slots (except Slots at JFK so long as such Slots are Primary Slots as a
result of Slot regulations existing on the Closing Date and Slots which are
reasonably determined by the Appraisers to be of de minimis value) in a manner
consistent in all material respects with applicable regulations, rules, law and
contracts in order to preserve its right to hold and operate the Primary Slots
and (ii) except where the failure to so utilize would not have a Material
Adverse Effect, the Slots (other than the Primary Slots, but including Slots at
JFK for so long as such Slots are excluded from the preceding clause) in a
manner consistent in all material respects with applicable regulations, rules,
law and contracts in order to preserve its right to hold and operate the Slots
(other than the Primary Slots, but including Slots at JFK for so long as such
Slots are excluded from the preceding clause), in each case taking into account
any waivers or other relief granted to the Borrower by the FAA, or other
applicable Governmental Authority or Airport Authority.

 

(b)           Cause to
be done all things reasonably necessary to preserve and keep in full force and
effect its rights in and use of the Primary Slots (except Slots at JFK so long
as such Slots are Primary Slots as a result of Slot regulations existing on the
Closing Date and Slots which are reasonably determined by the Appraisers to be
of de minimis value), and except where the failure to so preserve would not
have a Material Adverse Effect, the Slots (other than the Primary Slots), including,
without limitation, satisfying any applicable Use or Lose Rule.

 

(c)           Cause to
be delivered to the Agents an updated Schedule 1.01(h) to replace the
then-existing Schedule 1.01(h) within ten (10) Business Days
after (i) the allocation to, or the acquisition, by whatever means, of any
permanent Primary Slot to be added to Borrower’s or, if applicable a Guarantor’s,
base of Primary Slots; (ii) any permanent disposition or transfer by
Borrower or, if applicable, a Guarantor, of any Primary Slot permitted pursuant
to the terms of this Agreement and the SGR Security Agreement; or (iii) any
reasonable request by the Agents to update such Schedule 1.01(h).

 

SECTION 5.13       Primary Foreign Slot Utilization; Updated Schedule.

 

(a)           Utilize
the Primary Foreign Slots in a manner consistent in all material respects with
applicable regulations, rules, foreign law and contracts in order to preserve
its right to hold and operate the Primary Foreign Slots, taking into account
any waivers or other relief granted to the Borrower by any applicable Foreign
Aviation Authorities.

 

(b)           Cause to
be done all things reasonably necessary to preserve and keep in full force and
effect its right in and use of the Primary Foreign Slots, including, without
limitation, satisfying any applicable Use or Lose Rule.

 

(c)           Cause to
be delivered to the Agents an updated Schedule 1.01(b) to replace the
then-existing Schedule 1.01(b) within ten (10) Business Days
after (i) the allocation to, or acquisition by, Borrower or, if
applicable, a Guarantor, of an additional slot at any airport

 

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outside the United States
listed on Schedule 1.01(b); (ii) any permanent disposition or
transfer of any Primary Foreign Slot permitted pursuant to the terms of this
Agreement and the SGR Security Agreement; or (iii) any reasonable request
by the Agents to update such Schedule 1.01(b).

 

SECTION 5.14       Primary Route Utilization; Route Reporting;
Updated Schedule.

 

(a)           Utilize
the Primary Routes in a manner consistent in all material respects with Title
49, applicable foreign law, the applicable rules and regulations of any
applicable Foreign Aviation Authorities, and any applicable treaty in order to
preserve its rights to hold and operate the Primary Routes and maintain access
to Primary Supporting Route Facilities sufficient to ensure its ability to
retain its rights in and to the Primary Routes.

 

(b)           Cause to
be done all things reasonably necessary to preserve and keep in full force and
effect its authority to serve the Primary Routes.  Without in any way limiting the foregoing,
the Borrower and, if applicable, a Guarantor, shall promptly take (i) all
such steps as may be reasonably necessary to obtain renewal of its authority to
serve each such Primary Route from the DOT and any applicable Foreign Aviation
Authorities, within a reasonable time prior to the expiration of such authority
(as prescribed by law or regulation, if any), and notify the Agents of the
status of such renewal and (ii) all such other steps as may be necessary
to maintain, renew and obtain Primary Supporting Route Facilities as needed for
the continued and future operations of the Borrower and, if applicable, a
Guarantor, over the Primary Routes.  The
Borrower and, if applicable, a Guarantor, shall further take all actions
reasonably necessary or, in the reasonable judgment of either Agent (in
consultation with the other Agent), advisable in order to maintain its material
rights to use each Primary Route (including, without limitation, protecting
each Primary Route from dormancy or withdrawal by the DOT) and to have access
to the Primary Supporting Route Facilities. 
The Borrower and any applicable Guarantor shall pay any applicable
filing fees and other expenses related to the submission of applications,
renewal requests, and other filings as may be reasonably necessary to maintain
or obtain such entity’s rights in the Primary Routes and have access to the
Primary Supporting Route Facilities.

 

(c)           Promptly
upon receipt thereof, deliver to the Agents copies of (i) each certificate
or order issued by the DOT and the applicable Foreign Aviation Authorities with
respect to Primary Routes and Primary Supporting Route Facilities, (ii) all
filings made by the Borrower and, if applicable, a Guarantor, with the DOT, any
Governmental Authority, or any Foreign
Aviation Authorities related to preserving and maintaining the Primary Routes
and having access to the Primary Supporting Route Facilities and (iii) any
written notices received from any Person notifying the Borrower or any
applicable Guarantor of an event which could have a potential Material Adverse
Effect upon the Primary Routes and Primary Supporting Route Facilities, or of
the failure to preserve such Primary Routes or to have access to such Primary
Supporting Route Facilities as required pursuant to this Section 5.14.

 

(d)           Cause to
be delivered to the Agents an updated Schedule 1.01(c) to replace the
then existing Schedule 1.01(c), within ten (10) Business Days of (i) any
disposition or permanent transfer of any Primary Route which is permitted
pursuant to the terms of this

 

79

 

Agreement and the SGR Security
Agreement or (ii) any reasonable request by the Agents to update such Schedule 1.01(c).

 

SECTION 5.15       Additional Subsidiaries.  If any additional
Subsidiary of the Borrower or the Parent is formed or acquired after the
Closing Date, the Borrower will promptly, and in any event within twenty (20)
Business Days after such Subsidiary is formed or acquired, (a) notify the
Agents thereof, (b) to the extent such Subsidiary is an entity
incorporated or organized in the United States and is not an Immaterial
Subsidiary, cause such Subsidiary to become a party to the Guarantee contained
in Section 9 hereof, each applicable Collateral Document and all other
agreements, instruments or documents that create or purport to create and
perfect a Lien in favor of the Collateral Agents for the benefit of the Secured
Parties, by executing an Instrument of Assumption and Joinder substantially in
the form attached hereto as Exhibit H and, subject to preexisting Liens on
such Subsidiary’s assets and the terms thereof (to the extent the same are
permitted under this Agreement), promptly take such actions to create and
perfect Liens on such Subsidiary’s assets to secure the Obligations as the
Agents shall reasonably request and (c) cause any shares of Equity
Interests or promissory notes evidencing Indebtedness of such Subsidiary that
are owned by or on behalf of the Borrower or any Guarantor to be pledged to the
extent required by the Collateral Documents, provided that, if such
Subsidiary is directly owned by the Parent, the Borrower or any Guarantor
(other than the Parent) and is organized under the laws of a jurisdiction other
than the United States of America or any state thereof or the District of
Columbia, shares of common stock of such Subsidiary to be pledged shall be
limited to 65% of the outstanding shares of voting common stock of such
Subsidiary.

 

SECTION 5.16       Concentration Account.  Maintain JPMCB as the principal concentration
bank of the Borrower and the Guarantors, other than for funds maintained in the
Escrow Accounts, Payroll Accounts and Petty Cash Accounts, pursuant to a cash
management system reasonably satisfactory to the Agents.

 

SECTION 5.17       Operational Matters.  Provide the Collateral Agents with prompt
written notice upon, but in no event later than five (5) Business Days
after, an aircraft being Parked, which notice shall identify the location at
which such Aircraft will be Parked.

 

SECTION 5.18       Additional Collateral; Additional Grantors.

 

(a)           If any
assets (including any owned real property interests valued individually in
excess of $5,000,000 or $20,000,000 in the aggregate from the Closing Date, but
excluding any leasehold interests) are acquired by the Borrower or any
Guarantor after the Closing Date (other than assets constituting Collateral
under any Collateral Documents that become subject to the Lien of such
Collateral Document upon acquisition thereof), the Borrower will promptly
notify the Agents thereof and at the Agents’ request within thirty (30) days of
such notice, will cause such assets to be subjected to a Lien securing the
Obligations to the extent not excluded from the definition of “Collateral”
under the Loan Documents, subject to preexisting Liens on such assets and other
Liens permitted hereunder (to the extent the same are permitted under this
Agreement), and will take, and cause the Guarantors to take, such actions as
shall be necessary to grant and perfect such Liens, including actions described
in paragraph (a) of this Section, all at the expense of the Borrower and
Guarantors; provided that with respect to an

 

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acquisition of additional Aircraft,
Engines or Spare Engines, if the Agents receive, on or before the date of such
acquisition, a copy of an executed commitment letter, letter of intent,
memorandum of understanding or other similar document that evidences a
commitment to consummate a financing of such Aircraft, Engines or Spare Engines
within fourteen (14) days of the date of such acquisition, the Collateral Agent
will not file a Mortgage Supplement pertaining to such acquired Aircraft,
Engine or Spare Engine, as the case may be, with the FAA until the earlier to
occur of (x) fifteen (15) days after such acquisition (unless such financing
has been made available within such period) and (y) the date upon which such
commitment letter, letter of intent, memorandum of understanding or other
similar document shall have terminated, expired or shall no longer be in force
and effect.  Upon the occurrence of an
event described in (x) or (y) above, the Collateral Agent shall be authorized
to file such Mortgage Supplement with the FAA, provided that upon the
occurrence of the event described in clause (x), the Lenders hereby authorize
the Collateral Agent to withhold or delay such filing if the Collateral Agent
shall be satisfied in their respective sole discretion that the applicable
acquisition shall be consummated within a reasonable timeframe thereafter.

 

(b)           Upon any
Guarantor acquiring any right, title or interest in any Slots, Foreign Slots,
Routes, Supporting Route Facilities or Gate Interests acquired in connection
with a Permitted Acquisition, such Guarantor will promptly, and in any event
within twenty (20) Business Days of such acquisition, become a party to the SGR
Security Agreement.

 

SECTION 5.19       Non-Primary Route Flight Operations.  If, from the Closing Date through the date
upon which the Agents shall have received the Officer’s Certificate required to
be delivered pursuant to Section 5.01(c) with respect to the fiscal
year ended December 31, 2006, which certificate shall demonstrate
compliance with the covenant set forth in Section 6.04 hereof for the
fiscal quarter ending December 2006, the number of flights operated by the
Borrower using the Non-Primary Routes (i) during any fiscal quarter has
decreased by more than 15% from the number of flights operated by the Borrower
using the Non-Primary Routes in the immediately preceding fiscal quarter or (ii) at
any time is less than 85% of the flights operated by the Borrower using the
Non-Primary Routes as of the Closing Date, then the Borrower shall promptly
notify the Collateral Agents and shall provide the Collateral Agents with such
information as the Collateral Agents may reasonably request regarding any such
decrease in flights using the Non-Primary Routes.

 

SECTION 5.20       Further Assurances.  Execute any and all further documents and instruments,
and take all further actions, that may be required or advisable under
applicable law, the Cape Town Treaty or by the FAA, or that the Collateral
Agents may reasonably request, in order to effectuate the Transactions
contemplated by the Loan Documents and in order to create, grant, establish,
preserve, protect and perfect the validity, perfection and priority of the
Liens and security interests created or intended to be created by the
Collateral Documents, including, without limitation, amending, amending and
restating, supplementing, assigning or otherwise modifying, renewing or
replacing the Aircraft Mortgage or other agreements, instruments or documents
relating thereto, in each case as may be reasonably requested by the Collateral
Agents, in order to (i) create interests (including, but not limited to,
international interests, assignments, prospective international interests,
prospective assignments, and subordinations, each as defined in the Cape Town
Treaty) that may be registered and/or assigned under the Cape Town Treaty
(including the assignment of associated rights as defined in the Cape Town
Treaty),

 

81

 

(ii) create, grant,
establish, preserve, protect and perfect the Liens in favor of the Collateral
Agents for the benefit of the Secured Parties to the fullest extent possible
under the Cape Town Treaty, including, where necessary, the subordination of
other rights or interests and (iii) realize the benefit of the remedial
provisions that are contemplated by the Cape Town Treaty to the extent the
Borrower shall have agreed to any such beneficial remedial provisions in favor
of another secured creditor in connection with a new financing or a
refinancing, replacement or extension of any existing financing arrangement.

 

SECTION 5.21       Post Closing Items.  Perform, execute and deliver, as the case may
be, each of the items set forth on Schedule 5.21 as required by certain of the
Loan Documents within the time periods set forth on such schedule (or such
longer periods to which the Collateral Agent may agree). 

 

SECTION 6.           NEGATIVE COVENANTS

 

From the date hereof and
for so long as any Tranche A Commitment or Tranche B Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of Cash Collateralization held in the Letter of Credit
Account, or in excess of the face amount of back-to-back letters of credit
delivered, in each case pursuant to Section 2.02(j)) or any amount shall
remain outstanding or unpaid under this Agreement (other than contingent
indemnification obligations not due and payable), unless the Required Lenders
shall otherwise consent in writing, the Borrower and each of the Guarantors
will not:

 

SECTION 6.01       Liens.  Incur, create, assume or suffer to exist any
Lien on any asset of the Borrower or the Guarantors, now owned or hereafter
acquired by the Borrower or any of such Guarantors, other than (a) Liens
which were existing on the Closing Date as reflected on Schedule 3.07; (b) Permitted
Liens; (c) Liens in favor of the Collateral Agents and the Lenders
pursuant to the Loan Documents; (d) Liens (except with respect to Real
Property Assets) securing Indebtedness or Capitalized Leases permitted by
Sections 6.03(d) and (l), provided that such Lien is limited to the
particular assets acquired; (e) other Liens in favor of the Lenders and
their banking Affiliates (except with respect to Real Property Assets) securing
Indebtedness permitted by Section 6.03(g); (f) licenses, leases and
subleases of (A) Mortgaged Collateral and Collateral as defined in the SGR
Security Agreement granted to others but only to the extent permitted by the
Aircraft Mortgage with respect to Mortgaged Collateral and to the extent
permitted by the SGR Security Agreement with respect to Collateral as defined
therein and (B) all other Collateral to the extent such license,
sublicense, lease or sublease does not interfere in any material respect with
the business of the Borrower and the Guarantors, taken as a whole, in each
case, such license, sublicense, lease or sublease to be subject to the Liens
granted to the Collateral Agent pursuant to the Collateral Documents; (g) Liens
arising from precautionary UCC financing statements regarding operating leases
permitted by this Agreement; (h) any interest or title of a licensor,
sublicensor, lessor or sublessor under any lease or license granted in the
ordinary course of business; (i) Liens on real and personal property
acquired in connection with acquisitions permitted by this Agreement to the
extent such Liens exist on such acquired property at the time of acquisition
and not incurred in contemplation of such acquisition or Liens existing on any
property or asset of any Person that becomes a Guarantor after the date hereof prior
to the time such Person becomes a Guarantor, provided, (1) such
Liens are not created in contemplation of or in connection with such
acquisition or such Person becoming a Guarantor, as the case may be, (2) such
Liens shall not apply to any other property or assets of the Borrower or any
Guarantor and (3) such Liens shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Guarantor, as the case may be; (j) Liens in favor of credit card processors
consisting of rights of setoff, revocation, refund or charge back with respect
to money or instruments of the Borrower

 

82

 

or any Guarantor; (k)
Liens in favor of English travel agencies consisting of rights of setoff,
revocation, refund or charge back with respect to money or instruments of the
Borrower or any Guarantor; (l) Liens on (1) the Borrower’s right to receive a
refund of unearned insurance premiums and (2) such insurance policies and the
proceeds thereof, to secure the Borrower’s payment of such insurance premiums financed
by Indebtedness permitted pursuant to Section 6.03(d); (m) Liens on cash in an
aggregate amount not in excess of $18,000,000 representing a deposit securing
the obligations of the Borrower and UAFC under the Jet Fuel Supply Agreement; (n)
junior Liens (subject and fully subordinate to the Liens granted to the
Collateral Agents on behalf of the Secured Parties hereunder and under the
Collateral Documents) on the Collateral in favor of Chase Bank securing the Co-Branded
Obligations, provided, that (1) such Liens shall be subject in all
respects to terms set forth in the Intercreditor Agreement, including, without
limitation, that the holder of such Liens shall not be permitted to exercise
any remedies with respect thereto unless all of the Obligations have been paid
in full and the Lenders have no further Tranche A Commitment or Tranche B
Commitment hereunder and (2) the instruments and agreements pursuant to which
such Liens are created are reasonably satisfactory in form and substance to the
Agents; (o) junior Liens on the Collateral securing the Indebtedness permitted
pursuant to Section 6.03(n), provided, that such Liens shall be (1) pari
passu with or junior to the Liens granted in favor of Chase Bank securing
the Co-Branded Obligations and (2) subject in all respects to an intercreditor agreement
substantially in the form of the Intercreditor Agreement; (p) Liens consisting
of setoff or netting rights in connection with Hedging Agreements; (q) Liens
securing reimbursement obligations in respect of standby or documentary letters
of credit or bankers acceptances, provided
that in the case of (1) documentary
letters of credit or bankers acceptances, such Liens attach only to the
documents, goods covered thereby and proceeds thereof and (2) in the case of standby
letters of credit, such Liens may only be on cash in an amount not to exceed $50,000,000;
(r) Liens attaching solely to cash earnest money deposits in connection with Investments
permitted pursuant to Section 6.10; (s) Liens on the underlying commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business; (t) Liens which arise under Article 2 of the UCC; (u) replacement,
extension and renewal of any Lien permitted hereby, provided that any
such replacement, extension, or renewal of any Lien shall not extend to any
property or assets of the Borrower or any Guarantor which was not subject to
the Lien being replaced, extended or renewed; (v) Liens in favor of any of the
Borrower or a Guarantor; (w) a Lien in favor of the United States of America
arising from the right of the Internal Revenue Service to effect a setoff or
recoupment against the sum of $25,000,000 withheld pursuant to that certain
Stipulation for Settlement of Controversy between the Debtors and the United
States of America approved by the Bankruptcy Court in March 2003; (x) Liens on
the EETC Deposit; (y) Liens arising by operation of law in connection with
judgments, attachment or awards which do not constitute an Event of Default
hereunder; (z) Liens on assets acquired in connection with a Permitted
Acquisition (so long as such Lien is not in contemplation of such acquisition);
(aa) other Liens incurred by the Borrower and the Guarantors (except with
respect to Real Property Assets) so long as the Indebtedness and other
obligations secured thereby does not exceed Indebtedness permitted by Section
6.03(d); (bb) Liens on cash collateral and fuel inventory (and the
proceeds thereof) or Letters of Credit in an aggregate amount at any one time
for all such cash, fuel and Letters of Credit securing Indebtedness permitted
pursuant to Section 6.03(e), and Indebtedness owed to Lenders (or their banking
Affiliates) permitted by Section 6.03(f) in excess of the amount thereof that
is secured as permitted by Section 6.01(dd), not in excess of the greater of
(1) $500,000,000 and (2) an amount equal to 15% of the Unrestricted Cash; (cc) other
Liens so long as the obligations secured thereby do not exceed $5,000,000 at
any time; (dd) Liens on the 

 

83

 

Collateral that are pari
passu with the Liens in favor of the Collateral Agents securing
Indebtedness in an aggregate amount not in excess of $150,000,000 owed to
Lenders (or their banking Affiliates) permitted by Section 6.03(f); and (ee)
liens in connection with the EETC Transaction on the aircraft, engines and
related assets subject to the EETC Transaction.

 

SECTION 6.02       Merger,
etc.  Merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets, or all or
substantially all of the stock of any of its Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or dissolve, except that
(a) any Subsidiary (so long as such Subsidiary is not the Borrower) may
merge into the Borrower or any other Guarantor in a transaction in which the
Borrower or any Guarantor is the surviving corporation if immediately after
giving effect thereto no Event of Default or event with which upon notice or
the passage of time or both would constitute an Event of Default shall have
occurred and be continuing and (b) any Subsidiary (so long as such Subsidiary
is not the Borrower) may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders, provided
that (i) an Event of Default does not result from such merger, consolidation,
dissolution, liquidation or disposition and (ii) any such merger involving a
Person whose Equity Interests are not 100% owned by the Parent directly or
indirectly immediately prior to such merger shall not be permitted unless also
permitted by Section 6.11 and (c) asset sales permitted hereunder.

 

SECTION 6.03       Indebtedness.  Contract, create, incur, assume or suffer to
exist any Indebtedness, except for (a) Indebtedness under the Loan Documents;
(b) Indebtedness incurred prior to the Closing Date or with respect to which an
option exists (including existing Capitalized Leases) as set forth on Schedule 3.18;
(c) intercompany Indebtedness between the Borrower and the Guarantors,
which Indebtedness shall be pledged to the Collateral Agents pursuant to the
Pledge Agreement; (d) Indebtedness not to exceed $150,000,000 at any one time
outstanding for Indebtedness (i) incurred subsequent to the Closing Date to
acquire any asset and secured by purchase money Liens on such asset (except
with respect to Real Property Assets) (including Capitalized Leases), (ii) of
the Borrower or any Guarantor owed to one or more Persons in connection with
the financing of certain insurance premiums and (iii) incurred subsequent to
the Closing Date that will be secured Indebtedness; (e) Indebtedness owed to
any Lender (or any of its banking Affiliates) or any other Person in respect of
fuel hedges and other derivatives contracts, in each case to the extent that
such agreement or contract is entered into in the ordinary course of business
consistent with past practices; (f) Indebtedness owed to any Lender or any of
its banking Affiliates or any other Person in respect of (i) foreign exchange
contracts, currency swap agreements, currency future or option contracts and
other similar agreements designed to hedge against fluctuations in foreign exchange
rates and currency values and (ii) interest rate swap, cap or collar agreements,
interest rate future or option contracts and other similar agreements designed
to hedge against fluctuations in interest rates, in each case to the extent
that such agreement or contract is entered into in the ordinary course of
business for bona fide hedging purposes; (g) Indebtedness owed to any Lender or
any of its banking Affiliates or any other Person in respect of any overdrafts
and related liabilities arising from treasury, depository and cash management
services or in connection with any automated clearing house transfers of funds;
(h) guarantees permitted under Section 6.07; (i) Indebtedness of any of the
Borrower and the Guarantors consisting of take-or-pay obligations contained in 

 

84

 

supply agreements entered
into in the ordinary course of business and consistent with past practices of
the Borrower and the Guarantors; (j) Indebtedness of any of the Borrower
and the Guarantors arising in the ordinary course of business of the relevant
party and owing to Citibank, N.A., its banking Affiliates and other financial
institutions providing netting services permitted to be incurred and outstanding
pursuant to this Agreement so long as such Indebtedness does not remain
outstanding for more than three (3) days from the date of its incurrence; (k) Indebtedness
of any of the Borrower and the Guarantors to credit card processors in
connection with credit card processing services incurred in the ordinary course
of business of the Borrower and the Guarantors; (l) Indebtedness incurred to
finance (i) the acquisition of aircraft, provided that such Indebtedness
is incurred prior to or within twelve (12) months after such acquisition and
(ii) the acquisition of other assets, provided that such Indebtedness is
incurred prior to or within 120 days after such acquisition; (m) Indebtedness of
the Borrower incurred in connection with the Co-Branded Agreement in an aggregate
amount not to exceed $850,000,000; (n) Indebtedness of the Borrower and the
Guarantor in an aggregate amount not to exceed $1,500,000,000, provided
that such Indebtedness shall have a final maturity nine months after the
Maturity Date and shall be on terms reasonably satisfactory to the Agents; (o) Indebtedness
consisting of promissory notes issued to current or former directors,
consultants, managers, officers and employees or their spouses or estates to
purchase or redeem capital stock of the Parent issued to such director,
consultant, manager, officer or employee in an aggregate amount not to exceed $1,000,000
annually; (p) Indebtedness to the extent permitted by an Investment permitted
by Section 6.10(k); (q) Indebtedness of a person or acquired assets that is the
subject of a Permitted Acquisition which Indebtedness was in existence at the
time of such Permitted Acquisition and not incurred in contemplation thereof;
(r) Guarantees in respect of Indebtedness otherwise permitted under this Section
6.03; (s) intercompany Indebtedness owed by the Borrower and any Guarantor to
another Subsidiary, which is not a Guarantor, in an amount not to exceed $25,000,000
in the aggregate at any one time outstanding; (t) any Indebtedness extending,
renewing, replacing or refinancing all or any portion of any Indebtedness
permitted hereunder provided that (1) 50% of any cash proceeds (net of
transaction costs) of any such extension, renewal, replacement or refinancing
in excess of such amount not otherwise permitted hereunder, shall be applied as
a payment of the Loans pursuant to Section 2.11(e), (2) any such extension,
renewal, replacement or refinancing which is subordinated to the Obligations
shall remain subordinated on substantially the same basis, and (3) the weighted
average life to maturity of (A) such Indebtedness which prior to such
extension, renewal, replacement or refinancing, had a weighted average life to
maturity prior to the Maturity Date shall not be decreased and (B) such
Indebtedness which prior to such extension, renewal, replacement or refinancing
had a weighted average life to maturity after the Maturity Date shall not be
shortened to a weighted average life to maturity prior to the Maturity Date; (u) other unsecured Indebtedness incurred subsequent to the
Closing Date in an aggregate amount not to exceed $25,000,000 at any one time
outstanding; (v) Indebtedness in respect of Redeemable Stock; (w) Indebtedness
in respect of deferred rent; (x) Indebtedness in respect of deferred taxes; (y)
Indebtedness issued pursuant to the terms of the Senior Convertible Note
Indenture and the Senior Note Indenture; (z) Indebtedness incurred in
connection with an EETC Transaction, provided that an amount equal to
the first $250,000,000 of the proceeds of such EETC Transaction shall be
applied as a prepayment of the Tranche B Loans pursuant to Section 2.11(d); and
(aa) Indebtedness permitted to be secured pursuant to Section 6.01(q).

 

85

 

SECTION 6.04       Fixed
Charge Coverage.  Permit the
Fixed Charge Coverage Ratio as of the last day of each fiscal quarter ending in
the month below to be less than the corresponding ratio opposite such month:

 

	
  Fiscal quarter ending

  	
   

  	
  Ratio

  
	
  December 2006

  	
   

  	
  0.90:1.00

  
	
  March 2007

  	
   

  	
  0.95:1.00

  
	
  June 2007

  	
   

  	
  0.95:1.00

  
	
  September 2007 

  	
   

  	
  1.00:1.00 

  
	
  December 2007

  	
   

  	
  1.10:1.00

  
	
  March 2008

  	
   

  	
  1.10:1.00

  
	
  June 2008

  	
   

  	
  1.10:1.00

  
	
  September 2008 

  	
   

  	
  1.10:1.00 

  
	
  December 2008

  	
   

  	
  1.15:1.00

  
	
  March 2009

  	
   

  	
  1.15:1.00

  
	
  June 2009

  	
   

  	
  1.15:1.00

  
	
  September 2009

  	
   

  	
  1.15:1.00

  
	
  December 2009 and thereafter for each fiscal quarter ending through the
  Maturity Date

  	
   

  	
  1.20:1.00

  

 

SECTION 6.05       Unrestricted
Cash Reserve.  Permit the aggregate
amount of Unrestricted Cash to be less than $1,200,000,000 at any time, provided
that such minimum cash amount shall be reduced to $1,000,000,000 at any time after
December 31, 2006 upon the delivery to the Agents of an Officer’s Certificate pursuant
to Section 5.01(c) certifying that the Borrower is in compliance with the
covenant set forth in Section 6.04 hereof.

 

SECTION 6.06       Coverage
Ratio.  (a) Permit the Appraised
Value of the Eligible Collateral at any time to be less than 150% of the sum of
the aggregate outstanding principal amount of the Loans plus LC Exposure
plus the Swap Termination Value of all contracts or agreements relating
to Indebtedness permitted pursuant to Section 6.03(f) to the extent secured as
permitted by Section 6.01(dd), provided, that if, upon delivery of an
Appraisal Report or a Field Audit (as applicable) pursuant to Section 5.09
hereof, it is determined that the Borrower shall not be in compliance with this
Section 6.06, the Borrower shall, within forty-five (45) days of the date of
such Appraisal Report or Field Audit (as applicable), (i) designate Cure
Collateral as additional Eligible Collateral in accordance with clause (b) of
the definition of Eligible Collateral in Section 1.01 or (ii) prepay the Loans,
in each case in an amount sufficient to enable the Borrower to comply with this
Section 6.06.

 

(b)           At the Borrower’s
request, the Lien on an asset constituting Eligible Collateral (other than the Primary Routes), will be promptly released provided, that
the following conditions are satisfied or waived: (i) no Event of Default or
event which upon notice or lapse of time or both would constitute an Event of
Default shall have occurred and be continuing, (ii) either (A) after giving
effect to such release, the remaining Eligible Collateral shall continue to
satisfy this Section 6.06, (B) the Borrower shall prepay the Loans in an amount
required to 

 

86

 

comply with this Section
6.06, or (C) the Borrower shall deliver to the Collateral Agents Cure
Collateral in an amount required to comply with this Section 6.06, and (iii)
the Borrower shall deliver an Officer’s Certificate demonstrating compliance
with this Section 6.06.  In connection
herewith, the Collateral Agents agree to promptly provide any documents or
releases reasonably requested by the Borrower to evidence such release.

 

SECTION 6.07       Guarantees
and Other Liabilities. 
Purchase or repurchase (or agree, contingently or otherwise, so to do)
the Indebtedness of, or assume, guarantee (directly or indirectly or by an
instrument having the effect of assuring another’s payment or performance of
any obligation or capability of so doing, or otherwise), endorse or otherwise
become liable, directly or indirectly, in connection with the obligations,
stock or dividends of any Person, except (a) for any guaranty of Indebtedness
or other obligations of the Borrower or any Guarantor if the Borrower or such
Guarantor could have incurred such Indebtedness or obligations under this
Agreement, (b) by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, (c) to the extent in existence
on the Closing Date, (d) for any guaranty of Indebtedness of joint ventures of
the Borrower and the Guarantors to the extent permitted by Section 6.10(i), (e)
any other guaranty by the Borrower and the Guarantors in an aggregate amount
not to exceed $25,000,000 at any time, (f) for any guaranty of Indebtedness or
other obligations by the Borrower or any Guarantor of a Subsidiary which is not
a Guarantor, to the extent permitted by Section 6.10(w); and (g) guarantees or
indemnities in the nature of a guarantee provided in connection with leases,
fuel consortiums and, where necessary to comply with International Air
Transport Association (IATA) standards, contracts with a foreign entity where
performance takes place outside the United States, that are unsecured and in
the ordinary course of business.

 

SECTION 6.08       Dividends;
Capital Stock.  Declare or
pay, directly or indirectly, or otherwise make any Restricted Payment or set
apart any sum for the aforesaid purposes, provided, that (a) any
Guarantor other than the Parent may pay dividends or other distributions or
make transfers to the Borrower or another Guarantor; (b) the Borrower and any
Guarantor (other than the Parent) may pay dividends or make other distributions
or payments to the Parent for (i) corporate expenses, including, without
limitation, taxes and salaries and (ii) to permit the Parent to repurchase or
redeem stock held by officers, directors, employees, former officers, directors
or employees of the Parent, the Borrower or any Guarantor (A) upon their death,
disability, retirement, severance or termination of employment or service or
(B) pursuant to any equity plan, stock plan or management plan, collectively,
in an amount not to exceed $1,000,000 in the aggregate at any one time
outstanding; (c) dividends by any Subsidiary to any other holder of its equity
on a pro rata basis; (d) any Guarantor or Borrower may pay dividends in the
form of capital stock; (e) repurchases of Equity Interests deemed to occur upon
the exercise of stock options if the Equity Interests represents a portion of
the exercise price thereof; and (f) the Borrower or any Guarantor may pay dividends
with the proceeds from the issuance of additional Equity Interests or
subordinated Indebtedness permitted hereunder, provided that (1) the
Agents shall have received an Officer’s Certificate required to be delivered pursuant
to Section 5.01(c), which certificate shall demonstrate compliance with the
covenant set forth in Section 6.04 hereof for the fiscal quarter ending December
2006, (2) an amount equal to such dividend paid from the proceeds from the
issuance of additional Equity Interests or subordinated Indebtedness shall be
applied as a payment of the Loans pursuant to Section 2.11(f) and (3) no Event
of Default shall have occurred and be continuing at the time of payment of such
dividend.

 

87

 

SECTION 6.09       Transactions
with Affiliates.  Sell or
transfer any property or assets to, or otherwise engage in any other material
transactions with, any of its Affiliates (other than the Borrower, the Parent
and the Subsidiaries) or its shareholders, other than (a) on overall terms and conditions
not less favorable to the Borrower or such Guarantor than could be obtained on
an arm’s-length basis from unrelated third parties; (b) transactions contemplated
by the Plan of Reorganization; (c) fees and compensation paid to, and indemnity
provided on behalf of, officers, directors or employees of the Borrower or any
Guarantor as reasonably determined by the Board of Directors or senior
management, as the case may be, of the Borrower or any Guarantor; (d) any
dividends, other distributions or payments permitted by Section 6.08; (e) the
existence of, and the performance by a Guarantor or the Borrower of its
obligations under the terms of, any limited liability company, limited
partnership or other organization document or securityholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party on the Closing Date and set forth on Schedule
6.09, and similar agreements that it may enter into thereafter; (f) performance
of the Borrower’s and each Guarantor’s obligations under the Tax Sharing
Agreement; and (g) transactions with Affiliates set forth on Schedule 6.09.

 

SECTION 6.10       Investments,
Loans and Advances. 
Purchase, hold or acquire any Investments, except for: (a) ownership by
the Parent of the capital stock of the Borrower or any Guarantor, subject in
each case to Section 6.02; (b) ownership by the Borrower and the Guarantors of
the capital stock of each of the Subsidiaries subject in each case to Section
6.02; (c) Permitted Investments; (d) advances and loans among the Borrower and
the Guarantors in the ordinary course of business; (e) Investments in the
Escrow Accounts and other trust accounts; (f) Investments described on
Schedule 6.10 hereto; (g) Investments in connection with (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
entered into in the ordinary course of business for bona fide hedging purposes;
(h) Investments received (i) in settlement of amounts due to any of the
Borrower and the Guarantors effected in the ordinary course of business
(including as a result of dispositions permitted by this Agreement) or (ii) in
connection with the bankruptcy or the reorganization of any customers or
suppliers; (i) Investments in an amount not to exceed $150,000,000 in the aggregate
at any one time outstanding in connection with (1) Investments in travel or
airline related businesses made in connection with marketing and promotion
agreements, alliance agreements, distribution agreement, agreements with
respect to fuel consortiums, agreements relating to flight training, agreement
relating to insurance arrangements, agreement relating to parts management
systems and other similar agreements, (2) additional Investments in joint
ventures listed on Schedule 6.10 or Investments in new joint ventures made
after the Closing Date together with any guaranty of Indebtedness of joint
ventures pursuant to Section 6.07(d), and (3) Investments by the Borrower and
the Guarantors not otherwise permitted under this Agreement; (j) advances
to officers, directors and employees of the Borrower and the Guarantors in an
aggregate not to exceed (i) $10,000 at any time outstanding to any individual
officer, director or employee or (ii) $500,000 in the aggregate at any time
outstanding for all such advances; (k) Investments held or invested in by any
of the Borrower and the Guarantors in the form of foreign cash equivalents in
the ordinary course of business; (l) advances to officers, directors and
employees of the Borrower and the Guarantors in connection with relocation
expenses or signing bonuses for newly hired 

 

88

 

officers, directors or
employees of the Borrower and the Guarantors; (m) the ownership of the A, B and
C tranches of indebtedness under the 1997 EETC Facility by the Borrower; (n)
Investments in the form of lease, utility and other similar deposits or any
other deposits permitted hereunder in the ordinary course of business; (o)
pledges and deposits by the Borrower and the Guarantors permitted under Sections
6.01 or 6.03; (p) Investments and guarantees by the Borrower and the Guarantors
permitted under Sections 6.01 or 6.03; (q) loans or Investments by the Borrower
or any Guarantor that could otherwise be made as a distribution permitted under
Section 6.08; (r) Investments held by the Borrower or any Guarantor to the
extent such Investments reflect an increase in the value of Investments; (s)
Investments by the Borrower and the Guarantors creating new Subsidiaries so
long as they comply with Section 5.15 hereof; (t) Investments in (1) Subsidiaries
which are not Guarantors in an aggregate amount not to exceed $10,000,000 in
the aggregate at any one time outstanding and (2) in Four Star Insurance Co.
Ltd., to the extent reasonably necessary to support its working capital
insurance obligations in respect of the Borrower and the Guarantors; (u) any
Permitted Acquisition by the Borrower or any Guarantor in an aggregate amount
not to exceed $250,000,000; (v) any Investments acquired in connection with Permitted
Acquisitions; (w) capitalization or forgiveness of any Indebtedness owed to the
Borrower or any Guarantor by any other Guarantor; and (x) cancellation, forgiveness,
set-off, or acceptance of prepayments by the Borrower or any Guarantor with
respect to debt, other obligations and/or equity securities in the ordinary
course of business and to the extent not otherwise prohibited by the terms of
this Agreement.  The amount of any
investment or loan shall be the initial amount of such investment less all
returns of principal, capital, dividends and other cash returns thereof and
less all liabilities expressly assumed by another person in connection with the
sale of such investment.

 

SECTION 6.11       Disposition
of Assets.  Sell or
otherwise dispose of any assets (including, without limitation, the capital
stock of any Subsidiary, but excluding de minimis inventory assets sold or
otherwise disposed of in the ordinary course of business), except that such
sale or other disposition shall be permitted (other than with respect to
Primary Routes) provided that upon consummation of any such sale, or other
disposition (i) no Event of Default shall have occurred and be continuing, (ii)
it is determined that the Borrower is in compliance with Section 6.06 hereto
and (iii) to the extent such disposition is a disposition of Collateral, such
sale or other disposition is permitted by the Collateral Documents.

 

SECTION 6.12       Nature of
Business.  Enter into any
business that is materially different from those conducted by the Borrower and
the Guarantors on the Closing Date, except for any business ancillary to the
businesses conducted by the Borrower and the Guarantors on the Closing Date.

 

SECTION 6.13       Changes
to Corporate Documents. 
Amend the articles or certificate of incorporation, certificate of
formation, by-laws or limited liability company agreement of the Borrower or
any Guarantor in any manner which could be reasonably expected to have a
Material Adverse Effect.

 

SECTION 6.14       Restricted
Prepayments.  Neither the
Parent nor the Borrower will, and they will not permit any other Guarantor to,
declare or make, or agree to pay or make, or agree to pay or make, directly or
indirectly, or set apart any sum for, any Restricted Prepayment, or incur any
obligation (contingent or otherwise) to do so, except (i) the Borrower 

 

89

 

and each Guarantor may
make payments with respect to Indebtedness owed to the Borrower or any other
Guarantor, as the case may be and (ii) the Borrower or any Guarantor may enter
into an agreement to make a Restricted Prepayment provided that (A) the
effectiveness of such agreement is expressly conditioned upon consent of the
requisite Lenders hereunder or (B) such obligation to make the Restricted
Prepayment shall not be due and payable until the payment in full of the
Obligations.

 

SECTION 6.15       Restrictive Agreements.  Directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Guarantor to
create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of the Borrower or any Guarantor to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Guarantor or to Guarantee
Indebtedness of the Borrower or any other Guarantor; provided that (i)
the foregoing shall not apply to restrictions and conditions imposed by law or
by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.15, (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness, (v)
clause (a) of the foregoing shall not apply to customary provisions in leases,
subleases or licenses, sublicenses or service contracts restricting the
assignment thereof, (vi) the foregoing shall not apply to any agreement in
effect at the time any Person becomes a Subsidiary of the Borrower or a
Guarantor, provided that such agreement was not entered in contemplation of
such Person becoming a Subsidiary, (vii) clause (a) of the foregoing shall not
apply to assets encumbered by Liens permitted hereunder as long as such
restriction applies only to the asset encumbered by such Lien, and (viii) the
foregoing shall not apply to the Indentures; and provided, further,
that none of the restrictions referred to in clauses (i) through (viii) shall
prohibit or restrict the Liens contemplated hereby or Liens securing any Indebtedness
that refinances or replaces the Obligations hereunder.

 

SECTION 6.16       Fiscal Year. 
Change the last day of its fiscal year from December 31.

 

SECTION 7.           EVENTS OF DEFAULT

 

SECTION 7.01       Events of
Default.  In the case of
the happening of any of the following events and the continuance thereof beyond
the applicable grace period if any (each, an “Event of Default”):

 

(a)           any representation or
warranty made by the Borrower or any Guarantor in this Agreement, in any other Loan
Document or in any written document required to be delivered in connection
herewith or therewith, shall prove to have been false or materially misleading
when made or delivered; or

 

90

 

(b)           default shall be made
in the payment of any (i) Fees or interest on the Loans and such default shall
continue unremedied for more than five (5) Business Days, (ii) other amounts
payable hereunder when due (other than amounts set forth in clauses (i) and
(iii) hereof), and such default shall continue unremedied for more than ten (10)
Business Days, or (iii) principal of the Loans or reimbursement
obligations or cash collateralization in respect of Letters of Credit, when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or by acceleration thereof or otherwise; or

 

(c)           default shall be made
by the Borrower or any Guarantor in the due observance or performance of any
covenant, condition or agreement contained in Section 6 hereof; or

 

(d)           default shall be made
by the Borrower or any Guarantor in the due observance or performance of any
other covenant, condition or agreement to be observed or performed pursuant to
the terms of this Agreement or any of the other Loan Documents and such default
shall continue unremedied for more than thirty (30) days from the earlier of
(i) a Responsible Officer having knowledge of such default and (ii) written
notice by the Agents of such default; or

 

(e)           the Borrower or any Guarantor or any of their respective Subsidiaries
shall fail to make any payment of principal, interest or premium in
respect of any Material Indebtedness, when and as the same shall become due and
payable (after giving effect to any applicable grace periods or waivers or
amendments); or

 

(f)            any event or condition occurs that results in
any Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; or

 

(g)           an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any Guarantor or
its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Guarantor
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered; or

 

(h)           the Borrower or any Guarantor shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Guarantor or for a substantial part of its assets,
(iv) file an answer admitting the 

 

91

 

material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing; or

 

(i)            the Borrower or any
Guarantor admits in writing its inability to pay its debts; or

 

(j)            a Change of Control
shall occur; or

 

(k)           any material provision
of any Loan Document shall, for any reason, cease to be valid and binding on
the Borrower or any of the Guarantors, or the Borrower or any of the Guarantors
shall so assert in any pleading filed in any court or any material portion of
any Lien on the Collateral (as reasonably determined by the Agents, the
Collateral Agents and the Borrower) intended to be created by the Loan
Documents shall cease to be or shall not be a valid and perfected Lien having
the priorities contemplated hereby or thereby; or

 

(l)            any final judgment in
excess of $40,000,000 (exclusive of any judgment or order the amounts of which
are fully covered by insurance less any applicable deductible) and as to which
the insurer has been notified of such judgment and has not denied coverage shall
be rendered against the Borrower or any of the Guarantors and the enforcement
thereof shall not have been stayed, vacated, discharged or bonded pending
appeal within sixty (60) consecutive days; or

 

(m)          a Change in Law shall
have occurred with respect to Primary Routes or Primary Foreign Slots, which
Change in Law would reasonably be expected to have a Material Adverse Effect
with respect to such Collateral or a Material Adverse Effect; or

 

(n)           any Termination Event that
could reasonably be expected to result in a Material Adverse Effect shall have
occurred; or

 

(o)           (i) the Borrower or any
ERISA Affiliate thereof shall have been notified by the sponsor or trustee of a
Multiemployer Plan that it has incurred Withdrawal Liability to such
Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds, in the opinion of the Agent, to contest such Withdrawal
Liability and is not in fact contesting such Withdrawal Liability in a timely
and appropriate manner, and (iii) the amount of such Withdrawal Liability
specified in such notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal Liabilities
(determined as of the date of such notification), exceeds an amount that could
reasonably be expected to result in a Material Adverse Effect; or

 

(p)           the Borrower or any
ERISA Affiliate thereof shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions of the
Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years that include
the date hereof by an amount that could reasonably be expected to result in a
Material Adverse Effect; or

 

92

 

(q)           the Borrower or any
ERISA Affiliate shall have committed a failure described in Section 302(f)(1)
of ERISA (other than the failure to make any contribution accrued and unpaid as
of the Closing Date or any contribution waived in accordance with the grant of
a minimum funding waiver under Section 303 of ERISA or Section 412(d) of the
Code) and the amount determined under Section 302(f)(3) of ERISA is equal to or
greater than $10,000,000; or

 

(r)            it shall be determined
that the Borrower or any Guarantor is liable for the payment of claims arising
out of any failure to comply (or to have complied) with applicable Environmental
Laws or regulations or requirements of Airport Authorities (with respect to
environmental matters) the payment of which will have a Material Adverse Effect,
and the enforcement thereof shall not have been stayed, vacated or discharged
within 30 days; or

 

(s)           (i)            during
the first month of any two-month FAA slot reporting period (or other applicable
Slot utilization reporting period), 50% or more of the Primary Slots (except Slots at JFK so long as such Slots are
Primary Slots as a result of Slot regulations existing on the Closing Date and
Slots which are reasonably determined by the Appraisers to be of de minimis
value) are not utilized 80% of the time or more over such period, taking into
account any waivers or other relief granted by the FAA, other applicable
Governmental Authorities or Airport Authorities, or (ii) during any
two-month FAA slot reporting period (or other applicable Slot utilization
reporting period), the Borrower or, if applicable a Guarantor, fails to satisfy
any applicable Use or Lose Rule with respect to 20% or more of the Primary
Slots (except Slots at JFK so long as such Slots are Primary Slots as a result
of Slot regulations existing on the Closing Date and Slots which are reasonably
determined by the Appraisers to be of de minimis value) at any airport; or

 

(t)            (i)            during
the first half of any regulatory reporting period established by any
Governmental Authority, Foreign Aviation Authority or Airport Authority
regarding the utilization of the Primary Foreign Slots, 50% or more of such
Primary Foreign Slots are not utilized 80% of the time or more over such period
or (ii) during such regulatory reporting period, the Borrower or, if
applicable, a Guarantor, fails to satisfy any applicable Use or Lose Rule with
respect to 10% or more of the Primary Foreign Slots; or

 

(u)           the Borrower or, if
applicable, a Guarantor, loses its right in or to serve any of the Primary
Routes or its rights in or to use Primary Foreign Slots, other than (i) in
cases where the Primary Route(s) and/or Primary Foreign Slot(s) are transferred
or otherwise disposed of as permitted in this Agreement or the SGR Security
Agreement or (ii) in cases where the Collateral Agents have provided prior
written consent to the loss or such loss could not reasonably be expected to
have a material adverse effect on the relevant Primary Routes, taken as a whole;
or

 

(v)           all or substantially
all of the Borrower’s flights or operations are suspended for more than two (2)
consecutive days (other than as a result of an FAA suspension due to force
majeure);

 

then, and in every such event and at any time
thereafter during the continuance of such event, either Agent (in consultation
with the other Agent) may, and at the request of the Required Lenders, the
Agents shall, by written notice to the Borrower, take one or more of the
following 

 

93

 

actions, at the same or different times: (i) terminate forthwith the
Total Commitment; (ii) declare the Loans or any portion thereof then
outstanding to be forthwith due and payable, whereupon the principal of the
Loans together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower and the Guarantors, anything contained herein
or in any other Loan Document to the contrary notwithstanding; (iii) require
the Borrower and the Guarantors promptly upon written demand to deposit in the
Letter of Credit Account Cash Collateralization for the LC Exposure (and to the
extent the Borrower and the Guarantors shall fail to furnish such funds as
demanded by either Agent (in consultation with the other Agent), the Agents
shall be authorized to debit the accounts of the Borrower and the Guarantors
maintained with the Agents in such amounts; (iv) set-off amounts in the Letter
of Credit Account or any other accounts (other than Escrow Accounts, Payroll
Accounts or other accounts held in trust for an identified beneficiary) maintained
with the Agents or the Collateral Agents (or any of their respective
affiliates) and apply such amounts to the obligations of the Borrower and the
Guarantors hereunder and in the other Loan Documents; and (v) exercise any and
all remedies under the Loan Documents and under applicable law available to the
Agents, the Collateral Agents and the Lenders. 
In case of any event with respect to the Borrower or any Guarantor or
any of their respective Subsidiaries described in clause (g) or (h) of this
Section, the Total Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.  Any payment received as a result of the
exercise of remedies hereunder shall be applied in accordance with Section 2.16(b).

 

SECTION 8.           THE AGENTS

 

SECTION 8.01       Administration
by Agents.  (a)  Each of the Lenders and each Issuing Lender
hereby irrevocably appoints the Agents, Collateral Agents and Paying Agent as
its agents and authorizes the Agents, Collateral Agents and Paying Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Agents, Collateral Agents and Paying Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.

 

(b)           Each
of the Lenders and each Issuing Lender hereby authorizes the Agents and the
Collateral Agents, as applicable, and in their sole discretion:

 

                (i)            in
connection with the sale or other disposition of any asset that is part of the
Collateral of the Borrower or any Guarantor, as the case may be, to the extent permitted
by the terms of this Agreement, to release a Lien granted to the Collateral
Agents, for the benefit of the Secured Parties, on such asset;

 

                (ii)           to
determine that the cost to the Borrower or any Guarantor, as the case may be,
is disproportionate to the benefit to be realized by the Secured Parties by
perfecting a Lien in a given asset or group of assets included in the
Collateral and that the Borrower or such Guarantor, as the case may be, should
not be 

 

94

 

required to perfect such
Lien in favor of the Collateral Agents, for the benefit of the Secured Parties;

 

                (iii)          to
enter into and perform its obligations under the other Loan Documents; and

 

                (iv)          to
enter into intercreditor and/or subordination agreements in accordance with
Section 6.01(o) on terms acceptable to the Agents.

 

SECTION 8.02       Rights of
Agent, Paying Agent and Collateral Agents.  Any institution serving as the
Agents, Collateral Agents and Paying Agent hereunder shall have the same rights
and powers in their respective capacities as Lenders as any other Lender and
may exercise the same as though it were not an Agent, Collateral Agent or
Paying Agent, and such bank and its respective Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent,
Collateral Agent or Paying Agent hereunder.

 

SECTION 8.03       Liability
of Agents.

 

(a)           The Agents, Collateral
Agents and Paying Agent shall not have any duties or obligations except those
expressly set forth herein.  Without
limiting the generality of the foregoing, (i) the Agents, Collateral Agents
and Paying Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether an Event of Default has occurred and is continuing,
(ii) the Agents, Collateral Agents and Paying Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that each such
agent is required to exercise in writing as directed by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 10.08), and (iii) except as expressly
set forth herein, the Agents, Collateral Agents and Paying Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Parent or any of its Subsidiaries that is
communicated to or obtained by the institution serving as an Agent, Collateral
Agent or Paying Agent or any of its Affiliates in any capacity.  None of the Agents, Collateral Agents and
Paying Agent shall be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.08) or in the absence of its own gross negligence, bad
faith or willful misconduct.  The Agents,
Collateral Agents and Paying Agent shall be deemed not to have knowledge of any
Event of Default unless and until written notice thereof is given to the Agents,
Collateral Agents and Paying Agent by the Borrower or a Lender, and the Agents,
Collateral Agents and Paying Agent shall not be responsible for, or have any
duty to ascertain or inquire into, (A) any statement, warranty or
representation made in or in connection with this Agreement, (B) the
contents of any certificate, report or other document delivered hereunder or in
connection herewith, (C) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein,
(D) the validity, enforceability, effectiveness or genuineness of this Agreement
or any other agreement, instrument or document, or (E) the satisfaction of
any condition set forth in Section 4 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Agents, Collateral
Agents and Paying Agent.

 

95

 

(b)           The Agents, Collateral
Agents and Paying Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The Agents, Collateral Agents and Paying
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon.  The Agents,
Collateral Agents and Paying Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

(c)           Each of the Agents,
Collateral Agents and Paying Agent may perform any and all of its respective
duties and exercise its respective rights and powers by or through any one or
more sub-agents appointed by such agent. 
The Agents, Collateral Agents and Paying Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers through
its Related Parties.  The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Agents, Collateral Agents and Paying Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agents, Collateral Agents and Paying Agent.

 

SECTION 8.04       Reimbursement
and Indemnification.  Each
Lender agrees (a) to reimburse on demand the Agents (and the Collateral Agents
and Paying Agent) for such Lender’s Total Commitment Percentage of any expenses
and fees incurred for the benefit of the Lenders under this Agreement and any
of the Loan Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of
the Lenders, and any other expense incurred in connection with the operations
or enforcement thereof, not reimbursed by the Borrower or the Guarantors and (b)
to indemnify and hold harmless the Agents, Collateral Agents and Paying Agent
and any of their Related Parties, on demand, in the amount equal to such Lender’s
Total Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against it or any of them in any way
relating to or arising out of this Agreement or any of the Loan Documents or
any action taken or omitted by it or any of them under this Agreement or any of
the Loan Documents to the extent not reimbursed by the Borrower or the
Guarantors (except such as shall result from their respective gross negligence
or willful misconduct).

 

SECTION 8.05       Successor
Agents.  Subject to the
appointment and acceptance of a successor agent as provided in this paragraph, either
of the Agents or the Paying Agent may resign at any time by notifying the
Lenders, the Issuing Lender, the other Agent and the Borrower.  Upon any such resignation by an Agent (or by
an Agent and the Paying Agent), the other Agent shall become the sole Agent
hereunder.  Upon any resignation by the
remaining Agent, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor. 
If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Agent gives notice of its resignation, then the retiring Agent may, in
consultation with the Borrower, on behalf of the Lenders and the 

 

96

 

Issuing Lender, appoint a successor Agent which shall be a bank institution
with an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Agent’s resignation
hereunder, the provisions of this Article and Section 10.04 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as an Agent.

 

SECTION 8.06       Independent
Lenders.  Each Lender
acknowledges that it has, independently and without reliance upon the Agents,
Paying Agent or Collateral Agents or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.

 

SECTION 8.07       Advances
and Payments.

 

(a)           On the date of each
Loan, the Paying Agent shall be authorized (but not obligated) to advance, for
the account of each of the Lenders, the amount of the Loan to be made by it in
accordance with its Tranche A Commitment or Tranche B Commitment, as the
case may be, hereunder.  Should the Paying
Agent do so, each of the Lenders agrees forthwith to reimburse the Paying Agent
in immediately available funds for the amount so advanced on its behalf by the Paying
Agent, together with interest at the Federal Funds Effective Rate if not so
reimbursed on the date due from and including such date but not including the
date of reimbursement.

 

(b)           Any amounts received by
the Paying Agent in connection with this Agreement (other than amounts to which
the Paying Agent is entitled pursuant to Sections 2.17, 8.04 and 10.04), the
application of which is not otherwise provided for in this Agreement, shall be
applied in accordance with Section 2.16(b). 
All amounts to be paid to a Lender by the Paying Agent shall be credited
to that Lender, after collection by the Agent, in immediately available funds
either by wire transfer or deposit in that Lender’s correspondent account with
the Paying Agent, as such Lender and the Paying Agent shall from time to time
agree.

 

SECTION 8.08       Sharing
of Setoffs.  Each Lender
agrees that if it shall, through the exercise either by it or any of its
banking Affiliates of a right of banker’s lien, setoff or counterclaim against
the Borrower or a Guarantor, including, but not limited to, a secured claim
under Section 506 of the Bankruptcy Code or other security or interest arising
from, or in lieu of, such secured claim and received by such Lender (or any of
its banking Affiliates) under any applicable bankruptcy, insolvency or other
similar law, or otherwise, obtain payment in respect of its Loans or LC
Exposure as a result of which the unpaid portion of its Loans or LC Exposure is
proportionately less than the unpaid portion of the Loans or LC Exposure of any
other Lender 

 

97

 

(a) it shall promptly purchase at par (and shall be deemed to have
thereupon purchased) from such other Lender a participation in the Loans or LC
Exposure of such other Lender, so that the aggregate unpaid principal amount of
each Lender’s Loans and LC Exposure and its participation in Loans and LC
Exposure of the other Lenders shall be in the same proportion to the aggregate
unpaid principal amount of all Loans then outstanding and LC Exposure as the
principal amount of its Loans and LC Exposure prior to the obtaining of such
payment was to the principal amount of all Loans outstanding and LC Exposure prior
to the obtaining of such payment and (b) such other adjustments shall be made
from time to time as shall be equitable to ensure that the Lenders share such
payment pro-rata, provided, that if any such non-pro-rata
payment is thereafter recovered or otherwise set aside, such purchase of
participations shall be rescinded (without interest).  The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding (or deemed to be
holding) a participation in a Loan or LC Exposure acquired pursuant to this
Section or any of its banking Affiliates may exercise any and all rights of
banker’s lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender as fully as if such Lender was the original
obligee thereon, in the amount of such participation.

 

SECTION 8.09       Other
Agents.  GE Capital,
identified in this Agreement as a “syndication agent,” shall not have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, GE Capital
shall not have or be deemed to have any fiduciary relationship with any
Lender.  Each Lender acknowledges that it
has not relied, and will not rely, on GE Capital in deciding to enter into this
Agreement or in taking or not taking action hereunder.

 

SECTION 9.           GUARANTY

 

SECTION 9.01       Guaranty.

 

(a)           Each of the Guarantors
unconditionally and irrevocably guarantees the due and punctual payment by the
Borrower of the Obligations (including interest accruing on and after the
filing of any petition in bankruptcy or of reorganization of the obligor whether
or not post filing interest is allowed in such proceeding).  Each of the Guarantors further agrees that,
to the extent permitted by applicable law, the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
it will remain bound upon this guaranty notwithstanding any extension or
renewal of any of the Obligations.  The
Obligations of the Guarantors shall be joint and several.

 

(b)           To the extent permitted
by applicable law, each of the Guarantors waives presentation to, demand for
payment from and protest to the Borrower or any other Guarantor, and also
waives notice of protest for nonpayment. 
The Obligations of the Guarantors hereunder shall not be affected by (i)
the failure of the Agents or a Lender to assert any claim or demand or to
enforce any right or remedy against the Borrower or any other Guarantor under
the provisions of this Agreement or any other Loan Document or otherwise; (ii)
any extension or renewal of any provision hereof or thereof; (iii) any
rescission, waiver, compromise, acceleration, amendment or modification of any
of the terms or provisions of any of the Loan Documents; (iv) the release,
exchange, waiver or foreclosure of any security held by the Collateral Agents
for the Obligations or any of them; (v) the failure of the Collateral Agents or
a Lender to exercise any 

 

98

 

right or remedy against any other Guarantor; or (vi) the release or
substitution of any Guarantor or any other Guarantor.

 

(c)           To the extent permitted
by applicable law, each of the Guarantors further agrees that this guaranty
constitutes a guaranty of payment when due and not just of collection, and
waives any right to require that any resort be had by the Agents, the
Collateral Agents or a Lender to any security held for payment of the
Obligations or to any balance of any deposit, account or credit on the books of
the Agents, the Paying Agent, the Collateral Agents or a Lender in favor of the
Borrower or any other Guarantor, or to any other Person.

 

(d)           To the extent permitted
by applicable law, each of the Guarantors hereby waives any defense that it
might have based on a failure to remain informed of the financial condition of
the Borrower and of any other Guarantor and any circumstances affecting the
ability of the Borrower to perform under this Agreement.

 

(e)           To the extent permitted
by applicable law, each Guarantor’s guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations or any
other instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor or by any
other circumstance relating to the Obligations which might otherwise constitute
a defense to this Guaranty (other than payment in full of the Obligations).  None of the Agents, the Paying Agent, the
Collateral Agents, nor any of the Lenders makes any representation or warranty
in respect to any such circumstances or shall have any duty or responsibility
whatsoever to any Guarantor in respect of the management and maintenance of the
Obligations.

 

(f)            Upon the Obligations
becoming due and payable (by acceleration or otherwise), the Lenders shall be
entitled to immediate payment of such Obligations by the Guarantors upon
written demand by the Agents or the Paying Agent.

 

SECTION 9.02       No
Impairment of Guaranty.  To
the extent permitted by applicable law, the obligations of the Guarantors
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense (other than payment in full of the Obligations) or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations.  To
the extent permitted by applicable law, without limiting the generality of the
foregoing, the obligations of the Guarantors hereunder shall not be discharged
or impaired or otherwise affected by the failure of the Agents, the Paying
Agent, the Collateral Agents or a Lender to assert any claim or demand or to
enforce any remedy under this Agreement or any other agreement, by any waiver
or modification of any provision hereof or thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantors or
would otherwise operate as a discharge (other than payment in full of the
Obligations) of the Guarantors as a matter of law, unless and until the
Obligations are paid in full.

 

99

 

SECTION 9.03       Continuation
and Reinstatement, etc. 
Each Guarantor further agrees that its Guaranty hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any Obligation is rescinded or must otherwise be
restored by the Agents, the Issuing Lender, any Lender or any other Secured
Party upon the bankruptcy or reorganization of Borrower or a Guarantor, or
otherwise.

 

SECTION 9.04       Subrogation.  Upon payment by any Guarantor of any sums to
the Agents, the Paying Agent, the Collateral Agents or a Lender hereunder, all
rights of such Guarantor against the Borrower arising as a result thereof by
way of right of subrogation or otherwise, shall in all respects be subordinate
and junior in right of payment to the prior payment in full of all the
Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of an obligor whether or not post
filing interest is allowed in such proceeding). 
If any amount shall be paid to such Guarantor for the account of the
Borrower relating to the Obligations, such amount shall be held in trust for
the benefit of the Paying Agent and the Lenders and shall forthwith be paid to
the Paying Agent and the Lenders to be credited and applied to the Obligations,
whether matured or unmatured.

 

SECTION 10.         MISCELLANEOUS

 

SECTION 10.01     Notices.  (a)  Except
in the case of notices and other communications expressly permitted to be given
by telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein or under any other Loan Document shall be in
writing (including by facsimile or electronic mail pursuant to procedures
approved by the Agents), and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

(i)            if
to the Borrower or any Guarantor, to it at United Air Lines, Inc., 1200
Algonquin Road, Elk Grove Village, Illinois 60007, Attention of:  (x) Frederic F. Brace, Executive Vice
President and Chief Financial Officer and (y) the General Counsel (Telecopy
No.: 847-700-4412), with a copy to Kirkland & Ellis LLP, 200 East Randolph
Drive, Chicago, Illinois 60601, Attention of: 
James H.M. Sprayregen, P.C. and Linda K. Myers, P.C. (Telecopy No.: 312-861-2200);

 

(ii)           if
to JPMCB as Agent or Paying Agent, to it at JPMorgan Chase Bank, N.A., Loan and
Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention
of: Omar Jones (Telecopy No.: 713-750-2938), with a copy to JPMorgan Chase
Bank, N.A., 270 Park Avenue, New York 10017, Attention of: Matthew Massie (Telecopy No.: 212-270-5100), with
a copy to Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York
10178, Attention of: Robert H. Scheibe (Telecopy No.: 212-309-6001);

 

(iii)          if
to CITI as Agent, to it at Citicorp USA, Inc., 388 Greenwich Street, 19th
Floor, New York, New York 10013, Attention of: James J. McCarthy (Telecopy
No.: 212-816-2613);

 

100

 

(iv)          if
to the Issuing Lender, to it at the address most recently specified by it in
notice delivered by it to the Agent and the Borrower, with a copy to the Agent
as provided in clause (ii) above; and

 

(v)           if
to any other Lender, to it at its address (or telecopy number) set forth in
Annex A hereto or, if subsequently delivered, an administrative questionnaire
in a form as the Agents may require.

 

(b)           Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Agents; provided,
that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Agents and the applicable Lender.  Either Agent or the Borrower may, in its reasonable
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided,
that approval of such procedures may be limited to particular notices or
communications.

 

(c)           Any party hereto may
change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

 

SECTION 10.02     Successors
and Assigns.  (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower and the Guarantors may not
assign or otherwise transfer any of their rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower or any Guarantor without such consent shall be null
and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Lender that issues any Letter of Credit), Participants
(to the extent provided in paragraph (d) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agents, the
Issuing Lender and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b)         (i)          Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or
a portion of its Tranche A Commitment, Tranche B Commitment or Delayed Draw
Tranche B Loan Commitment (as the case may be) and the Loans at the time owing
to it) with the prior written consent (such consent not to be unreasonably
withheld) of:

 

(A) the Paying Agent
(with the consent of the Agents), provided that no consent of the Paying
Agent shall be required for an assignment of all or any portion of a
Tranche B Loan (including the Delayed Draw Tranche B Loan Commitment, if
any) to an assignee that is (I) immediately prior to 

 

101

 

giving effect to
such assignment a Lender owning a portion of the Loan of the same tranche as
the portion of the Loan to be assigned, (II) an Affiliate of such a Lender, or
(III) an Approved Fund; provided, further, no consent of the
Paying Agent shall be required for an assignment of all or any portion of a
Tranche A Commitment and Tranche A Loans to an assignee that is (I) immediately
prior to giving effect to such assignment a Lender owning a portion of the Loan
of the same tranche as the portion of the Loan to be assigned or (II) an Affiliate
of such a Lender; and

 

(B) the Issuing
Lender, provided that no consent of the Issuing Lender shall be required
for an assignment of all or any portion of a Tranche B Loan or a Delayed
Draw Tranche B Loan Commitment..

 

(ii)           Assignments
shall be subject to the following additional conditions:

 

(A)          any
assignment of any portion of the Total Tranche A Commitment, Tranche A Loans,
LC Exposure, the Tranche B Commitment, the Delayed Draw Tranche B Loan
Commitment and the Tranche B Loans shall be made to an Eligible Assignee;

 

(B)           except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Tranche A
Commitment, Tranche B Commitment, the Delayed Draw Tranche B Loan Commitment or
Loans, the amount of such commitment or Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall not
be less than $1,000,000, and after giving effect to such assignment, the
portion of the Loan held by the assigning Lender of the same tranche as the
assigned portion of the Loan shall not be less than $1,000,000, in each case
unless the Borrower and the Agents otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

 

(C) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, provided
that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of the Total Commitment or Loans;

 

(D) the parties to
each assignment shall execute and deliver to the Paying Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 for the
account of the Paying Agent; and

 

(E) the assignee,
if it was not a Lender immediately prior to such 

 

102

 

assignment, shall
deliver to the Paying Agent an administrative questionnaire in a form as the
Agents may require.

 

For the purposes
of this Section 10.02(b), the term “Approved Fund” means any Person
(other than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Tranche A Lender or Tranche B Lender (or both), as
the case may be, under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.13, 2.15 and
10.04).  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 10.02 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with paragraph (d) of this Section.

 

(iv)          The
Paying Agent shall maintain at its offices a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Tranche A Commitments, Tranche B Commitments or the
Delayed Draw Tranche B Loan Commitment (as the case may be) of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Guarantors, the Paying Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower, the Issuing Lender and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

(c)           Upon its receipt of a
duly completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee’s completed administrative questionnaire in a form as
the Agents may require (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Paying Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register; provided, that if either the assigning Lender or the assignee
shall have failed to make any payment required to be made by it pursuant to
Section 2.02(d) or (e), 2.04(b) or 10.04(c), the Paying Agent shall have no
obligation to accept such Assignment and Assumption and record the information
therein in the Register unless and until such payment 

 

103

 

shall have been made in full, together with all accrued interest
thereon.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(d)           (i)            Any
Lender may, without the consent of the Borrower, the Agents, the Paying Agent
or the Issuing Lender, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights
and obligations under this Agreement (including all or a portion of its Tranche
A Commitment, Tranche B Commitment or the Delayed Draw Tranche B Loan
Commitment (as the case may be) and the Loans owing to it); provided,
that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the
Borrower, the Agents, the Paying Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided,
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 10.08(a) that
affects such Participant.  Subject to
paragraph (d)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.13 and 2.15 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 2.15 as though it
were a Lender, provided such Participant agrees to be subject to Section 8.08
as though it were a Lender.

 

(ii)           A
Participant shall not be entitled to receive any greater payment under Section
2.15 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.15 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower,
to comply with Section 2.15(e) as though it were a Lender.

 

(e)           Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of a
security interest; provided, that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(f)            Any Lender may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 10.02, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the Borrower or
any of the Guarantors furnished to such Lender by or on behalf of the Borrower
or any of the Guarantors; provided, that prior to any such disclosure,
each such assignee or participant or 

 

104

 

proposed assignee or participant shall agree in writing to be bound by
the provisions of Section 10.03.

 

(g)           The Borrower hereby
agrees, to the extent set forth in the Joint Commitment Letter, to actively
assist and cooperate with the Agents in the Agents’ efforts to sell
participations herein (as described in Section 10.02(d)) and assign to one or
more Lenders or assignees a portion of its interests, rights and obligations
under this Agreement (as set forth in Section 10.02(b)).

 

SECTION 10.03     Confidentiality.  Each Lender agrees to keep any information
delivered or made available by the Borrower or any of the Guarantors to it
confidential from anyone other than persons employed or retained by such Lender
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans, and who are advised by such Lender of the
confidential nature of such information; provided, that nothing herein
shall prevent any Lender from disclosing such information (a) to any of its
Affiliates (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such information and
instructed to keep such information confidential) or to any other Lender, (b)
upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority, (d) which has been publicly
disclosed other than as a result of a disclosure by the Agents or any Lender
which is not permitted by this Agreement, (e) in connection with any litigation
to which the Agents, any Lender, or their respective Affiliates may be a party
to the extent possible or practicable and reasonably required, (f) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (g) to such Lender’s legal counsel and independent auditors, and (h)
to any actual or proposed participant or assignee of all or part of its rights
hereunder subject to the proviso in Section 10.02(f).  Each Lender shall use reasonable efforts to give
the Borrower prior notice of any required disclosure under clauses (b) and (e)
of this Section.

 

SECTION 10.04     Expenses;
Indemnity; Damage Waiver. 
(a)  (i)  The Borrower shall pay or reimburse:  (A) all reasonable fees and reasonable out-of-pocket
expenses of the Agents, JPMSI and CGMI (including the reasonable fees,
disbursements and other charges of Morgan, Lewis & Bockius LLP (“Morgan
Lewis”), special counsel to the Agents, and any other counsel retained by Morgan
Lewis, the Agents, JPMSI or CGMI) associated with the syndication of the credit
facilities provided for herein, and the preparation, execution, delivery and
administration of the Loan Documents and any amendments, modifications or
waivers of the provisions hereof (whether or not the transactions contemplated
hereby or thereby shall be consummated); and (B) all reasonable fees and
reasonable out-of-pocket expenses of the Agents, JPMSI and CGMI (including the
reasonable fees, disbursements and other charges of Morgan Lewis, special
counsel to the Agents, and any other counsel retained by Morgan Lewis, the
Agents, JPMSI or CGMI) and the Lenders in connection with the enforcement of
the Loan Documents.

 

(ii)           The
Borrower shall pay or reimburse (A) all reasonable fees and reasonable expenses
of the Agents, JPMSI and CGMI and their internal and third-party auditors, the
Appraisers, the Real Estate Appraiser and consultants incurred in connection
with the Agents’ (a) periodic field examinations and appraisals and (b) other
monitoring of assets as allowed hereunder and (B) all reasonable fees and
reasonable expenses of the 

 

105

 

Issuing Lenders in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand or any
payment thereunder.

 

(iii)          All
payments or reimbursements pursuant to the foregoing clauses (a)(i) and (ii)
shall be paid within thirty (30) days of written demand together with back-up
documentation supporting such reimbursement request.

 

(b)           The Borrower shall
indemnify the Agents, the Paying Agent, JPMSI, CGMI, the Joint Lead Arrangers, the
Issuing Lenders and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way or asserted against the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided,
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the bad faith, gross negligence or willful
misconduct of such Indemnitee.

 

(c)           To the extent that the
Borrower fails to pay any amount required to be paid by it to the Agents or the
Issuing Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Agents, the Paying Agent or the Issuing Lender,
as the case may be, such portion of the unpaid amount equal to such Lender’s
Total Commitment Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought); provided, that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against the Agents, the Paying
Agent or the Issuing Lender in its capacity as such.

 

(d)           To the extent permitted
by applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.

 

106

 

SECTION 10.05     Governing
Law; Jurisdiction; Consent to Service of Process.  (a) This Agreement shall be construed in
accordance with and governed by the law of the State of New York.

 

(b)           The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this
Agreement shall affect any right that the Agents, the Issuing Lender or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against the Borrower or its properties in the courts of any
jurisdiction.

 

(c)           The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 10.01.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.

 

SECTION 10.06     No Waiver.  No failure on the part of the Agents or the
Collateral Agents or any of the Lenders to exercise, and no delay in exercising,
any right, power or remedy hereunder or any of the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.  All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.

 

SECTION 10.07     Extension
of Maturity.  Should any
payment of principal of or interest or any other amount due hereunder become
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of principal,
interest shall be payable thereon at the rate herein specified during such
extension.

 

SECTION 10.08     Amendments,
etc.

 

(a)           No modification,
amendment or waiver of any provision of this Agreement or the Collateral
Documents, and no consent to any departure by the Borrower or any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and 

 

107

 

signed by the Required Lenders, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given;
provided, however, that no such modification or amendment shall without
the written consent of (i) the Lender directly affected thereby (A) increase
the Tranche A Commitment, Tranche B Commitment or the Delayed Draw Tranche B
Loan Commitment (as the case may be) or extend the expiry of the Tranche A
Commitment, Tranche B Commitment or the Delayed Draw Tranche B Loan Commitment
(as the case may be) of a Lender (it being understood that a waiver of an Event
of Default shall not constitute an increase in or extension of the expiry of
the Tranche A Commitment, Tranche B Commitment or the Delayed Draw Tranche B
Loan Commitment (as the case may be) of a Lender), or (B) reduce the principal
amount of any Loan or the rate of interest payable thereon (provided that only
the consent of the Required Lenders shall be necessary for a waiver of default
interest referred to in Section 2.07), extend the scheduled date or reduce the
amount of any required amortization payment of the Tranche B Loan or extend any
date for the payment of interest hereunder or reduce any Fees payable hereunder
or extend the final maturity of the Borrower’s obligations hereunder or (ii)
all of the Lenders (A) amend or modify any provision of this Agreement which
provides for the unanimous consent or approval of the Lenders, (B) amend this
Section 10.08 or modify the percentage of the Lenders required in the definition
of Required Lenders or (C) release all or substantially all of the Liens
granted to the Agents or the Collateral Agents hereunder or under any other
Loan Document, or release all or substantially all of the Guarantors.  No such amendment or modification shall
adversely affect the rights and obligations of the Agents or any Issuing Lender
hereunder without its prior written consent. 
No notice to or demand on the Borrower or any Guarantor shall entitle
the Borrower or any Guarantor to any other or further notice or demand in the
same, similar or other circumstances. 
Each assignee under Section 10.02(b) shall be bound by any amendment,
modification, waiver, or consent authorized as provided herein, and any consent
by a Lender shall bind any Person subsequently acquiring an interest on the
Loans held by such Lender.  No amendment
to this Agreement shall be effective against the Borrower or any Guarantor
unless signed by the Borrower or such Guarantor, as the case may be.

 

(b)           Notwithstanding
anything to the contrary contained in Section 10.08(a), (i) in the event
that the Borrower requests that this Agreement be modified or amended in a
manner which would require the unanimous consent of all of the Lenders and such
modification or amendment is agreed to by the Required Lenders, then with the
consent of the Borrower and the Required Lenders, the Borrower and the Required
Lenders shall be permitted to amend the Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment
requested by the Borrower (such Lender or Lenders, collectively the “Minority
Lenders”) to provide for (A) the termination of the Tranche A Commitment,
Tranche B Commitment or the Delayed Draw Tranche B Loan Commitment (as the case
may be) of each of the Minority Lenders, (B) the addition to this Agreement of
one or more other financial institutions in accordance with Section 10.02, or
an increase in the Tranche A Commitment, Tranche B Commitment or the Delayed
Draw Tranche B Loan Commitment (as the case may be) of one or more of the
Required Lenders, so that the Total Commitment after giving effect to such
amendment shall be in the same amount as the Total Commitment immediately
before giving effect to such amendment, (C) if any Loans are outstanding at the
time of such amendment, the making of such additional Loans by such new
financial institutions or Required Lender or Lenders, as the case may be, as
may be necessary to repay in full the outstanding Loans of the Minority Lenders
immediately before giving effect to such amendment and (D) such other 

 

108

 

modifications to this Agreement as may be appropriate; and (ii) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Total Commitment of such Lender
may not be increased or extended without the consent of such Lender (it being
understood that any Loans held or deemed held by any Defaulting Lender shall be
excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders).

 

SECTION 10.09     Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 10.10     Headings.  Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.

 

SECTION 10.11     Survival.  All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Agents, the Issuing Lender or any Lender may have had notice or knowledge of
any Event of Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Total Commitments have not
expired or terminated.  The provisions of
Sections 2.13, 2.14, 2.15 and 10.04 and Section 8 shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Total Commitments or the termination of this
Agreement or any provision hereof.

 

SECTION 10.12     Execution
in Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and any separate letter agreements with respect to fees payable to
the Agents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the Agents
and when the Agents shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy or electronic .pdf copy shall be effective as delivery of
a manually executed counterpart of this Agreement.

 

109

 

SECTION 10.13     Prior
Agreements.  This
Agreement represents the entire agreement of the parties with regard to the
subject matter hereof and the terms of any letters and other documentation
entered into between the Borrower or a Guarantor and any Lender or the Agents
prior to the execution of this Agreement which relate to Loans to be made
hereunder shall be replaced by the terms of this Agreement (except as otherwise
expressly provided herein with respect to the Joint Commitment Letter and the
fee letter referred to therein, including without limitation the Borrower’s
agreements to actively assist the Agents in the syndication of the transactions
contemplated hereby referred to in Section 10.02(a) and with respect to
interest rates and Commitment Fees and including also the provisions of Section
2.18, and except with respect to any separate commitment letter or other
agreement relating to the additional Tranche B Loan referred to in Section
2.01(c)).

 

SECTION 10.14     Further
Assurances.  Whenever and
so often as reasonably requested by the Agents, the Borrower and the Guarantors
will promptly execute and deliver or cause to be executed and delivered all
such other and further instruments, documents or assurances, and promptly do or
cause to be done all such other and further things as may be necessary in order
to further and more fully vest in the Agents all rights, interests, powers,
benefits, privileges and advantages conferred or intended to be conferred by
this Agreement and the other Loan Documents.

 

SECTION 10.15     USA
Patriot Act.  Each Lender
that is subject to the requirements of the Patriot Act hereby notifies the
Borrower that pursuant to the requirements of the Act, it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Patriot Act.

 

SECTION 10.16     WAIVER OF JURY TRIAL.  EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

110

 

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

 

 

[Signature pages
and exhibits intentionally omitted]

 

111

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