Document:

Exhibit 10.5 LLC Funding 10-K

                                         AMENDMENT TO TRANSITION PROPERTY SERVICING AGREEMENT

         This AMENDMENT is made as of June 20, 2002, to the TRANSITION PROPERTY SERVICING AGREEMENT dated as of December 11, 1997
(the "Servicing Agreement"), between SCE FUNDING LLC, a Delaware limited liability company (the "Note Issuer), and SOUTHERN
CALIFORNIA EDISON COMPANY, a California corporation, as Servicer (the "Servicer").

                                                                    RECITALS

          A.      The Note Issuer and the Servicer previously entered into the Servicing Agreement.

          B.      Section 8.01(a) of the Servicing Agreement provides that the Servicing Agreement may be amended in writing by the
Servicer and the Note Issuer with five Business Days' prior written notice given to the Rating Agencies and the prior written
consent of the Note Trustee, but without the consent of any of the Noteholders or Certificateholders, to cure any ambiguity, to
correct or supplement any provisions in the Servicing Agreement, or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in the Servicing Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided that such action shall not, as evidenced by an Officer's Certificate delivered to the Note
Issuer and the Note Trustee, adversely affect in any material respect the interests of any Noteholder or Certificateholder.

          C.      The Note Issuer and the Servicer have determined that it is in their mutual best interests and the best interests
of the Noteholders and Certificateholders to enter into this Amendment to supplement and add provisions to the Servicing Agreement
providing for routine quarterly True-Up Adjustments under certain circumstances.

          D.      The Note Issuer and the Servicer have received an Officer's Certificate evidencing that this Amendment will not
adversely affect in any material respect the interests of any Noteholder or Certificateholder; written notice has been given to the
Rating Agencies; and the written consent of the Note Trustee has been obtained.

          E.      All acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms, have
been done and performed, and the execution and delivery of this Amendment by the Servicer and the Note Issuer have been duly
authorized by the Servicer and the Note Issuer.

                                                               AGREEMENT

         NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Amendment and the Servicing
Agreement, the Note Issuer and the Servicer agree as follows:

         Section 1.  Definitions.  Except as otherwise expressly provided in this Amendment or unless the context otherwise
                     ------------
requires, all capitalized terms used in this Amendment which are defined in the Servicing Agreement shall have the meanings assigned
 to them in the Servicing Agreement (including meanings assigned by reference to the related Indenture).

          Section 2.  Amendment of Section 4.01(b)(ii).  Section 4.01(b)(ii) of the Servicing Agreement is amended by designating
                      --------------------------------
the existing first paragraph as (1), and adding a new paragraph (2), so that Section 4.01(b)(ii) reads in its entirety as follows:

                                      -2-

          (ii)  Routine Quarterly True-Up Adjustments.
                -------------------------------------

                  (1)  If the Issuance Advice Letter with respect to a Series of Notes provides that the Servicer will file Routine
          Quarterly True-Up Mechanism Advice Letters, then the Servicer shall make such filings in accordance with the procedures
          set forth in Annex II hereto.  On each Series Issuance Date, the Servicer and the Note Issuer shall amend Annex II to
          specify in detail the Servicer's obligations to perform routine quarterly True-Up Adjustments, if any, with respect to the
          new Series of Notes issued on such Series Issuance Date.

                  (2)  With respect to the Notes of Series 1997-1, issued on December 11, 1997, the Servicer shall file Routine
          Quarterly True-Up Mechanism Advice Letters upon the conditions and in accordance with the procedures set forth in
          Annex II.

         Section 3.  Amendment of Annex II.  Annex II to the Servicing Agreement is amended by deleting the existing text and
                     ---------------------
         replacing it in its entirety with the following:

          Section 1.  Routine Quarterly True-Up Adjustments.
                      -------------------------------------

                  (i)  During the first fourteen days of the last month of each of the first three Quarters of each calendar year,
         the Servicer shall determine whether:  (A) the balance in the Collection Account (excluding the General Subaccount) is less
         than the Required Capital Level as of the next Payment Date, and (B) the actual aggregate energy usage volume by Customers
         during the immediately preceding three calendar months is at least three percent lower than the aggregate energy usage
         volume by Customers that the Servicer assumed for purposes of Section 4.01(b) of the Agreement.  If the Servicer determines
         that the conditions specified in clauses (A) and (B) then exist, the Servicer shall file a Routine Quarterly True-Up
         Mechanism Advice Letter with the CPUC at least fifteen days before the end of the applicable Quarter.

                  (ii)  If the Servicer is required to file a Routine Quarterly True-Up Mechanism Advice Letter pursuant to
         paragraph (i) above, the Servicer shall: (A) estimate collections through the end of the Quarter in which the filing is to
         be made; (B)  update the assumptions underlying the FTA Charges, including energy usage volume, the rate of delinquencies
         and write-offs, and estimated expenses and fees of the Note Issuer, the Trust and the Infrastructure Bank to the extent not
         fixed; (C)  determine the revised FTA Charges that, together with the funds on deposit in the Reserve Subaccount, would
         restore: (1) the Principal Balance to the Projected Principal Balance, (2) the balance in the Overcollateralization
         Subaccount to the Required Overcollateralization Level, and (3) the balance in the Capital Subaccount to the Required
         Capital Level, in each case within twelve months after such revised FTA Charges go into effect (and with respect to any
         True-Up Adjustments occurring after the last Scheduled Maturity Date for any Class of a Series, determine the revised FTA
         Charges that would be sufficient to retire the unpaid Principal Balance within the earlier of (x) a date which is not more
         than twelve months after the Scheduled Maturity Date (or, in the case of the last Class of a Series, a date which is not
         more than three months after the Scheduled Maturity Date) and (y) the last Final Maturity Date for any Class of such
         Series); (D) file a Routine Quarterly True-Up Mechanism Advice Letter with the CPUC, substantially in the form attached
         hereto as Schedule 1;
                                                                                                                         ----------
         and (E) take all reasonable actions and make all reasonable efforts to secure the resulting True-Up Adjustment and to
         enforce the provisions of the Statute which obligate the CPUC to approve rates at levels sufficient to recover the FTA
         Payments in accordance with the Expected Amortization Schedule.

                                      -3-

                  (iii) In the case of a True-Up Adjustment pursuant to a Routine Quarterly True-Up Mechanism Advice Letter, the
         Servicer shall implement the revised FTA Charges, if any, as of the first calendar day of the next Quarter

          Section 4.  Schedule 1 to Annex II.  Annex II to the Servicing Agreement is further amended by adding to it as Schedule 1
                      ----------------------
         the form of Routine Quarterly True-Up Mechanism Advice Letter attached hereto.

                  IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their
 proper and duly authorized officers as of the day and year first above written.

                                                     SCE FUNDING LLC

                                                     By:          Mary C. Simpson
                                                          -----------------------------------------------
                                                          Name:  Mary C. Simpson
                                                          Title:  Vice President and Treasurer

                                                     SOUTHERN CALIFORNIA EDISON COMPANY

                                                     By:          W. James Scilacci
                                                          -----------------------------------------------
                                                          Name:   W. James Scilacci
                                                          Title:Vice President and Chief Financial
                                                                Officer

 Acknowledged and consented to:

 DEUTSCHE BANK NATIONAL TRUST COMPANY,
 not in its individual capacity but solely as Note Trustee

 By:           Peter Becker
      ---------------------------------------------
      Name:    Peter Becker
      Title:   Vice President

                                      -4-

                                                        SCHEDULE 1 TO ANNEX II
                                                        ----------------------

                                       Form of Routine Quarterly True-Up Mechanism Advice Letter

                                                            ________, 20__

ADVICE ________-E
(U 338-E)

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION

SUBJECT:                Quarterly Trust Transfer Amount (TTA) True-Up
                        Mechanism Advice Filing
Pursuant to California Public Utilities Commission (Commission) Decision No. 97-09-056 (D.97-09-056), Ordering Paragraph No. 14,
Southern California Edison Company (SCE), as servicer of the Rate Reduction Bonds (RRBs) and on behalf of SCE Funding LLC, is
authorized to apply for adjustments to Trust Transfer Amount (TTA) charges at least 15 days before the end of each calendar quarter,
if determined by SCE to be necessary.  (The term "Trust Transfer Amount" is used consistent with Decision No. 98-06-026, dated
June 4, 1998.  However, the term "Fixed Transition Amount Charge (FTAC)" is referenced on SCE's applicable tariffs.  The FTAC is
also listed on customers' bills as the Trust Transfer Amount.)

SCE hereby transmits for filing the following changes to its tariff schedules.  The revised tariff sheets are listed on Attachment A
and are attached hereto.

PURPOSE
-------

This advice filing increases the TTA charges for the rate schedules for Residential and Small Commercial Customers.  The revised TTA
charges will be included in the Rate Components Tables of the applicable rate schedules.  Changes in the TTA charges will be offset
by an equal and opposite change in the residually determined Generation rate component.

BACKGROUND
----------

In D.97-09-056, the Commission authorized Edison to file routine True-Up Mechanism Advice Letters on a quarterly basis, if necessary,
at least 15 days before the end of a calendar quarter.  Routine Advice Letter filings are those where Edison uses the methodology
found reasonable by the Commission in D.97-09-056 to revise existing TTA charges.

Using the methodology approved by the Commission in D.97-09-056, this advice filing modifies the variables used in the TTA charges
calculation and provides the resulting modified TTA charges.  Table I shows the revised assumptions for each of the variables used
in calculating the new TTA charges for Residential and Small Commercial Customers.  The assumptions underlying the current FTA
charges were filed in Advice ____-E, SCE's [Annual or Quarterly] True-Up Mechanism Advice Letter, on ____________, 20__.  Appendix 1
shows the revised payment schedule (see page 1).

----------------------------------------------------------------------------------------------------------------------
                                                       TABLE I
                                            Input Values For TTA Charges
----------------------------------------------------------------------------------------------------------------------
                                                                                       Residential         Small
                                                                                        Customers        Commercial
                                                                                                         Customers
----------------------------------------------------------------------------------- ------------------ ---------------
Monthly kWh sales:
----------------------------------------------------------------------------------- ------------------ ---------------
[June 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[July 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[August 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[September 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[October 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[November 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[December 2001]
----------------------------------------------------------------------------------- ------------------ ---------------
[January 2002]
----------------------------------------------------------------------------------- ------------------ ---------------
[February 2002]
----------------------------------------------------------------------------------- ------------------ ---------------
[March 2002]
----------------------------------------------------------------------------------- ------------------ ---------------
[April 2002]
----------------------------------------------------------------------------------- ------------------ ---------------
[May 2002]
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of residential customers' and small commercial customers' billed amounts
expected to be uncollected
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of billed amounts collected in current month
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of billed amounts collected in second month after billing
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of billed amounts collected in third month after billing
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of billed amounts collected in fourth month after billing
----------------------------------------------------------------------------------- ------------------ ---------------
Percent of billed amounts collected in fifth month after billing
----------------------------------------------------------------------------------- ------------------ ---------------
Average rates in effect at June 1996                                                 12.70(cent)/kWh   13.43(cent)/kWh
----------------------------------------------------------------------------------- ------------------ ---------------
                                                                                      For This Series
----------------------------------------------------------------------------------- ------------------ ---------------
Quarterly deposit to Overcollateralization Subaccount
----------------------------------------------------------------------------------- ------------------ ---------------
Quarterly Servicing Fee as percent of RRB outstanding balance                                 0.0625%
----------------------------------------------------------------------------------- ------------------ ---------------
Quarterly trustee and ongoing transaction expenses
----------------------------------------------------------------------------------- ------------------ ---------------
Expected RRB outstanding balance as of __/__/__
----------------------------------------------------------------------------------- ------------------ ---------------
Undercollection of principal to be reflected in the new TTA charges
----------------------------------------------------------------------------------- ------------------ ---------------
Reserve Subaccount balance to be reflected in the new TTA charges
----------------------------------------------------------------------------------- ------------------ ---------------
Difference between Overcollateralization Subaccount balance and Required
Overcollateralization Level to be reflected in the new TTA charges
----------------------------------------------------------------------------------- ------------------ ---------------
Difference between Capital Subaccount balance and Required Capital Level to be
reflected in the new TTA charges
----------------------------------------------------------------------------------- ------------------ ---------------

Table II shows the revised TTA charges calculated for Residential and Small Commercial Customers which will become effective on
____________, 20__.  The TTA charge calculations are shown in Appendix 1 (see pages 2 and 3).

                  ---------------------------------------------------------------------------
                                                   TABLE II
                  ---------------------------------------------------------------------------
                       Residential Customer TTA Charge                          (cent)/kWh
                  ------------------------------------------------------ --------------------
                       Small Commercial Customer TTA Charge                     (cent)/kWh
                  ------------------------------------------------------ --------------------

As a result of these revised TTA charges, the Rate Components Tables for the affected rate schedules have been revised and are
attached hereto.

EFFECTIVE DATE
--------------

In accordance with D.97-09-056, routine True-Up Mechanism Advice Letters for quarterly TTA charge adjustments shall be filed at
least 15 days before the end of a calendar quarter, if necessary, and these adjustments to TTA charges shall be effective at the
beginning of the next calendar quarter.  These TTA charges shall be effective ______ 1, 20__, through December 31, 20__, unless they
are changed by a quarterly adjustment prior to December 31, 20__.

NOTICE
------

Copies of this advice filing are being furnished to the parties on the attached GO 96A Service List.  In accordance with Public
Utilities Codess.491, notice to the public is hereby given by filing and keeping this advice filing open for public inspection at
the SCE's corporate headquarters.

EnclosuresBank One/United: DIP Credit Agreement

Exhibit
4.7

DEBTOR IN
POSSESSION

CREDIT AGREEMENT

               
This Debtor In Possession Credit Agreement, dated as of  December
24, 2002 ("Closing Date"), is among United Air Lines, Inc., a Delaware
corporation, as debtor and debtor in possession ("Borrower"), the parties
identified herein as the "Credit Parties", as debtors and debtors in possession,
the Lenders (as defined below) and Bank One, NA, a national banking association
having its principal office in Chicago, Illinois, as Agent.  The parties
hereto agree as follows:

               
WHEREAS, on December 9, 2002 (the "Petition Date"), the Credit Parties
filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the Northern District
of Illinois, Eastern Division (the "Bankruptcy Court"), which cases are
jointly administered under Case No. 02-B-48191 (each a "Chapter 11 Case"
and collectively, the "Chapter 11 Cases");

               
WHEREAS, the Credit Parties continue to operate their respective businesses
and manage their respective properties as debtors and debtors in possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code; and

               
WHEREAS, Borrower has requested that Lenders provide a senior secured superpriority
term loan facility of up to $300,000,000 for the purposes of financing
the Credit Parties' ordinary course working capital and general corporate
needs.

ARTICLE I.

DEFINITIONS

               
As used in this Agreement:

               
"Accounts" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"Additional DIP" means that certain debtor in possession financing provided
to Borrower pursuant to the Additional DIP Credit Agreement.

               
"Additional DIP Collateral" means all Property, now existing or hereafter
acquired, of the Credit Parties which secures the Credit Parties' obligations
under the Additional DIP, including, without limitation, all unencumbered
aircraft, spare engines, spare parts inventory, Routes, Supporting Route
Facilities, Slots, Foreign Slots, QEC Kits (as defined in the Additional
DIP Credit Agreement), Flight Simulators , and Gate Leaseholds (to the
extent that the grant of a Lien on such Gate Leaseholds, Supporting Route
Facilities and/or Foreign Slots is permitted by applicable law, it being
understood that in any event a Lien on Gate Leaseholds, Supporting Route
Facilities and/or Foreign Slots shall extend to the proceeds of any such
Gate Leaseholds, Supporting Route Facilities and/or Foreign Slots). 
Notwithstanding the foregoing, "Additional DIP Collateral" shall not include
the Co-Branded Card Collateral.

               
"Additional DIP Credit Agreement" means that certain Revolving Credit,
Term Loan and Guaranty Agreement dated the date hereof, among Borrower,
Parent, the Guarantors named therein, the Lenders party thereto, JPMorgan
Chase Bank, 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,
Salomon Smith Barney Inc., as Joint Lead Arranger and Joint Bookrunner,
Bank One, NA, as Co-Arranger, Banc One Capital Markets, Inc., as Co-Arranger,
and The CIT Group/Business Credit, Inc., as Co-Arranger.

               
"Additional DIP Intercreditor Agreement" shall have the meaning set forth
in Section 4.1 hereof.

               
"Additional DIP Lenders" means those entities that are lenders under the
Additional DIP, in their capacities as such.

               
"Additional DIP Voluntary Prepayment" shall have the meaning set forth
in Section 2.2.

               
"Affected Lender" shall have the meaning set forth in Section 2.19 hereof.

               
"Affiliate" means, as to any Person, any other Person that directly or
indirectly, controls, is controlled by or is under common control with
such Person.  For purposes of this definition, the term "control"
(including the terms "controlling," "controlled by" and "under common control
with") of a Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting stock, by contract
or otherwise; provided, however, that an Affiliate shall not include the
Parent's Employee Stock Option Plan (for purposes of this definition, "ESOP"),
the trustee of the ESOP or any Person who is a beneficial owner of voting
stock of the Parent that is subject to the ESOP and who is eligible to
report and reports such beneficial ownership on Schedule 13G promulgated
under the Securities Exchange Act of 1934, as amended.

               
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as
a Lender, and any successor Agent appointed pursuant to Article X.

               
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof and
in no event in excess of $300,000,000.

               
"Agreement" means this debtor in possession credit agreement, as it may
be amended, restated, supplemented or otherwise modified and in effect
from time to time.

               
"Agreement Accounting Principles" means generally accepted accounting principles
as in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in Section 5.4 hereof.

               
"Aircraft Mortgage" shall have the meaning set forth in Section 4.1(xxvii).

               
"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.

               
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.

               
"Application" shall mean the Application of the Borrower to be updated
or supplemented with the ATSB for the issuance of a federal credit instrument
under the Air Transportation Stabilization Act and Regulations, as amended,
modified or supplemented from time to time.

               
"Applicable Margin" means, with respect to a Loan of any Type at any time,
the following rate per annum:  (a) 3.50% per annum, with respect to
a Floating Rate Loan, and (b) 4.50% per annum, with respect to a Eurodollar
Loan.

               
"Approved Fund" means any Fund 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.

               
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.

               
"Article" means an article of this Agreement unless another document is
specifically referenced.

               
"ATSB" shall mean the Air Transportation Stabilization Board, created pursuant
to Section 102(b) of the Air Transportation Safety and System Stabilization
Act.

               
"Authorized Officer" means any of the Treasurer, Chief Financial Officer,
Principal Accounting Officer, Controller or financial Vice President of
the Borrower or the applicable Credit Party, acting singly.

               
"Avoidance Actions" shall mean the Borrower's and the Credit Parties' claims
and causes of action arising under Section 502(d), 544, 547, 548 or 550
of the Bankruptcy Code or any other avoidance action under the Bankruptcy
Code.

               
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and
its successors.

               
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§ 101, et seq.), as amended and in effect from time
to time and the regulations issued from time to time thereunder.

               
"Bankruptcy Court" shall have the meaning set forth in the Recitals hereof.

               
"Borrower" shall have the meaning set forth in the preamble hereof, and
its successors and assigns.

               
"Borrowing Date" means December 24, 2002 or such other Business Day (as
shall be mutually agreed upon by the Parties hereto) on which the Loan
is made hereunder.

               
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Loans, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago and New York City for the
conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in United
States dollars are carried on in the London interbank market and (ii) for
all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made
on the Fedwire system.

               
"Capital Expenditures" shall mean, for any period, the aggregate of all
expenditures (whether (i) paid in cash and not theretofore accrued or (ii)
accrued as liabilities during such period, and including that portion of
any post-petition Capitalized Lease which is capitalized on the consolidated
balance sheet of the Parent and the Subsidiaries) net of cash amounts received
by the Borrower and the Credit Parties from other Persons during such period
in reimbursement of Capital Expenditures made by the Borrower and the Credit
Parties, excluding interest capitalized during construction, made by the
Borrower and the Credit Parties during such period that, in conformity
with Agreement Accounting Principles, are required to be included in or
reflected by the property, plant, Equipment or similar fixed asset accounts
reflected in the consolidated balance sheet of the Parent and the Subsidiaries
(including Equipment which in the ordinary course of business is purchased
simultaneously with the trade-in or exchange of existing Equipment owned
by the Borrower or any of the Credit Parties to the extent of the gross
amount of such purchase price less the book value of the Equipment being
traded in or exchanged at such time), but excluding expenditures made in
connection with the replacement or restoration of assets to the extent
reimbursed or financed from (x) insurance proceeds paid on account of the
loss of or the damage to the assets being replaced or restored, (y) awards
of compensation arising from the taking by condemnation or eminent domain
of such assets being replaced or (z) proceeds of asset sales permitted
by this Agreement which proceeds are not required to be used to prepay
the Loans pursuant to Section 2.13 of the Additional DIP Credit Agreement.

               
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles (excluding
any leases that become Capitalized Leases as a result of a recharacterization
of operating leases as Capitalized Leases in connection with the renegotiation
thereof, provided that the Borrower's payment obligations thereunder are
unchanged).

               
"Carve Out Reserve" shall have the meaning set forth in Section 2.21(c)
hereof.

               
"Change in Control" means (i) the acquisition 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
shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Parent or
the Borrower; or (ii) the occupation of a majority of the seats (other
than vacant seats) on the Board of Directors of the Parent or the Borrower
by Persons who were neither (A) nominated by the Board of Directors of
the Parent or the Borrower nor (B) appointed by directors so nominated.

               
"Chapter 11 Cases" shall have the meaning set forth in the Recitals hereof.

               
"Chattel Paper" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"Closing Date" shall have the meaning set forth in the preamble hereof.

               
"Co-Branded Card Agreements" means, collectively, (i) that certain Co-Branded
Card Marketing Services Agreement dated as of July 1, 2001, among Parent,
ULS and Bank One, Delaware, N.A. f/k/a First USA Bank, NA, as amended,
restated, supplemented and otherwise modified from time to time, including,
without limitation, as amended pursuant to the Co-Branded Card Amendment
and the Co-Branded Debit Card Amendment, (ii) that certain Side Letter
to Bank One, Delaware, N.A. dated December 7, 2002 by Parent and agreed
and acknowledged to by Borrower, ULS, Mileage Plus Holdings, Inc., Mileage
Plus Marketing, Inc. and Mileage Plus, Inc., (iii) the License Agreement
dated as of November 22, 2002, by and between Borrower and ULS, (iv) the
Mileage Plus Operating Agreement dated as of November 22, 2002, by and
between Borrower and ULS, (v) the Umbrella Agreement dated as of November
22, 2002, by and between Borrower and ULS and (vi) the Domestic Customer
Service Outsourcing Agreement dated as of November 22, 2002, by and among
ULS, Mileage Plus, Inc. and Borrower, in each case as amended and in effect
on the Closing Date and as the same may be hereafter amended, supplemented
or otherwise modified in accordance herewith.

               
"Co-Branded Debit Card Amendment" means that certain Third Amendment to
Co-Branded Card Marketing Services Agreement dated as of December 7, 2002,
by and among Bank One, Delaware, N.A., Parent and ULS.

               
"Co-Branded Card Amendment" means that certain Amendment Number 4 to the
Co-Branded Card Marketing Services Agreement dated as of December 7, 2002,
by and among Bank One, Delaware, N.A., Parent, ULS and Borrower.

               
"Co-Branded Card Collateral" means all of the Credit Parties' right, title
and interest in the Co-Branded Card Agreements, including, without limitation,
all rights to payment thereunder, and all Property used or useful in connection
with the delivery by the Credit Parties (including, without limitation,
the Borrower) or any of their Affiliates of the benefits (including, without
limitation, miles and other services) Bank One, Delaware, N.A. receives
under the Co-Branded Card Agreements, including, without limitation, all
assets owned by ULS (except for those assets which are not used or useful
in connection with the delivery of the above described benefits), Mileage
Plus Holdings, Inc., Mileage Plus Marketing, Inc. and Mileage Plus, Inc.
and all call centers, customer lists, systems, programs, software, and
all trademarks, tradenames (including without limitation the "Mileage Plus"
tradename and derivations thereof), other intellectual property and general
intangibles in connection with the foregoing and all proceeds, rents and
products thereof and distributions thereon.

               
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

               
"Collateral" means all Property of the Borrower and each Credit Party,
including, without limitation, all of the Property covered (or intended
to be covered) by this Agreement, the Orders and the other Loan Documents,
including, without limitation, the Co-Branded Card Collateral and the Additional
DIP Collateral. Collateral shall not include (i) Section 1110 Assets that
are subject to valid, perfected and non-avoidable liens, (ii) Avoidance
Actions (it being understood that, notwithstanding such exclusion, the
proceeds of Avoidance Actions shall be available to repay the Obligations),
(iii) funds held in Escrow Accounts (it being understood that, notwithstanding
such exclusion, the Borrower's and any applicable Credit Party's rights
to receive any excess funds remaining in the Escrow Accounts following
the payment in full of the taxes, fees and charges payable from such Escrow
Accounts shall be subject to the grant of security interest and Lien described
in Section 2.21 (subject only to the Additional DIP Lenders' Lien on the
Additional DIP Collateral)) and (iv) interests of the Borrower and the
Credit Parties in the joint ventures set forth on Schedule 1.1(d) (but
only to the extent that applicable law or the organizational documents
with respect to any such joint venture do not permit an assignment of such
interests, it being understood that in any event the Agent's Lien granted
hereunder shall extend to the proceeds (of any kind) of any disposition
of any such joint venture interests and all distributions thereon).

               
"Commercial Tort Claims" means those certain currently existing commercial
tort claims of the Credit Parties.

               
"Commitment" means, for each Lender, the obligation of such Lender to make
the Loan not exceeding the amount set forth opposite its signature below,
as it may be modified as a result of any assignment that has become effective
pursuant to Section 12.3.3 or as otherwise modified from time to time pursuant
to the terms hereof.

               
"Control" shall have the meaning set forth in Article 8 or, if applicable,
in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Illinois UCC.

               
"Conversion/Continuation Notice" shall have the meaning set forth in Section
2.9 hereof.

               
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Parent, the
Borrower or any of the Parent's Subsidiaries, are treated as a single employer
under Section 414 of the Code.

               
"Credit Parties" means Borrower and the other parties identified as "Credit
Parties" on the signature pages hereto.

               
"DCA" shall mean Ronald Reagan Washington National Airport.

               
"Default" means an event described in Article VII.

               
"Deposit Accounts" shall have the meaning set forth in Article 9 of the
Illinois UCC.

               
"Documents" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"DOT" shall mean the United States Department of Transportation.

               
"EBITDAR" shall mean, for any period, all as determined in accordance with
Agreement Accounting Principles, 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 (excluding any book gains or losses recognized on the
return of aircraft associated with a rejection or settlement of the Borrower's
credit agreement dated as of November 17, 1999, as amended, with Kreditanstalt
fur Wiederaufbau and the Borrower's 1997-1 enhanced equipment trust certificates),
(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 losses, (viii) any non-recurring
charge or restructuring charge; (ix) the cumulative effect (whether positive
or negative) of any change in accounting principles; (x) any Fees (as defined
in the Additional DIP Credit Agreement) and fees set forth in the Fee Letter
paid, in each case, by the Borrower and not otherwise added back to consolidated
net income (or net loss) pursuant to any of the foregoing clauses of this
definition; and (xi) the difference (whether positive or negative) between
the cash paid by Bank One, Delaware, N.A. during such period pursuant to
its "Annual Guaranteed Miles Purchased" (as defined in the agreement referred
to in clause (i) of the definition of Co-Branded Card Agreements) and the
amount of the revenue recorded during such period on account of the miles
so purchased by Bank One, Delaware, N.A. pursuant to the Co-Branded Card
Agreements during such period and prior periods less (b) extraordinary
gains plus or minus (c) the amount of cash received or expended
in such period in respect of any amount which, under clause (viii) above,
was taken into account in determining EBITDAR for such or any prior period.

               
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i)
the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land,
or (iv) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.

               
"Environmental Lien" shall mean a Lien in favor of any Governmental Authority
for (i) any liability under federal or state environmental laws or regulations,
or (ii) damages arising from or costs incurred by such Governmental Authority
in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.

               
"Equipment" shall have the meaning set forth in Article 9 of the Illinois
UCC and shall include, without limitation, all vehicles, vessels, aircraft,
aircraft engines, propellers, parts, spare parts, spare engines, flight
simulators, and quick engine change kits.

               
"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 each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a single employer within the meaning of Section 414(b),
(c), (m), or (o) of the Code.

               
"Escrow Accounts" shall mean certain funds set aside by the Borrower or
any Credit Party to manage the collection and payment of amounts collected
by the Borrower or such Credit Party 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 (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 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 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; and (c) passenger facility fees and charges as described
in Title 49 Section 40117 (2002) and Title 14 of the Code of Federal Regulations
of 2002, Subchapter 1, Part 158 collected on behalf of and owed to various
administrators, institutions, authorities, agencies and entities; in each
case held in escrow accounts or trust funds in an aggregate amount for
all of such Escrow Accounts not in excess of $200,000,000 (provided that
such amount may be increased upon an increase in any of the foregoing taxes,
fees and charges for which the Borrower's officers and directors may have
personal liability if not paid).

               
"Eurodollar Base Rate" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, and having a maturity
equal to such Interest Period, provided that, if no such British Bankers'
Association LIBOR rate is available to the Agent, the applicable Eurodollar
Base Rate for the relevant Interest Period shall instead be the rate determined
by the Agent to be the rate at which Bank One or one of its Affiliate banks
offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate
amount of Bank One's relevant Eurodollar Loan and having a maturity equal
to such Interest Period.

               
"Eurodollar Loan" means a Loan which, except as otherwise provided in Section
2.11, bears interest at the applicable Eurodollar Rate.

               
"Eurodollar Rate" means, with respect to a Eurodollar Loan for the relevant
Interest Period, the sum of (i) the greater of (I) two percent (2%) and
(II) the quotient of (a) the Eurodollar Base Rate applicable to such Interest
Period, divided by (b) one minus the Reserve Requirement (expressed as
a decimal) applicable to such Interest Period, plus (ii) the Applicable
Margin.

               
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its net income, and franchise
taxes imposed on it, by (i) the United States of America jurisdiction under
the laws of which such Lender or the Agent is incorporated or organized
or (ii) the jurisdiction in which the Agent's or such Lender's principal
executive office or such Lender's applicable Lending Installation is located.

               
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.

               
"FAA" shall mean the Federal Aviation Administration.

               
"Facility Termination Date" means the earliest of (a) July 1, 2004, (b)
the substantial consummation (as defined in Section 1101 of the Bankruptcy
Code) of a plan of reorganization (the "Plan of Reorganization") that is
confirmed pursuant to a final, non-appealable order entered by the Bankruptcy
Court or any other court having jurisdiction in the Chapter 11 Cases, but
in no event shall such date be later than the effective date of such Plan
of Reorganization and (c) the date of termination of the Additional DIP
Credit Agreement or of the Additional DIP Lenders' commitments thereunder;
or any earlier date on which the Aggregate Commitment is reduced to zero
or otherwise terminated pursuant to the terms hereof.

               
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at approximately
10:00 a.m. (Chicago time) on such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by the Agent in its sole discretion.

               
"Fee Letter" has the meaning set forth in Section 4.1(ix).

               
"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.

               
"Final Order" means an order of the Bankruptcy Court entered in the Chapter
11 Cases after a final hearing under Bankruptcy Rule 4001(c)(2) which order,
among other things, modifies the automatic stay under Section 362 of the
Bankruptcy Code to permit the creation and perfection of Agent's Liens
on the Collateral and to provide for the automatic vacation of the automatic
stay to permit the enforcement of Agent's and Lenders' remedies under the
Loan Documents and which order is in substantially the form attached as
Exhibit E hereto, as the same may be amended, supplemented or otherwise
modified from time to time with the express written consent or joinder
of Agent and Requisite Lenders and approved by the Bankruptcy Court.

               
"Final Order Date" means the date of entry of the Final Order by the Bankruptcy
Court.

               
"Financial Forecast" shall have the meaning set forth in Section 4.1(xvi)
hereof.

               
"Fixtures" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"Flight Simulators" shall mean the flight simulators and flight training
devices of the Borrower or any applicable Guarantor other than the flight
simulators listed on Schedule 1.1(c).

               
"Floating Rate" means, for any day, a rate per annum equal to (i) the Alternate
Base Rate for such day plus (ii) the Applicable Margin, in each case changing
when and as the Alternate Base Rate changes.

               
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.

               
"Foreign Aviation Authorities" shall mean any foreign or governmental,
regulatory or other agency or agencies which exercise jurisdiction over
the issuance or authorization to serve any foreign point on each of the
Routes and/or operations related to the Routes and Supporting Route Facilities.

               
"Foreign Slot" shall mean all of the rights and operational authority,
now held or hereafter acquired, of the Borrower and, if applicable, a Credit
Party, to conduct one landing or takeoff operation during a specific hour
or other period at each non-U.S. airport necessary to operate a Route.

               
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

               
"Gate Leaseholds" shall mean all of the right, title, privilege, interest,
and authority now or hereafter acquired or held by the Borrower or, if
applicable, a Credit Party in connection with the right to use, operate
or occupy space in any airport or terminal at which the Borrower conducts
scheduled operations.

               
"General Intangibles" shall have the meaning set forth in Article 9 of
the Illinois UCC, including, without limitation, all right, title and interest
in (i) Slots, Primary Foreign Slots, Routes, Primary Routes, leasehold
interests (including, without limitation, leasehold interests in hangars
and parts depots), Fifth Freedom Rights and "behind and beyond" rights
and (ii) Gate Leaseholds, Supporting Route Facilities (including, without
limitation, with respect to hangers and parts depots) and Foreign Slots
to the extent that the grant of a security interest is permitted by applicable
law, it being understood that, in any event, the grant of the security
interest described in Section 2.26.1 on such Gate Leaseholds, Supporting
Route Facilities and Foreign Slots shall extend to the proceeds (of any
kind) received or to be received by the Borrower or applicable Credit Party
upon the transfer or other disposition of such Foreign Slots, Gate Leaseholds
and/or Supporting Route Facilities.

               
"Governmental Authority" shall mean any Federal, state, municipal or other
governmental department, commission, board, bureau, agency, administration
or instrumentality or any court, in each case whether of the United States
or foreign.

               
"Guaranteed Obligations" shall have the meaning set forth in Section 16.1
hereof.

               
"Guarantor" means Parent and each other Credit Party (other than Borrower),
together with each such entity's successors and assigns.

               
"Illinois UCC" means the Illinois Uniform Commercial Code as in effect
from time to time in the State of Illinois.

               
"Indebtedness" shall mean, at any time and with respect to any Person,
(i) all indebtedness of such Person for borrowed money; (ii) all indebtedness
of such Person for the deferred purchase price of property or services
(other than property, including inventory, and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary
course of business); (iii) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments (other than performance,
surety and appeal bonds arising in the ordinary course of business); (iv)
all indebtedness of such Person created or arising under any conditional
sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession
or sale of such property); (v) all obligations of such Person under Capitalized
Leases; (vi) all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of credit or
similar facilities and all obligations of such Person in respect of (x)
currency swap agreements, currency future or option contracts and other
similar agreements designed to hedge against fluctuations in foreign interest
rates and currency values, (y) interest rate swap, cap or collar agreements
and interest rate future or option contracts, and (z) fuel hedges and other
derivatives contracts; (vii) all Indebtedness referred to in clauses (i)
through (vi) above guaranteed directly or indirectly by such Person, or
in effect guaranteed directly or indirectly by such Person through an agreement
(A) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (B) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss
in respect of such Indebtedness, (C) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered or to maintain the net worth or other financial condition
or ratio of the debtor) or (D) otherwise to assure a creditor against loss
in respect of such Indebtedness; and (viii) all Indebtedness referred to
in clauses (i) through (vii) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in Property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness (it
being understood that claims arising upon the rejection of unexpired leases
and other executory contracts shall not be treated as Indebtedness hereunder).

               
"Instruments" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"Insufficiency" shall mean, with respect to any Plan, its "amount of unfunded
benefit liabilities" within the meaning of Section 4001(a)(18) of ERISA,
if any.

               
"Interest Period" means, with respect to a Eurodollar Loan, a period of
one, two, three or six months commencing on a Business Day selected by
the Borrower pursuant to this Agreement.  Such Interest Period shall
end on the day which corresponds numerically to such date one, two, three
or six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month,
such Interest Period shall end on the last Business Day of such next, second,
third or sixth succeeding month.  If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end
on the next succeeding Business Day, provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.

               
"Interim Order" means the order of the Bankruptcy Court entered on December
9, 2002 in the Chapter 11 Cases and attached hereto as Exhibit D, as the
same may be amended, supplemented or otherwise modified from time to time
with the express written consent or joinder of Agent and Required Lenders
and approved by the Bankruptcy Court.

               
"Interim Order Date" means December 9, 2002.

               
"Inventory" shall have the meaning set forth in Article 9 of the Illinois
UCC.

               
"Investments" of a Person shall have the meaning set forth in Section 6.25
hereof.

               
"Investment Property" shall have the meaning set forth in Article 9 of
the Illinois UCC, and shall include, without limitation, .securities or
other ownership interests in a corporation, partnership, joint venture,
limited liability company or other entity.

               
"JFK" shall mean New York's John F. Kennedy (JFK) International Airport.

               
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.

               
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by
such Lender or the Agent pursuant to Section 2.17 hereof.

               
"LGA" shall mean New York's LaGuardia Airport.

               
"Lien" means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

               
"Loan" means, with respect to a Lender, such Lender's term loan made pursuant
to Article II (or any conversion or continuation thereof).

               
"Loan Documents" means the Orders, this Agreement, any Notes issued pursuant
to Section 2.13, the SGR Security Agreement, the Aircraft Mortgage and
any other ancillary and collateral documents contemplated hereby or executed
in connection herewith.

               
"Mandatory Reductions" shall have the meaning set forth in Section 2.2(a)
hereof.

               
"Material Adverse Effect" means a material adverse effect on (i) the operations,
business, Property, assets, prospects or condition (financial or otherwise)
of the Borrower and the Credit Parties taken as a whole, (ii) the ability
of the Borrower and the Credit Parties to perform their obligations under
the Loan Documents, or (iii) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.

               
"Material Indebtedness" means Indebtedness in an aggregate principal amount
in excess of $20,000,000 that would give rise to an administrative claim
under the Bankruptcy Code, including, but not limited to, those administrative
claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c),
507(a), 507(b), 546(c) or 726 of the Bankruptcy Code.

               
"Material Indebtedness Agreement" means any agreement (a) under which any
Material Indebtedness was created or is governed or which provides for
the incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder) and (b) which was entered into
either (i) Prepetition and which is affirmed after the Petition Date or
(ii) Postpetition.

               
"Moody's" means Moody's Investors Service, Inc.

               
"Mortgage Supplement" shall have the meaning set forth in the Aircraft
Mortgage.

               
"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 and spare parts inventory
included within the Collateral.

               
"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 (i) 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 (ii) 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.

               
"Non-U.S. Lender" shall have the meaning set forth in Section 3.5(iv) hereof.

               
"Note" shall have the meaning set forth in Section 2.13 hereof.

               
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loan, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower or any other Credit Party
to the Lenders or to any Lender, the Agent or any indemnified party arising
under the Loan Documents.

                
"Orders" means the Interim Order and the Final Order.

               
"Other Taxes" shall have the meaning set forth in Section 3.5(ii) hereof.

               
"Parent" shall mean UAL Corporation, a Delaware corporation, as debtor
and debtor in possession.

               
"Participants" shall have the meaning set forth in Section 12.2.1 hereof.

               
"Payment Date" means the last calendar day of each month.

               
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

               
"Pension Plan" shall mean a defined benefit plan (as defined in Section
414(j) of the Code and Section 3(35) of ERISA) which is intended to be
qualified under Section 401(a) of the Code.

               
"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 twelve months from the date of acquisition thereof;

                       
(b) investments in commercial paper maturing within six months from the
date of acquisition thereof and having, at such date of acquisition, a
rating of at least "A-2" or the equivalent thereof from Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. or of at least "P-2"
or the equivalent thereof from Moody's Investors Service, Inc.;

                       
(c) investments in certificates of deposit, banker's acceptances and time
deposits (including Eurodollar time deposits) maturing within six months
from the date of acquisition thereof issued or guaranteed by or placed
with (i) any domestic office of the Agent or the bank with whom the Borrower
and the Credit Parties maintain their cash management system, or (ii) 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 is the principal banking Subsidiary of a bank holding
company having a long-term unsecured debt rating of at least "A-2" or the
equivalent thereof from Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. or at least "P-2" or the equivalent thereof from Moody's
Investors Service, Inc.;

                       
(d) investments in commercial paper maturing within six months from the
date of acquisition thereof and issued by (i) Agent or (ii) the holding
company 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) a combined capital and surplus in excess of $250,000,000 and (B) commercial
paper rated at least "A-2" or the equivalent thereof from Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. or of at least "P-2"
or the equivalent thereof from Moody's Investors Service, Inc.;

                       
(e) investments in repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (a)
above entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above; and

                       
(f) investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (a) through
(e) above.

               
"Permitted Liens" shall mean (i) Liens imposed by law (other than Environmental
Liens and any Lien imposed under ERISA) for taxes, assessments 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 Agreement Accounting Principles; (ii) Liens of landlords
and Liens of carriers, warehousemen, consignors, mechanics, materialmen
and other Liens (other than Environmental Liens and any Lien imposed under
ERISA) in existence on the Petition Date or thereafter imposed by law and
created in the ordinary course of business; (iii) Liens (other than any
Lien imposed under ERISA) incurred or deposits (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; (iv) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere materially with the ordinary conduct of
the business of the Borrower or any Credit Party, as the case may be, and
which 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
Credit Party, as the case may be; (v) purchase money Liens (including Capitalized
Leases) upon or in any Property acquired or held in the ordinary course
of business to secure the purchase price of such Property or to secure
Indebtedness permitted by Section 6.03(v) solely for the purpose of financing
the acquisition of such property; (vi) letters of credit or deposits in
the ordinary course to secure leases; and (vii) extensions, renewals or
replacements of any Lien referred to in paragraphs (i) through (vi) 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" means any natural person, corporation, firm, joint venture, partnership,
limited liability company, association, enterprise, trust or other entity
or organization, or any government or political subdivision or any agency,
department or instrumentality thereof.

               
"Petition Date" shall have the meaning set forth in the Recitals hereof.

               
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.

               
"Plan of Reorganization" shall have the meaning set forth in the definition
of Facility Termination Date.

               
"Pledged Deposits" means all time deposits of money (other than Deposit
Accounts and Instruments), whether or not evidenced by certificates, which
any Credit Party may from time to time designate as pledged to the Agent
or to any Lender as security for any Obligation, and all rights to receive
interest on said deposits.

               
"Postpetition" means the time period immediately following the filing of
the Chapter 11 Cases.

               
"Postpetition Indebtedness" means all Indebtedness of the Credit Parties
incurred after the filing of the Chapter 11 Cases.

               
"Prepetition" means the time period ending immediately prior to the filing
of the Chapter 11 Cases.

               
"Prepetition Indebtedness" means all Indebtedness of any of the Credit
Parties outstanding on the Petition Date immediately prior to the filing
of the Chapter 11 Cases.

               
"Primary Foreign Slots" shall mean the Foreign Slots set forth on Schedule
1.1(a), as may be amended from time to time at the request of the Agent
pursuant to Section 6.19(b).

               
"Primary Routes" shall mean the Routes set forth on Schedule 1.1(b) as
may be amended from time to time at the request of the Agent pursuant to
Section 6.19(b).

               
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime
rate changes.

               
"Property" of a Person means any and all property, of any kind or type
whatsoever and wherever located, whether real, personal, tangible, intangible,
or mixed, of such Person, or other assets, whether now owned, leased or
operated or hereafter acquired, leased or operated by such Person, including,
without limitation, all Accounts (including, without limitation, in the
case of ULS, ULS' right to payment under the Co-Branded Card Agreements),
Chattel Paper, Commercial Tort Claims, Documents, Equipment, Fixtures,
General Intangibles, Instruments, Inventory, Investment Property, and Pledged
Deposits, wherever located, in which such Person now has or hereafter acquires
any right or interest, and the proceeds (including Stock Rights), insurance
proceeds and products thereof, together with all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto.

               
"Purchasers" shall have the meaning set forth in Section 12.3.1 hereof.

               
"Receivables" means the Accounts, Chattel Paper, Investment Property, Instruments,
Pledged Deposits, and any other rights or claims to receive money which
are General Intangibles or which are otherwise included as Collateral.

               
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

               
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.

               
"Reports" shall have the meaning set forth in Section 9.6 hereof.

               
"Required Lenders" means Lenders in the aggregate having at least a majority
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least a majority of the aggregate unpaid
principal amount of the outstanding Loan.

               
"Reserve Requirement" means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal
and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

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

               
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.

               
"Sale and Leaseback Transaction" means any sale or other transfer of Property
by any Person with the intent to lease such Property as lessee.

               
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

               
"Section" means a numbered section of this Agreement, unless another document
is specifically referenced.

               
"Section 1110 Assets" shall mean (i) property (and agreements related to
such property) that qualifies as an "aircraft," "aircraft engine," "propeller,"
"appliance" or "spare part" (as defined in Section 40102 of Title 49) as
those terms are used in Section 1110(a)(3)(A)(i) and (B) of the Bankruptcy
Code to the extent that the Borrower or any applicable Credit Party is
expressly prohibited from granting liens thereon or assignments thereof
under the terms of any security agreement, lease or conditional sale agreement
related thereto under which the applicable secured party, lessor or seller
is entitled to the protections afforded under Section 1110 of the Bankruptcy
Code with respect to such property or agreements or (ii) property referred
to in the previous clause that the Borrower or any of the Credit Parties
elects to return to the party providing financing therefor in exchange
for a discharge of the related indebtedness.

               
"Security" shall have the meaning set forth in Article 8 of the Illinois
UCC.

               
"SGR Security Agreement" shall have the meaning set forth in Section 4.1(xxvi).

               
"Single Employer Plan" shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect
of which the Borrower could 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 Credit Party, now held or hereafter acquired, to
conduct one Instrument Flight Rule (as defined under the FAA regulations)
landing or takeoff operation during a specific hour or half-hour period
at LGA, DCA or JFK pursuant to FAA regulations, including Title 14.

               
"Slot Reporting Guidelines" shall mean that, for purposes of each slot
utilization report delivered pursuant to Section 6.1(n),

               
(i)    a Slot will be deemed "utilized" if (A) such Slot
is used for a take-off or landing operation, (B) by regulation or other
regulatory notice, the FAA considers such Slot as "used" for purposes of
14 C.F.R. Section 93.227, regardless of whether or not such Slot was, in
fact, used (e.g., holidays as defined in 14 C.F.R. Section 93.227(l) and
labor actions), (C) by waiver, the FAA considers such Slot as "used" for
purposes of 14 C.F.R. Section 93.227, even though such Slot was not, in
fact, used or (D) the FAA otherwise waives the Slot utilization requirement
of 14 C.F.R. Section 93.227,
               
(ii)    if the Borrower engages in a temporary Slot trade,
transfer, exchange or lease with another air carrier, the Borrower shall
report the utilization rate for the slot received in the
trade, transfer or lease, rather than for the Slot traded, transferred
or leased to such other air carrier, for so long as the slot received continues
to be operated by the Borrower,

               
(iii)    a "week" is defined as a seven-day period, and

               
(iv)    the two month FAA reporting period shall be the
period for which air carriers provide slot utilization reports to the FAA
pursuant to 14 C.F.R. Section 93.227.

               
"Stock Rights" means any securities, dividends or other distributions and
any other right or property which any Credit Party shall receive or shall
become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any securities or other ownership interests
in a corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities
and any right to receive earnings, in which any Credit Party now has or
hereafter acquires any right, issued by an issuer of such securities.
               
"Subsidiary" means, with respect to any Person (referred to as the "parent"
solely for purposes of this definition), 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 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 the takeoff and/or landing rights,
gates, ticket counters, office space and baggage claim areas at each airport
necessary to operate a Route including, but not limited to, those at the
following airports: London; Heathrow; Tokyo; Narita; Osaka; Kansai; Beijing;
Capital Airport; Shanghai; Puo Dong; and Hong Kong, Hong Kong International.

               
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect
to the foregoing, but excluding Excluded Taxes and Other Taxes.

               
"Termination Event" shall mean (i) a "reportable event", as such term is
described in Section 4043(c) of ERISA (other than a "reportable event"
as to which the 30-day notice is waived under subsection .22, .23, .25,
..27 or .28 of PBGC Regulation Section 4043) or an event described in Section
4068 of ERISA and excluding events which would not be reasonably likely
(as reasonably determined by the Agent) to have a material adverse effect
on the financial condition, operations, business, properties or assets
of the Borrower and the Credit Parties taken as a whole, or (ii) 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, the incurrence of liability by the Borrower
or any ERISA Affiliate under Section 4064 of ERISA upon the termination
of a Multiple Employer Plan, the imposition of Withdrawal Liability, or
(iii) providing notice of intent to terminate a Pension Plan pursuant to
Section 4041(c) of ERISA (provided such termination would have a Material
Adverse Effect) or the treatment of a Pension Plan amendment as a termination
under Section 4041 of ERISA, if such amendment requires the provision of
security, or (iv) the institution of proceedings to terminate a Pension
Plan by the PBGC under Section 4042 of ERISA (provided such termination
would have a Material Adverse Effect), or (v) any other event or
condition (other than the commencement of the Chapter 11 Cases and the
failure to have made any contribution accrued as of the Petition Date but
not paid) 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), excluding events or conditions which would not be reasonably
likely (as reasonably determined by the Agent) to have a Material Adverse
Effect.

               
"Title 14" means Title 14 of the U.S. Code of Federal regulations, Part
93, Subparts K and S, as amended from time to time or any successor or
recodified regulation.

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

               
"Transferee" shall have the meaning set forth in Section 12.4 hereof.

               
"Type" means, with respect to the Loan, its nature as a Floating Rate Loan
or a Eurodollar Loan.

               
"ULS" means UAL Loyalty Services, Inc., a Delaware corporation.

               
"United States Citizen"  shall have the meaning set forth in Section
5.22 hereof.

               
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.

               
"Use or Lose Rule" shall mean with respect to Slots, the terms of 14 C.F.R.
Section 93.227.

               
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries
of such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

               
"Withdrawal Liability" shall have the meaning given such term under Part
I of Subtitle E of Title IV of ERISA.

               
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.  Terms defined in the Illinois
UCC which are not otherwise defined in this Agreement are used herein as
defined in the Illinois UCC.

 

ARTICLE II.

THE CREDITS

 

 

 

 

 

 

 

 

 

 

2.1    Commitment.  Each Lender severally
agrees, on the terms and conditions set forth in this Agreement, to make
a Loan to the Borrower in an amount not to exceed the amount of its Commitment. 
At no time shall the aggregate principal amount of the outstanding Loan
exceed the Aggregate Commitment.  Amounts repaid hereunder shall not
be reborrowed.  The Loan shall become due and payable on the Facility
Termination Date.
2.2    Required Payments; Termination.

(a)    Commencing on March 1, 2004 and on the first
Business Day of each calendar month thereafter, the principal amount of
the Loan shall be paid (with a corresponding permanent reduction in the
Aggregate Commitment) in installments (each such payment and Aggregate
Commitment reduction, a "Mandatory Reduction" and collectively with all
other payments and reductions, the "Mandatory Reductions") in the respective
amounts shown below opposite the applicable month:

 

 
	
Calendar Month of

Payment and Aggregate

Commitment Reduction
	
Payment and Aggregate

Commitment Reduction

	
March, 2004
	
$60,000,000

	
April, 2004
	
$60,000,000

	
May, 2004
	
$60,000,000

	
June, 2004
	
$60,000,000

	
July, 2004
	
$60,000,000

Notwithstanding the foregoing, the final Mandatory Reduction on July
1, 2004 shall be the greater of $60,000,000 and the remaining amount of
the outstanding Loan.  Immediately upon the repayment of the Loan
(and corresponding Aggregate Commitment reductions) set forth in this Section
2.2(a), each Lender's Commitment shall automatically and permanently be
reduced by an amount equal to such Lender's ratable share of such reduction.

(ii) At any time that any portion of the outstanding Loan is due and
payable or the Aggregate Commitments are reduced below the aggregate principal
amount of the outstanding Loan (in either case, due to a Mandatory Reduction
set forth in this Section 2.2(a) or otherwise), Agent shall be entitled,
solely at its discretion, to set-off or otherwise apply amounts payable
by Bank One, Delaware, N.A. to Borrower under the Co-Branded Card Agreements
against any such amounts due the Lenders.

    (b)    Any outstanding Loan and all
other unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.

    (c)    At any time following the occurrence
of a default, event or condition, the effect of which default, event or
condition permits Bank One, Delaware, N.A. to terminate any of the Co-Branded
Card Agreements,  all payments made by Bank One, Delaware,  N.A.
under the Co-Branded Card Agreements shall be immediately set-off or otherwise
applied against the outstanding Loan with a corresponding permanent reduction
in the Aggregate Commitment equal to the amount of such payments.

    (d)    Upon any voluntary permanent
reduction of the revolving loan commitment and/or voluntary prepayment
of the term loans under the Additional DIP Credit Agreement (the amount
of such reduction or prepayment, the "Additional DIP Voluntary Prepayment"),
the Borrower shall contemporaneously repay the Loan (with a corresponding
reduction in the Aggregate Commitment) in an amount equal to the product
of (i) the Additional DIP Voluntary Prepayment multiplied by (ii) a ratio
(expressed as a percentage) of the Aggregate Commitment at the time of
such prepayment to the sum of the outstanding commitments under the Additional
DIP Credit Agreement at such time and the Aggregate Commitment at such
time.  Such prepayment shall be applied pro rata among all remaining
Mandatory Reductions.

 
2.3    Ratable Loan.  The Loan shall be made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.

2.4    Types of Loan.  The Loan may be a
Floating Rate Loan or a Eurodollar Loan, or a combination thereof, selected
by the Borrower in accordance with Sections 2.8 and 2.9.

2.5    [Intentionally Deleted]

2.6    [Intentionally Deleted]

2.7    Optional Principal Payments.  The
Borrower may from time to time pay, without penalty or premium, all of
the outstanding Floating Rate Loan, or, in a minimum aggregate amount of
$10,000,000 or any integral multiple of $1,000,000 in excess thereof, any
portion of the outstanding Floating Rate Loan, upon two Business Days'
prior notice to the Agent.  The Borrower may from time to time pay,
subject to the payment of any funding indemnification amounts required
by Section 3.4 but without penalty or premium, all of the outstanding Eurodollar
Loan, or, in a minimum aggregate amount of $10,000,000 or any integral
multiple of $10,000,000 in excess thereof, any portion of the outstanding
Eurodollar Loan, upon three Business Days' prior notice to the Agent. 
Amounts repaid may not be reborrowed.

2.8    Method of Selecting Types and Interest Periods
of Loan.  The Borrower shall select the Type of Loan and, in the
case of each Eurodollar Loan, the Interest Period applicable thereto from
time to time.  No more than five (5) Eurodollar Loans may be outstanding
at any time.  The Type of Loan funded on the Closing Date shall be
a Floating Rate Loan.

2.9    Conversion and Continuation of Outstanding
Loan.  Each Floating Rate Loan shall continue as a Floating Rate
Loan unless and until such Floating Rate Loan is converted into Eurodollar
Loan pursuant to this Section 2.9 or is repaid in accordance with Section
2.7.  Each Eurodollar Loan shall continue as a Eurodollar Loan until
the end of the then applicable Interest Period therefor, at which time
such Eurodollar Loan shall be automatically converted into a Floating Rate
Loan unless (x) such Eurodollar Loan is or was repaid in accordance with
Section 2.7 or (y) the Borrower shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest
Period, such Eurodollar Loan continue as a Eurodollar Loan for the same
or another Interest Period.  Subject to the terms of Section 2.9,
the Borrower may elect from time to time to convert all or any part of
a Floating Rate Loan into a Eurodollar Loan.  The Borrower shall give
the Agent irrevocable (unless a Eurodollar Loan is not available due to
increased costs (as set forth in Section 3.2) or illegality (as set forth
in Section 3.3)) notice (a "Conversion/Continuation Notice") of each conversion
of a Floating Rate Loan into a Eurodollar Loan or continuation of a Eurodollar
Loan not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:

 

(i)    the requested date, which shall be a Business
Day, of such conversion or continuation,
(ii)    the aggregate amount and Type of the Loan which
is to be converted or continued, and

(iii)    the amount of such Loan which is to be converted
into or continued as a Eurodollar Loan and the duration of the Interest
Period applicable thereto.

 

2.10    Changes in Interest Rate, etc.  Each
Floating Rate Loan shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Loan is made or
is automatically converted from a Eurodollar Loan into a Floating Rate
Loan pursuant to Section 2.9, to but excluding the date it is paid or is
converted into a Eurodollar Loan pursuant to Section 2.9, at a rate per
annum equal to the Floating Rate for such day.  Changes in the rate
of interest on that portion of any Loan maintained as a Floating Rate Loan
will take effect simultaneously with each change in the Alternate Base
Rate.  Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined by the Agent as applicable to such
Eurodollar Loan based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof.  No Interest
Period may end after the Facility Termination Date.

2.11    Rates Applicable After Default. 
Notwithstanding anything to the contrary contained in Section 2.8, 2.9
or 2.10, during the continuance of a Default the Agent or Required Lenders
may, at their option, by written notice to the Borrower (which notice may
be revoked at the option of the Required Lenders notwithstanding any provision
of Section 8.2 requiring unanimous consent of the Lenders to changes in
interest rates), declare that no Loan may be made as, converted into or
continued as a Eurodollar Loan.  During the continuance of a Default,
Agent or the Required Lenders may, at their option, by written notice to
the Borrower (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Loan shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period
plus 2% per annum and (ii) each Floating Rate Loan shall bear interest
at a rate per annum equal to the Floating Rate in effect from time to time
plus 2% per annum.

2.12    Method of Payment.  Subject to the
right of Bank One, NA to setoff payments pursuant to Section 2.2 hereof
(which such right shall be exclusively exercised by Bank One, NA), all
payments of the Obligations hereunder shall be made, without setoff, deduction,
or counterclaim, in immediately available funds to the Agent at the Agent's
address specified pursuant to Article XIII, or at any other Lending Installation
of the Agent specified in writing by the Agent to the Borrower, by noon
(local time) on the date when due and shall be applied ratably by the Agent
among the Lenders.  Each payment delivered to the Agent for the account
of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds that the Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender.  The Agent is hereby
authorized to charge any account of the Credit Parties maintained with
Bank One or any Affiliate of Bank One for each payment of principal, interest
and fees as it becomes due hereunder.

2.13    Noteless Agreement; Evidence of Indebtedness.

               
(i)    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 from
time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.

               
(ii)    The Agent shall also maintain accounts in which
it will record (a) the amount of each Loan made hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount of any principal
or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (c) the amount of any sum received by the
Agent hereunder from the Borrower and each Lender's share thereof.

               
(iii)    The entries maintained in the accounts maintained
pursuant to paragraphs (i) and (ii) above shall be prima facie evidence
of the existence and amounts of the Obligations therein recorded; provided,
however,
that the failure of the Agent or any Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the
Borrower to repay the Obligations in accordance with their terms.

               
(iv)    Any Lender may request that its Loan be evidenced
by a promissory note in substantially the form of Exhibit C (a "Note"). 
In such event, the Borrower shall prepare, execute and deliver to such
Lender such Note payable to the order of such Lender.  Thereafter,
the Loan evidenced by such Note and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be represented by one
or more Notes payable to the order of the payee named therein, except to
the extent that any such Lender subsequently returns any such Note for
cancellation and requests that such Loan once again be evidenced as described
in paragraphs (i) and (ii) above.

2.14    Telephonic Notices.  The Borrower
hereby authorizes the Lenders and the Agent to convert or continue the
Loan, effect selections of Types of the Loan and to transfer funds based
on telephonic notices made by any person or persons the Agent or any Lender
in good faith believes to be acting on behalf of the Borrower, it being
understood that the foregoing authorization is specifically intended to
allow Conversion/Continuation Notices to be given telephonically. 
The Borrower agrees to deliver promptly to the Agent a written confirmation,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice signed by an Authorized Officer.  If the written confirmation
differs in any material respect from the action taken by the Agent and
the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.

2.15    Interest Payment Dates; Interest and Fee Basis. 
Interest accrued on each Floating Rate Loan shall be payable on each Payment
Date, commencing with the first such date to occur after the date hereof,
and at maturity.  Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Loan converted into a Eurodollar
Loan on a day other than a Payment Date shall be payable on the date of
conversion.  Interest accrued on each Eurodollar Loan shall be payable
on the last day of its applicable Interest Period, on any date on which
the Eurodollar Loan is prepaid, whether by acceleration or otherwise, and
at maturity.  Interest accrued on each Eurodollar Loan having an Interest
Period longer than three months shall also be payable on the last day of
each three-month interval during such Interest Period.  Interest and
commitment fees shall be calculated for actual days elapsed on the basis
of a 360-day year.  Interest shall be payable for the day a Loan is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment.  If any
payment of principal of or interest on a Loan shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of
time shall be included in computing interest in connection with such payment.

2.16    [Intentionally Deleted]

2.17    Lending Installations.  Each Lender
may book its Loan at any Lending Installation selected by such Lender and
may change its Lending Installation from time to time.  All terms
of this Agreement shall apply to any such Lending Installation and the
Loan and any Notes issued hereunder shall be deemed held by each Lender
for the benefit of any such Lending Installation.

2.18    Non-Receipt of Funds by the Agent. 
Unless the Borrower notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of a payment of principal, interest
or fees to the Agent for the account of the Lenders, that it does not intend
to make such payment, the Agent may assume that such payment has been made. 
The Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. 
If the Borrower has not in fact made such payment to the Agent, the recipient
of such payment shall, on demand by the Agent, repay to the Agent the amount
so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per
annum equal to the interest rate applicable to the relevant Loan.

2.19    Replacement of Lender.  If the Borrower
is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional
payment to any Lender or if any Lender's obligation to make or continue,
or to convert Floating Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 3.3 (any Lender so affected an "Affected Lender"),
the Borrower may elect with the consent of Agent (such consent not to be
unreasonably withheld; provided that it shall not be deemed unreasonable
for Agent to withhold its consent if the Loan and this facility have not
been fully syndicated (as determined by Agent in its sole discretion)),
if such amounts continue to be charged or such suspension is still effective,
to replace such Affected Lender as a Lender party to this Agreement, provided
that no Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement,
(i) another bank or other entity which is reasonably satisfactory to the
Borrower and the Agent shall agree, as of such date, to purchase for cash
the Loan and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit A and to become a Lender
for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such date and to comply with
the requirements of Section 12.3 applicable to assignments, and (ii) the
Borrower shall pay to such Affected Lender in same day funds on the day
of such replacement (A) all interest, fees and other amounts then accrued
but unpaid to such Affected Lender by the Borrower hereunder to and including
the date of termination, including without limitation payments due to such
Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if
any, equal to the payment which would have been due to such Lender on the
day of such replacement under Section 3.4 had the Loan of such Affected
Lender been prepaid on such date rather than sold to the replacement Lender.

2.20    Approval of Interest.  Approval of
this Agreement by the Bankruptcy Court shall constitute approval of the
rates of interest and other amounts payable hereunder and a ruling that
they are exempt from any otherwise applicable limitation.

2.21    Superpriority Nature of Obligations; Priming
Lien.

               
(a)    Except as set forth in this paragraph, the Obligations
shall be secured by Liens in all of the Collateral under Sections 364(c)(2)
and (c)(3) of the Bankruptcy Code, senior to all other Liens, regardless
of when the Liens were obtained and regardless of their previous priority. 
The Liens granted under section 364(c)(2) and (3) of the Bankruptcy Code
shall be subject only to (i) in the case of Liens granted under section
364(c)(3) of the Bankruptcy Code, Liens granted to the Additional DIP Lenders
on the Additional DIP Collateral, (ii) non-avoidable, valid and perfected
liens in existence on the Petition Date, (iii) non-avoidable valid liens
in existence on the Petition Date that are perfected subsequent to the
Petition Date by section 546(b) of the Bankruptcy Code and (iv) the Carve-Out
Reserve (set forth below).

               
(b)    The Obligations shall also have the status in the
Chapter 11 Cases of superpriority administrative expenses under Section
364(c)(1) of the Bankruptcy Code.  Subject to the Carve Out Reserve,
such superpriority administrative claim shall have priority over all other
claims, costs and expenses of the kinds specified in, or ordered pursuant
to, Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 726,
1114  or any other provision of the Bankruptcy Code and shall at all
times be senior to the rights of any Credit Party, any Credit Party's estate,
and any successor trustee or estate representative in the Chapter 11 Cases
or any subsequent proceeding or case under the Bankruptcy Code (provided
such claims shall be pari passu with Additional DIP Lenders' superpriority
administrative expense claims).

               
(c)    Agent's Liens on the Collateral under Sections 364(c)(2)
and (c)(3) of the Bankruptcy Code, for the benefit of Agent and Lenders,
and the superpriority administrative claim under Section 364(c)(1) of the
Bankruptcy Code afforded the Obligations shall be subject only to the following:
(i) fees payable to the United States Trustee pursuant to 28 U.S.C. Section
1930(a)(6) and to the Clerk of the Bankruptcy Court and (ii) upon the occurrence
and during the continuance of a Default (which is not subsequently waived
or cured), the payment of accrued and unpaid professional fees and expenses
allowed by the Bankruptcy Court (whether incurred prior to or subsequent
to such Default) of attorneys, accountants, financial advisors or other
professionals retained by any of the Credit Parties and any official committee
appointed in the Chapter 11 Cases pursuant to Section 1103 of the Bankruptcy
Code, in an aggregate amount not to exceed $35,000,000 (the "Carve-Out
Reserve")
in toto to be allocated pro rata among the Obligations
hereunder and the obligations under the Additional DIP Credit Agreement,
plus amounts payable pursuant to 28 U.S.C. Section 1930(a)(6) and to the
Clerk of the Bankruptcy Court; provided, that any payments actually
made to such professionals under Sections 330, 331 and 503 of the Bankruptcy
Code in respect of fees and expenses incurred or accrued (x) prior to the
occurrence of a Default, shall not reduce the Carve Out Reserve and (y)
from and after the occurrence of a Default, shall reduce dollar-for-dollar
the Carve Out Reserve; provided,
further, that in no event
shall any of the Carve Out Reserve include any fees or expenses arising
after the conversion of the Chapter 11 Case to a case under Chapter 7 of
the Bankruptcy Code.  In the event of a liquidation of the Borrower's
and the Credit Parties' estates, the amount of the Carve-Out Reserve shall
be funded into a segregated account prior to the making of any distributions.

            (d)   
Notwithstanding the foregoing, the Credit Parties shall be permitted to
pay, as the same may become due and payable, subject to the provisions
of the Orders and this Section 2.21 and provided that no Default has occurred
and is continuing, compensation and reimbursement of expenses to professionals
allowed by the Bankruptcy Court and payable under Sections 330 and 331
of the Bankruptcy Code, provided that  the Credit Parties shall
not be permitted to use cash collateral of Lenders or Additional DIP Lenders
or the proceeds of Loan made hereunder or under the Additional DIP to pay
any amount in professional fees and expenses incurred in connection with
the investigation (including discovery proceedings) of potential claims,
causes of action, actions or proceedings against (i) Agent or any Lender
in respect of the Obligations or otherwise or (ii) the Additional DIP Lenders
in respect of obligations owing under the Additional DIP Credit Agreement. 
Except for the Carve-Out Reserve and payments under 28 U.S.C. § 1930(a)(6)
and to the Clerk of the Bankruptcy Court, no costs or expenses of administration
shall be imposed against Agent and Lenders or the Collateral under Sections
105, 506(c) or 552 of the Bankruptcy Code, or otherwise.

2.22    Release.  The Borrower and the other
Credit Parties each hereby acknowledge, effective upon the Interim Order
Date, that Borrower, the other Credit Parties, or any of their Subsidiaries,
have no defense, counterclaim, offset, recoupment, cross-complaint, claim
or demand of any kind or nature whatsoever that can be asserted to reduce
or eliminate all or any part of Borrower's, the other Credit Parties',
or their Subsidiaries' liability to repay Agent or any Lender as provided
in this Agreement or to seek affirmative relief or damages of any kind
or nature from Agent or any Lender.  Borrower and the other Credit
Parties, each in its own right and on behalf of its bankruptcy estate,
all its successors, assigns, Subsidiaries and any Affiliates and any Person
acting for and on behalf of, or claiming through it (collectively, the
"Releasing Parties"), hereby fully, finally and forever release and discharge
Agent and Lenders and all of Agent's and Lenders' past and present officers,
directors, servants, agents, attorneys, assigns, heirs, parents, subsidiaries,
and each Person acting for or on behalf of any of them (collectively, the
"Released Parties") of and from any and all past and present actions, causes
of action, demands, suits, claims, liabilities, Liens, lawsuits, adverse
consequences, amounts paid in settlement, costs, damages, debts, deficiencies,
diminution in value, disbursements, expenses, losses and other obligations
of any kind or nature whatsoever, whether in law, equity or otherwise (including,
without limitation, those arising under Sections 541 through 550 of the
Bankruptcy Code and interest or other carrying costs, penalties, legal,
accounting and other professional fees and expenses, and incidental, consequential
and punitive damages payable to third parties), whether known or unknown,
fixed or contingent, direct, indirect, or derivative, asserted or unasserted,
foreseen or unforeseen, suspected or unsuspected, now or heretofore existing
against any of the Released Parties, whether held in a personal or representative
capacity, and which are based on any act, fact, event or omission or other
matter, cause or thing occurring at or from any time prior to and including
the date hereof in any way, directly or indirectly arising out of, connected
with or relating to this Agreement, the Interim Order, the Final Order
and the debtor in possession financings, and allother agreements, certificates,
instruments and other documents and statements (whether written or oral)
related to  the debtor in possession financings.

2.23    Waiver of any Priming Rights.  Upon
the Closing Date, and on behalf of themselves and their estates, and for
so long as any Obligation shall be outstanding, Borrower and the other
Credit Parties hereby irrevocably waive any right, pursuant to Sections
364(c) or 364(d) of the Bankruptcy Code or otherwise, (a) to grant any
Lien of equal or greater priority than the Lien securing the Obligations
other than Liens permitted to be granted by this Agreement to the Additional
DIP Lenders on the Additional DIP Collateral, or (b) to approve or incur
a claim of equal or greater priority than the Obligations.

2.24    Payment of Obligations.  Upon the
Facility Termination Date (whether by acceleration or otherwise) of any
of the Obligations under this Agreement or any of the other Loan Documents,
Lenders shall be entitled to immediate payment of such Obligations without
further application to or order of the Bankruptcy Court.

2.25    No Discharge; Survival of Claims. 
Borrower and each of the other Credit Parties agrees that (a) the Obligations
hereunder shall not be discharged by the entry of an order confirming a
Plan of Reorganization (and Borrower and each of the other Credit Parties,
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any
such discharge) and (b) the superpriority administrative claim granted
to Agent and Lenders pursuant to the Interim Order and Final Order and
described in Section 2.21 and the Liens granted to Agent pursuant to the
Interim Order and Final Order and described in Section 2.21 shall not be
affected in any manner by the entry of an order confirming a Plan of Reorganization
in any Chapter 11 Case.

2.26    Security.

            2.26.1

Grant of Security Interest.

 

           
(a)  The Borrower and each other Credit Party hereby pledges, assigns
and grants to the Agent, on behalf of and for the ratable benefit of the
Lenders and (to the extent specifically provided in this Section 2.26)
their Affiliates, a security interest in all of the Borrower's and each
other Credit Party's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance of the Obligations. 
Notwithstanding the foregoing, the total amount of shares of capital stock
or other ownership interests of any Person pledged hereunder that is not
incorporated or organized in the United States shall in no event exceed
sixty-five percent (65%) of the total outstanding shares of capital stock
or such other ownership interests thereof.
            (b) 
With respect to all real property the title to which is held by the Borrower
or any of the Credit Parties, or the possession of which is held by the
Borrower or any of the Credit Parties pursuant to leasehold interest, the
Borrower and each Credit Party hereby assigns and conveys as security,
grants a security interest in, hypothecates, mortgages, pledges and sets
over unto the Agent on behalf of the Lenders all of the right, title and
interest of the Borrower and such Credit Parties in all of such owned real
property and in all such leasehold interests, together in each case with
all of the right, title and interest of the Borrower and such Credit Parties
in and to all buildings, improvements, and fixtures related thereto, any
lease or sublease thereof, all General Intangibles relating thereto and
all proceeds thereof.  The Borrower and each Credit Party acknowledges
that, pursuant to the Orders, the Liens in favor of the Agent on behalf
of the Lenders in all of such real property and leasehold instruments (limited,
in the case of leasehold interests, to the proceeds received upon any sale,
disposition or termination thereof) shall be perfected without the recordation
of any instruments of mortgage or assignment.  The Borrower and each
Credit Party further agrees that, upon the request of Agent, the Borrower
and such Credit Party shall enter into separate fee or leasehold mortgages
in recordable form with respect to such properties on terms reasonably
satisfactory to the Agent.

            2.26.2

Lockboxes.  Upon request of the Agent after the occurrence
of a Default, the Borrower and each other Credit Party shall execute and
deliver to the Agent irrevocable lockbox agreements in the form provided
by or otherwise acceptable to the Agent, which agreements shall be accompanied
by an acknowledgment by the bank where the lockbox is located of the Lien
of the Agent granted hereunder and of irrevocable instructions to wire
all amounts collected therein to a special collateral account at the Agent.

            2.26.3

Special Collateral Account.  The Agent shall require all cash
proceeds of the Co-Branded Card Collateral to be deposited in a special
non-interest bearing cash collateral account (account number 644433310)
with the Agent as security for the Obligations.  The Borrower and
the Credit Parties shall have no control whatsoever over said cash collateral
account.  If no Default has occurred or is continuing and if no setoff
is permitted pursuant to Section 2.2 hereof at such time, the Agent shall
promptly transfer the collected balances in said cash collateral account
into the Borrower's or applicable Credit Party's general operating account
with the Agent.  If any Default has occurred and is continuing or
if set-off is otherwise permitted pursuant to Section 2.2 hereof at such
time, the Agent may (and shall, at the direction of the Required Lenders),
from time to time, apply the collected balances in said cash collateral
account to the payment of the Obligations whether or not the Obligations
shall then be due.  At all times, the Borrower and the Credit Parties
(i) shall direct Bank One, Delaware, N.A. to deposit all amounts owed ULS
under the Co-Branded Card Agreements in such cash collateral account and
(ii) agree to promptly deposit all amounts received under the Co-Branded
Card Agreements in such cash collateral account.

            2.26.4

Agent's Performance of Obligations.  Without having any obligation
to do so, the Agent may perform or pay any obligation which the Borrower
or any other Credit Party has agreed to perform or pay relating to the
Collateral and the Borrower shall reimburse the Agent for any amounts paid
by the Agent pursuant to this Section 2.26.4.  The Borrower's obligation
to reimburse the Agent pursuant to the preceding sentence shall be an Obligation
payable upon written demand with reasonable documentation supporting such
reimbursement request.

            2.26.5

Authorization for Agent to Take Certain Action.  The Borrower
and each Credit Party irrevocably authorizes the Agent at any time and
from time to time in the reasonable discretion of the Agent and appoints
the Agent as its attorney in fact (i) to execute on behalf of the Borrower
and each Credit Party as debtor and to file financing statements necessary
in the Agent's reasonable discretion to perfect and to maintain the perfection
and priority of the Agent's security interest in the Collateral, (ii) to
endorse and collect any cash proceeds of the Collateral, (iii) to file
a carbon, photographic or other reproduction of this Agreement (or any
portion thereof) or any financing statement with respect to the Collateral
as a financing statement and to file any other financing statement or amendment
of a financing statement (which does not add new collateral or add a debtor)
in such offices as the Agent in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority of the
Agent's security interest in the Collateral, (iv) to contact and enter
into one or more agreements with the issuers of uncertificated securities
which are Collateral and which are Securities or with financial intermediaries
holding other Investment Property as may be necessary or advisable to give
the Agent Control over such Securities or other Investment Property, (v)
to enforce payment of the Receivables in the name of the Agent or the Borrower
or any other Credit Party, (vi) to apply the proceeds of any Collateral
received by the Agent to the Obligations as provided herein and (vii) to
discharge past due taxes, assessments, charges, fees or Liens on the Collateral
(except for such Liens as are specifically permitted hereunder), and the
Borrower and each other Credit Party agrees to reimburse the Agent upon
written demand (together with reasonable documentation supporting such
reimbursement request) for any payment made or any expense incurred by
the Agent in connection therewith, provided that this authorization
shall not relieve the Borrower and each other Credit Party of any of its
obligations under this Agreement.

        2.26.6   Further
Assurances.

        (a)  The Borrower and
each Credit Party agree that from time to time, at the expense of the Borrower
and each Credit Party, they will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Agent to exercise and enforce any of its rights and remedies hereunder
with respect to any Collateral.  Without limiting the generality of
the foregoing, and without further order of the Bankruptcy Court, the Borrower
and each Credit Party (i) will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices,
as may be necessary, or as Agent may reasonably request, (ii) will enter
into control agreements (or take such other steps as may be reasonably
requested by Agent to establish control over the Collateral) and (iii)
will deliver to Agent possession of Collateral (including certificates
evidencing shares of capital stock or other ownership interests) (accompanied
by instruments of transfer or assignment duly executed in blank as may
be reasonably requested by Agent).

        (b)  The Borrower and
each Credit Party hereby authorize Agent to file one or more financing
or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Borrower or the Credit
Parties where permitted by law.

        (c)  The Borrower and
each Credit Party will furnish to the Agent from time to time statements
and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as Agent may reasonably
request, all in reasonable detail.

        (d)  The Borrower and
each Credit Party shall provide the Agent with at least fifteen (15) days
prior written notice of (i) any change in the name, organizational structure
or jurisdiction of organization of the Borrower or any Credit Party, (ii)
a change in the organizational identification number of the Borrower or
any Credit Party and (iii) any change in the location of the chief executive
office of the Borrower or any Credit Party or place of business of the
Borrower or any Credit Party if it only has one place of business. 
The Borrower and each Credit Party shall also promptly, but in any event
within thirty (30) days of receipt of an organizational identification
number, if the Borrower or applicable Credit Party did not previously have
one, notify the Agent of the receipt thereof.

        (e)  In order to facilitate
a subsequent transfer, if any, of Slots held by the Borrower or any Credit
Party, the Borrower and the applicable Credit Parties (A) have, prior to
the Closing Date, executed a blank, undated transfer document for each
Slot held by the Borrower and applicable Credit Parties, as applicable,
as of the Closing Date, and (B) shall, on the date of acquisition thereof,
execute a blank, undated transfer document for each Slot acquired by Borrower
and any Credit Party after the Closing Date, in each case, to be held in
escrow by Agent until (i) exercise by the Agent of its rights upon the
occurrence and during the continuance of a Default or (ii) termination
of, or release from, the Liens of the SGR Security Agreement and this Agreement
in accordance with the terms thereof and hereof.
2.27    Increase in Interest.

        (a) In the event that the
Additional DIP (whether initially or by way of a future amendment) provides
for an interest rate that exceeds the Eurodollar Rate or Floating Rate,
the definition of Eurodollar Rate or Floating Rate, as applicable, will,
at the Requisite Lenders' option, be increased such that the applicable
interest rates hereunder shall be no less than the applicable interest
rates under the Additional DIP; any such increase shall take effect on
the same date as the increased rates under the Additional DIP became effective.

        (b) It is the intent
of this Section 2.27 to cause all interest rates hereunder to be no less
than those interest rates charged under the Additional DIP.

ARTICLE III

YIELD PROTECTION; TAXES

        3.1    Yield
Protection.  If, on or after the date of this Agreement, the adoption
of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law),
or any change in the interpretation or administration thereof by any governmental
or quasi-governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation with any request or directive
(whether or not having the force of law) of any such authority, central
bank or comparable agency:

 

(i)    subjects any Lender or any applicable
Lending Installation to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or
(ii)    imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate applicable
to Eurodollar Loan), or

(iii)    imposes any other condition the result of which
is to increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in connection
with its Eurodollar Loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to the amount
of Eurodollar Loans held or interest received by it, in each case by an
amount deemed material by such Lender, and the result of any of the foregoing
is to increase the cost to such Lender or applicable Lending Installation
of making or maintaining its Eurodollar Loans or Commitment or to reduce
the return received by such Lender or applicable Lending Installation in
connection with such Eurodollar Loans or Commitment, then, within 15 days
of written demand (together with reasonable documentation supporting such
reimbursement request) by such Lender, the Borrower shall pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received.

 
3.2    Changes in Capital Adequacy Regulations. 
If a Lender reasonably determines the amount of capital required or expected
to be maintained by such Lender, any Lending Installation of such Lender
or any corporation controlling such Lender is increased as a result of
a Change, then, within 15 days of written demand (together with reasonable
documentation supporting such reimbursement request) by such Lender, the
Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital
which such Lender reasonably determines is attributable to this Agreement,
its Loan or its Commitment to make a Loan hereunder (after taking into
account such Lender's policies as to capital adequacy).  "Change"
means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after
the date of this Agreement which affects the amount of capital required
or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender.  "Risk-Based Capital Guidelines"
means (i) the risk-based capital guidelines in effect in the United States
on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled "International
Convergence of Capital Measurements and Capital Standards," including transition
rules, and any amendments to such regulations adopted prior to the date
of this Agreement.

3.3    Availability of Types of Loan.  If
any Lender reasonably determines that maintenance of a Eurodollar Loans
at a suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if
the Required Lenders reasonably determine that (i) deposits of a type and
maturity appropriate to match fund the Eurodollar Loan is not available
or (ii) the interest rate applicable to the Eurodollar Loan does not accurately
reflect the cost of making or maintaining the Eurodollar Loan, then the
Agent shall suspend the availability of the Eurodollar Loan and require
any affected Eurodollar Loan to be repaid or converted to Floating Rate
Loan, subject to the payment of any funding indemnification amounts required
by Section 3.4.

3.4    Funding Indemnification.  If any payment
of a Eurodollar Loan occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment
or otherwise, or a Eurodollar Loan is not made on the date specified by
the Borrower for any reason other than default by the Lenders, the Borrower
will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating
or employing deposits acquired to fund or maintain such Eurodollar Loan.

3.5    Taxes.

               
(i)        All payments by the Borrower
or any other Credit Party to or for the account of any Lender or the Agent
hereunder or under any Note shall be made free and clear of and without
deduction for any and all Taxes.  If the Borrower or any other Credit
Party shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, (a) 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 3.5) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (b) the Borrower or the other applicable Credit Party shall make
such deductions, (c) the Borrower or the other applicable Credit Party
shall pay the full amount deducted to the relevant authority in accordance
with applicable law and (d) the Borrower or the other applicable Credit
Party shall furnish to the Agent the original copy of a receipt (to the
extent reasonably available) evidencing payment thereof within 30 days
after such payment is made.

               
(ii)        In addition, the Borrower
hereby agrees to pay any present or future stamp or documentary taxes and
any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or under any Note or from the execution
or delivery of, or otherwise with respect to, this Agreement or any Note
("Other Taxes").

               
(iii)        The Borrower hereby agrees
to indemnify the Agent and each Lender for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
on amounts payable under this Section 3.5) paid by the Agent or such Lender
as a result of its Commitment, any Loan made by it hereunder, or otherwise
in connection with its participation in this Agreement and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto.  Payments due under this indemnification shall be
made within 30 days of the date the Agent or such Lender makes written
demand (together with reasonable documentation supporting such reimbursement
request) therefor pursuant to Section 3.6.

               
(iv)    Each Lender that is not incorporated under the laws
of the United States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not more than ten Business Days after the date of
this Agreement, (i) deliver to the Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either
case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
and (ii) deliver to the Agent a United States Internal Revenue Form W-8
or W-9, as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax.  Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Agent (x) renewals
or additional copies of such form (or any successor form) on or before
the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Borrower or the Agent.  All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding
of any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form or amendment with respect
to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.

               
(v)        For any period during which
a Non-U.S. Lender has failed to provide the Borrower with an appropriate
form pursuant to clause (iv), above (unless such failure is due to a change
in treaty, law or regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the date
on which a form originally was required to be provided), such Non-U.S.
Lender shall not be entitled to indemnification under this Section 3.5
with respect to Taxes imposed by the United States;
provided that,
should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv), above, the Borrower
shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.

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

               
(vii)        If the U.S. Internal Revenue
Service or any other governmental authority of the United States or any
other country or any political subdivision thereof asserts a claim that
the Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered or
properly completed, because such Lender failed to notify the Agent of a
change in circumstances which rendered its exemption from withholding ineffective,
or for any other reason), such Lender shall indemnify the Agent fully for
all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including
taxes imposed by any jurisdiction on amounts payable to the Agent under
this subsection, together with all costs and expenses related thereto (including
reasonable attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent).  The obligations of
the Lenders under this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.

3.6.    Lender Statements; Survival of Indemnity. 
To the extent reasonably possible, each Lender shall designate an alternate
Lending Installation with respect to its Eurodollar Loans to reduce any
liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5
or to avoid the unavailability of a Eurodollar Loan under Section 3.3,
so long as such designation is not, in the reasonable judgment of such
Lender, disadvantageous to such Lender.  Each Lender shall deliver
a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Sections 3.1, 3.2, 3.4 or 3.5. 
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive
and binding on the Borrower in the absence of manifest error.  Determination
of amounts payable under such Sections in connection with a Eurodollar
Loan shall be calculated as though each Lender funded its Eurodollar Loan
through the purchase of a deposit of the type and maturity corresponding
to the deposit used as a reference in determining the Eurodollar Rate applicable
to such Loan, whether in fact that is the case or not.  Unless otherwise
provided herein, the amount specified in the written statement of any Lender
shall be payable on demand after receipt by the Borrower of such written
statement.  The obligations of the Borrower under Sections 3.1, 3.2,
3.4 and 3.5 shall survive payment of the Obligations and termination of
this Agreement.

 

 

 

 

 

     ARTICLE IV.

CONDITIONS PRECEDENT

 

 

 

 

 

4.1    Conditions Precedent to the Loan. 
The Lenders shall not be required to make the Loan hereunder unless the
Credit Parties have furnished to the Agent with sufficient copies for the
Lenders the following documents and satisfied (or such condition has been
waived) the following conditions, as applicable, in each case to Agent's
reasonable satisfaction:

 

(i)        Copies of the articles
or certificate of incorporation of each Credit Party, together with all
amendments, and a certificate of good standing (provided that such good
standing certificate for iTarget.com, Inc. shall be delivered to the Agent
within 30 days of the Closing Date) and, if reasonably requested by Agent,
a certificate or certificates of qualification to do business as a foreign
corporation, each certified by the appropriate governmental officer in
its jurisdiction of incorporation or other applicable jurisdiction.
(ii)        Copies certified by the
Secretary or Assistant Secretary of the applicable Credit Party, of its
by-laws and of its Board of Directors' resolutions and of resolutions or
actions of any other body authorizing the execution of the Loan Documents
to which such Credit Party is a party.

(iii)        An incumbency certificate
or certificates, executed by the Secretary or Assistant Secretary of each
Credit Party, which shall identify by name and title and bear the signatures
of the Authorized Officers and any other officers of each Credit Party
authorized to sign the Loan Documents to which such Credit Party is a party,
upon which certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by the Credit Party.

(iv)        A certificate, signed
by the chief financial officer of the Borrower, stating that on the Borrowing
Date no Default or Unmatured Default has occurred and is continuing.

(v)        A written opinion of (i)
Kirkland & Ellis, the Borrower's counsel, (ii) McAfee & Taft, special
aviation counsel to the Agent, and (iii) Vedder, Price, Kaufman & Kammholz,
special counsel to the Borrower and the Credit Parties, in each case addressed
to the Lenders in form and substance reasonably acceptable to Agent.

(vi)        Any Notes requested by
a Lender pursuant to Section 2.13 payable to the order of each such requesting
Lender.

(vii)        Written money transfer
instructions, in substantially the form of Exhibit B, addressed to the
Agent and signed by an Authorized Officer, together with such other related
money transfer authorizations as the Agent may have reasonably requested.

(viii)        To the extent that
the applicable insurance certificate permits identifying Agent, for the
benefit of the Lenders, as a lienholder junior to the Additional DIP Lenders,
the insurance certificates described in Section 5.20, together with endorsements
naming Agent, on behalf of the Lenders, as an additional insured and loss
payee under all insurance policies maintained with respect to the Properties
of the Credit Parties forming a part of the Collateral, subject only to
the interests of the Additional DIP Lenders.

(ix)        The Credit Parties shall
have paid all reasonable fees and expenses (including reasonable fees and
expenses of counsel) (including the fees specified in any fee letter between
Bank One, NA and any Credit Party (the "Fee Letter")) required to be paid
to the Agent and the Lenders on or before the Closing Date to the extent
invoices have been presented to the Credit Parties.

(x)        The Bankruptcy Court shall
have approved the entry by the Borrower and the other Credit Parties into
the Additional DIP Credit Agreement pursuant to which the Additional DIP
Lenders shall have committed to lend $1,200,000,000 to the Borrower and
which Indebtedness thereunder shall be secured by a first priority Lien
in the Additional DIP Collateral and a Lien junior to that of Agent on
all Co-Branded Card Collateral securing the Obligations.  The Additional
DIP Credit Agreement and all documents executed in connection with the
Additional DIP shall be in form and substance reasonably satisfactory to
Agent, including, without limitation, with respect to Agent's approval
of the nature, availability requirements and repayment and default provisions
of the Additional DIP.  Simultaneously with the funding of the Loan
hereunder, (a) $400,000,000 shall be advanced under the Additional DIP
and (b) an additional $100,000,000 shall be made available to the Borrower
under the Additional DIP.

(xi)        The Additional DIP Lenders
and the Agent and Lenders shall have executed an intercreditor agreement
in form and substance reasonably acceptable to Agent (the "Additional DIP
Intercreditor Agreement").

(xii)        The Agent shall have
received evidence, pursuant to the Interim Order or otherwise satisfactory
to it, that Borrower and the Credit Parties have created in favor of Agent,
for the benefit of Lenders, a valid and perfected first priority Lien in
the Collateral (other than (i) the Additional DIP Collateral, as to which
Agent's Lien shall be junior to that of the Additional DIP Lenders and
(ii) any other Collateral for which non-avoidable, valid and perfected
Liens were in existence at the time of the Petition Date or perfected subsequent
to the Petition Date as permitted by Section 546(b) of the Bankruptcy Code,
as to which Agent's Lien shall be junior to such lienholders).

(xiii)        All of the "first day
orders" entered by the Bankruptcy Court at the time of the commencement
of the Chapter 11 Cases, related orders and all motions and other documents
to be filed with and submitted to the Bankruptcy Court in connection with
this Agreement shall be reasonably satisfactory in form and substance to
Agent, including, without limitation, pursuant to Section 365 of the Bankruptcy
Code, the assumption (on a final and non-appealable basis) of the Co-Branded
Card Agreements (including, without limitation, the Co-Branded Card Amendment)
and
the Co-Branded Debit Card Amendment.

(xiv)        The Interim Order shall
(a) have been entered by the Bankruptcy Court upon an application or motion
of Borrower reasonably satisfactory in form and substance to Agent and
on such prior notice to such parties as may be reasonably satisfactory
to Agent, (b) be in full force and effect and (c) not have been reversed,
stayed, modified or amended in a manner adverse to Agent in its sole discretion.

(xv)        The Credit Parties, Bank
One, Delaware, N.A. and the Agent shall have executed an agreement providing
for, among other things, the ability of the Agent to apply amounts owed
to UAL Loyalty Services, Inc. under the Co-Branded Card Agreements by Bank
One, Delaware, N.A. to the Obligations.

(xvi)        The Lenders shall have
received (i) audited financial statements of the Credit Parties and Parent's
Subsidiaries and its Affiliates on a consolidated basis for the fiscal
year ended December 31, 2001, (ii) interim unaudited quarterly and monthly
financial statements of the Credit Parties and Parent's Subsidiaries and
Affiliates on a consolidated basis through the fiscal quarter ended September
30, 2002 and each fiscal month ending thereafter for which financial
statements are available, (iii) the Credit Parties' business plan which
shall include a financial forecast on a monthly basis for the fiscal period
ending December 31, 2002 and on a monthly basis for the fiscal period ending
December 31, 2003 and 2004 prepared by the Credit Parties and in a form
reasonably acceptable to Agent (the "Financial Forecast") and (iv) a rolling
13-week cash budget for the 13-week period from the Petition Date, prepared
by the Credit Parties and in a form reasonably acceptable to Agent.

(xvii)        The Credit Parties
shall have established a cash collateral account with Agent for cash deposits
related to the Co-Branded Card Agreements. The Credit Parties, Bank One,
Delaware, N.A. and the Agent shall have executed an agreement directing
Bank One, Delaware, N.A. to make all payments under the Co-Branded Card
Agreements directly to such cash collateral account.

(xviii)        Except as set forth
on Schedule 4.1 hereto, there shall exist no unstayed action, suit, investigation,
litigation or proceeding (other than the Chapter 11 Cases) pending or,
to the knowledge of the Credit Parties, threatened in any court or before
any arbitrator or governmental instrumentality that (i) has a reasonable
probability of having a Material Adverse Effect or (ii) restrains, prevents
or imposes or can reasonably be expected to impose materially adverse conditions
upon the transactions contemplated hereby.

(xix)        Such other documents
as any Lender or its counsel may have reasonably requested, each in form
and substance reasonably satisfactory to the Borrower and its counsel and
the Lenders and its counsel.

(xx)        There exists no Default
or Unmatured Default.

(xxi)        The representations
and warranties contained in Article V are true and correct in all material
respects as of such Borrowing Date except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall have been true and correct on and
as of such earlier date.

(xxii)        All legal matters incident
to the making of the Loan shall be reasonably satisfactory to the Lenders
and their counsel.

(xxiii)        The final order providing
for the assumption of the Co-Branded Card Agreements and the Interim Order
and, if such proposed Borrowing Date is more than 30 days following the
commencement of the Chapter 11 Cases, the Final Order shall be in full
force and effect and satisfactory to Agent and the Requisite Lenders and
shall not have been reversed, stayed, modified or amended and no appeal
of any such order shall be pending.  The Co-Branded Card Agreements
shall be in full force and effect and the Credit Parties shall not be in
default thereunder.

(xxiv)        Except (a) as disclosed
in writing to the Agent and approved by the Requisite Lenders and (b) those
events which (i) occur as a result of events leading up to and following
the commencement of a case under Chapter 11 of the Bankruptcy Code and
(ii) are reflected in the financial forecast delivered to Agent as required
under Section 4.1 hereof, there shall have occurred no Material Adverse
Effect since December 8, 2002 (other than those occurring as a result of
events leading up to and following the commencement of a case under Chapter
11 of the Bankruptcy Code and as contemplated by the Financial Forecast).

(xxv)        There shall exist no
breach or default of any Credit Party in the performance (beyond the applicable
grace period with respect thereto, if any) of any term, provision or condition
contained in the Co-Branded Card Agreements or any document executed in
connection therewith, and no other event shall have occurred or condition
shall exist, the effect of which breach, default, event or condition is
to cause, or to permit Bank One, Delaware, N.A. to suspend the payment
of obligations otherwise owed under any of the Co-Branded Card Agreements
or terminate any of the Co-Branded Card Agreements prior to the stated
termination date.

(xxvi)        The Borrower and each
Credit Party shall have duly executed and delivered to the Agent a slot,
gate and route security and pledge agreement (the "SGR Security Agreement"),
in form and substance reasonably acceptable to Agent, duly executed by
the Borrower and the Credit Parties as of the Closing Date and have taken
such actions as may be contemplated by such agreement to perfect the Liens
granted to the Agent thereunder.

(xxvii)        The Borrower shall
have duly executed and delivered to the Agent an aircraft mortgage (together
with the Mortgage Supplement hereinafter described, the "Aircraft Mortgage"),
and a Mortgage Supplement with respect to the Mortgaged Collateral in substantially
the form annexed to the Aircraft Mortgage, and the Agent shall have received
evidence that the Aircraft Mortgage and the Mortgage Supplement have been
recorded with the FAA.  The parties hereto acknowledge and agree that
any Lien described in this Agreement on the Mortgaged Collateral is a Lien
in favor of the Agent for the ratable benefit of the Lenders.

 

 

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Each of the Credit Parties jointly and severally represents and warrants
to the Lenders that:

        5.1    Existence
and Standing.  Each of the Borrower and the other Credit Parties
(i) is duly organized and validly existing under the laws of the State
of its organization and is duly qualified as a foreign organization and
is in good standing in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect; (ii) subject to the entry by the
Bankruptcy Court of the Interim Order (or the Final Order, when applicable)
has the requisite corporate power and authority to effect the transactions
contemplated hereby, and by the other Loan Documents to which it is a party,
and (iii) subject to the entry by the Bankruptcy Court of the Interim Order
(or the Final Order, when applicable) has all requisite organizational
power and authority and, upon the entry of the Interim Order (or the Final
Order, when applicable) the legal right to own, pledge, mortgage and operate
its Properties, and to conduct its business as now or currently proposed
to be conducted.

        5.2    Authorization
and Validity.  Subject to the entry of the Interim Order of the
Bankruptcy Court, each Credit Party has the power and authority and legal
right to execute and deliver the Loan Documents and to perform its obligations
thereunder.  Subject to the entry of the Interim Order of the Bankruptcy
Court, the execution and delivery by the Credit Parties of the Loan Documents
and the performance of its obligations thereunder have been duly authorized
by proper corporate or other organizational proceedings, and the Loan Documents
to which the applicable Credit Party is a party constitute legal, valid
and binding obligations of such Credit Party enforceable against such Credit
Party in accordance with their terms.  This Agreement and the Loan
Documents have been duly executed and delivered by each of the Borrower
and the Credit Parties, as applicable.

        5.3    No
Conflict; Government Consent.  Upon the entry by the Bankruptcy
Court of the Interim Order, neither the execution and delivery by the Credit
Parties of the Loan Documents, nor the creation and perfection of the security
interest in the Collateral granted hereunder, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law (including, without limitation, the Securities
Exchange Act of 1934), rule, regulation (including, without limitation,
Regulations T, U or X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree or award binding on
the Credit Parties or any of their Subsidiaries or (ii) any Credit Party's
or any of its Subsidiaries' articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating or other management agreement, as the case may be,
or (iii) the provisions of any indenture, mortgage, deed of trust, 
instrument or agreement entered into or affirmed postpetition to which
any Credit Party or any of its Subsidiaries is a party or is subject, or
by which it, or its Property, is bound, or conflict with or constitute
a default thereunder, or result in, or require, the creation or imposition
of any Lien in, of or on the Property of such Credit Party or any of its
Subsidiaries pursuant to the terms of any such indenture, instrument or
agreement.  Except for the entry of the Interim Order by the Bankruptcy
Court, no order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption
by, or other action in respect of any governmental or public body or authority,
or any subdivision thereof, which has not been obtained by the applicable
Credit Party or any of its Subsidiaries, is required to be obtained by
such Credit Party or any of its Subsidiaries in connection with the execution
and delivery of the Loan Documents, the borrowings under this Agreement,
the payment and performance by the Credit Parties of the Obligations or
the legality, validity, binding effect or enforceability of any of the
Loan Documents.

        5.4    Financial
Statements.  The Borrower has furnished the Lenders with copies
of the audited consolidated financial statement and schedules of the Parent
and its Subsidiaries for the fiscal year ended December 31, 2001 and the
unaudited consolidated financial statements for the Parent and  its
Subsidiaries for the fiscal quarter ended September 30, 2002.  Such
financial statements present fairly in all material respects the financial
condition and results of operations of the Parent and its Subsidiaries
on a consolidated basis as of such dates and for such periods; such balance
sheets and the notes thereto disclose all liabilities, direct or contingent,
of the Parent and its Subsidiaries as of the dates thereof required to
be disclosed by Agreement Accounting Principles and such financial statements
were prepared in a manner consistent with Agreement Accounting Principles. 
No material adverse change in the operations, business, properties, assets,
prospects or condition (financial or otherwise) of the Parent and its Subsidiaries,
taken as a whole, has occurred from the date set forth in the Parent's
and its Subsidiaries' financial statements for the fiscal year ended December
31, 2001 and the fiscal quarter ended September 30, 2002 other than those
occurring as a result of events leading up to and following the commencement
of a proceeding under Chapter 11 of the Bankruptcy Code and the commencement
of the Chapter 11 Cases.

        5.5    Material
Adverse Change.  Other than the filing of the Chapter 11 Cases,
since December 31, 2001 there has been no change in the business, Property,
prospects, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect.

        5.6    Taxes. 
The Parent and its Subsidiaries have filed all United States federal tax
returns and all other tax returns which are required to be filed and have
paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Parent or any of its Subsidiaries, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves
have been provided in accordance with Agreement Accounting Principles and
as to which no Lien exists.  The United States income tax returns
of the Parent and its Subsidiaries have been audited by the Internal Revenue
Service through the fiscal year ended December 31, 2001.  No tax liens
have been filed and no claims are being asserted with respect to any such
taxes.  The charges, accruals and reserves on the books of the Parent
and its Subsidiaries in respect of any taxes or other governmental charges
are adequate.

        5.7    Litigation
and Contingent Obligations.  There is no action, litigation, arbitration,
governmental investigation, suit, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting
the Parent or any of its Subsidiaries or any of their respective Properties
which could reasonably be expected to have a Material Adverse Effect or
which seeks to prevent, enjoin or delay the making of any Loan.  The
Borrower is a wholly-owned Subsidiary of the Parent.  Other than any
liability incident to any litigation, arbitration or proceeding which could
not reasonably be expected to have a Material Adverse Effect, no Credit
Party has material contingent obligations not provided for or disclosed
in the financial statements referred to in Section 5.4.

        5.8    Subsidiaries. 
Schedule 5.8 contains an accurate list of all Subsidiaries of each Credit
Party as of the date of this Agreement, setting forth their respective
jurisdictions of organization and the percentage of their respective capital
stock or other ownership interests owned by each Credit Party or other
Subsidiaries.  All of the issued and outstanding shares of capital
stock or other ownership interests of such Subsidiaries have been (to the
extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable. 
Except for changes in ownership permitted by this Agreement, the Borrower
is a direct wholly-owned Subsidiary of the Parent and the Parent owns no
other Subsidiaries, whether directly or indirectly, other than the Borrower,
the Credit Parties (other than the Parent) and other than as listed on
Schedule 5.8 (which shall be updated, on a quarterly basis, to reflect
changes in ownership permitted by this Agreement).  Other than as
set forth on Schedule 5.8, (i) each of the Persons listed on Schedule 5.8
is a wholly-owned, direct or indirect Subsidiary of the Borrower, and (ii)
the Borrower owns no other Subsidiaries, whether directly or indirectly.

        5.9    Intentionally
Deleted.

        5.10  Statements
Made.  The information that has been delivered in writing by the
Borrower or any of the Credit Parties to the Lenders or to the Bankruptcy
Court in connection with any Loan Document, and any financial statement
delivered pursuant hereto or thereto (other than to the extent that any
such statements constitute projections), taken as a whole and in light
of the circumstances in which made, contains no untrue statement of a material
fact and does not omit to state a material fact necessary to make such
statements not misleading; and, to the extent that any such information
constitutes projections, such projections were prepared in good faith on
the basis of assumptions, methods, data, tests and information believed
by the Borrower or such Credit Party to be reasonable at the time such
projections were furnished (it being understood that projections by their
nature are inherently uncertain, that no assurances can be given that projections
will be realized and that actual results may in fact differ materially
from any projections provided to the Lenders).

        5.11    Regulation
U.  Margin stock (as defined in Regulation U) constitutes less
than 25% of the value of those assets of the Parent and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.  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), or extending
credit for the purpose of purchasing or carrying margin stock and no proceeds
of any Loans will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock.

        5.12    Material
Agreements.  No Credit Party nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect.

        5.13    Compliance
With Laws.  (a) Except for matters which could not reasonably
be expected to have a Material Adverse Effect, (i) the operations of the
Borrower and the Credit Parties comply in all material respects with all
applicable aviation, transportation, environmental, health and safety statutes
and regulations, including, without limitation, regulations promulgated
under the Resource Conservation and Recovery Act (42 U.S.C. §§
6901
et seq.) and foreign aviation laws and regulations;
(ii) to the Borrower's and each of the Credit Parties' knowledge, none
of the operations of the Borrower or the Credit Parties is the subject
of any Federal or state investigation evaluating whether any remedial action
involving a material expenditure by the Borrower or any Credit Party is
needed to respond to a release of any Hazardous Waste or Hazardous Substance
(as such terms are defined in any applicable state or Federal environmental
law or regulations) into the environment; and (iii) to the Borrower's and
each of the Credit Party's knowledge, the Borrower and the Credit Parties
do not have any material contingent liability in connection with any release
of any Hazardous Waste or Hazardous Substance into the environment.

 
                   
(b) Neither the Borrower nor any Credit Party is, to the best of its knowledge,
in violation of any law, rule or regulation, or in default with respect
to any judgment, writ, injunction or decree of any Governmental Authority
or Foreign Aviation Authorities the violation of which, or a default with
respect to which, would have a Material Adverse Effect.
        5.14    Ownership
of Collateral.  Except as set forth on Schedule 5.14, on the date
of this Agreement, each Credit Party and its Subsidiaries will have good
title, free of all Liens of any nature whatsoever other than those permitted
by Section 6.26, to all of the Collateral and assets reflected in Parent's
most recent consolidated financial statements provided to the Agent as
owned by the Parent and its Subsidiaries.  The Interim Order and the
Final Order will grant to Agent for its benefit and the benefit of the
Lenders, a legal, valid and binding first priority Lien on the Co-Branded
Card Collateral and a legal, valid and binding junior priority Lien on
the Additional DIP Collateral (directly behind the Additional DIP Lenders'
Lien and as permitted under Section 6.26 hereof).  Neither the Borrower
nor the Credit Parties 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 Credit Party or otherwise result in
a violation of this Agreement other than (x) the Liens granted to the Agent
and the Lenders as provided for in this Agreement, (y) Liens granted to
the Additional DIP Lenders and (z) Liens on aircraft parts to the extent
that the terms of any mortgage or security agreement in effect on the Petition
Date extends any Lien on an airframe or engine to include  parts which
are subsequently installed on such airframe or engine (to the extent permitted
by law).

        5.15    Intentionally
Deleted.

        5.16    Environmental
Matters.  In the ordinary course of its business, the officers
of the Credit Parties consider the effect of Environmental Laws on the
business of the Parent and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Parent
and its Subsidiaries due to Environmental Laws.  On the basis of this
consideration, the Borrower has concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect.  Neither
the Parent nor any Subsidiary has received any notice to the effect that
its operations are not in material compliance with any of the requirements
of applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected to
have a Material Adverse Effect.

        5.17    Investment
Company Act.  No Credit Party nor any Subsidiary is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.  Neither
the making of any Loan, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other transactions
contemplated by the Loan Documents, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange Commission
thereunder.

        5.18    Public
Utility Holding Company Act.  No Credit Party nor any Subsidiary
is a "holding company" or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of
a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

        5.19    Intentionally
Deleted.

        5.20    Insurance. 
All policies of insurance of any kind or nature owned by or issued to the
Borrower and the Credit Parties, 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 greater of (i) the maximum amount available to
the Borrower and the Credit Parties from the DOT under the Federal Aviation
Insurance Program, as amended by the Air Transportation Safety and Stabilization
Act and further amended by the Homeland Security Act of 2002 and the maximum
(to the extent requested by the Agents) amount available under programs
established pursuant to the Terrorism Risk Insurance Act of 2002 and (ii)
such amount as is customarily carried by major United States air carriers
in the United States domestic airline industry; and the Borrower and the
Credit Parties maintain other insurance that is sufficient and in such
amounts as is customary in the United States domestic airline industry
for major United States air carriers.

        5.21    Reorganization
Matters.

        (a)       
The Chapter 11 Cases were commenced on the Petition Date in accordance
with applicable law and proper notice thereof and the proper notice for
the hearing for the approval of the Interim Order and the Final Order has
been given.

        (b)       
After the entry of the Interim Order, and pursuant to and to the extent
permitted in the Interim Order and the Final Order, the Obligations will
constitute allowed administrative expense claims in the Chapter 11 Cases
having priority over all administrative expense claims and unsecured claims
against the Borrower now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expense claims of the
kind specified in Sections 105, 326, 328, 330, 331, 503(b), 504(a), 506(c),
507(a), 507(b), 546(c), 726, 1114 or any other provision of the Bankruptcy
Code, as provided under Section 364(c)(1) of the Bankruptcy Code, subject,
as to priority only to the Carve Out Reserve and provided that all such
claims shall be pari passu with all allowed administrative expense claims
under the Additional DIP.

        (c)       
After the entry of the Interim Order and pursuant to and to the extent
provided in the Interim Order and the Final Order, the Obligations will
be secured by a valid and perfected first priority Lien on all of the Collateral,
subject, as to priority, only to Liens in favor of the Additional DIP Lenders
on the Additional DIP Collateral and the Liens permitted pursuant to Section
6.26(i).

        (d)       
The Interim Order (with respect to the period prior to the Final Order
Date) or the Final Order (with respect to the period on and after the Final
Order Date), as the case may be, is in full force and effect and has not
been reversed, stayed, modified or amended.

        (e)       
Notwithstanding the provisions of Section 362 of the Bankruptcy Code, upon
the maturity (whether by acceleration or otherwise) of any of the Obligations,
Agent and Lenders shall be entitled to immediate payment of such Obligations
and to enforce the remedies provided for hereunder, without further application
to or order by the Bankruptcy Court.

        5.22    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
and consents which are material to the operation of the routes flown by
it and the conduct of its business and operations as currently conducted.

 
        (b) No Credit Party (other than
the Borrower) is (or will become) an "air carrier" within the meaning of
Section 40102(a)(2) of Title 49, and no Credit Party (other than the Borrower)
holds (or will hold) a certificate under Section 41102(a)(1) of Title 49.
        5.23    Slot
Utilization.  The Borrower is utilizing the Slots in a manner
consistent with applicable regulations and contracts in order to preserve
both its right to hold and operate the Slots, taking into account any waivers
or other relief granted to the Borrower by the FAA.  The Borrower
has not received any notice from the FAA, and is not aware of any other
event or circumstance, that would be reasonably likely to impair its right
to hold and operate the Slots in any material respect.

        5.24    Primary
Foreign Slot Utilization.  The Borrower is utilizing the Primary
Foreign Slots in a manner consistent with applicable regulations, foreign
laws, and contracts in order to preserve both its right to hold and operate
the Primary Foreign Slots.  The Borrower has not received any notice
from any applicable Foreign Aviation Authorities, nor is the Borrower aware
of any other event or circumstance, that would be reasonably likely to
impair its right to hold and operate any Primary Foreign Slots in any material
respect.

        5.25    Primary
Route Utilization.  The Borrower holds the requisite authority
to operate over each of the Primary Routes pursuant to Title 49, all rules
and regulations promulgated thereunder, applicable foreign law, and the
applicable rules and regulations of the FAA, the DOT and any applicable
Foreign Aviation Authorities, and has, 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 or applicable
foreign law.  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 in any such Primary Route.

        5.26    Non-Primary
Route Utilization.  The Borrower holds the requisite authority
to operate over each of the Non-Primary Routes pursuant to Title 49, all
rules and regulations promulgated thereunder, and the applicable rules
and regulations of the DOT and FAA.  To the best of the Borrower's
knowledge, 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 in any such Non-Primary Route over which
the Borrower currently operates.

        5.27    Ownership
Interest in Slots, Routes and Gates.  No Credit Party has (or
will have) any right, title or interest in any of the Slots, Foreign Slots,
Routes, Supporting Route Facilities  or Gate Leasesholds.

 

 

ARTICLE VI.

COVENANTS

               
During the term of this Agreement and until the Aggregate Commitment has
been terminated and all Obligations have been repaid in full in cash (other
than contingent indemnification obligations in respect of which no claims
giving rise thereto have been asserted) unless the Required Lenders shall
otherwise consent in writing:

        6.1    Financial
Reporting.  The Parent will maintain, for itself and each Subsidiary,
a system of accounting established and administered in accordance with
generally accepted accounting principles, and furnish to 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 Borrower, 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
(which shall not be qualified in any material respect other than with respect
to the Chapter 11 Cases or a going concern qualification) and to be certified
by an Authorized Officer of the Parent to the effect that such consolidated
financial statements fairly present the financial condition and results
of operations of the Borrower, the Parent and its Subsidiaries on
a consolidated basis in accordance with Agreement Accounting Principles. 
Such delivery shall be accompanied by any management letter prepared by
such accountants;

 
        (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 Borrower, 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 an Authorized Officer as
fairly presenting in all material respects the financial condition and
results of operations of the Borrower, the Parent and its Subsidiaries
on a consolidated basis in accordance with Agreement Accounting Principles,
subject to normal year-end audit adjustments and the absence of footnotes;

 
        (c) (i) concurrently with any
delivery of financial statements under (a) and (b) above, a certificate
of an Authorized Officer (A) certifying that no Default or Unmatured Default,
or, if such a Default or Unmatured Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to
be taken with respect thereto and (B) setting forth computations in reasonable
detail satisfactory to the Agent demonstrating compliance with the provisions
of Sections 6.22, 6.24, 6.25 and 6.35 and (ii) concurrently with any delivery
of financial statements under (a) above, a certificate (which certificate
may be limited to accounting matters and disclaim responsibility for legal
interpretations) of the accountants auditing the consolidated financial
statements delivered under (a) above certifying that, in the course of
the regular audit of the business of the Borrower, the Parent and its Subsidiaries,
such accountants have obtained no knowledge that a Default has occurred
and is continuing, or if, in the opinion of such accountants, a Default
has occurred and is continuing, specifying the nature thereof and all relevant
facts with respect thereto;

 
        (d) as soon as available, but
no more than 30 days after the end of each fiscal month (i) the consolidated
and unaudited monthly cash flow reports, consolidated balance sheets and
related statements of income of the Borrower and its Subsidiaries on a
consolidated basis and as of the close of such fiscal month and the results
of their operations during such month and the then elapsed portion of the
fiscal quarter, (ii) an updated 13-week rolling cash flow projection together
with a weekly reconciliation of such cash flows to actual weekly results,
and (iii) a monthly report detailing professional fees and expenses that
have been billed and paid or billed but unpaid to date, the accumulated
"hold-back" of professional fees and expenses to date, material adverse
events or changes (if any) to the financial condition, operations, business,
properties, assets or prospects of the Borrower and the Credit Parties
taken as a whole and material litigation (if any), each certified by an
Authorized Officer of the Parent as fairly presenting in all material respects
the financial condition and results of operations of the Borrower, the
Parent and its Subsidiaries on a consolidated basis in accordance
with Agreement Accounting Principles, subject to normal year-end audit
adjustments and the absence of footnotes;

 
        (e) as soon as possible, and
in any event within 30 days of the Closing Date, a consolidated proforma
balance sheet of the Parent's and its Subsidiaries' financial condition
as of the Petition Date;

 
        (f) promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by it with the Securities and Exchange
Commission, or any governmental authority succeeding to any of or all the
functions of said commission, or with any national securities exchange,
as the case may be;

 
        (g) as soon as available and
in any event (A) within 30 days after the Borrower or any of its ERISA
Affiliates knows or has reason to know that any Termination Event described
in clause (i) of the definition of Termination Event with respect to any
Single Employer Plan of the Borrower or such ERISA Affiliate has occurred
and (B) within 10 Business Days after the Borrower or any of its ERISA
Affiliates knows or has reason to know that any other Termination Event
with respect to any such Plan has occurred, a statement of an Authorized
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;

 
        (h) promptly and in any event
within 10 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;

 
        (i) if requested by 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 Single Employer Plan
of the Borrower or any of its ERISA Affiliates;

 
        (j) within 10 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 an Authorized Officer of the Borrower setting
forth (A) sufficient information necessary to determine the amount of the
lien under Section 302(f)(3) of ERISA, (B) the reason for the failure to
make the required payments and (C) the action, if any, which the Borrower
or any of its ERISA Affiliates proposed to take with respect thereto;

 
        (k) promptly and in any event
within 10 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 (A) the imposition of
Withdrawal Liability by a Multiemployer Plan, (B) the determination that
a Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA, (C) the termination of a Multiemployer
Plan within the meaning of Title IV of ERISA, or (D) 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 (A), (B) or (C) above;

 
        (l) promptly, from time to time,
such other information regarding the operations, business affairs and condition
(financial and otherwise) and Collateral of the Borrower or any Credit
Party, or compliance with the terms of any material loan or financing agreement
as the Agent, at the request of any Lender, may reasonably request;

 
        (m) furnish to the Lenders and
their counsel promptly after the same is available, copies of all pleadings,
motions, applications, judicial information, financial information and
other documents filed by or on behalf of the Borrower or any of the Credit
Parties with the Bankruptcy Court in the Chapter 11 Cases, or distributed
by or on behalf of the Borrower or any of the Credit Parties to any official
committee appointed in the Chapter 11 Cases;

 
        (n) on the fifth Business Day
following the end of each seven-day reporting period (or, with respect
to the final report to be delivered in any two-month period, following
the end of such two-month period), a slot utilization report conforming
to the Slot Reporting Guidelines for the most recently completed reporting
period, showing, for each airport and time allotment set forth in Schedule
6.1(n) as amended from time to time, the percentage utilization for the
Slots for such airport during such time allotment for the cumulative period
ending on the last day of such reporting period, certified by an Authorized
Officer of the Borrower and stating that the Borrower is conducting its
operations and monitoring Slot usage in a manner such that the Borrower
should be able to meet the Use or Lose Rule for such Slots with respect
to the applicable two-month FAA reporting period;

 
        (o) as soon as available, but
in any event within 30 days prior to the beginning of each fiscal year
of the Borrower, a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and funds flow statement)
of the Parent and its Subsidiaries for the immediately succeeding fiscal
year;

 
        (p) no later than 12:00 noon
(Chicago time) on Friday of each week, a variance report identifying the
variance to actual thirteen (13) week cash flow projections of each Credit
Party and their Subsidiaries for the immediately succeeding thirteen (13)
week period, accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion;

 
        (q) as soon as possible and
in any event within 10 days after receipt by any Credit Party, a copy of
(a) any notice or claim to the effect that such Credit Party or any of
its Subsidiaries is or may be liable to any Person as a result of the release
by such Credit Party, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local environmental,
health or safety law or regulation by any Credit Party or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect;

 
        (r) promptly upon becoming aware
thereof, notice of (a) any dispute, litigation, investigation or proceeding
which may exist at any time between any Credit Party or any of its Subsidiaries
and any other Person which could reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect, or (b)
the commencement of or any material development in, any litigation or proceeding
affecting any Credit Party in which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect or in which the relief sought
is an injunction or other stay of the performance of this Agreement or
any Loan Document; and

 
        (s) simultaneously with the
furnishing thereof to the Additional DIP Lenders, all reports, documents,
certificates and other information required to be furnished to the Additional
DIP Lenders pursuant to the Additional DIP Credit Agreement.
        6.2    Use
of Proceeds.  The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Loan for general working capital and other
corporate purposes.  The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loan to purchase or carry
any "margin stock" (as defined in Regulation U).  Such proceeds may
not be used in connection with the investigation (including discovery proceedings),
initiation or prosecution of any claims, causes of action, adversary proceedings
or other litigation against the Lenders or the Agent in their capacities
as such.

        6.3    Notice
of Default.  Each Credit Party will, and will cause each Subsidiary
to, give prompt notice in writing to the Lenders of the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse
Effect.

        6.4    Conduct
of Business; Corporate Existence.

 
        (a) Each Credit Party will,
and will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or organization,
as the case may be, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
        (b) Each Credit Party will,
and will cause each Subsidiary to preserve and maintain in full force and
effect all governmental rights, privileges, qualifications, permits, licenses
and franchises necessary or desirable in the normal conduct of its business
except if such failure to preserve the same could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

        6.5    Obligations
and Taxes.  The Parent will, and will cause each Subsidiary to
pay all of its respective material obligations arising after the Petition
Date promptly and in accordance with their terms and timely file complete
and correct United States federal and applicable foreign, state and local
tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.

        6.6    Insurance. 
(a) In addition to the requirements of Section 6.6(b), the Borrower and
each Credit Party shall (i) keep its insurable properties insured at all
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 (including, without limitation,
casualty insurance or reinsurance on its aircraft at the appraised value)
and which is reasonably satisfactory to the Agent; and 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 Property (including aircraft) owned, occupied or controlled
by the Borrower or any Credit Party, as the case may be, in such amounts
(giving effect to self-insurance) and with such deductibles as are required
pursuant to Section 5.20; and (ii) maintain such other insurance or self
insurance as may be required by law.

        (b) The Borrower and each
Credit Party shall maintain in full force and effect war risk and terrorism
insurance on all its property in an amount that is no less than (x) through
June 30, 2003 (unless the Federal Aviation Insurance Program, as amended
through the date hereof, is extended to December 31, 2003, in which case,
December 31, 2003), the maximum amount available to the Borrower and the
Credit Parties 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 (y) thereafter,
such amount as is then customary for major United States air carriers in
the United States domestic airline industry.

        (c) The Borrower and each
Credit Party shall maintain business interruption insurance in amounts
that are reasonably satisfactory to the Agent and customary in the airline
industry for major United States carriers with foreign operations.

        (d) The Borrower and each
Credit Party shall promptly deliver to the Agent copies of any notices
received from its insurers with respect to insurance programs required
by the Terrorism Risk Insurance Act of 2002 and, if so requested by the
Agent, procure and maintain in force the insurance that is offered in such
programs.

        6.7    Compliance
with Laws.  The Credit Parties will, and will cause each Subsidiary
to, comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject including, without
limitation, all Environmental Laws and all Federal Aviation Administration
regulations.

        6.8    Maintenance
of Properties.  The Credit Parties will, and will cause each Subsidiary
to, do all things necessary to maintain, preserve, protect and keep their
Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that their business carried
on in connection therewith may be properly conducted at all times.

        6.9    Inspection. 
The Credit Parties will, and will cause each Subsidiary to, permit the
Agent and the Lenders, by their respective representatives, agents and
advisors, to inspect any of the Property (including, without limitation,
conducting appraisals and examinations of and monitoring the Collateral
held by the Agent; provided that, Agent's appraisals of Additional DIP
Collateral shall be at Agent's expense unless and until either (a) a Default
exists or (b) the Additional DIP Credit Agreement has been paid in full
and terminated), books and financial records and any appraisals of the
Credit Parties and each Subsidiary, to examine and make copies and abstracts
of the books of accounts and other financial records of the Credit Parties
and each Subsidiary, and to discuss the affairs, finances and accounts
of the Credit Parties and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals
as the Agent or any Lender may designate.  All such reasonable inspections
shall be at the expense of the Borrower.  The Credit Parties will
maintain complete and accurate books and records (in accordance with Agreement
Accounting Principles) with respect to the financial operations of the
Credit Parties and the Collateral, and furnish to the Agent, with sufficient
copies for each of the Lenders, such reports relating to the Collateral
as the Agent shall from time to time request.

        6.10    FAA
and DOT Matters; Citizenship.  In the case of the Borrower, the
Borrower shall (a) maintain at all times its status at the DOT 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.
Sections 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 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.

        6.11    Gate
Utilization.  The Borrower and each Credit Party shall utilize
all of its Gate Leaseholds in a manner sufficient to comply in all material
respects with applicable lease provisions governing such airport gate leaseholds.

        6.12    Compliance
With Terms of Leaseholds.  The Borrower and each Credit Party
shall (i) make all Postpetition payments and otherwise perform all obligations
in respect of all leases of real property (including, without limitation,
arrangements with respect to Gate Leaseholds to which the Borrower or any
Credit Party may be party), to the extent necessary to keep such leases
in full force and effect and not allow such leases to lapse or be terminated
or any rights to renew such leases to be forfeited or cancelled, and (ii)
notify the Agent of any default by any party with respect to such leases
and cooperate with the Agent in all respects to cure any such default,
except, in any case, where the failure to do so, either individually or
in the aggregate, could not be reasonably likely to have a Material Adverse
Effect.

        6.13    Slot
Utilization.  The Borrower shall:

                   
(i)        utilize the Slots in a manner
consistent in all material respects with applicable regulations and contracts
in order to preserve its right to hold and operate the Slots, taking into
account any waivers or other relief granted to the Borrower by the FAA.

                   
(ii)        cause to be done all things
reasonably necessary to preserve and keep in full force and effect its
rights in and use of its Slots, including, without limitation, satisfying
the Use or Lose Rule.  Without in any way limiting the foregoing,
the Borrower shall promptly take all such steps as may be reasonably necessary
now or in the future to maintain, renew and obtain the rights, licenses,
authorizations or certifications as are necessary to the continued and
future holding and use by the Borrower of its Slots.

        6.14    Primary
Foreign Slot Utilization.  The Borrower shall:

                   
(i)        utilize the Primary Foreign
Slots in a manner consistent in all material respects with applicable regulations
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.

                   
(ii)         cause to be done all
things reasonably necessary to preserve and keep in full force and effect
its rights in and use of its Primary Foreign Slots.  Without in any
way limiting the foregoing, the Borrower shall promptly take all such steps
as may be reasonably necessary now or in the future to maintain, renew
and obtain the rights, licenses, authorizations or certifications as are
necessary to the continued and future holding and operation by the Borrower
of its Primary Foreign Slots.

        6.15    Primary
Route Utilization; Route Reporting.  The Borrower and each Credit
Party shall:

                   
(i)        utilize the Primary Routes
in a manner consistent in all material respects with Title 49, rules and
regulations promulgated thereunder, and applicable foreign law, and the
applicable rules and regulations of the FAA, DOT and any applicable Foreign
Aviation Authorities, including, without limitation, any operating authorizations,
certificates, bilateral authorizations and bilateral agreements with any
applicable Foreign Aviation Authorities and contracts with respect to such
Primary Routes, in order to preserve its rights to hold and operate the
Primary Routes and utilize the Supporting Route Facilities for the Primary
Routes.

                   
(ii)        cause to be done all things
reasonably necessary to preserve and keep in full force and effect its
material rights in and to use its Primary Routes, except as to its authority
for seven weekly services on a Fifth-Freedom basis between Hong Kong and
Japan pursuant to Notice of Action Taken issued by DOT Docket OST-02 13760,
dated November 22, 2002.  Without in any way limiting the foregoing,
the Borrower shall promptly take (i) all such steps as may be reasonably
necessary to obtain renewal of each such Primary Route authority from the
DOT and any applicable Foreign Aviation Authorities, within a reasonable
time prior to the expiration of such authority (as prescribed by law ore
regulation, if any), and notify the Agent of the status of such renewal
and (ii) all such other steps as may be necessary to maintain, renew and
obtain any and all Supporting Route Facilities for the Primary Routes as
needed for the continued and future operations of the Borrower over the
Primary Routes which are now allocated or possessed, or as may hereafter
be allocated or acquired.  The Borrower shall further take all actions
reasonably necessary or, in the reasonable judgment of Agent or the agent
for the Additional DIP Lenders, advisable in order to maintain its material
rights to use its Primary Routes (including, without limitation, protecting
the Primary Routes from dormancy or withdrawal by the DOT) and Supporting
Route Facilities for the Primary Routes.  The Borrower and any applicable
Credit Party 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 Supporting Route Facilities for the Primary Routes.

                   
(iii)        promptly upon receipt thereof,
deliver to the Agent copies of (i) each certificate or order issued by
the DOT and the applicable Foreign Aviation Authorities with respect to
Primary Routes and Supporting Route Facilities for the Primary Routes,
(ii) all filings made by the Borrower with any Governmental Authority or
any Foreign Aviation Authorities related to preserving and maintaining
the Primary Routes and Supporting Route Facilities for the Primary Routes
and (iii) any notices received from any Person notifying the Borrower or
any applicable Credit Party of an event which could have a potential adverse
effect upon the Primary Routes and Supporting Route Facilities for the
Primary Routes, or the failure to preserve such Primary Routes and Supporting
Route Facilities for the Primary Routes as required pursuant to this Section
6.15.

        6.16    Business
Plan.  The Borrower and each Credit Party shall make its senior
officers available to discuss the Borrower's business plan (a copy of which
has heretofore been delivered to the Agent referred to in Section 4.1(xvi))
with the Agent upon the Agent's reasonable request.

        6.17    ATSB
Application.  The Borrower and each Credit Party shall use all
reasonable efforts to modify its previously filed Application with the
ATSB, and comply in all material respects with any reasonable request from
the ATSB for information in connection with such Application, to obtain
a guarantee of any exit financing which may be required in connection with
a Plan of Reorganization.

        6.18    Operational
Matters.  The Borrower and each Credit Party shall:

 
        (a) provide the Agent with ten
(10) days prior written notice of its intent to store any Aircraft, Engine
or Spare Engine (each as defined in the Aircraft Mortgage) and obtain the
written consent of the Agent to (i) the identity of, and servicing obligations
of, any third party with which such Aircraft, Engine or Spare Engine may
be stored from time to time and (ii) the location at which such Aircraft,
Engine or Spare Engine will be stored (it being understood that all such
storage locations shall be reasonably satisfactory to the Agent).

 
        (b) promptly notify the Agent
of any reduction in work force or reallocation of the work force with primary
responsibility for preparing and maintaining maintenance records for the
Borrower and the Credit Parties.

 
        (c) provide to the Agent, no
later than the last Business Day after the end of each month, the information
described in Schedule 6.18(c) in a format reasonably satisfactory to the
Agent.
        6.19    Additional
Collateral.   The Borrower and each Credit Party shall:

 
        (a) upon any additional aircraft,
engines, spare engines or spare parts becoming free and clear of liens,
deliver to the Agent an Aircraft Mortgage and Mortgage Supplement with
respect to such aircraft, engines, spare engines or spare parts.

 
        (b) upon ten (10) days' notice
from Agent, supplement Schedule 1.1(a) and (b) to include any other Foreign
Slots or Routes of the Borrower as the Agent may reasonably require to
be added to such Schedule as a Primary Foreign Slot or Primary Route, as
the case may be.
        6.20    Post
Closing.  The Borrower and each Credit Party shall:

 
        (a) cause to be delivered to
the Agent, within 45 days of the Closing Date, a favorable opinion of McAfee
& Taft, special counsel to the Agent, with regard to, among other things,
Liens on such aircraft, engines, spare parts and spare engines on which
the Agent, for the benefit of the Lenders, is entitled to have a second
priority Lien, in form and substance reasonably satisfactory to the Agent.

 
        (b) deliver to the Agent, within
60 days of the Closing Date, a complete list of the Routes, Supporting
Route Facilities and Foreign Slots.
        6.21    Dividends;
Capital Stock.  No Credit Party will, nor will any Credit Party
permit any Subsidiary to, declare or pay, directly or indirectly, any dividends
or make any other distribution or payment, whether in cash, property, securities
or a combination thereof, with respect to (whether by reduction of capital
or otherwise) any shares of capital stock (or any options, warrants, rights
or other equity securities or agreements relating to any capital stock),
or set apart any sum for the aforesaid purposes, provided, that
(i) any Credit Party other than the Parent may pay dividends to the Borrower
or another Credit Party and (ii) the Borrower and any Credit Party (other
than the Parent) may pay dividends or make other distributions or payments
to the Parent for corporate expenses, including, without limitation, taxes
and salaries.

        6.22    Indebtedness. 
No Credit Party will, nor will any Credit Party permit any Subsidiary to
contract, create, incur,  assume or suffer to exist any Indebtedness,
except
for (i) Indebtedness under the Loan Documents; (ii) Indebtedness incurred
prior to the Petition Date (including existing Capitalized Leases as set
forth on Schedule 6.22); (iii) intercompany Indebtedness between the Borrower
and the Credit Parties, provided that (a) all such Indebtedness owing by
the Credit Parties or any Subsidiary shall be subordinated to the indefeasible
payment in full of the Obligations on terms and in form and substance satisfactory
to Agent and (b) at the request of Agent, such Indebtedness shall be evidenced
by promissory notes payable to the applicable Credit Party, in form and
substance satisfactory to Agent, which promissory notes shall be pledged
to Agent as part of the Collateral, (iv) Indebtedness owed to the Additional
DIP Lenders under the Additional DIP in an aggregate principal amount not
to exceed $1,200,000,000; (v) Indebtedness incurred subsequent to the Petition
Date secured by purchase money Liens or Capitalized Leases in an aggregate
amount not to exceed the amounts permitted under Section 6.35(a); (vi)
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 permitted
by order of the Bankruptcy Court and entered into in the ordinary course
of business consistent with past practices; (vii) Indebtedness owed to
any Lender, any Additional DIP Lender or any of their respective banking
Affiliates in respect of (A) currency swap agreements, currency future
or option contracts and other similar agreements designed to hedge against
fluctuations in foreign interest rates and currency values, and (B) interest
rate swap, cap or collar agreements and interest rate future or option
contracts, in each case to the extent that such agreement or contract is
permitted by order of the Bankruptcy Court and entered into in the ordinary
course of business consistent with past practices; (viii) Indebtedness
owed to any Lender, any Additional DIP Lender or any of their banking
Affiliates 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; (ix) refinancings
and replacements of Indebtedness secured directly or indirectly by "equipment"
described in Section 1110(a)(3) of the Bankruptcy Code (as in effect on
the Petition Date hereof and permitted by Section 6.22(ii)), provided that
(A) the principal amount of such existing Indebtedness shall not be
increased above the principal amount thereof outstanding immediately prior
to such refinancing or replacement, (B) the maturity of such existing Indebtedness
shall not be shortened as a result of such refinancing or replacement,
(C) the weighted average life to maturity of such existing Indebtedness
shall not be reduced as a result of such refinancing or replacement, and
(D) the direct and contingent obligors therefore shall not be changed,
as a result of or connection with such refinancing or replacement; (x)
guarantees permitted under Section 6.29; (xi) Indebtedness of any of the
Borrower and the Credit Parties consisting of take-or-pay obligations contained
in supply agreements entered into in the ordinary course of business and
consistent with past practices of the Borrower and the Credit Parties;
(xii) Indebtedness of any of the Borrower and the Credit Parties arising
in the ordinary course of business and consistent with the past practices
of the relevant party and owing to Citibank, N.A. and its banking Affiliates
providing netting services with respect to intercompany Indebtedness permitted
to be incurred and outstanding pursuant to this Agreement so long as such
Indebtedness does not remain outstanding for more than three days from
the date of its incurrence; (xiii) Indebtedness of any of the Borrower
and the Credit Parties to credit card processors in connection with credit
card processing services incurred in ordinary course of business and consistent
with past practices of the Borrower and the Credit Parties; and (xiv) other
Indebtedness incurred subsequent to the Petition Date in an aggregate amount
not to exceed $10,000,000.

        6.23    Merger. 
The Credit Parties will not, nor will they permit any Subsidiary to, merge
or consolidate with or into any other Person, except that any Guarantor
may merge with any other Guarantor or the Borrower.

        6.24    Dispositions
of Assets.  The Credit Parties will not, nor will they permit
any Subsidiary to, sell or otherwise dispose of any assets (including,
without limitation, the capital stock of any Subsidiary), or permit any
of their Subsidiaries that are not Credit Parties so to do, except for:
(i) sales or dispositions of assets (not including (A) aircraft, engines,
spare engines or spare parts or (B) Slots, Foreign Slots, Routes, Supporting
Route Facilities or Gate Leaseholds, the disposition of which assets referred
to in this clause (B) shall be in accordance with clause (xi) of this Section)
in the ordinary course of business; (ii) sales or dispositions of surplus,
obsolete, negligible or uneconomical assets (including, without limitation,
aircraft, engines, spare engines and spare parts, but excluding Slots,
Foreign Slots, Routes, Supporting Route Facilities  and Gate Leaseholds)
no longer used in the business of the Borrower and the Credit Parties;
provided,
that
(1) 100% of the Net Proceeds  (as defined in the Additional DIP Credit
Agreement) of any such sale or other disposition of aircraft included within
the Borrowing Base (as defined in the Additional DIP Credit Agreement)
at the time of such sale or other disposition shall be applied as a mandatory
prepayment and permanent reduction of the Additional DIP pursuant to Section
2.13(b) of the Additional DIP Credit Agreement and (2) 100% of the cumulative
Net Proceeds (as defined in the Additional DIP Credit Agreement) of such
sales or other dispositions of property or assets (other than aircraft
included within the Borrowing Base (as defined in the Additional DIP Credit
Agreement)) in an aggregate amount in excess of (aa) $200,000,000 in respect
of such sales or other dispositions made during the period from the Closing
Date through December 31, 2003 and (bb) $300,000,000 in respect of such
sales or other dispositions made during the term of this Agreement, shall
be applied as a mandatory prepayment and permanent reduction of the Additional
DIP pursuant to Section 2.13(b) of the Additional DIP Credit Agreement;
(iii) sales or dispositions of assets among the Borrower and the Credit
Parties; (iv) sales or dispositions of assets set forth on Schedule 6.24
hereto; (v) sales or dispositions in arm's length transactions, at fair
market value and for cash in an aggregate amount not to exceed $5,000,000;
provided,
that
100% of the aggregate Net Proceeds (as defined in the Additional DIP Credit
Agreement) of such sales or dispositions shall be applied as a mandatory
prepayment and permanent reduction of the Additional DIP pursuant to Section
2.13(b) of the Additional DIP Credit Agreement,
providedfurtherthat
such prepayment and permanent reduction shall be made each time the cumulative
Net Proceeds of such sales or other dispositions not theretofore so applied
is equal to $1,000,000; (vi) abandonment and licensing (or sublicensing)
of intellectual property Collateral provided, that such abandonment and
licensing (or sublicensing) is (A) consistent with past practices and (B)
with respect to intellectual property that is not material to the business
of the Borrower and the Credit Parties; (vii) dispositions of assets located
outside of the United States in an amount not to exceed $2,000,000; (viii)
termination or rejection of any lease or the return, surrender or abandonment
of any property subject thereto; (ix) the sale or discount of accounts
receivable to a collection agency in connection with collections of delinquent
receivables; (x) sales and dispositions of equipment, to the extent that
(A) such property is exchanged for credit against the purchase price of
similar replacement property or (B) the proceeds of such sale or disposition
are promptly applied to the purchase price of such replacement property,
provided, that any sale or disposition of Mortgaged Collateral shall only
be in accordance with terms of the Aircraft Mortgage; (xi) dispositions
permitted by any of the Loan Documents; (xii) sales, exchanges and swaps
of engines and spare parts in the ordinary course of business and consistent
with past practice and to the extent permitted by the Loan Documents; and
(xiii) sales and dispositions of Section 1110 Assets.

        6.25    Investments. 
The Credit Parties will not, nor will they permit any Subsidiary to, purchase,
hold or acquire any capital stock, evidences of indebtedness or other securities
of, make or permit to exist any loans or advances to, or make or permit
to exist any investment in, any other Person (all of the foregoing, "Investments")
except:  (i) ownership by the Parent of the capital stock of the Borrower
or any Credit Party, as listed on Schedule 5.8, (ii) ownership by
the Borrower and the Guarantors of the capital stock of each of the Subsidiaries
listed on Schedule 5.8; (iii)Permitted Investments; (iv) advances
and loans among the Borrower and the Credit Parties in the ordinary course
of business; (v) Investments in the Escrow Accounts and other trust accounts;(vi)
Investments existing on the Petition Date and described on Schedule 5.8
hereto; (vii) Investments in connection with (A) currency swap agreements,
currency future or option contracts and other similar agreements designed
to hedge against fluctuations in foreign interest rates and currency values,
(B) interest rate swap, cap or collar agreements and interest rate future
or option contracts, and (C) fuel hedges and other derivatives contracts,
in each case to the extent that such agreement or contract is permitted
by order of the Bankruptcy Court and by Section 6.22 and entered into in
the ordinary course of business consistent with past practices; (viii)
Investments received in settlement of amounts due to any of the Borrower
and the Credit Parties effected in the ordinary course of business (including
as a result of dispositions permitted by this Agreement); (ix) Investments
in an amount not to exceed $10,000,000 in the aggregate 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; (x) advances to officers, directors and employees
of the Borrower and the Credit Parties in an aggregate amount not to exceed
(A) $10,000 at any time outstanding to any individual officer, director
or employee or (B) $500,000 in the aggregate at any time outstanding for
all such advances; (xi) additional Investments in joint ventures listed
in Schedule 5.8 for Investments in new joint ventures made after the Petition
Date in an aggregate amount thereof at any one time not to exceed $10,000,000
for all Investments made pursuant to this clause together with any guaranty
of Indebtedness pursuant to Section 6.29(iv); (xii) Investments held or
invested in by any of the Borrower and the Credit Parties in the form of
foreign cash equivalents in the ordinary course of business and consistent
with past practices of the Borrower and the Credit Parties; (xiii) Investments
by the Borrower and the Credit Parties not otherwise permitted under this
Agreement in an aggregate amount not to exceed $5,000,000; and (xiv) advances
to officers, directors and employees of the Borrower and the Credit Parties
in connection with relocation expenses or signing bonuses for newly hired
officers, directors or employees of the Borrower and the Credit Parties. 
The term "Investments" shall not include deposits to secure the performance
of leases.

        6.26    Liens. 
The Credit Parties will not, nor will they permit any Subsidiary to, incur,
create, assume or suffer to exist any Lien on any asset of the Borrower
or the Credit Parties, now owned or hereafter acquired by the Borrower
or any of such Credit Parties, other than (i) Liens which were existing
on the Petition Date as reflected on Schedule 5.14; (ii) Permitted Liens;
(iii) Liens in favor of the Agent and the Lenders; (iv) Liens securing
purchase money Indebtedness or Capitalized Leases permitted by Section
6.22; (v) Liens securing the Additional DIP; provided that, with respect
to the Additional DIP Lenders' Liens on Collateral other than Additional
DIP Collateral, such Liens shall be subject and fully subordinate to the
Liens granted to the Agent on behalf of the Lenders hereunder and under
the Orders; and provided further that (A) the holders of such Liens shall
not be permitted to exercise any remedies with respect thereto unless all
of the Obligations have been paid in full in cash and the Lenders have
no further Commitments hereunder and (B) the instruments and agreements
pursuant to which such Lien is created are reasonably satisfactory in form
and substance to the Agent and Lenders; (vi) other Liens securing Indebtedness
permitted by Section 6.22(viii); (vii) licenses, leases and subleases of
Mortgaged Collateral granted to others but only to the extent permitted
by the Aircraft Mortgage and not interfering in any material respect with
the business of the Borrower and the Credit Parties, taken as a whole;
(viii) any renewal of any Lien on any "equipment" described in Section
1110(a)(3) of the Bankruptcy Code (as in effect on the Petition Date) permitted
by clause (i) above, provided that the Indebtedness secured is not increased
and the Lien is not extended to any additional assets of the Borrower and
the Credit Parties; (ix) Liens arising from precautionary UCC financing
statements regarding operating leases permitted by this Agreement; (x)
any interest or title of a licensor, lessor or sublessor under any lease
permitted by this Agreement; (xi)  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, provided, that such
Liens do not attach to other assets of the Borrower and the Credit Parties;
(xii) Liens in favor of credit card processors having a right of setoff,
revocation, refund or charge back with respect to money or instruments
of the Borrower or any Credit Party; (xiii) Liens in favor of English travel
agencies having a right of setoff, revocation, refund or charge back with
respect to money or instruments of the Borrower or any Credit Party; (xiv)
Liens on cash collateral or Letters of Credit (as defined in the Additional
DIP Credit Agreement) in an aggregate amount not in excess of $50,000,000
securing Indebtedness permitted pursuant to Sections 6.22(vi) and (vii);
(xv) other Liens incurred by the Borrower and the Credit Parties so long
as the value of the property subject to such Liens, and the Indebtedness
and other obligations secured thereby, do not exceed $1,000,000.

        6.27   Transactions
with Affiliates.  The Credit Parties will not, and will not permit
any Subsidiary to sell or transfer any property or assets to, or otherwise
engage in any other material transactions with, any of its Affiliates (other
than the Borrower and the Credit Parties) or such Affiliates' shareholders,
other than transactions (i) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such
Credit Party than could be obtained on an arm's-length basis from unrelated
third parties and investments in non-Credit Party Subsidiaries of the Borrower
that are permitted hereunder, (ii) transactions permitted in the Loan Documents
and the transactions contemplated thereby, (iii) reasonable and customary
fees and compensation paid to, and indemnities provided on behalf of, officers,
directors or employees of the Borrower or any Credit Party and (iv) any
dividends, other distributions or payments permitted by Section 6.21(ii).

        6.28    Amendments
to Agreements.  The Credit Parties will not enter into or permit
any material amendment or modification and will not permit the termination
of the Additional DIP Credit Agreement (including, without limitation,
any modification of the maturity date of any loan under the Additional
DIP Credit Agreement) without written consent from Requisite Lenders which
consent may be withheld if the Requisite Lenders reasonably determine that
such amendment or modification will adversely affect their interests. Without
the written consent of the Requisite Lenders, the Credit Parties will not
enter into or permit any material amendment or modification of the Co-Branded
Card Agreements and will not permit the termination of the Co-Branded Card
Agreements, provided that the Credit Parties may amend the Co-Branded Card
Agreements in the ordinary course of business so long as such amendment
shall not materially adversely affect the Lenders.

        6.30    Guarantees
and Other Liabilities.  Borrower and the Credit Parties shall
not 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 (i) for any guaranty
of Indebtedness or other obligations of any Borrower or Credit Party if
the Borrower or Credit Party could have incurred such Indebtedness or obligations
under this Agreement, (ii) by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, (iii) to the
extent existing on the Petition Date, (iv) any guaranty of Indebtedness
of joint ventures of the Borrower and the Credit Parties in an aggregate
amount, together with the Investments permitted by Section 6.25(xi), not
to exceed $5,000,000, and (v) any other guaranty by the Borrower and the
Credit Parties in an aggregate amount not to exceed $5,000,000.

        6.31 
No Negative Pledges.  The Credit Parties shall not and
shall not cause or permit their domestic Subsidiaries to directly or indirectly
enter into or assume any agreement (other than this Agreement and the Additional
DIP Credit Agreement) prohibiting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired,
in favor of Agent, except for property subject to purchase money security
interests, operating leases and capital leases and shall not permit to
exist any consensual encumbrance (other than in connection with this Agreement
and the Additional DIP Credit Agreement) on the ability of any Subsidiary
to pay dividends or other distributions to the Credit Parties.

        6.32    Restriction
on Changes.  Without the consent of the Requisite Lenders, the
Credit Parties shall not and shall not cause or permit their Subsidiaries
to directly or indirectly:  (a)  amend, modify or waive any term
or provision of its organizational documents, including its articles of
incorporation, certificates of designations pertaining to preferred stock,
by-laws, partnership agreement or operating agreement in any way or change
its state of incorporation, in each case unless such amendment, modification
or waiver is not adverse to the Lenders (determined by the Requisite Lenders
in their sole discretion), (b) engage in any material line of business
substantially different from those lines of business carried on by the
Credit Parties and their Subsidiaries on the Petition Date, and (c) make
any changes in its equity capital structure (including, without limitation,
in the terms of its outstanding capital stock) or ownership structure (except
with respect to the ownership of Parent), in either case unless such change
is not adverse to the Lenders (determined by the Requisite Lenders in their
sole discretion).

        6.33    Reclamation
Claims.  No Credit Party shall enter into any agreement to return
any of its Property to any of its creditors for application against any
Prepetition Indebtedness, Prepetition trade payables or other Prepetition
claims under Section 546(g) of the Bankruptcy Code or allow any creditor
to take any setoff or recoupment against any of its Prepetition Indebtedness,
Prepetition trade payables or other Prepetition claims based upon any such
return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise
if, after giving effect to any such agreement, setoff or recoupment, the
aggregate amount of Prepetition Indebtedness, Prepetition trade payables
and other Prepetition claims subject to all such agreements, setoffs and
recoupments since the Petition Date would exceed $25,000,000.

        6.34    Chapter
11 Claims.  No Credit Party shall incur, create, assume, suffer
to exist or permit any other superpriority administrative claim which is
pari passu with or senior to the claims of Agent and the Lenders against
Borrower and the other Credit Parties, except as permitted in Section 2.21(b)
hereof.

        6.35    Orders. 
Without the Required Lenders' prior written consent, there shall not occur
any amendments, modifications or other changes to the Interim Order, the
Final Order or any order issued under Section 365 of the Bankruptcy Code
with respect to the Co-Branded Card Agreements.

        6.36    Financial
Covenants.

                   
(a)    Capital Expenditures.  Borrower and the
Credit Parties collectively shall not make Capital Expenditures, in the
aggregate, for each fiscal quarter ending on the dates listed below in
an aggregate amount in excess of the amount listed below opposite such
date, provided, that if the amount of the actual Capital Expenditures
that are made during any fiscal quarter is less than such amount, 50% of
the unused portion thereof may be carried forward to and made only during
the immediately following fiscal quarter and any such amount carried forward
shall be deemed to be the first portion spent:

 

 
	Fiscal Quarter Ending	Capital Expenditures
	March 31, 2003	$110,000,000
	June 30, 2003	$110,000,000
	September 30, 2003	$116,000,000
	December 31, 2003	$142,000,000
	March 31, 2004	$100,000,000
	June 30, 2004	$100,000,000

                   
(b)    EBITDAR.  (i) Borrower and the Credit
Parties shall not permit cumulative consolidated EBITDAR for each fiscal
period beginning on December 1, 2002 and ending in each case on the last
day of each fiscal month ending on the dates listed below to be less than
the amount specified opposite such date:

 
	Month	EBITDAR
	February 28, 2003	$(964,000,000)
	March 31, 2003	$(881,000,000)
	April 30, 2003	$(849,000,000)
	May 31, 2003	$(738,000,000)
	June 30, 2003	$(585,000,000)
	July 31, 2003	$(448,000,000)
	August 31, 2003	$(219,000,000)
	September 30, 2003	$(98,000,000)
	October 31, 2003	$46,000,000
	November 30, 2003	$112,000,000

                           
(ii) Borrower and the Credit Parties shall not permit  cumulative
consolidated EBITDAR for each rolling twelve (12) fiscal month period ending
on the dates listed below to be less than the amount listed opposite such
month:

 

 
	Month	EBITDAR
	December 31, 2003	$575,000,000
	January 31, 2004	$901,000,000
	February 28, 2004	$1,084,000,000
	March 31, 2004	$1,196,000,000
	April 30, 2004	$1,297,000,000
	May 31, 2004	$1,383,000,000

                   
(c)    Minimum Cash.  Borrower and the Credit
Parties shall not permit their aggregate cash and cash equivalents (net
of cash maintained in the Escrow Accounts) to be less than $200,000,000
at any time.

 

 

ARTICLE VII.

DEFAULTS

The occurrence of any one or more of the following events shall constitute
a Default:
        7.1    Representations
and Warranties.  Any representation or warranty made or deemed
made by or on behalf of any Credit Party or any of its Subsidiaries to
the Lenders or the Agent under or in connection with this Agreement, any
Loan, or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the date
as of which made.

 
        7.2    Nonpayment. 
(i) Nonpayment of principal of any Loan when due, (ii) nonpayment of interest
upon any Loan or of any fees under any of the Loan Documents within two
Business Days after the same becomes due or (iii) nonpayment of any other
obligations (other than amounts set forth in clauses (i) and (ii) hereof)
under any of the Loan Documents within five Business Days after the same
becomes due.
        7.3    Breach.

               
(a)    The breach by any Credit Party of any of the terms
or provisions of Section 2.21, 2.22, 2.23, 2.24, 2.25, 2.26 or Article
VI.

               
(b)    The breach by any Credit Party (other than a breach
which constitutes a Default under another Section of this Article VII)
of any of the terms or provisions of this Agreement which is not remedied
within ten days after written notice from the Agent or any Lender.

        7.4    Material
Indebtedness.  (a) Failure of any Credit Party or any of its Subsidiaries
to pay when due any Material Indebtedness; (b) the default by any Credit
Party or any of its Subsidiaries in the performance (beyond the applicable
grace period with respect thereto, if any) of any term, provision or condition
contained in any Material Indebtedness Agreement, or any other event shall
occur or condition exist, the effect of which default, event or condition
is to cause, or to permit the holder(s) of such Material Indebtedness or
the lender(s) under any Material Indebtedness Agreement to cause, such
Material Indebtedness to become due prior to its stated maturity or any
commitment to lend under any Material Indebtedness Agreement to be terminated
prior to its stated expiration date; or (c) any Material Indebtedness of
any Credit Party or any of its Subsidiaries shall be declared to be due
and payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof.

        7.5    Additional
DIP Credit Agreement.  The occurrence and continuance of any Event
of Default under and as defined in the Additional DIP Credit Agreement.

        7.6    Governmental
Action.  Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Credit Parties and their Subsidiaries which,
when taken together with all other Property of the Credit Parties and their
Subsidiaries so condemned, seized, appropriated, or taken custody or control
of, during the twelve-month period ending with the month in which any such
action occurs, is in excess of $10,000,000.

        7.7   Judgments. 
The Credit Parties or any of their Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge one or more (i) judgments or orders
for the payment of money in excess of $10,000,000 (or the equivalent thereof
in currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, which judgment(s), in any
such case, is/are not stayed (to the extent not covered by insurance (where
the applicable insurance carrier has accepted such liability)) nor on appeal
or otherwise being appropriately contested in good faith.

        7.8    Intentionally
Deleted.

        7.9    Intentionally
Deleted.

        7.10   Change
in Control.  Any Change in Control shall occur.

        7.11   Intentionally
Deleted.

        7.12    Environmental
Law.  The Parent or any of its Subsidiaries shall (i) be the subject
of any proceeding or investigation pertaining to the release by the Parent,
any of its Subsidiaries or any other Person of any toxic or hazardous waste
or substance into the environment, or (ii) violate any Environmental Law,
which, in the case of an event described in clause (i) or clause (ii),
could reasonably be expected to have a Material Adverse Effect.

        7.13    Loan
Documents.  The occurrence of any "default", as defined in any
Loan Document (other than this Agreement) or the breach of any of the terms
or provisions of any Loan Document (other than this Agreement), which default
or breach continues beyond any period of grace therein provided.

        7.14    Liens. 
The Agreement and any Loan Document shall for any reason fail to create
a valid and perfected first priority (or second priority with respect to
the Additional DIP Collateral (or otherwise junior Lien in the event a
Lien on such Additional DIP Collateral exists ahead of the Additional DIP
Lenders' Lien and is permitted under Section 6.26 hereof; provided that,
in such event, the Lenders' Lien shall be immediately junior to the Additional
Lenders' Lien on such Additional DIP Collateral)) security interest in
any Collateral purported to be covered hereby, or any Lien on any material
amount of Collateral (determined by Agent in its sole discretion) granted
by the terms hereof or by the terms of any Loan Document shall fail to
remain in full force or effect or any action shall be taken to discontinue
or to assert the invalidity or unenforceability of this Agreement.

        7.15    ERISA.

                   
(a)    any Termination Event described in clauses (iii)
or (iv) of the definition of such term shall have occurred and shall continue
unremedied for more than 10 days; or

                   
(b)    (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 $10,000,000 allocable to post-petition obligations
or requires payments exceeding $1,000,000 per annum in excess of the annual
payments made with respect to such Multiemployer Plans by the Borrower
or such ERISA Affiliate for the plan year immediately preceding the plan
year in which such notification is received; or

                   
(c)    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 exceeding
$10,000,000; or

                   
(d)    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 Petition 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.

        7.16    Bankruptcy
Matters.

                   
(a)    (i)  The entry of an order dismissing any Chapter
11 Case or converting any such case to one under Chapter 7 of the Bankruptcy
Code or (ii) any Credit Party shall file a motion or other pleading seeking
to convert any of the Chapter 11 Cases to a proceeding under Chapter 7
of the Bankruptcy Code or the dismissal of any of the Chapter 11 Cases
under Section 1112 of the Bankruptcy Code or otherwise.

                   
(b)    The entry of an order appointing a Chapter 11 trustee
or receiver in any of the Chapter 11 Cases and
the order appointing such trustee or receiver shall not be reversed or
vacated within 30 days after the entry thereof.

                   
(c)    The entry of an order  in any of the Chapter
11 Cases granting any other superpriority administrative claim or Lien
equal or superior to that granted to Agent, on behalf of itself and Lenders
(or the filing of an application by any Credit Party to approve any such
superpriority administrative claim), other than (a) the permitted Liens
granted to the Additional DIP Lenders in the Additional DIP Collateral
and the priority claim granted to the Additional DIP Lenders under Section
364(c)(1) of the Bankruptcy Code, (b) unless the proceeds of a new loan
will repay in full all Obligations and (c) ordinary course transactions
under the Credit Parties' cash management systems.

                   
(d)    The entry of an order in any of the Chapter 11 Cases
modifying, staying, vacating, reversing or amending the final order issued
under Section 365 of the Bankruptcy Code with respect to the Co-Branded
Card Agreements in a manner adverse to Lenders (determined by Lenders in
their sole discretion).

                   
(e)    The entry of an order in any of the Chapter 11 Cases
modifying, staying, vacating, reversing or amending in a manner adverse
to Lenders (determined by Lenders in their sole discretion) the Interim
Order, the Final Order or any other final order issued under Section 365
of the Bankruptcy Code with respect to this Agreement or any other Loan
Document and such order is effective for a period in excess of 10 days.

                   
(f)    The entry of an order in any of the Chapter 11 Cases
appointing an officer or examiner having enlarged powers (beyond those
set forth under Bankruptcy Code Sections 1106(a)(3) and (4)) or person
having similar powers and functions and the order appointing such officer
or examiner shall not be reversed or vacated within 30 days after the entry
thereof.

                   
(g)    The failure (for any reason) of the Final Order to
be entered within 45 days following the Petition Date and in substantially
the form of Exhibit E attached hereto.

                   
(h)    The entry of an order in any of the Chapter 11 Cases
avoiding or requiring repayment of any portion of the payments made on
account of the Obligations owing under this Agreement.

                   
(i)    The allowance of any claims arising under Section
506(c) of the Bankruptcy Code against Agent or any Lender or the Collateral
or the commencement of any action adverse to Agent or any Lender or their
respective rights and remedies under the Loan Documents.

                   
(j)    Any Credit Party shall: (i) obtain working capital
financing from any Person other than Agent and Lenders and the Additional
DIP Lenders under Section 364(d) of the Bankruptcy Code; (ii) obtain financing
from any Person other than Agent and Lenders under Section 364(c) of the
Bankruptcy Code (other than the Additional DIP Credit Agreement or with
respect to a financing used, in whole or in part, to repay in full the
Obligations); (iii) grant any Lien upon or affecting any Collateral other
than Liens expressly permitted by Section 6.26; or (iv) use cash collateral
(as defined in Section 363(a) of the Bankruptcy Code) of Agent and Lenders
under Section 363(c) of the Bankruptcy Code.

                   
(k)    The entry of an order by the Bankruptcy Court in
any of the Chapter 11 Cases granting relief from or modifying the automatic
stay of Section 362 of the Bankruptcy Code (i) to allow any creditor (other
than Agent and Lenders or, to the extent permitted under the Additional
DIP Intercreditor Agreement, Additional DIP Lenders) to execute upon or
enforce a Lien on any Collateral if, after giving effect thereto, the aggregate
amount of all claims as to which such relief has been granted since the
Petition Date would exceed $10,000,000 in the aggregate (it being understood
that the relinquishment by the Credit Parties of Section 1110 Assets, or
the foreclosure of security interests in Section 1110 Assets (or in property
in the possession of the applicable secured party) as to which defaults
have not been cured pursuant to Section 1110 of the Bankruptcy Code, shall
not be included in this $10,000,000 cap), or (ii) with respect to any Lien
of, or the granting of any Lien on any Collateral to, any state or local
environmental or regulatory agency or authority that could reasonably be
expected to have a Material Adverse Effect.

                   
(l)    There shall commence any suit or action against Agent
or any Lender by or on behalf of (i) any Credit Party, (ii) the Environmental
Protection Agency, (iii) any state environmental protection or health and
safety agency, or (iv) any official committee in any of the Chapter 11
Cases, in each case that asserts a claim in excess of $5,000,000 or seeks
a legal or equitable remedy that would have the effect of subordinating
the claim or Lien of Agent or any Lender to a claim in excess of $5,000,000
and, if such suit or action is commenced by any Person other than any Credit
Party or any Subsidiary, officer, or employee of any Credit Party, such
suit or action shall not have been dismissed or stayed within 30 days after
service thereof on Agent or such Lender, as applicable, and, if stayed,
such stay shall have been lifted.

                   
(m)   The failure of any Credit Party to perform any of its material
obligations under the Interim Order or the Final Order.

                   
(n)    The entry of an order in any of the Chapter 11 Cases
confirming a plan or plans of reorganization which does not contain a provision
for termination of the Commitments and repayment in full in cash of all
Obligations on or before the effective date of such plan or plans.

                   
(o)    Any Credit Party shall make any payment in respect
of Prepetition Indebtedness, Prepetition trade payables or other Prepetition
claims, other than any such payments authorized by the Bankruptcy Court
and approved by the Requisite Lenders (i) in accordance with "first day"
orders reasonably satisfactory to Agent, (ii) in respect of certain critical
vendors and other critical creditors, (iii) in respect of accrued payroll
and related expenses as of the Petition Date, (iv) in respect of payments
made pursuant to Section 1110 Assets and (v) in connection with the assumption
of executory contracts and unexpired leases.

                   
(p)    Any Credit Party shall state in writing that it (i)
has ceased or intends to cease operating its business in the ordinary course
or (ii) has commenced or intends to commence an orderly liquidation of
substantially all of its assets.

                   
(q)    Borrower, Parent or ULS has taken any step leading
to its cessation as a going concern or Borrower, Parent or ULS ceases or
suspends operations.

                   
(r)    Any of the Co-Branded Card Agreements shall be terminated.

        7.17    Assumption
of Co-Branded Card Agreements.  The sale or other disposition
of all or substantially all of the Borrower's Property without the buyer's
assumption of Borrower's obligations under the Co-Branded Card Agreements,
which assumption Bank One, Delaware N.A. may contest.

        7.18    Slots
and Routes.

        (a) During the first month
of any two-month FAA slot reporting period, 50% of more of the Slots are
not utilized 80% or more over such period or (ii) during the two-month
FAA slot reporting period, the Borrower fails to satisfy the Use or Lose
Rule with respect to 20% of the Slots at DCA and LGA; or

        (b) The Borrower loses its
material rights in and to use any of its Primary Routes, Primary Foreign
Slots, and/or Supporting Route Facilities for the Primary Routes, other
than in cases where the Primary Routes, Primary Foreign Slots, and/or Supporting
Route Facilities for the Primary Routes are transferred or otherwise disposed
of as permitted in this Agreement or the SGR Security Agreement, or (iii)
in cases where the Agent has provided prior written consent to the loss
of such material rights.

ARTICLE VIII.

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

        8.1    Acceleration
and Remedies.

               
(a)    If any Default occurs, Agent may (and at the written
request of the Requisite Lenders shall), notwithstanding the provisions
of Section 362 of the Bankruptcy Code but subject to any provision of the
Interim Order or Final Order, without any application, motion or notice
to, or order from, the Bankruptcy Court, terminate or suspend the obligations
of the Lenders to make a Loan hereunder, or declare the Obligations to
be due and payable, or both, whereupon the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any
kind, all of which the Borrower hereby expressly waives.

               
(b)    If, within 10 days after acceleration of the maturity
of the Obligations or termination of the obligations of the Lenders to
make a Loan hereunder as a result of any Default and before any judgment
or decree for the payment of the Obligations due shall have been obtained
or entered, the Required Lenders (in their sole discretion) shall so direct,
the Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.

               
(c)    Upon the occurrence of a Default and notwithstanding
the provisions of Section 362 of the Bankruptcy Code but subject to any
provision of the Interim Order or Final Order, without any application,
motion or notice to, or order from, the Bankruptcy Court, the Agent may
(and shall at the direction of the Required Lenders), exercise any or all
of the following rights and remedies:

 

(i)    Those rights and remedies available to a secured
party under the Illinois UCC (whether or not the Illinois UCC applies to
the affected Collateral) or under any other applicable law (including,
without limitation, any law governing the exercise of a bank's right of
setoff or bankers' lien) when a debtor is in default under a security agreement
or otherwise.
(ii)    Without notice, sell, lease, assign, grant an
option or options to purchase or otherwise dispose of the Collateral or
any part thereof in one or more parcels at public or private sale, for
cash, on credit or for future delivery, and upon such other terms as the
Agent may deem commercially reasonable.

 

The Agent, on behalf of the secured parties, may comply with any applicable
state or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

               
(d)    Upon the request of the Agent after the occurrence
of a Default and notwithstanding the provisions of Section 362 of the Bankruptcy
Code but subject to any provision of the Interim Order or Final Order,
without any application, motion or notice to, or order from, the Bankruptcy
Court, the Borrower and the other Credit Parties will:

 

(i)    Assemble and make available to the Agent the
Collateral and all records relating thereto at any place or places specified
by the Agent.
(ii)    Permit the Agent, by the Agent's representatives
and agents, to enter any premises where all or any part of the Collateral,
or the books and records relating thereto, or both, are located, to take
possession of all or any part of the Collateral and to remove all or any
part of the Collateral.

        (e)    The
proceeds of the Collateral shall be applied by the Agent to payment of
the Obligations in the following order:

(i)    FIRST, to payment of all costs and expenses of
the Agent incurred in connection with the collection and enforcement of
the Obligations;

(ii)    SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest and fees, pro rata among the Lenders
and their Affiliates in accordance with the amount of such accrued and
unpaid interest and fees owing to each of them;

(iii)    THIRD, to payment of the principal of the Obligations,
pro rata among the Lenders and their Affiliates in accordance with the
amount of such principal then due and unpaid owing to each of them; and

(iv)    FOURTH, to payment of any Obligations (other
than those listed above) pro rata among those parties to whom such Obligations
are due in accordance with the amounts owing to each of them.

        (f)    The
Borrower and each other Credit Party hereby waives notice of the time and
place of any public sale or the time after which any private sale or other
disposition of all or any part of the Collateral may be made.  To
the extent such notice may not be waived under applicable law, any notice
made shall be deemed reasonable if sent to the Borrower or other applicable
Credit Party, addressed as set forth in Section 13.1, at least ten days
prior to (i) the date of any such public sale or (ii) the time after which
any such private sale or other disposition may be made.  Agent shall
have no obligation to clean-up or otherwise prepare the Collateral for
sale.

        (g)    Upon
the occurrence of a Default, the Agent shall be entitled to occupy and
use any premises owned or leased by the Borrower or any other Credit Party
where any of the Collateral or any records relating to the Collateral are
located until the Obligations are paid or the Collateral is removed therefrom,
whichever first occurs, without any obligation to pay the Borrower or any
other Credit Party for such use and occupancy.

 
        8.2    Amendments. 
Subject to the provisions of this Section 8.2, the Required Lenders (or
the Agent with the consent in writing of the Required Lenders) and the
Borrower may enter into agreements supplemental hereto for the purpose
of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving
any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Lenders:

 

(i)    Extend the final maturity of any Loan, postpone
or reduce the mandatory Commitment reductions set forth in Section 2.2(a)
hereof, forgive all or any portion of the principal amount thereof, or
reduce the rate or extend the time of payment of interest or fees thereon.
(ii)    Reduce the percentage specified in the definition
of Required Lenders.

(iii)    Extend the Facility Termination Date or increase
the amount of the Aggregate Commitment beyond $300,000,000 or of the Commitment
of any Lender hereunder, or permit the Borrower to assign its rights under
this Agreement.

(iv)    Amend this Section 8.2.

(v)    Except as otherwise expressly permitted under
Section 6.24, release any guarantor of the Loan or release, or, except
with respect to the Additional DIP Lenders' Liens on the Additional DIP
Collateral, agree to subordinate the Lenders' Liens with respect to, all
or substantially all of the Collateral.

 

Notwithstanding the foregoing, no amendments, modifications or waivers
to the covenants set forth in Section 6.35 shall be deemed given or made
unless the same shall be in writing and signed by Lenders and Additional
DIP Lenders holding more than 50% of the sum of (a) the Aggregate Commitment
and (b) the outstanding commitments and/or exposure under the Additional
DIP.  No amendment of any provision of this Agreement relating to
the Agent shall be effective without the written consent of the Agent. 
The Agent may waive payment of the fee required under Section 12.3.3 without
obtaining the consent of any other party to this Agreement.

        8.3    Preservation
of Rights.    No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default
or the inability of the Borrower to satisfy the conditions precedent to
such Loan shall not constitute any waiver or acquiescence.  Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment
or other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing specifically
set forth.  All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and
the Lenders until the Obligations have been paid in full.

 

 

ARTICLE IX.

GENERAL PROVISIONS

        9.1    Survival
of Representations.  All representations and warranties of each
Credit Party contained in this Agreement shall survive the making of a
Loan herein contemplated.

        9.2    Governmental
Regulation.  Anything contained in this Agreement to the contrary
notwithstanding, no Lender shall be obligated to extend credit to the Borrower
in violation of any limitation or prohibition provided by any applicable
statute or regulation.

        9.3    Headings. 
Section headings in the Loan Documents are for convenience of reference
only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

        9.4    Entire
Agreement.  The Loan Documents embody the entire agreement and
understanding among the Borrower, the other Credit Parties, the Agent and
the Lenders and supersede all prior agreements and understandings among
the Borrower, the other Credit Parties, the Agent and the Lenders relating
to the subject matter thereof other than those contained in the fee letter
described in Section 10.13.

        9.5    Several
Obligations; Benefits of this Agreement.  The respective obligations
of the Lenders hereunder are several and not joint and no Lender shall
be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such).  The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder.  This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement and their respective successors and assigns,
provided, however, that the parties hereto expressly agree that the Arranger
shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11
to the extent specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to the same
extent as if it were a party to this Agreement.

        9.6    Expenses;
Indemnification.

               
(i)        The Borrower shall reimburse
the Agent and the Arranger for any reasonable costs, internal charges and
reasonable out-of-pocket expenses (including reasonable attorneys' fees
and time charges of attorneys for the Agent (including special counsel
for the Agent (including, without limitation, aviation counsel)), which
attorneys may be employees of the Agent) paid or incurred by the Agent
or the Arranger in connection with the preparation, filing, recordation,
negotiation, execution, delivery, syndication, distribution (including,
without limitation, via the internet), review, amendment, modification,
and administration of the Loan Documents.  The Borrower also agrees
to reimburse the Agent, the Arranger and the Lenders for any reasonable
costs, internal charges and reasonable out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Agent,
the Arranger and the Lenders (including special counsel for the Agent (including,
without limitation, aviation counsel)), which attorneys may be employees
of the Agent, the Arranger or the Lenders) paid or incurred by the Agent,
the Arranger or any Lender in connection with the collection and enforcement
of the Loan Documents and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including, without limitation,
the expenses and charges associated with any periodic or special audit
of the Collateral).  Expenses being reimbursed by the Borrower under
this Section include, without limitation, (a) reasonable costs and expenses
of reviewing pleadings and documents related to any Chapter 11 Case and
any subsequent Chapter 7 case, attendance at all hearings and meetings
related to any Chapter 11 Case and any subsequent Chapter 7 case, and general
monitoring of any Chapter 11 Case and any subsequent Chapter 7 case, (b)
all due diligence, syndication (including printing, and distribution of
documents and all bank meetings), transportation (provided the Agent, Arranger
and each Lender shall use the Borrower for air travel to the extent reasonably
practicable), computer, duplication, messenger, audit (all audits shall
include a charge of $750 per day per auditor plus reasonable out-of-pocket
expenses incurred in connection therewith), insurance, appraiser and consultant
costs and expenses (including, without limitation, the reasonable costs
and expenses of any management consultant retained to represent the Lenders),
and (c) reasonable costs and expenses incurred in connection with the Reports
described in the following sentence.  The Borrower acknowledges that
from time to time Bank One may prepare and may distribute to the Lenders
(but shall have no obligation or duty to prepare or to distribute to the
Lenders) certain audit reports (the "Reports") pertaining to the Borrower's
assets for internal use by Bank One from information furnished to it by
or on behalf of the Borrower, after Bank One has exercised its rights of
inspection pursuant to this Agreement

               
(ii)        The Borrower hereby further
agrees to indemnify the Agent, the Arranger, each Lender, their respective
affiliates, and each of their directors, officers, employees, agents, advisors,
attorneys and representatives against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all
reasonable expenses of litigation or preparation therefor whether or not
the Agent, the Arranger, any Lender or any affiliate is a party thereto
and whether or not any investigation, litigation or other proceeding is
brought by a Credit Party, any of its directors, securityholders, creditors
or any other Person) which any of them may pay or incur arising out of
or relating to this Agreement, including, without limitation, the purchase,
acceptance, rejection, delivery, lease, possession, use, operation, sale,
return or other disposition of any Collateral (including, without limitation,
latent and other defects, whether or not discoverable by Agent, the Lenders
or any Credit Party, and any claim for patent, trademark or copyright infringement),
the other Loan Documents, the financing contemplated hereby or the direct
or indirect application or proposed application of the proceeds of any
Loan hereunder except to the extent that direct damages (as opposed to
special), indirect, consequential or punitive damages (including, without
limitation, any loss of products, business or anticipated savings) are
determined in a final non-appealable judgment by a court of competent jurisdiction
to have resulted from the bad faith, gross negligence or willful misconduct
of the party seeking indemnification.   The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.

        9.7    Numbers
of Documents.  All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.

        9.8    Accounting. 
Except as provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall
be made in accordance with Agreement Accounting Principles, except that
any calculation or determination which is to be made on a consolidated
basis shall be made for the Parent and all its Subsidiaries, including
those Subsidiaries, if any, which are unconsolidated on the Parent's audited
financial statements.

        9.9    Severability
of Provisions.  Any provision in any Loan Document that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction,
and to this end the provisions of all Loan Documents are declared to be
severable.

        9.10   Nonliability
of Lenders.  The relationship between the Borrower on the one
hand and the Lenders and the Agent on the other hand shall be solely that
of borrower and lender.  Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibilities to the Borrower or any Credit
Party arising out of this Agreement, the Loan Documents and the financing
contemplated hereby.  Neither the Agent, the Arranger nor any Lender
undertakes any responsibility to the Borrower or any Credit Party to review
or inform the Borrower or any Credit Party of any matter in connection
with any phase of the Borrower's or any Credit Party's business or operations. 
The Borrower and each Credit Party agree that neither the Agent, the Arranger
nor any Lender shall have liability to the Borrower or any Credit Party
(whether sounding in tort, contract or otherwise) for losses suffered by
the Borrower or any Credit Party in connection with, arising out of, or
in any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring
in connection therewith, unless it is determined in a final non-appealable
judgment by a court of competent jurisdiction that such losses resulted
from the bad faith, gross negligence or willful misconduct of the party
from which recovery is sought.  Neither the Agent, the Arranger nor
any Lender shall have any liability with respect to, and the Borrower and
each Credit Party hereby waives, releases and agrees not to sue for, any
special, indirect, consequential or punitive damages suffered by the Borrower
or any Credit Party in connection with, arising out of, or in any way related
to the Loan Documents or the financing contemplated thereby.

        9.11    Confidentiality. 
Each Lender agrees to keep any information delivered or made available
to it by the Borrower or any of the Credit Parties pursuant to this Agreement
confidential from anyone other than persons employed or retained by such
Lender who are or are expected to become engaged in evaluating, approving,
structuring, monitoring or administering the Loan 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
(i) to any of its Affiliates or to any other Lender, provided such Affiliate
agrees to keep such information confidential to the same extent required
by the Lenders hereunder, (ii)as required by law, regulation, legal process
or upon the order of any court or administrative agency, (iii) upon the
request or demand of any regulatory agency or authority (including, without
limitation, rating agencies), (iv) which has been publicly disclosed other
than as a result of a disclosure by the Agent or any Lender which is not
permitted by this Agreement, (v) in connection with any litigation to which
the Agent, any Lender, or their respective Affiliates may be a party to
the extent reasonably required, (vi) to the extent reasonably required
in connection with the exercise of any remedy hereunder, (vii) to such
Lender's legal counsel and independent auditors, (viii) to the extent permitted
by Section 12.4, and (ix) to such Lender's direct or indirect contractual
counterparties in swap agreements or to legal counsel, accountants and
other professional advisors to such counterparties.  Each Lender shall
use commercially reasonable efforts to notify the Borrower of any required
disclosure under clause (ii) of this Section 9.11.

        9.12    Nonreliance. 
Each Lender hereby represents that it is not relying on or looking to any
margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) for the repayment of the Loan provided for herein.

        9.13    Disclosure. 
The Credit Parties and each Lender hereby acknowledge and agree that Bank
One and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with the Credit Parties and
their Affiliates.

        9.14    Parties
Including Trustees; Bankruptcy Court Proceedings.  This Agreement,
the other Loan Documents, and all Liens and other rights and privileges
created hereby or pursuant to any other Loan Document shall be binding
upon each Credit Party, the estate of each Credit Party, and any trustee
or successor in interest of any Credit Party in the Chapter 11 Cases or
any subsequent case commenced under Chapter 7 of the Bankruptcy Code, and
shall not be subject to Section 365 of the Bankruptcy Code. The Liens created
by this Agreement and the other Loan Documents shall be and remain valid
and perfected in the event of the substantive consolidation or conversion
of any Chapter 11 Case or any other bankruptcy case of any Credit Party
to a case under chapter 7 of the Bankruptcy Code or in the event of dismissal
of any Chapter 11 Case or the release of any Collateral from the jurisdiction
of the Bankruptcy Court for any reason, without the necessity that Agent
file financing statements or otherwise perfect its security interests or
Liens under applicable law.

        9.15    Marshalling. 
No Lender nor the Agent shall be under any obligation to marshal any assets
in favor of the Borrower or any other party or against or in payment of
any or all of the Obligations.

 

 

ARTICLE X.

THE AGENT

        10.1   Appointment;
Nature of Relationship.  Bank One, NA is hereby appointed by each
of the Lenders as its contractual representative (herein referred to as
the "Agent") hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set
forth herein and in the other Loan Documents.  The Agent agrees to
act as such contractual representative upon the express conditions contained
in this Article X.  Notwithstanding the use of the defined term "Agent,"
it is expressly understood and agreed that the Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or
any other Loan Document and that the Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set
forth in this Agreement and the other Loan Documents.  In its capacity
as the Lenders' contractual representative, the Agent (i) does not hereby
assume any fiduciary duties to any of the Lenders, (ii) is a "representative"
of the Lenders within the meaning of the term "secured party" as defined
in the Illinois UCC and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in
this Agreement and the other Loan Documents.  Each of the Lenders
hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.  Without limiting the generality
of the foregoing, each Lender hereby authorizes Bank One, NA to consent,
on behalf of such Lender, to an Interim Order substantially in the form
attached as Exhibit D hereto and a Final Order substantially in the form
attached as Exhibit E hereto.

        10.2    Powers. 
The Agent shall have and may exercise such powers under the Loan Documents
as are specifically delegated to the Agent by the terms of each thereof,
together with such powers as are reasonably incidental thereto.  The
Agent shall have no implied duties to the Lenders, or any obligation to
the Lenders to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Agent.

        10.3    General
Immunity.  Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Borrower, any Credit Party,
the Lenders or any Lender for any action taken or omitted to be taken by
it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final non-appealable judgment by a court of competent jurisdiction
to have arisen from the bad faith, gross negligence or willful misconduct
of such Person.

        10.4    No
Responsibility for Loans, Recitals, etc.  Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or
any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information
directly to each Lender; (c) the satisfaction of any condition specified
in Article IV, except receipt of items required to be delivered solely
to the Agent; (d) the existence or possible existence of any Default or
Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency
or genuineness of any Loan Document or any other instrument or writing
furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower, the other Credit Parties or any guarantor
of any of the Obligations or of any of the Borrower's, the other Credit
Parties' or any such guarantor's respective Subsidiaries.  The Agent
shall have no duty to disclose to the Lenders information that is not required
to be furnished by the Borrower to the Agent at such time, but is voluntarily
furnished by the Borrower to the Agent (either in its capacity as Agent
or in its individual capacity).

        10.5    Action
on Instructions of Lenders.  The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders. 
The Lenders hereby acknowledge that the Agent shall be under no duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall
be requested in writing to do so by the Required Lenders.  The Agent
shall be fully justified in failing or refusing to take any action hereunder
and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all liability,
cost and expense that it may incur by reason of taking or continuing to
take any such action.

        10.6    Employment
of Agents and Counsel.  The Agent may execute any of its duties
as Agent hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care.  The Agent shall be entitled to advice
of counsel concerning the contractual arrangement between the Agent and
the Lenders and all matters pertaining to the Agent's duties hereunder
and under any other Loan Document.

        10.7    Reliance
on Documents; Counsel.  The Agent shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.

        10.8    Agent's
Reimbursement and Indemnification.  The Lenders agree to reimburse
and indemnify the Agent ratably in proportion to their respective Commitments
(or, if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (i) for any amounts not reimbursed
by the Borrower for which the Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses incurred
by the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent
in connection with any dispute between the Agent and any Lender or between
two or more of the Lenders) and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or
arising out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted against the Agent
in connection with any dispute between the Agent and any Lender or between
two or more of the Lenders), or the enforcement of any of the terms of
the Loan Documents or of any such other documents,
provided that
(i) no Lender shall be liable for any of the foregoing to the extent any
of the foregoing is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from the bad faith, gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof.  The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.

        10.9    Notice
of Default.  The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder
unless the Agent has received written notice from a Lender or the Borrower
referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default".  In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.

        10.10   Rights
as a Lender.  In the event the Agent is a Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document
with respect to its Commitment and its Loan as any Lender and may exercise
the same as though it were not the Agent, and the term "Lender" or "Lenders"
shall, at any time when the Agent is a Lender, unless the context otherwise
indicates, include the Agent in its individual capacity.  The Agent
and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with
the Borrower, any other Credit Party or any of its Subsidiaries in which
the Borrower, any other Credit Party or such Subsidiary is not restricted
hereby from engaging with any other Person.  The Agent, in its individual
capacity, is not obligated to remain a Lender.

        10.11    Lender
Credit Decision.  Each Lender acknowledges that it has, independently
and without reliance upon the Agent, the Arranger or any other Lender and
based on the financial statements prepared by the Borrower and the other
Credit Parties and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents.  Each Lender also acknowledges
that it will, independently and without reliance upon the Agent, the Arranger
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents.

        10.12    Successor
Agent.  The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has
been appointed, forty-five days after the retiring Agent gives notice of
its intention to resign.  The Agent may be removed at any time with
or without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders.  Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders,
a successor Agent.  If no successor Agent shall have been so appointed
by the Required Lenders within thirty days after the resigning Agent's
giving notice of its intention to resign, then the resigning Agent may
appoint, on behalf of the Borrower and the Lenders, a successor Agent. 
Notwithstanding the previous sentence, the Agent may at any time without
the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Agent hereunder.  If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. 
No successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment.  Any such successor
Agent shall be a commercial bank having capital and retained earnings of
at least $100,000,000.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the resigning or removed Agent.  Upon the effectiveness
of the resignation or removal of the Agent, the resigning or removed Agent
shall be discharged from its duties and obligations hereunder and under
the Loan Documents.  After the effectiveness of the resignation or
removal of an Agent, the provisions of this Article X shall continue in
effect for the benefit of such Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents.  In the event that there is a successor
to the Agent by merger, or the Agent assigns its duties and obligations
to an Affiliate pursuant to this Section 10.12, then the term "Prime Rate"
as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.

        10.13    Agent
and Arranger Fees.  The Borrower agrees to pay to the Agent and
the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated December 24, 2002, or as otherwise agreed from time to time.

        10.14    Delegation
to Affiliates.  The Borrower and the Lenders agree that the Agent
may delegate any of its duties under this Agreement to any of its Affiliates. 
Any such Affiliate (and such Affiliate's directors, officers, agents and
employees) which performs duties in connection with this Agreement shall
be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX
and X.

        10.15    Execution
of Documents on behalf of Lenders.  The Lenders hereby empower
and authorize the Agent to execute and deliver to the Borrower on their
behalf all financing statements and any financing statements, agreements,
documents or instruments as shall be necessary or appropriate to effect
the purposes of securing the Collateral hereunder.

        10.16    Collateral
Releases.  The Lenders hereby empower and authorize the Agent
to execute and deliver to the Borrower on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect
any releases of Collateral which shall be permitted by the terms hereof
or of any other Loan Document or which shall otherwise have been approved
by the Required Lenders (or, if required by the terms of Section 8.2, all
of the Lenders) in writing.

        10.17    Co-Agents,
Documentation Agent, Syndication Agent, etc.  Neither any of the
Lenders identified in this Agreement as a "co-agent" nor the Documentation
Agent or the Syndication Agent shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such.  Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender.  Each Lender hereby makes the same acknowledgments
with respect to such Lenders as it makes with respect to the Agent in Section
10.11.

 

 

ARTICLE XI.

SETOFF; RATABLE PAYMENTS

        11.1   Setoff.

                   
(a)    In addition to, and without limitation of, any rights
of the Lenders under applicable law and under Section 2.2 hereof, if any
Default occurs and is continuing and notwithstanding the provisions of
Section 362 of the Bankruptcy Code (and subject to the Orders), without
any application, motion or notice to, or order from, the Bankruptcy Court,
any and all deposits (including all account balances, whether provisional
or final and whether or not collected or available) and any other Indebtedness
at any time held or owing by any Lender or any Affiliate of any Lender
to or for the credit or account of the Borrower or any Credit Party (except
with respect to amounts held in trust accounts, if any, and payroll accounts,
if any) may be offset, recouped and applied toward the payment of the Obligations
owing to such Lender, whether or not the Obligations, or any part thereof,
shall then be due; provided that the Lenders shall provide notice to the
Borrower or such Credit Party following such setoff; provided further that
the failure to provide such notice shall not distinguish the Lenders' rights
under this Section 11.1(a).

                   
(b)    If all or any part of the Guaranteed Obligations
is then due, whether pursuant to the occurrence of a Default or otherwise,
then each Guarantor authorizes the Agent and the Lenders to apply any sums
standing to the credit of such Guarantor with the Agent or any Lender or
any Lending Installation of the Agent or any Lender toward the payment
of the Guaranteed Obligations.

        11.2    Ratable
Payments.

If any Lender, whether by setoff, recoupment or otherwise, has payment
made to it upon its Loan (other than payments received pursuant to Section
3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion
of the Loan held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of the Loan.  If any Lender,
whether in connection with setoff, recoupment or amounts which might be
subject to setoff, recoupment or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to
setoff or recoupment, such Lender agrees, promptly upon demand, to take
such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loan.  In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

ARTICLE XII.

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

        12.1   Successors
and Assigns.  The terms and provisions of the Loan Documents shall
be binding upon and inure to the benefit of the Borrower, the other Credit
Parties, Agent and the Lenders and their respective successors, assigns,
transferees and endorsees permitted hereby, except that (i) the Borrower
and the other Credit Parties shall not have the right to assign their rights
or obligations under the Loan Documents without the prior written consent
of each Lender, (ii) any assignment by any Lender must be made in compliance
with Section 12.3, and (iii) any transfer by Participation must be made
in compliance with Section 12.2.  Any attempted assignment or transfer
by any party not made in compliance with this Section 12.1 shall be null
and void, unless such attempted assignment or transfer is treated as a
participation in accordance with Section 12.2.  The parties to this
Agreement acknowledge that clause (ii) of this Section 12.1 relates only
to absolute assignments and this Section 12.1 does not prohibit assignments
creating security interests, including, without limitation, (x) any pledge
or assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to a Federal Reserve Bank or (y) in the case of
a Lender which is a Fund, any pledge or assignment of all or any portion
of its rights under this Agreement and any Note to its trustee in support
of its obligations to its trustee; provided, however, that
no such pledge or assignment creating a security interest shall release
the transferor Lender from its obligations hereunder unless and until the
parties thereto have complied with the provisions of Section 12.3. 
The Agent may treat the Person which made any Loan or which holds any Note
as the owner thereof for all purposes hereof unless and until such Person
complies with Section 12.3;
provided, however, that the Agent
may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person.  Any assignee of
the rights to any Loan or any Note agrees by acceptance of such assignment
to be bound by all the terms and provisions of the Loan Documents. 
Any request, authority or consent of any Person, who at the time of making
such request or giving such authority or consent is the owner of the rights
to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of
the rights to such Loan.

        12.2    Participations.

                  
12.2.1    Permitted Participants; Effect.  Any
Lender may at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents.  In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, such Lender shall remain the owner of its Loan and
the holder of any Note issued to it in evidence thereof for all purposes
under the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such participating
interests, and the Borrower and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.

                  
12.2.2    Voting Rights.  Each Lender shall
retain the sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the Loan Documents
other than any amendment, modification or waiver with respect to any Loan
or Commitment in which such Participant has an interest which would require
consent of all of the Lenders pursuant to the terms of Section 8.2 or of
any other Loan Document.

                  
12.2.3    Benefit of Certain Provisions.  The
Borrower agrees that each Participant shall be deemed to have the right
of setoff and recoupment provided in Section 11.1 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as
if the amount of its participating interest were owing directly to it as
a Lender under the Loan Documents, provided that each Lender shall retain
the right of setoff and recoupment provided in Section 11.1 with respect
to the amount of participating interests sold to each Participant. 
The Lenders agree to share with each Participant, and each Participant,
by exercising the right of setoff and recoupment provided in Section 11.1,
agrees to share with each Lender, any amount received pursuant to the exercise
of its right of setoff and recoupment, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender.  The Borrower
further agrees that each Participant shall be entitled to the benefits
of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to Section 12.3, provided
that (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant
is made with the prior written consent of the Borrower, and (ii) any Participant
not incorporated under the laws of the United States of America or any
State thereof agrees to comply with the provisions of Section 3.5 to the
same extent as if it were a Lender.

        12.3    Assignments.

                  
12.3.1    Permitted Assignments.  Any Lender
may at any time assign to one or more banks or other entities ("Purchasers")
all or any part of its rights and obligations under the Loan Documents. 
Such assignment shall be substantially in the form of Exhibit A or in such
other form as may be agreed to by the parties thereto.  Each such
assignment with respect to a Purchaser which is not a Lender or an Affiliate
of a Lender or an Approved Fund shall either be in an amount equal to the
entire applicable Commitment and Loan of the assigning Lender or 
(unless the Agent otherwise consents) be in an aggregate amount not less
than $5,000,000.  The amount of the assignment shall be based on the
Commitment or outstanding Loan (if the Commitment has been terminated)
subject to the assignment, determined as of the date of such assignment
or as of the "Trade Date," if the "Trade Date" is specified in the assignment.

                  
12.3.2    Consents.  The consent of the Borrower
shall not be required prior to an assignment becoming effective. 
The written consent of the Agent shall be required prior to an assignment
becoming effective unless the Purchaser is a Lender, an Affiliate of a
Lender or an Approved Fund.  Any consent required under this Section
12.3.2 shall not be unreasonably withheld or delayed.

                  
12.3.3    Effect; Effective Date.  Upon (i)
delivery to the Agent of an assignment, together with any consents required
by Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the
Agent for processing such assignment (unless such fee is waived by the
Agent), such assignment shall become effective on the effective date specified
in such assignment.  The assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Loan under the applicable assignment
agreement constitutes "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA.  On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender party
to this Agreement and any other Loan Document executed by or on behalf
of the Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an original
party thereto, and the transferor Lender shall be released with respect
to the Commitment and Loan assigned to such Purchaser without any further
consent or action by the Borrower, the Lenders or the Agent.  In the
case of an assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits of, and subject
to, those provisions of this Agreement and the other Loan Documents which
survive payment of the Obligations and termination of the applicable agreement. 
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 12.3 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 Section 12.2.  Upon
the consummation of any assignment to a Purchaser pursuant to this Section
12.3.3 , the transferor Lender, the Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loan be evidenced by
Notes, make appropriate arrangements so that (a) new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser, in each
case in principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment, and (b) thereafter, the old or replaced notes
shall be marked cancelled and returned to the Borrower.

                 
12.3.4    Register.       
The Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain at one of its offices in Chicago, Illinois a copy of each
Assignment and Assumption delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitments of, and
principal amounts of the Loan 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 Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

        12.4    Dissemination
of Information.  The Borrower and each other Credit Party authorize
each Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the Borrower,
each other Credit Party and their Subsidiaries, including, without limitation,
any information contained in any Reports; provided that each Transferee
and prospective Transferee agrees to be bound by Section 9.11 of this Agreement
and any other confidentiality agreement executed by such Lender in connection
with this Agreement and the Loan.

        12.5    Tax
Treatment.  If any interest in any Loan Document is transferred
to any Transferee which is not incorporated under the laws of the United
States or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).

 

 

ARTICLE XIII.

NOTICES

        13.1    Notices. 
Except as otherwise permitted by Section 2.14 with respect to Conversion/Continuation
Notices, all notices, requests and other communications to any party hereunder
shall be in writing (including electronic transmission, facsimile transmission
or similar writing) and shall be given to such party: (x) in the case of
the Borrower, any other Credit Party or the Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any
Lender, at its address or facsimile number set forth in its administrative
questionnaire or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower in accordance with the provisions
of this Section 13.1.  Each such notice, request or other communication
shall be effective (i) if given by facsimile transmission, when transmitted
to the facsimile number specified in this Section and confirmation of receipt
is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid,
or (iii) if given by any other means, when delivered (or, in the case of
electronic transmission, received) at the address specified in this Section;
provided
that notices to the Agent under Article II shall not be effective until
received.

        13.2    Change
of Address.

The Borrower, any other Credit Party, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing
to the other parties hereto.

ARTICLE XIV.

COUNTERPARTS

        This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute
one agreement, and any of the parties hereto may execute this Agreement
by signing any such counterpart.  This Agreement shall be effective
when it has been executed by the Borrower, each other Credit Party, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.

 

 

ARTICLE XV.

CHOICE OF LAW; WAIVER OF JURY TRIAL

        15.1    CHOICE
OF LAW.  THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1
ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF ILLINOIS AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY
CODE, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

        15.2    [Intentionally
deleted].

        15.3    WAIVER
OF JURY TRIAL.  THE BORROWER, EACH CREDIT PARTY, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

 

   ARTICLE XVI.

GUARANTY

        16.1    Guaranty. 
Subject to Section 16.6, each Guarantor hereby absolutely and unconditionally
guarantees, as primary obligor and not as surety, the full and punctual
payment (whether at stated maturity, upon acceleration or early termination
or otherwise, and at all times thereafter) and performance of the Obligations
(subject to the provisions of Section 16.6 hereof, being referred to collectively
as the "Guaranteed Obligations").  Upon failure by the Borrower to
pay punctually any such amount, each Guarantor agrees that it shall forthwith
upon written demand pay to the Agent for the benefit of the Lenders and,
if applicable, their Affiliates, the amount not so paid.  This is
a guaranty of payment and not of collection.  Each Guarantor waives
any right to require the Lenders to sue the Borrower, any other guarantor,
or any other person obligated for all or any part of the Guaranteed Obligations,
or otherwise to enforce its payment against any collateral securing all
or any part of the Guaranteed Obligations.  The Agent is hereby authorized
to charge any account (except the Escrow Accounts, other trust accounts,
if any, and payroll accounts, if any) of the Guarantors maintained with
Bank One or any Affiliate of Bank One for each payment of principal, interest
and fees as it becomes due hereunder.

        16.2    Guaranty
Unconditional.  Subject to Section 16.6, the obligations of each
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:

 

(i)    any extension, renewal, settlement, compromise,
waiver or release in respect of any of the Guaranteed Obligations, by operation
of law or otherwise, or any obligation of any other guarantor of any of
the Guaranteed Obligations, or any default, failure or delay, willful or
otherwise, in the payment or performance of the Guaranteed Obligations;
(ii)    any modification or amendment of or supplement
to this Agreement, any Note or any other Loan Document;

(iii)    any release, nonperfection or invalidity of
any direct or indirect security for any obligation of the Borrower under
this Agreement, any Note, any other Loan Document, or any obligations of
any other guarantor of any of the Guaranteed Obligations, or any action
or failure to act by the Agent, any Lender or any Affiliate of any Lender
with respect to any Collateral securing all or any part of the Guaranteed
Obligations;

(iv)    except to the extent permitted under Section
6.23 hereof, any change in the corporate existence, structure or ownership
of the Borrower, any Guarantor or any other guarantor of any of the Guaranteed
Obligations or any resulting release or discharge of any obligation of
the Borrower, any Guarantor or any other guarantor of any of the Guaranteed
Obligations;

(v)    the existence of any claim, setoff, recoupment
or other rights which any Guarantor may have at any time against the Borrower,
any Guarantor, any other guarantor of any of the Guaranteed Obligations,
the Agent, any Lender or any other Person, whether in connection herewith
or any unrelated transactions;

(vi)    any invalidity or unenforceability relating to
or against the Borrower, any Guarantor or any other guarantor of any of
the Obligations, for any reason related to this Agreement, any other Loan
Document, or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower, any Guarantor or any other guarantor
of the Guaranteed Obligations, of the principal of or interest on any Note
or any other amount payable by the Borrower under this Agreement, any Note
or any other Loan Document; or

(vii)    any other act or omission to act or delay of
any kind by the Borrower, any Guarantor, any other guarantor of the Obligations,
the Agent, any Lender or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal
or equitable discharge of any Guarantor's obligations hereunder other than
the payment in full in cash of the Guaranteed Obligations and the termination
of all Commitments.

 

        16.3    Discharge
Only Upon Payment In Full: Reinstatement In Certain Circumstances. 
Each Guarantor's obligations hereunder shall remain in full force and effect
until all Guaranteed Obligations shall have been indefeasibly paid in full
and the Commitments shall have terminated or expired (other than contingent
indemnification obligations to the extent no claim thereto has been asserted).

        16.4    Waivers. 
Each Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by law, any notice not provided
for herein, as well as any requirement that at any time any action be taken
by any Person against the Borrower, any Guarantor, any other guarantor
of any of the Guaranteed Obligations, or any other Person.

        16.5    Subrogation. 
Each Guarantor hereby agrees not to assert any right, claim or cause of
action, including, without limitation, a claim for subrogation, reimbursement,
indemnification or otherwise, against the Borrower arising out of or by
reason of this Article XVI or the obligations hereunder, including, without
limitation, the payment or securing or purchasing of any of the Guaranteed
Obligations by any Guarantor unless and until the Guaranteed Obligations
are indefeasibly paid in full and any commitment to lend under this Agreement
and any other Loan Documents is terminated.

        16.6    Application
of Payments.  All payments received by the Agent under this Article
XVI shall be applied by the Agent to payment of the Guaranteed Obligations
in the following order unless the Bankruptcy Court or other court of competent
jurisdiction shall otherwise direct:

 

(a)    FIRST, to payment of all reasonable costs and
expenses of the Agent incurred in connection with the collection and enforcement
of the Guaranteed Obligations or of any security interest granted to the
Agent in connection with any collateral securing the Guaranteed Obligations;
(b)    SECOND, to payment of that portion of the Guaranteed
Obligations constituting accrued and unpaid interest and fees, pro rata
among the Lenders and their Affiliates in accordance with the amount of
such accrued and unpaid interest and fees owing to each of them;

(c)    THIRD, to payment of the principal of the Guaranteed
Obligations pro rata among the Lenders and their Affiliates in accordance
with the amount of such principal then due and unpaid owing to each of
them; and

(d)    FOURTH, to payment of any Guaranteed Obligations
(other than those listed above) pro rata among those parties to whom such
Guaranteed Obligations are due in accordance with the amounts owing to
each of them.

 

        16.7    No
Duty to Advise. The Guarantors assume all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks that
the Guarantors assume and incur under this Article XVI, and agree that
neither the Agent nor any Lender has any duty to advise the Guarantors
of information known to it regarding those circumstances or risks.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Borrower, the other Credit Parties, the Lenders
and the Agent have executed this Agreement as of the date first above written.

 

 

BORROWER:

UNITED AIR LINES, INC.,

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Executive Vice President & CFO

 

LENDERS:

                                                                     
Commitments:

BANK ONE, NA,                                                                                        
$300,000,000

Individually and as Agent

By:  /s/ Joseph R. Lehrer

        Name:  Joseph R. Lehrer

        Title:   
Managing Director

CREDIT PARTIES:

UAL CORPORATION,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

     Name:  Frederic F. Brace

        Title:   
Executive Vice President & CFO

UAL LOYALTY SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

UAL COMPANY SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Vice President and Treasurer

 

FOUR STAR LEASING INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

AIR WIS SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

UAL BENEFITS MANAGEMENT, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

UNITED BIZJET HOLDINGS, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

CONFETTI, INC.,

as debtor and debtor in possession

By:  /s/ Douglas A. Hacker

     Name:  Douglas A. Hacker

     Title:    President

 

MILEAGE PLUS HOLDINGS, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

MYPOINTS.COM, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

AIR WISCONSIN, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

DOMICILE MANAGEMENT SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Francesca M. Maher

        Name:  Francesca M.
Maher

        Title:   
Vice President and Secretary

 

BIZ JET CHARTER, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

BIZJET FRACTIONAL, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

BIZJET SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

MILEAGE PLUS MARKETING, INC.,

as debtor and debtor in possession

By:  /s/ Mary Jo C. Georgen

        Name:  Mary Jo C. Georgen

        Title:   
Assistant Corporate Secretary

 

CYBERGOLD, INC.,

as debtor and debtor in possession

By:  /s/ Richard J. Poulton

        Name:  Richard J. Poulton

        Title:   
Senior Vice President, Chief

                
Financial Officer and Treasurer

ITARGET.COM, INC.,

as debtor and debtor in possession

By:  /s/ Richard J. Poulton

        Name:  Richard J. Poulton

        Title:   
Senior Vice President, Chief

                
Financial Officer and Treasurer

MYPOINTS OFFLINE SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Susan O'Donnell

        Name:  Susan O'Donnell

        Title:    
Vice President

 

KION LEASING, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

PREMIER MEETING AND TRAVEL

SERVICES, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Vice President and Treasurer

 

UNITED AVIATION FUELS CORPORATION,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Vice President

 

UNITED COGEN, INC.,

as debtor and debtor in possession

By:  /s/ Francesca M. Maher

        Name:  Francesca M.
Maher

        Title:   
Vice President and Secretary

 

MILEAGE PLUS, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Vice President

 

UNITED GHS, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

UNITED WORLDWIDE CORPORATION,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
President

 

UNITED VACATIONS, INC.,

as debtor and debtor in possession

By:  /s/ Frederic F. Brace

        Name:  Frederic F.
Brace

        Title:   
Vice President

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