10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2007

Or

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

Commission File Number 1-5424

DELTA AIR LINES, INC.

State of Incorporation: Delaware

IRS Employer Identification No.: 58-0218548

P.O. Box 20706, Atlanta, Georgia 30320-6001

Telephone: (404) 715-2600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes R No £

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

Large accelerated filer £ Accelerated filer R Non-accelerated filer £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes £ No R

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes R No £

Number of shares outstanding by each class of common stock, as of June 30, 2007:

Common Stock, $0.0001 par value - 240,670,191 shares outstanding

This document is also available on our website at http://investor.delta.com/edgar.cfm.

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. For examples of such risks and uncertainties, please see the cautionary statements contained in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (“Form 10-K”) and “Part II, Item IA. Risk Factors” of this Form 10-Q. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

OTHER INFORMATION

On September 14, 2005 (the “Petition Date”), we and substantially all of our subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On April 25, 2007, the Bankruptcy Court approved the Debtors’ Joint Plan of Reorganization (the “Plan”). On April 30, 2007 (the “Effective Date”), the Debtors emerged from bankruptcy.

On the Effective Date, we adopted fresh start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Financial Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”). The adoption of fresh start reporting results in our becoming a new entity for financial reporting purposes. Accordingly, our Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to our Condensed Consolidated Financial Statements prior to that date.

References in this Form 10-Q to “Successor” refer to Delta on or after May 1, 2007, after giving effect to (1) the cancellation of Delta common stock issued prior to the Effective Date; (2) the issuance of new Delta common stock and certain debt securities in accordance with the Plan; and (3) the application of fresh start reporting. References to “Predecessor” refer to Delta prior to May 1, 2007.

Additional information about our Chapter 11 filing is available on the Internet at www.delta.com/restructure. Bankruptcy Court filings, claims information and our Plan are available at www.deltadocket.com.

Unless otherwise indicated, the terms “Delta,” the “Company,” “we,” “us,” and “our” refer to Delta Air Lines, Inc. and its subsidiaries.

1

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DELTA AIR LINES, INC.
Consolidated Balance Sheets
	Successor			Predecessor
ASSETS	June 30,			December 31,
(in millions)	2007			2006
	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	1,830		$	2,034
Short-term investments		1,549			614
Restricted cash		333			750
Accounts receivable, net of an allowance for uncollectible accounts
of $21 at June 30, 2007 and $21 at December 31, 2006		1,140			915
Expendable parts and supplies inventories, net of an allowance for
obsolescence of $3 at June 30, 2007 and $161 at December 31, 2006		246			181
Deferred income taxes, net		731			402
Prepaid expenses and other		420			489
Total current assets		6,249			5,385
PROPERTY AND EQUIPMENT:
Flight equipment		9,176			17,641
Accumulated depreciation		(76	)		(6,800	)
Flight equipment, net		9,100			10,841
Ground property and equipment		1,750			4,575
Accumulated depreciation		(64	)		(2,838	)
Ground property and equipment, net		1,686			1,737
Flight and ground equipment under capital leases		556			474
Accumulated amortization		(14	)		(136	)
Flight and ground equipment under capital leases, net		542			338
Advance payments for equipment		141			57
Total property and equipment, net		11,469			12,973
OTHER ASSETS:
Goodwill		12,373			227
Operating rights and other intangibles, net of accumulated amortization
of $35 at June 30, 2007 and $190 at December 31, 2006		2,918			89
Other noncurrent assets		725			948
Total other assets		16,016			1,264
Total assets	$	33,734		$	19,622
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2

DELTA AIR LINES, INC.
Consolidated Balance Sheets
	Successor			Predecessor
LIABILITIES AND SHAREOWNERS' EQUITY (DEFICIT)	June 30,			December 31,
(in millions, except share data)	2007			2006
	(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt and capital leases	$	1,386		$	1,503
Air traffic liability		2,684			1,797
Accounts payable		1,288			936
Taxes payable		438			500
Deferred revenue		1,155			363
Accrued salaries and related benefits		621			405
Other accrued liabilities		159			265
Total current liabilities		7,731			5,769
NONCURRENT LIABILITIES:
Long-term debt and capital leases		6,913			6,509
Pension and related benefits		3,235			-
Postretirement benefits		1,042			-
Deferred income taxes, net		1,502			406
Deferred revenue		2,599			346
Notes payable		640			-
Other		600			368
Total noncurrent liabilities		16,531			7,629
LIABILITIES SUBJECT TO COMPROMISE		-			19,817
COMMITMENTS AND CONTINGENCIES
SHAREOWNERS' EQUITY (DEFICIT):
Common stock:
Predecessor common stock at $0.01 par value; 900,000,000 shares authorized,
202,081,648 shares issued at December 31, 2006		-			2
Successor common stock at $0.0001 par value; 1,500,000,000 shares authorized,
246,863,602 shares issued at June 30, 2007		-			-
Additional paid-in capital		9,428			1,561
Retained earnings (accumulated deficit)		164			(14,414	)
Accumulated other comprehensive income (loss)		8			(518	)
Predecessor stock held in treasury, at cost, 4,745,710 shares at December 31, 2006		-			(224	)
Successor stock held in treasury, at cost, 6,193,411 shares at June 30, 2007		(128	)		-
Total shareowners' equity (deficit)		9,472			(13,593	)
Total liabilities and shareowners' equity (deficit)	$	33,734		$	19,622
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
	Successor			Predecessor						Successor			Predecessor
	Two Months			One Month			Three			Two Months			Four Months			Six
	Ended			Ended			Months Ended			Ended			Ended			Months Ended
	June 30,			April 30,			June 30,			June 30,			April 30,			June 30,
(in millions, except per share data)	2007			2007			2006			2007			2007			2006
OPERATING REVENUE:
Passenger:
Mainline	$	2,338		$	1,046		$	3,176		$	2,338		$	3,829		$	5,669
Regional affiliates		760			349			1,035			760			1,296			1,893
Cargo		82			36			128			82			148			251
Other, net		268			124			402			268			523			722
Total operating revenue		3,448			1,555			4,741			3,448			5,796			8,535
OPERATING EXPENSE:
Aircraft fuel and related taxes		790			322			1,142			790			1,270			2,101
Salaries and related costs		708			331			1,070			708			1,302			2,293
Contract carrier arrangements		530			239			660			530			956			1,269
Depreciation and amortization		193			95			318			193			386			619
Contracted services		160			83			218			160			326			440
Aircraft maintenance materials and outside repairs		165			82			232			165			320			459
Passenger commissions and other selling expenses		175			78			234			175			298			446
Landing fees and other rents		122			60			194			122			250			491
Passenger service		61			24			81			61			95			154
Aircraft rent		36			20			73			36			90			168
Profit sharing		65			14			-			65			14			-
Other		98			62			150			98			189			211
Total operating expense		3,103			1,410			4,372			3,103			5,496			8,651
OPERATING INCOME (LOSS)		345			145			369			345			300			(116	)
OTHER (EXPENSE) INCOME:
Interest expense (contractual interest expense totaled $88 and $366 for the
one month and four months ended April 30, 2007, respectively, and $306
and $615 for the three and six months ended June 30, 2006, respectively)		(120	)		(62	)		(227	)		(120	)		(262	)		(441	)
Interest income		33			4			18			33			14			30
Miscellaneous, net		9			(2	)		19			9			27			19
Total other expense, net		(78	)		(60	)		(190	)		(78	)		(221	)		(392	)
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, NET		267			85			179			267			79			(508	)
REORGANIZATION ITEMS, NET		-			1,339			(2,380	)		-			1,215			(3,783	)
INCOME (LOSS) BEFORE INCOME TAXES		267			1,424			(2,201	)		267			1,294			(4,291	)
INCOME TAX (PROVISION) BENEFIT		(103	)		4			(4	)		(103	)		4			17
NET INCOME (LOSS)		164			1,428			(2,205	)		164			1,298			(4,274	)
PREFERRED STOCK DIVIDENDS		-			-			-			-			-			(2	)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREOWNERS	$	164		$	1,428		$	(2,205	)	$	164		$	1,298		$	(4,276	)
BASIC INCOME (LOSS) PER SHARE	$	0.42		$	7.24		$	(11.18	)	$	0.42		$	6.58		$	(21.86	)
DILUTED INCOME (LOSS) PER SHARE	$	0.42		$	5.19		$	(11.18	)	$	0.42		$	4.63		$	(21.86	)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

DELTA AIR LINES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
	Successor			Predecessor
	Two Months			Four			Six
	Ended			Months Ended			Months Ended
	June 30,			April 30,			June 30,
(in millions)	2007			2007			2006
Net cash (used in) provided by operating activities	$	(210	)	$	1,025		$	770
Cash Flows From Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments		(89	)		(167	)		(102	)
Ground property and equipment, including technology		(31	)		(41	)		(62	)
Proceeds from sales of flight equipment		6			21			26
Proceeds from sales of investments		-			34			-
Decrease in restricted cash		58			56			8
Other, net		-			-			5
Net cash used in investing activities		(56	)		(97	)		(125	)
Cash Flows From Financing Activities:
Payments on long-term debt and capital lease obligations		(74	)		(166	)		(217	)
Proceeds from Exit Facilities		-			1,500			-
Payments on DIP Facility		-			(2,076	)		-
Other, net		-			(50	)		(5	)
Net cash used in financing activities		(74	)		(792	)		(222	)
Net (Decrease) Increase in Cash and Cash Equivalents		(340	)		136			423
Cash and cash equivalents at beginning of period		2,170			2,034			2,008
Cash and cash equivalents at end of period	$	1,830		$	2,170		$	2,431
Supplemental disclosure of cash paid (refunded) for:
Interest, net of amounts capitalized	$	77		$	243		$	347
Interest received from the preservation of cash due to Chapter 11 filing		-			(50	)		(47	)
Cash received from aircraft renegotiation		-			-			(10	)
Non-cash transactions:
Flight equipment	$	-		$	135		$	-
Flight equipment under capital leases		4			13			156
Debt extinguishment from aircraft renegotiation		-			-			171
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

Delta Air Lines, Inc.
Consolidated Statements of Shareowners' Equity (Deficit)
										Accumulated
							Retained			Other
				Additional			Earnings			Comprehensive
	Common			Paid-In			(Accumulated			Income			Treasury
(in millions, except share data)	Stock			Capital			Deficit)			(Loss)			Stock			Total
Balance at January 1, 2007 (Predecessor)	$	2		$	1,561		$	(14,444	)	$	(518	)	$	(224	)	$	(13,623	)
Comprehensive income:
Net income from January 1 to April 30, 2007		-			-			1,298			-			-			1,298
Other comprehensive income		-			-			-			75			-			75
Total comprehensive income		-			-			-			-			-			1,373
Balance at April 30, 2007 (Predecessor) (Unaudited)		2			1,561			(13,146	)		(443	)		(224	)		(12,250	)
Fresh start adjustments:
Cancellation of Predecessor common stock		(2	)		(1,561	)		-			-			224			(1,339	)
Elimination of Predecessor accumulated deficit and
accumulated other comprehensive loss		-			-			13,146			443			-			13,589
Reorganization value ascribed to Successor		-			9,400			-			-			-			9,400
Balance at May 1, 2007 (Successor) (Unaudited)		-			9,400			-			-			-			9,400
Issuance of 246,863,602 shares of common stock in connection
with emergence from Chapter 11 ($0.0001 per share),
including 6,193,411 shares held in Treasury ($20.60 per share)		-			-			-			-			(128	)		(128	)
Comprehensive income:
Net income from May 1 to June 30, 2007		-			-			164			-			-			164
Other comprehensive income		-			-			-			8			-			8
Total comprehensive income																	172
Compensation expense associated with equity awards		-			28			-			-			-			28
Balance at June 30, 2007 (Successor) (Unaudited)	$	-		$	9,428		$	164		$	8		$	(128	)	$	9,472
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6

DELTA AIR LINES, INC.

Notes to the Condensed Consolidated Financial Statements

June 30, 2007

(Unaudited)

1. CHAPTER 11 PROCEEDINGS

General Information

Delta Air Lines, Inc., a Delaware corporation, is a major air carrier that provides air transportation for passengers and cargo throughout the United States (“U.S.”) and around the world. Our Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries, including Comair, Inc. (“Comair”), which are collectively referred to as Delta.

On September 14, 2005 (the “Petition Date”), we and substantially all of our subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The reorganization cases were jointly administered under the caption “In re Delta Air Lines, Inc., et al., Case No. 05-17923-ASH.” On April 25, 2007, the Bankruptcy Court approved the Debtors’ Joint Plan of Reorganization (the “Plan”). On April 30, 2007 (the “Effective Date”), we emerged from bankruptcy as a competitive airline with a global network.

Upon emergence from Chapter 11, we adopted fresh start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Financial Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”). The adoption of fresh start reporting results in our becoming a new entity for financial reporting purposes. Accordingly, our Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to our Condensed Consolidated Financial Statements prior to that date.

Fresh start reporting requires resetting the historical net book value of assets and liabilities to fair value by allocating the entity’s reorganization value to its assets and liabilities pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations” (“SFAS 141”). The excess reorganization value over the fair value of tangible and identifiable intangible assets is recorded as goodwill on our Consolidated Balance Sheet. Deferred taxes are determined in conformity with SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”). For additional information regarding the impact of fresh start reporting on our Consolidated Balance Sheet as of the Effective Date, see “Fresh Start Consolidated Balance Sheet” below.

References in this Form 10-Q to “Successor” refer to Delta on or after May 1, 2007, after giving effect to (1) the cancellation of Delta common stock issued prior to the Effective Date; (2) the issuance of new Delta common stock and certain debt securities in accordance with the Plan; and (3) the application of fresh start reporting. References to “Predecessor” refer to Delta prior to May 1, 2007.

Effectiveness of Plan of Reorganization. Under the Plan, most holders of allowed general, unsecured claims against the Debtors received or will receive newly issued common stock in satisfaction of their claims. Holders of de minimis allowed general, unsecured claims received cash in satisfaction of their claims.

The Plan contemplates the distribution of 400 million shares of common stock, consisting of (1) 386 million shares to holders of allowed general, unsecured claims (including our pilots) and (2) 14 million shares to our approximately 39,000 eligible non-contract, non-management employees. The new common stock was listed on the New York Stock Exchange (the “NYSE”) and began trading under the symbol “DAL” on May 3, 2007. As of July 31, 2007, the following distributions of common stock have been made or commenced in accordance with the Plan:

· 254 million shares of common stock to holders of allowed general, unsecured claims with respect to allowed general, unsecured claims of $11.4 billion. We have reserved 132 million shares of common stock for future distributions to holders of allowed general, unsecured claims when disputed claims are resolved.

· Approximately all 14 million shares of common stock to eligible non-contract, non-management employees. We expect to issue the remaining shares as eligible employees return to work during 2007.

7

The Bankruptcy Court also authorized the distribution of equity awards to our approximately 1,200 officers, director level employees and managers and senior professionals (“management personnel”). For additional information about these awards, see Note 10.

In addition, as of July 31, 2007, we issued the following debt securities and made the following cash distributions under the Plan:

· $66 million principal amount of senior unsecured notes in connection with our settlement agreement relating to the restructuring of certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (the “Cincinnati Airport Settlement Agreement”). For additional information on this subject, see Note 4;

· an aggregate of $78 million in cash to holders in satisfaction of their claims, including to holders of administrative claims, state and local priority tax claims and de minimis allowed unsecured claims;

· $225 million in cash to the Pension Benefit Guaranty Corporation (the “PBGC”) in connection with the termination of our qualified defined benefit pension plan for pilots (the “Pilot Plan”).

During our Chapter 11 proceedings, we entered into a comprehensive agreement with the Air Line Pilots Association, International, the collective bargaining representative of Delta’s pilots (“ALPA”), to reduce our pilot labor costs. Under this agreement, we are required to issue by August 28, 2007, for the benefit of Delta pilots, senior unsecured notes (the “Pilot Obligation”) with an aggregate principal amount equal to $650 million, a term of up to 15 years and an annual interest rate calculated to ensure that the Pilot Obligation trades at par on the issuance date. The Pilot Obligation is pre-payable at any time at our option, and we may replace all or a portion of the Pilot Obligation with cash prior to issuance.

Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, pre-petition liabilities and post-petition liabilities must be satisfied in full before shareowners are entitled to receive any distribution or retain any property under the Plan. In accordance with the Plan, holders of our equity interests that were in existence prior to April 30, 2007, including our common stock, did not receive any distributions, and their equity interests were cancelled on the Effective Date.

On the Effective Date, we entered into a senior secured exit financing facility (the “Exit Facilities”) to borrow up to $2.5 billion from a syndicate of lenders. We used a portion of the proceeds from the Exit Facilities and existing cash to repay our two then outstanding debtor-in-possession financing facilities (the “DIP Facility”). For additional information regarding the Exit Facilities, see Note 4.

We continue to incur expenses related to our Chapter 11 proceedings, primarily professional fees that were classified as a reorganization item in the Predecessor. After we emerged, these expenses are classified in their appropriate line item, primarily in other expenses, in the Successor’s Consolidated Statement of Operations. For the two months ended June 30, 2007, the amount of such expenses was $9 million.

Significant Ongoing Chapter 11 Matters

Resolution of Outstanding Claims. The Debtors have filed with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions filed in connection therewith. All of the schedules are subject to amendment or modification.

Bankruptcy Rule 3003(c)(3) requires the Bankruptcy Court to set the time within which proofs of claim must be filed in a Chapter 11 case. The Bankruptcy Court established August 21, 2006  (the “Bar Date”) as the last date for each person or entity to file a proof of claim against the Debtors. Subject to certain exceptions, the Bar Date applies to all claims against the Debtors that arose prior to the Petition Date.

As of July 31, 2007, claims totaling $91 billion have been filed with the Bankruptcy Court against the Debtors.  This amount includes $11.4 billion of allowed general, unsecured claims with respect to which common stock distributions have occurred or commenced and $32 billion of claims which have been expunged, reduced or withdrawn. We expect new and amended claims to be filed in the future, including claims amended to assign values to claims originally filed with no designated value. We have identified, and we expect to continue to identify, many claims that we believe should be disallowed by the Bankruptcy Court because they are duplicative, have been later amended or superseded, are without merit, are overstated or for other reasons. As of July 31, 2007, we have filed objections with respect to an additional $528 million in claims, but the Bankruptcy Court has not yet ruled on these objections. We expect to continue to file objections in the future. Because the process of analyzing and objecting to claims is ongoing, the amount of disallowed claims may increase significantly in the future.  We currently estimate that the total allowed general, unsecured claims in our Chapter 11 proceedings will be approximately $15 billion, including claims with respect to which we have issued or commenced distributions of common stock.

8

The Plan provides that administrative and priority claims will be satisfied with cash. Certain administrative and priority claims remain unpaid, and we will continue to settle claims and file objections with the Bankruptcy Court with respect to such claims. All of these claims have been accrued by the Successor based upon the best available estimates of amounts to be paid. However, it should be noted that the claims resolution process is uncertain and could result in material adjustments to the Successor’s financial statements.

Through the claims resolution process, differences in amounts scheduled by the Debtors and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court where appropriate. In light of the substantial number and amount of claims filed, the claims resolution process may take considerable time to complete, and we expect that it will continue for some time. Accordingly, the ultimate number and amount of allowed claims is not presently known, nor is the exact recovery with respect to allowed claims presently known.

Cincinnati Airport Settlement. On April 24, 2007, the Bankruptcy Court approved the Cincinnati Airport Settlement Agreement. A small group of bondholders is challenging the settlement in U.S. District Court for the Southern District of New York. For additional information on this subject, see Note 4.

Section 1110 Matters. During our Chapter 11 proceedings, we reached agreement with respect to substantially all of our aircraft financing obligations, subject in certain instances to the execution of definitive documentation. As of July 31, 2007, we were continuing to negotiate an agreement with aircraft financing parties for 12 aircraft; the outcome of these negotiations cannot be predicted with certainty. Upon emergence from bankruptcy, we lost the protection of the automatic stay provided under Section 362 of the Bankruptcy Code. To the extent we are unable to reach definitive agreements with, or obtain an extension and forbearance from, aircraft financing parties, those parties may seek to repossess such aircraft. 

Tax Indemnity Agreements/Stipulated Loss Value Claims. A significant amount of disputed claims involves claims related to aircraft matters that have been filed by certain parties to aircraft leverage lease transactions. Some of these claims arise from tax indemnity agreements entered into with certain parties to these leverage lease transactions. We have filed objections, and expect to file further objections, seeking to expunge or reduce such claims.  On July 19, 2007, the Bankruptcy Court entered an order affirming Delta’s objections as to certain claims and ordering those claims be expunged.  A notice of appeal of that order is pending.  Hearing dates as to further objections by Delta as to other claims have not yet been set.  We continue to negotiate and review opportunities to settle such other claims where such settlements are advisable. We cannot predict the ultimate outcome of these negotiations or the ultimate resolution of these claims.

Liabilities Subject to Compromise

The following table summarizes the components of liabilities subject to compromise included on our Consolidated Balance Sheet at December 31, 2006:

	Predecessor
(in millions)	December 31, 2006
Pension, postretirement and other benefits	$	10,329
Debt and accrued interest		5,079
Aircraft lease related obligations		3,115
Accounts payable and other accrued liabilities		1,294
Total liabilities subject to compromise	$	19,817

9

Liabilities subject to compromise refers to pre-petition obligations that were impacted by the Chapter 11 reorganization process. The amounts represented our estimate of known or potential obligations to be resolved in connection with our Chapter 11 proceedings.

At June 30, 2007, we had a zero balance for liabilities subject to compromise due to our emergence from bankruptcy. For information regarding the discharge of liabilities subject to compromise, see “Fresh Start Consolidated Balance Sheet” below.

Differences between liabilities we have estimated and the claims filed will be investigated and resolved in connection with the claims resolution process.

Reorganization Items, net

The following table summarizes the components of reorganization items, net on our Consolidated Statements of Operations for the one month and four months ended April 30, 2007, and the three and six months ended June 30, 2006:

	Predecessor
(in millions)	One Month Ended April 30, 2007			Three Months Ended June 30, 2006			Four Months Ended April 30, 2007			Six Months Ended June 30, 2006
Discharge of claims and liabilities(1)	$	4,424		$	-		$	4,424		$	-
Revaluation of frequent flyer obligation(2)		(2,586	)		-			(2,586	)		-
Revaluation of other assets and liabilities(3)		238			-			238			-
Aircraft financing renegotiations and rejections(4)		(438	)		(284	)		(440	)		(1,590	)
Contract carrier agreements(5)		-			-			(163	)		-
Emergence compensation(6)		(162	)		-			(162	)		-
Professional fees		(51	)		(25	)		(88	)		(53	)
Pilot collective bargaining agreement(7)		-			(2,100	)		(83	)		(2,100	)
Interest income(8)		12			26			50			47
Facility leases(9)		(81	)		11			43			(24	)
Vendor waived pre-petition debt		5			-			29			-
Retiree healthcare claims(10)		-			-			(26	)		-
Debt issuance costs		-			(13	)		-			(13	)
Compensation expense(11)		-			-			-			(55	)
Other		(22	)		5			(21	)		5
Total reorganization items, net	$	1,339		$	(2,380	)	$	1,215		$	(3,783	)

⁽¹⁾ The discharge of claims and liabilities primarily relates to allowed general, unsecured claims in our Chapter 11 proceedings, such as (a) ALPA’s claim under our comprehensive agreement reducing pilot labor costs; (b) the PBGC’s claim relating to the termination of the Pilot Plan; (c) claims relating to changes in postretirement healthcare benefits and the rejection of our non-qualified retirement plans; (d) claims associated with debt and certain municipal bond obligations based upon their rejection; (e) claims relating to the restructuring of financing arrangements or the rejection of leases for aircraft; and (f) other claims due to the rejection or modification of certain executory contracts, unexpired leases and contract carrier agreements. For additional information on these subjects, see Notes 1 and 10 of the Notes to the Consolidated Financial Statements in our Form 10-K.   In accordance with the Plan, we discharged our obligations to holders of allowed general, unsecured claims in exchange for the distribution of 386 million newly issued shares of common stock and the issuance of certain debt securities and obligations. Accordingly, in discharging our liabilities subject to compromise, we recognized a reorganization gain of $4.4 billion as follows:

(in millions)
Liabilities subject to compromise	$	19,345
Reorganization equity value		(9,400	)
Liabilities reinstated		(4,429	)
Issuance of new debt securities and obligations, net of discounts of $22		(938	)
Other		(154	)
Discharge of claims and liabilities	$	4,424

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(2) We revalued our SkyMiles frequent flyer obligation at fair value as a result of fresh start reporting, which resulted in a $2.6 billion reorganization charge. For information about a change in our accounting policy for the SkyMiles program, see Note 2.

(3) We revalued our assets and liabilities at estimated fair value as a result of fresh start reporting. This resulted in a $238 million gain, primarily reflecting the fair value of newly recognized intangible assets, which was partially offset by reductions in the fair value of tangible property and equipment.

(4) Estimated claims for the one month ended April 30, 2007 relate to the restructuring of the financing arrangements for 127 aircraft, the rejection of two aircraft leases and adjustments to prior claims estimates. Estimated claims for the four months ended April 30, 2007 relate to the restructuring of the financing arrangements for 143 aircraft, the rejection of two aircraft leases and adjustments to prior claims estimates.  Estimated claims for the three months ended June 30, 2006 related to the restructuring of the financing arrangements for 17 aircraft and the rejection of 14 aircraft leases. Estimated claims for the six months ended June 30, 2006 relate to the restructuring of the financing arrangements for 143 aircraft and the rejection of 16 aircraft leases.

(5) In connection with amendments to our contract carrier agreements with Chautauqua Airlines, Inc. (“Chautauqua”) and Shuttle America Corporation (“Shuttle America”), both subsidiaries of Republic Airways Holdings, Inc. (“Republic Holdings”), which, among other things, reduced the rates we pay those carriers, we recorded (1) a $91 million allowed general, unsecured claim and (2) a $37 million net charge related to our surrender of warrants to purchase up to 3.5 million shares of Republic Holdings common stock. Additionally, in connection with an amendment to our contract carrier agreement with Freedom Airlines, Inc. (“Freedom”), a subsidiary of Mesa Air Group, Inc., which, among other things, reduced the rates we pay that carrier, we recorded a $35 million allowed general, unsecured claim.

(6) In accordance with the Plan, we made $130 million in lump-sum cash payment to approximately 39,000 eligible non-contract, non-management employees.  We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan, of approximately 14 million shares of common stock to these employees. For additional information regarding the stock grants, see Note 10.

(7) Allowed general, unsecured claims of $83 million for the four months ended April 30, 2007 and $2.1 billion for the three months and six months ended June 30, 2006 in connection with Comair’s and Delta’s respective comprehensive agreements with ALPA reducing pilot labor costs.

(8) Reflects interest earned due to the preservation of cash during our Chapter 11 proceedings.

(9) Primarily reflects a net $80 million charge from an allowed general, unsecured claim under the Cincinnati Airport Settlement Agreement for the one month ended April 30, 2007. For the four months ended April 30, 2007, we recorded a net $43 million gain, primarily reflecting a $126 million net gain in connection with our settlement agreement with the Massachusetts Port Authority (“Massport”) which was partially offset by the aforementioned $80 million charge. For additional information regarding the Cincinnati Airport Settlement Agreement and our settlement agreement with Massport, see Note 4.

(10) Allowed general, unsecured claims in connection with agreements reached with committees representing pilot and non-pilot retired employees reducing their postretirement healthcare benefits.

(11) Reflects a charge for rejecting substantially all of our stock options in our Chapter 11 proceedings. For additional information regarding this matter, see Note 2 of the Notes to the Consolidated Financial Statements in our Form 10-K.

Fresh Start Consolidated Balance Sheet

As previously noted, upon emergence from Chapter 11, we adopted fresh start reporting, which required us to revalue our assets and liabilities to fair value. In estimating fair value, we based our estimates and assumptions on the guidance prescribed by SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which we adopted in conjunction with our adoption of fresh start reporting. SFAS 157, among other things, defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. For additional information about SFAS 157, see Note 2.

Our estimates of fair value are based on independent appraisals and valuations, some of which are not final. Where independent appraisals and valuations are not available, we estimate fair value using industry data and trends and refer to relevant market rates and transactions. As new or improved information on asset and liability appraisals and valuations becomes available, we may adjust our preliminary allocation of fair value within one year from the Effective Date. Adjustments to the recorded fair values of these assets and liabilities may impact the amount of recorded goodwill.

To facilitate the calculation of the enterprise value of the Successor, management developed a set of financial projections for the Successor using a number of estimates and assumptions. With the assistance of financial advisors, management determined the enterprise and corresponding equity value of the Successor based on the financial projections using various valuation methods, including (1) a comparison of our projected performance to the market values of comparable companies; (2) a review and analysis of several recent transactions in the airline industry; and (3) a calculation of the present value of future cash flows based on our projections. Utilizing this methodology, the equity value of the Successor was estimated to be in the range of $9.4 billion and $12.0 billion. The enterprise value, and corresponding equity value, are dependent upon achieving the future financial results set forth in our projections, as well as the realization of certain other assumptions. There can be no assurance that the projections will be achieved or that the assumptions will be realized. The excess equity value (using the low end of the range) over the fair value of tangible and identifiable intangible assets has been reflected as goodwill in the Consolidated Fresh Start Balance Sheet.  The financial projections and estimates of enterprise and equity value are not incorporated herein.

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All estimates, assumptions, valuations, appraisals and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, appraisals and the financial projections will be realized, and actual results could vary materially.

The adjustments set forth in the following Fresh Start Consolidated Balance Sheet in the columns captioned “Debt Discharge, Reclassifications and Distribution to Creditors,” “Repayment of DIP Facility and New Exit Financing” and “Revaluation of Assets and Liabilities” reflect the effect of the consummation of the transactions contemplated by the Plan, including the settlement of various liabilities, securities issuances, incurrence of new indebtedness and cash payments.

The effects of the Plan and fresh start reporting on our Consolidated Balance Sheet at April 30, 2007 are as follows:

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Fresh Start Consolidated Balance Sheet

(in millions)	(Predecessor) April 30, 2007			Debt Discharge, Reclassifications and Distribution to Creditors			Repayment of DIP Facility and New Exit Financing			Revaluation of Assets and Liabilities			(Successor) Reorganized Balance Sheet May 1, 2007
CURRENT ASSETS
Cash, cash equivalents and short-term investments	$	2,915		$	—		$	(557	)	$	—		$	2,358
Restricted and designated cash		1,069			—			—			—			1,069
Accounts receivable, net		1,086			—			—			—			1,086
Expendable parts and supplies inventories, net		183			—			—			58			241
Deferred income taxes, net		441			—			—			296			737
Prepaid expenses and other		437			(19	)		—			(69	)		349
Total current assets		6,131			(19	)		(557	)		285			5,840
PROPERTY AND EQUIPMENT
Net flight equipment and net flight equipment under capital lease		11,087			—			—			(1,254	)		9,833
Other property and equipment, net		1,498			—			—			215			1,713
Total property and equipment, net		12,585			—			—			(1,039	)		11,546
OTHER ASSETS
Goodwill		227			—			—			12,249			12,476
Intangibles, net		88			—			—			2,865			2,953
Other noncurrent assets		740			—			48			87			875
Total other assets		1,055			—			48			15,201			16,304
Total assets	$	19,771		$	(19	)	$	(509	)	$	14,447		$	33,690
CURRENT LIABILITIES
Current maturities of long-term debt and capital leases	$	1,292		$	5		$	—		$	35		$	1,332
DIP Facility		1,959			—			(1,959	)		—			—
Accounts payable, accrued salaries and related benefits		1,396			561			(50	)		155			2,062
SkyMiles deferred revenue		602			—						620			1,222
Air traffic liability		2,567			—			—			—			2,567
Taxes payable		423			—			—			(2	)		421
Total current liabilities		8,239			566			(2,009	)		808			7,604
NONCURRENT LIABILITIES
Long-term debt and capital leases		5,132			37			—			398			5,567
Exit Facilities		—			—			1,500			—			1,500
SkyMiles deferred revenue		294			—			—			1,966			2,260
Other notes payable		—			697			—			—			697
Pension, postretirement and related benefits		62			4,202			—			—			4,264
Other		1,026			—			—			1,372			2,398
Total noncurrent liabilities		6,514			4,936			1,500			3,736			16,686
Liabilities subject to compromise		19,345			(19,345	)		—			—			—
SHAREOWNERS’ (DEFICIT) EQUITY
Debtors
Common stock and additional paid in capital - Debtors		1,563			—			—			(1,563	)		—
Retained deficit and other - Debtors		(15,890	)		4,424			__			11,466			—
Reorganized Debtors
Common stock and additional paid in capital - Reorganized Debtors		—			9,400			—			—			9,400
Total liabilities and shareowners’ (deficit) equity	$	19,771		$	(19	)	$	(509	)	$	14,447		$	33,690

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· Debt Discharge, Reclassifications and Distribution to Creditors. Adjustments reflect the elimination of liabilities subject to compromise totaling $19.3 billion on our Consolidated Balance Sheet immediately prior to the Effective Date. Excluding certain liabilities, which were assumed by the Successor, liabilities subject to compromise of $13.8 billion were discharged in the Chapter 11 cases. Adjustments include:

(a) The recognition or reinstatement of $561 million to accounts payable, accrued salaries and related benefits comprised of (1) a $225 million obligation to the PBGC relating to the termination of the Pilot Plan (which is reflected on the Consolidated Balance Sheet net of a $3 million discount) and (2) $339 million to reinstate or accrue certain liabilities related to the current portion of our pension and postretirement benefit plans and for certain administrative claims and cure costs.

(b) The recognition of $697 million in other notes payable comprised of (1) the $650 million Pilot Obligation relating to our comprehensive agreement with ALPA reducing pilot labor costs (which is reflected on the Consolidated Balance Sheet net of a $19 million discount) and (2) $66 million principal amount of senior unsecured notes (following the reduction of the $85 million face value of the notes for the application of certain payments made by us in 2006 and 2007) under the Cincinnati Airport Settlement Agreement. For additional information on the Cincinnati Airport Settlement Agreement, see Note 4.

(c) The reinstatement from liabilities subject to compromise of $3.2 billion associated with our non-pilot defined benefit pension plan (the “Non-pilot Plan”) and other long-term accrued benefits and $1.0 billion associated with postretirement benefits.

· Repayment of DIP Facility and New Exit Financing. Adjustments reflect the repayment of the DIP Facility and borrowing under the Exit Facilities. Financing fees related to (1) the DIP Facility were written off at the Effective Date and (2) fees related to the Exit Facilities were capitalized and will be amortized over the term of the facility. For additional information regarding the Exit Facilities, see Note 4.

· Revaluation of Assets and Liabilities. Significant adjustments reflected in the Fresh Start Consolidated Balance Sheet based on the revaluation of assets and liabilities are summarized as follows:

(a) Property and equipment, net. A net adjustment of $1.0 billion was recorded to reduce the net book value of fixed assets to their estimated fair value.

(b) Goodwill. An adjustment of $12.2 billion was recorded to reflect reorganization value of the Successor in excess of the fair value of tangible and identified intangible assets.

(c) Intangibles. An adjustment of $2.9 billion was recorded to recognize identifiable intangible assets. These intangible assets reflect the estimated fair value of our trade name, takeoff and arrival slots, SkyTeam alliance agreements, marketing agreements, customer relationships and certain contracts. Certain of these assets will be subject to an annual impairment review. For additional information on intangible assets, see Note 2.

(d) Long-term debt and capital leases. An adjustment of $398 million was recorded primarily to reflect a $223 million net premium associated with long-term debt and a $138 million net premium associated with capital lease obligations to be amortized to interest expense over the life of such debt and capital lease obligations.

(e) SkyMiles deferred revenue. An adjustment to revalue our obligation under the SkyMiles frequent flyer program was recorded to reflect the estimated fair value of miles to be redeemed in the future. An adjustment of $2.0 billion and $620 million was reflected for the fair value of these miles in long-term and current classifications, respectively. Effective with our emergence from bankruptcy, we changed our accounting policy from an incremental cost basis to a deferred revenue model for miles earned through travel. For additional information on the accounting policy for our SkyMiles frequent flyer program, see Note 2.

(f) Noncurrent liabilities - other. An adjustment of $1.4 billion was recorded primarily related to the tax effect of fresh start valuation adjustments.

(g) Total shareowners’ deficit. The adoption of fresh start reporting resulted in a new reporting entity with no beginning retained earnings or accumulated deficit. All common stock of the Predecessor was eliminated and replaced by the new equity structure of the Successor based on the Plan. The Fresh Start Consolidated Balance Sheet reflects initial shareowners’ equity value of $9.4 billion, representing the low end in the range of $9.4 billion to $12.0 billion estimated in our financial projections developed in connection with the Plan. The low end of the range is estimated to reflect market conditions as of the Effective Date and therefore was used to establish initial shareowners’ equity value.

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2. ACCOUNTING AND REPORTING POLICIES

Basis of Presentation

Our unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K.

Upon emergence from Chapter 11, we adopted fresh start reporting in accordance with SOP 90-7. The adoption of fresh start reporting results in our becoming a new entity for financial reporting purposes. Accordingly, our Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to our Condensed Consolidated Financial Statements prior to that date.

Fresh start reporting requires resetting the historical net book value of assets and liabilities to fair value by allocating the entity’s reorganization value to its assets and liabilities pursuant to SFAS 141. The excess reorganization value over the fair value of tangible and identifiable intangible assets is recorded as goodwill on our Consolidated Balance Sheet. Deferred taxes are determined in conformity with SFAS 109. For additional information regarding the impact of fresh start reporting on our Consolidated Balance Sheet as of the Effective Date, see Note 1.

In preparing our Consolidated Financial Statements for the Predecessor, we applied SOP 90-7, which requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses, realized gains and losses and provisions for losses that were realized or incurred in the bankruptcy proceedings were recorded in reorganization items, net on the accompanying Consolidated Statements of Operations. In addition, pre-petition obligations that were impacted by the bankruptcy reorganization process were classified as liabilities subject to compromise on our Consolidated Balance Sheet at December 31, 2006. For additional information regarding the discharge of liabilities subject to compromise upon emergence, see Note 1.

We have eliminated all material intercompany transactions in our Condensed Consolidated Financial Statements. We do not consolidate the financial statements of any company in which we have an ownership interest of 50% or less unless we control that company. We did not control any company in which we had an ownership interest of 50% or less for any period presented in our Condensed Consolidated Financial Statements.

Management believes that the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including adjustments required by fresh start reporting, normal recurring items, restructuring and related items, and reorganization items, considered necessary for a fair statement of results for the interim periods presented.

Due to the impact of our Chapter 11 proceedings, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the two months ended June 30, 2007 and the one and four months ended April 30, 2007 are not necessarily indicative of operating results for the entire year.

New Accounting Standards

Effective January 1, 2007, we adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. FIN 48 is intended to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The adoption of FIN 48 resulted in a $30 million charge to accumulated deficit that is reported as a cumulative effect adjustment for a change in accounting principle to the opening balance sheet position of shareowners’ deficit at January 1, 2007. For additional information regarding FIN 48, see Note 8.

15

In September 2006, the FASB issued SFAS 157. This statement, among other things, defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. SFAS 157 is intended to eliminate the diversity in practice associated with measuring fair value under existing accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We adopted SFAS 157 on April 30, 2007 in connection with our adoption of fresh start reporting.  For our presentation associated with our recurring and nonrecurring fair value measurements, see Note 12.

In June 2006, the FASB ratified the Emerging Issues Task Force (“EITF”) consensus on EITF Issue No. 06-03, “How Taxes Collected From Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (“EITF 06-03”). The scope of EITF 06-03 includes any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer, and provides that a company may adopt a policy of presenting taxes either gross within revenue or on a net basis. For any such taxes that are reported on a gross basis, a company should disclose the amounts of those taxes for each period for which an income statement is presented if those amounts are significant. This statement is effective for interim and annual reporting periods beginning after December 15, 2006. We adopted EITF 06-03 on January 1, 2007. Various taxes and fees on the sale of tickets to customers are collected by us as an agent and remitted to the respective taxing authority. These taxes and fees have been presented on a net basis in the accompanying Consolidated Statements of Operations and recorded as a liability until remitted to the respective taxing authority.

Reclassifications

Prior to amending our Visa/MasterCard processing agreement, as described in Note 5, the credit card processor (“Processor”) withheld payment from our receivables and/or required a cash reserve of an amount (“Reserve”) equal to the Processor’s potential liability for tickets purchased with Visa or MasterCard that had not yet been used for travel (the “unflown ticket liability”). The cash portion of the Reserve was recorded in restricted cash on our Consolidated Balance Sheet.

For the two months ended June 30, 2007 and the four months ended April 30, 2007, the change in the cash portion of the Reserve is reported as a component of operating activities on our Condensed Consolidated Statements of Cash Flows to better reflect the nature of the restricted cash activities. For the six months ended June 30, 2006, we presented such change as an investing activity. We have reclassified prior period amounts to be consistent with the current period presentation. For the six months ended June 30, 2006, these reclassifications resulted in a $177 million decrease to cash flows from operating activities and a corresponding increase to cash flows from investing activities from the amounts previously reported.

Upon emergence and as a result of the adoption of fresh start reporting, we changed the classification of certain items in our Consolidated Statements of Operations. We also reclassified prior period amounts to conform to current period presentation. These changes have no impact on net income in any period prior to or subsequent to our emergence. These reclassifications are as follows for the three and six months ended June 30, 2006:

· In-sourcing revenue. We reclassified $75 million and $136 million, respectively, associated with revenue for our maintenance in-sourcing business to other, net revenue, and reclassified the related costs to (1) salaries and related costs, (2) aircraft maintenance materials and outside repairs and (3) other operating expense. Previously, these revenues and expenses were reflected on a net basis in other operating expense.  

· Delta Global Services, LLC (“DGS”). We reclassified $41 million and $82 million, respectively, associated with salaries for employees at our wholly owned subsidiary, DGS, to salaries and related costs. DGS provides staffing services to both internal and external customers. Previously, these costs were recorded in contracted services.

16

· Fuel taxes. We reclassified $31 million and $61 million, respectively, to aircraft fuel expense. Previously, fuel taxes were recorded in other operating expense.

· Crown Room Club. We reclassified $11 million and $25 million, respectively, associated with the expense of our Crown Room Club operations to several operating expense line items, primarily salaries and related costs and contracted services. Our Crown Room Club provides amenities to members when traveling. Previously, these expenses were recorded net in other, net revenue.

· Arrangements with Other Airlines. We reclassified to passenger revenue $17 million and $96 million, respectively, of revenue associated with (1) SkyMiles earned or redeemed on other airlines and (2) frequent flyer miles of other airlines earned or redeemed on Delta. Previously, these amounts were reflected in other, net revenue.

Cash and Cash Equivalents

We classify short-term, highly liquid investments with maturities of three months or less when purchased as cash and cash equivalents. These investments are recorded at cost, which approximates fair value.

Under our cash management system, we utilize controlled disbursement accounts that are funded daily. Checks we issue that have not been presented for payment are recorded in accounts payable on our Consolidated Balance Sheets. These amounts totaled $109 million and zero at June 30, 2007 and December 31, 2006, respectively.

Short-Term Investments

At June 30, 2007 and December 31, 2006, our short-term investments were comprised of auction rate securities. In accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” we record these investments as trading securities at fair value on our Consolidated Balance Sheets. For additional information about our accounting for trading securities, see “Investments in Debt and Equity Securities” in Note 2 of the Notes to the Consolidated Financial Statements in our Form 10-K.

Restricted Cash

We have restricted cash, which primarily relates to cash held as collateral by credit card processors and interline clearinghouses to support projected self-insurance obligations. In June 2007, we amended our Visa/MasterCard processing agreement to provide for the return of the then existing Reserve. This Reserve consisted of an $804 million cash reserve and a related $300 million letter of credit. Pursuant to the amendment, the entire cash reserve was returned to us and the letter of credit was terminated. No future holdback or cash reserve is required except in certain circumstances. The $804 million cash reserve was reclassified from restricted cash to cash and cash equivalents. For additional information regarding our amended Visa/MasterCard processing agreement, see Note 5.

Restricted cash included in current assets on our Consolidated Balance Sheets totaled $333 million and $750 million at June 30, 2007 and December 31, 2006, respectively. Restricted cash recorded in other noncurrent assets on our Consolidated Balance Sheets totaled $15 million and $52 million at June 30, 2007 and December 31, 2006, respectively.

Long-Lived Assets

We record property and equipment at cost and depreciate or amortize these assets on a straight-line basis to their estimated residual values over their respective estimated useful lives. In connection with our adoption of fresh start reporting, we reduced the net book values of property and equipment to their estimated fair values and revised the estimated useful life of flight equipment. The estimated useful lives for major asset classifications are as follows:

17

	Estimated Useful Life
Asset Classification	Successor	Predecessor
Flight equipment	25-30 years	25 years
Capitalized software	5-7 years	5-7 years
Ground property and equipment	3-40 years	3-40 years
Leasehold improvements	Shorter of lease term or estimated useful life	Shorter of lease term or estimated useful life
Flight equipment under capital lease	Shorter of lease term or estimated useful life	Shorter of lease term or estimated useful life

Goodwill and Intangible Assets

Goodwill reflects the excess of the reorganization value of the Successor over the fair value of tangible and identifiable intangible assets from our adoption of fresh start reporting. We recorded $12.5 billion of goodwill upon emergence from bankruptcy.

Identifiable intangible assets consist primarily of our trade name, takeoff and arrival slots, our SkyTeam alliance agreements, marketing agreements, customer relationships and certain contracts. These intangible assets, excluding marketing agreements, customer relationships and certain contracts, are indefinite-lived assets and are not amortized. Marketing agreements, customer relationships and certain contracts are definite-lived intangible assets and are amortized over the expected term of the respective agreements and contracts.

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” we apply a fair value-based impairment test to the net book value of goodwill and indefinite-lived intangible assets on an annual basis and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The annual impairment test date for our goodwill and indefinite-lived intangible assets is October 1. We have not performed impairment testing on goodwill and intangible assets subsequent to May 1, 2007, because there have been no events or changes that would indicate that such assets are impaired.

In accordance with SOP 90-7, if we utilize pre-emergence bankruptcy net operating loss (“NOL”) carryforwards, we will sequentially reduce the cost of goodwill followed by other indefinite-lived assets until the net carrying cost of these assets is zero.  Accordingly, during the two months ended June 30, 2007, we reduced goodwill by $103 million with respect to utilization of pre-emergence NOL carryforwards.

The following table presents information about our intangible assets, including goodwill, at June 30, 2007 and December 31, 2006.

Indefinite-lived intangible assets

	Successor		Predecessor
	June 30, 2007		December 31, 2006
	Gross Carrying		Gross Carrying
(in millions)	Amount		Amount
Goodwill	$	12,373	$	227
Trade name		880		1
Takeoff and arrival slots		635		71
SkyTeam alliance		480		-
Other		2		-
Total	$	14,370	$	299

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Definite-lived intangible assets

	Successor							Predecessor
	June 30, 2007							December 31, 2006
	Estimated		Gross Carrying		Accumulated			Estimated		Gross Carrying		Accumulated
(in millions)	life		Amount		Amortization			life		Amount		Amortization
Marketing agreements		4 years	$	710	$	(32	)			$	-	$	-
Contracts		17 to 34 years		205		(3	)				-		-
Customer relationships		4 years		40		-					-		-
Operating rights				-		-			9 to 19 years		121		(104	)
Other		1 year		1		-			3 to 5 years		3		(3	)
Total			$	956	$	(35	)			$	124	$	(107	)

The following table summarizes the expected amortization expense for the definite-lived intangible assets:

(in millions)
Six months ending December 31, 2007	$	112
2008		217
2009		217
2010		217
2011		18
After 2011		140
Total	$	921

Revenue Recognition and Frequent Flyer Program

We recognize revenue from the sale of passenger tickets as air transportation is provided or when the ticket expires unused. Our SkyMiles program offers participants the opportunity to earn travel awards primarily by flying on Delta, Delta Connection carriers and participating airlines. We also sell mileage credits in our frequent flyer program to participating companies such as credit card companies, hotels and car rental agencies.

As a result of the adoption of fresh start reporting, we revalued our SkyMiles frequent flyer award liability to estimated fair value. In accordance with SFAS 157, fair value represents the estimated amount we would pay a third party to assume the obligation for miles expected to be redeemed under the SkyMiles program. These miles were valued based upon the weighted average of amounts paid to SkyTeam alliance members and the equivalent ticket value of similar fares on Delta.

We previously accounted for frequent flyer miles earned on Delta flights on an incremental cost basis as an accrued liability and as operating expense, while miles sold to airline and non-airline businesses were accounted for on a deferred revenue basis. For additional information concerning the accounting for the SkyMiles program prior to May 1, 2007, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation - Application of Critical Accounting Policies - Frequent Flyer Program” in our Form 10-K.

Upon emergence from bankruptcy, we changed our accounting policy to a deferred revenue model for all frequent flyer miles. We now account for all miles earned and sold as separate deliverables in a multiple element revenue arrangement as prescribed by EITF 00-21, “Revenue Arrangements with Multiple Deliverables.” Our revenues are generated from the sale of passenger tickets, which includes air transportation and mileage credits. Our revenues are also generated from the sale of miles to other airline and non-airline businesses, which may include a marketing premium. 

We use the residual method for revenue recognition.  The fair value of the mileage credit component is determinable based on the selling rate per mile to other SkyTeam alliance members.  The fair values of the air transportation and marketing premium components are not determinable because they are not sold without mileage credits.  Under the residual method, the fair value of the mileage credits is deferred and the remaining portion of the sale is allocated to air transportation or the marketing premium component, as applicable, and is recognized as revenue when the related services are provided.

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The value associated with mileage credits that we estimate are not likely to be redeemed in the future is recognized as passenger revenue in proportion to actual mileage redemptions over the period redemptions occur.

3. DERIVATIVE INSTRUMENTS

Fuel Hedging Program

As of June 30, 2007, we had hedged 22% of our projected aircraft fuel requirements for the September 2007 quarter using heating oil zero-cost collar contracts. We have not entered into any fuel hedge contracts for the December 2007 quarter or thereafter.

Prior to the adoption of fresh start reporting, we had recorded as a component of shareowners’ deficit a $46 million unrealized gain related to our fuel hedging program. This gain would have been recognized as an offset to aircraft fuel expense as the underlying fuel hedge contracts were settled. However, as required by fresh start reporting, our accumulated shareowners’ deficit and accumulated other comprehensive loss were reset to zero. Accordingly, fresh start reporting adjustments eliminated the unrealized gain and increased aircraft fuel expense by $25 million for the two months ended June 30, 2007.

Gains (losses) recorded on our Consolidated Statements of Operations for the two months ended June 30, 2007, one month ended April 30, 2007 and three months ended June 30, 2006 related to our fuel hedge contracts are as follows:

	Aircraft fuel and related taxes						Other income (expense)
	Successor		Predecessor				Successor		Predecessor
	Two Months		One Month		Three Months		Two Months		One Month			Three Months
	Ended		Ended		Ended		Ended		Ended			Ended
	June 30,		April 30,		June 30,		June 30,		April 30,			June 30,
(in millions)	2007		2007		2006		2007		2007			2006
Open fuel hedge contracts	$	-	$	-	$	-	$	2	$	(7	)	$	7
Settled fuel hedge contracts		4		10		1		-		(2	)		-
Total	$	4	$	10	$	1	$	2	$	(9	)	$	7

Gains (losses) recorded on our Consolidated Statements of Operations for the two months ended June 30, 2007, four months ended April 30, 2007 and six months ended June 30, 2006 related to our fuel hedge contracts are as follows:

	Aircraft fuel and related taxes							Other income (expense)
	Successor		Predecessor					Successor		Predecessor
	Two Months		Four Months			Six Months		Two Months		Four Months			Six Months
	Ended		Ended			Ended		Ended		Ended			Ended
	June 30,		April 30,			June 30,		June 30,		April 30,			June 30,
(in millions)	2007		2007			2006		2007		2007			2006
Open fuel hedge contracts	$	-	$	-		$	-	$	2	$	15		$	7
Settled fuel hedge contracts		4		(8	)		4		-		(1	)		-
Total	$	4	$	(8	)	$	4	$	2	$	14		$	7

Our open fuel hedge contracts at June 30, 2007 had an estimated fair value gain of $37 million, which we recorded in prepaid expenses and other on our Consolidated Balance Sheet. For additional information about our fuel hedging program, see Note 2 of the Notes to the Consolidated Financial Statements in our Form 10-K.

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4. DEBT

The following table summarizes our debt at June 30, 2007 and December 31, 2006:

	Successor		Predecessor
(in millions)	June 30, 2007		December 31, 2006
Senior Secured(1)
Senior Secured Exit Financing Facility(2)
7.36% First-Lien Synthetic Revolving Facility due April 30, 2012	$	600	$	—
8.61% Second-Lien Term Loan due April 30, 2014		900		—
		1,500		—
Secured Super-Priority Debtor-in-Possession Credit Agreement(2)
8.12% GE DIP Credit Facility Term Loan A due March 16, 2008		—		600
10.12% GE DIP Credit Facility Term Loan B due March 16, 2008		—		700
12.87% GE DIP Credit Facility Term Loan C due March 16, 2008		—		600
		—		1,900
Other senior secured debt(2)
14.11% Amex Facility Note due in installments during 2007		—		176
		—		176
Secured(1)
Series 2000-1 Enhanced Equipment Trust Certificates
7.38% Class A-1 due in installments from 2007 to May 18, 2010		120		136
7.57% Class A-2 due November 18, 2010		738		738
7.92% Class B due November 18, 2010		182		182
		1,040		1,056
Series 2001-1 Enhanced Equipment Trust Certificates
6.62% Class A-1 due in installments from 2007 to March 18, 2011		130		130
7.11% Class A-2 due September 18, 2011		571		571
7.71% Class B due September 18, 2011		207		207
		908		908
Series 2001-2 Enhanced Equipment Trust Certificates(2)
7.06% Class A due in installments from 2007 to December 18, 2011		298		313
8.26% Class B due in installments from 2007 to December 18, 2011		131		145
9.61% Class C due in installments from 2007 to December 18, 2011		58		64
		487		522
Series 2002-1 Enhanced Equipment Trust Certificates
6.72% Class G-1 due in installments from 2007 to January 2, 2023		421		454
6.42% Class G-2 due July 2, 2012		370		370
7.78% Class C due in installments from 2007 to January 2, 2012		95		111
		886		935
Series 2003-1 Enhanced Equipment Trust Certificates(2)
6.11% Class G due in installments from 2007 to January 25, 2008		279		291
9.11% Class C due in installments from 2007 to January 25, 2008		135		135
		414		426

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	Successor			Predecessor
(in millions)	June 30, 2007			December 31, 2006
General Electric Capital Corporation(2)(3)(4)
9.85% Notes due in installments from 2007 to July 7, 2011		153			168
9.85% Notes due in installments from 2007 to July 7, 2011		109			119
9.85% Notes due in installments from 2007 to July 7, 2011		246			271
		508			558
Other secured debt(2)
8.86% Senior Secured Notes due in installments from 2007 to September 29, 2012		175			189
5.00% to 8.83% Other secured financings due in installments from 2007 to June 19, 2021(5)(6)		1,040			1,354
Total senior secured and secured debt	$	6,958		$	8,024
Unsecured(5)
Massachusetts Port Authority Special Facilities Revenue Bonds
5.0-5.5% Series 2001A due in installments from 2012 to January 1, 2027	$	—		$	338
4.25% Series 2001B due in installments from 2027 to January 1, 2031(2)		—			80
4.3% Series 2001C due in installments from 2027 to January 1, 2031(2)		—			80
8.75% Boston Terminal A due in installments from 2007 to June 30, 2016		204			—
Development Authority of Clayton County, loan agreement(2)
3.82% Series 2000A due June 1, 2029		65			65
3.89% Series 2000B due May 1, 2035		110			110
3.89% Series 2000C due May 1, 2035		120			120
Other unsecured debt
7.7% Notes due December 15, 2005		—			122
7.9% Notes due December 15, 2009		—			499
9.75% Debentures due May 15, 2021		—			106
8.3% Notes due December 15, 2029		—			925
8.125% Notes due July 1, 2039		—			538
10.0% Senior Notes due August 15, 2008		—			248
8.0% Convertible Senior Notes due June 3, 2023		—			350
2 7/8% Convertible Senior Notes due February 18, 2024		—			325
3.01% to 8.00% Other unsecured debt due in installments from 2007 to December 1, 2030		72			703
Total unsecured debt		571			4,609
Total secured and unsecured debt, including liabilities subject to compromise		7,529			12,633
Plus: unamortized premiums, net		214			—
Total secured and unsecured debt, including liabilities subject to compromise		7,743			12,633
Less: pre-petition debt classified as liabilities subject to compromise(5)(6)		—			(4,945	)
Total debt		7,743			7,688
Less: current maturities		(1,305	)		(1,466	)
Total long-term debt	$	6,438		$	6,222

⁽¹⁾ Our senior secured debt and secured debt is collateralized by first liens, and in many cases second and junior liens, on substantially all of our assets, including but not limited to accounts receivable, owned aircraft, certain spare engines, certain spare parts, certain flight simulators, ground equipment, landing slots, international routes, equity interests in certain of our domestic subsidiaries, intellectual property and real property. For more information on the Senior Secured Exit Financing Facility, see “Exit Financing” in this Note.

⁽²⁾ Our variable interest rate long-term debt is shown using interest rates which represent LIBOR or Commercial Paper plus a specified margin, as provided for in the related agreements. The rates shown were in effect at June 30, 2007, if applicable. For our long-term debt discharged as part of our emergence from bankruptcy, the rates shown were in effect at December 31, 2006.

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⁽³⁾ For information about the letters of credit issued by, and our related reimbursement obligation to, General Electric Capital Corporation (“GECC”), see “Letter of Credit Enhanced Special Facility Bonds” and “Reimbursement Agreement and Other GECC Agreements” in Note 6 of the Notes to the Consolidated Financial Statements in our Form 10-K.

⁽⁴⁾ For additional information about this debt, as amended, see “Reimbursement Agreement and Other GECC Agreements” in Note 6 of the Notes to the Consolidated Financial Statements in our Form 10-K.

⁽⁵⁾ In accordance with SOP 90-7, substantially all of our unsecured debt had been classified as liabilities subject to compromise at December 31, 2006. Additionally, certain of our undersecured debt had been classified as liabilities subject to compromise at December 31, 2006. For more information on liabilities subject to compromise, see Note 1.

⁽⁶⁾ Certain of our secured and undersecured debt, which was classified as liabilities subject to compromise at December 31, 2006, has been reclassified from liabilities subject to compromise to long-term debt or converted to operating leases as of June 30, 2007 in connection with restructuring initiatives during our Chapter 11 reorganization.

Future Maturities

The following table summarizes the contractual maturities of our debt, including current maturities, at June 30, 2007:

Years Ending December 31, (in millions)	Principal Amount
Six months ending December 31, 2007	$	515
2008		982
2009		487
2010		1,392
2011		1,389
After 2011		2,978
Total	$	7,743

Exit Financing

On April 30, 2007 (the “Closing Date”), we entered into the Exit Facilities to borrow up to $2.5 billion from a syndicate of lenders. Proceeds from a portion of the Exit Facilities and existing cash were used to repay the DIP Facility. The remainder of the proceeds from the Exit Facilities and the letters of credit issued thereunder are available for general corporate purposes.

The Exit Facilities consist of a $1.0 billion first-lien revolving credit facility, up to $400 million of which may be used for the issuance of letters of credit (the “Revolving Facility”), a $600 million first-lien synthetic revolving facility (the “Synthetic Facility”) (together with the Revolving Facility, the “First-Lien Facilities”), and a $900 million second-lien term loan facility (the “Term Loan” or the “Second-Lien Facility”). The scheduled maturity dates for the First-Lien Facilities and the Second-Lien Facility are the fifth and seventh anniversaries, respectively, of the Closing Date of the Exit Facilities.

The First-Lien Facilities bear interest, at our option, at LIBOR plus 2.0% or an index rate plus 1.0%; the Second-Lien Facility bears interest, at our option, at LIBOR plus 3.25% or an index rate plus 2.25%. Interest is payable (1) with respect to LIBOR loans, on the last day of each relevant interest period (defined as one, two, three or six months or any longer period available to all lenders under the relevant facility) and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period, and (2) with respect to indexed loans, quarterly in arrears.

Our obligations under the Exit Facilities are guaranteed by substantially all of our domestic subsidiaries (the “Guarantors”). The Exit Facilities and the related guarantees are secured by liens on substantially all of our and the Guarantors’ present and future assets that previously secured the DIP Facility on a first priority basis (the “Collateral”). The First-Lien Facilities are secured by a first priority security interest in the Collateral. The Second-Lien Facility is secured by a second priority security interest in the Collateral.

We are required to make mandatory repayments of the Exit Facilities, subject to certain reinvestment rights, from the sale of any Collateral or receipt of insurance proceeds in respect of any Collateral in the event we fail to maintain the minimum collateral coverage ratios described below. Any portion of the Exit Facilities that is repaid through mandatory prepayments may not be reborrowed. Any portion of the Term Loan that is voluntarily repaid may also not be reborrowed.

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The Exit Facilities include affirmative, negative and financial covenants that restrict our ability to, among other things, incur additional secured indebtedness, make investments, sell or otherwise dispose of assets if not in compliance with the collateral coverage ratio tests, pay dividends or repurchase stock. These covenants provide us with increased financial and operating flexibility as compared to the DIP Facility, but may still have a material adverse impact on our operations.

The Exit Facilities contain financial covenants that require us to:

· maintain a minimum fixed charge coverage ratio (defined as the ratio of (1) earnings before interest, taxes, depreciation, amortization and aircraft rent, and subject to other adjustments to net income (“EBITDAR”) to (2) the sum of gross cash interest expense, cash aircraft rent expense and the interest portion of our capitalized lease obligations, for successive trailing 12-month periods ending at each quarter-end date through the maturity date of the respective Exit Facilities), which minimum ratio will range from 1.00:1 to 1.20:1 in the case of the First-Lien Facilities and from 0.85:1 to 1.02:1 in the case of the Second-Lien Facility;

· maintain unrestricted cash, cash equivalents and short-term investments of not less than $750 million in the case of the First-Lien Facilities and $650 million in the case of the Second-Lien Facility, in each case at all times following the 30^th day after the Closing Date;

· maintain a minimum total collateral coverage ratio (defined as the ratio of (1) certain of our Collateral that meets specified eligibility standards (“Eligible Collateral”) to (2) the sum of the aggregate outstanding exposure under the First-Lien Facilities and the Second-Lien Facility and the aggregate termination value of certain hedging agreements) of 125% at all times; and

· in the case of the First-Lien Facilities, also maintain a minimum first-lien collateral coverage ratio (together with the total collateral coverage ratio described above, the “collateral coverage ratios”) (defined as the ratio of (1) Eligible Collateral to (2) the sum of the aggregate outstanding exposure under the First Lien Facilities and the aggregate termination value of certain hedging agreements) of 175% at all times.

The Exit Facilities contain events of default customary for Chapter 11 exit financings, including cross-defaults to other material indebtedness and certain change of control events. The Exit Facilities also include events of default specific to our business, including if all or substantially all of our flights and other operations are suspended for more than two consecutive days (other than as a result of a Federal Aviation Administration (the “FAA”) suspension due to extraordinary events similarly affecting other major U.S. air carriers). Upon the occurrence of an event of default, the outstanding obligations under the Exit Facilities may be accelerated and become due and payable immediately.

Boston Airport Terminal Project

During 2001, we entered into lease and financing agreements with Massport for the redevelopment and expansion of Terminal A at Boston’s Logan International Airport. The construction of the new terminal was funded with $498 million in proceeds from Special Facilities Revenue Bonds issued by Massport on August 16, 2001. We agreed to pay the debt service on the bonds under an agreement with Massport and issued a guarantee to the bond trustee covering the payment of the debt service.

As part of our Chapter 11 proceedings, we entered into a settlement agreement with Massport, the bond trustee and the bond insurer providing, among other things, for a reduction in our leasehold premises, the ability to return some additional space in 2007 and 2011, the reduction of our lease term to ten years and the elimination of the guarantee of debt service. On February 14, 2007, the Bankruptcy Court approved the settlement agreement, the assumption of the amended lease and the restructuring of related agreements.

Due to the settlement with Massport, we derecognized $498 million of debt associated with the Special Facility Revenue Bonds offset in part primarily by (1) $155 million in asset charges related to a reduction in space and (2) $134 million associated with the recording of new debt. As a result, we recorded a net reorganization gain of $126 million for the three months ended March 31, 2007.

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In connection with our adoption of fresh start reporting, the remaining Massport assets and debt were revalued at estimated fair value, resulting in (1) a $70 million increase in the fair value of the debt and (2) a $41 million reduction in the fair value of the assets.

Cincinnati Airport Settlement

On April 24, 2007, the Bankruptcy Court approved the Cincinnati Airport Settlement Agreement with the Kenton County Airport Board (“KCAB”) and UMB Bank, N.A., the trustee (the “Bond Trustee”) for the Series 1992 Bonds (as defined below), to restructure certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (the “Cincinnati Airport”). The Series 1992 Bonds include: (1) the $419 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series A (Delta Air Lines, Inc. Project), $397 million of which were then outstanding; and (2) the $19 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series B (Delta Air Lines, Inc. Project), $16 million of which were then outstanding.

The Cincinnati Airport Settlement Agreement, among other things:

· provides for agreements under which we will continue to use certain facilities at the Cincinnati Airport at substantially reduced costs;

· settles all disputes among us, the KCAB, the Bond Trustee and the former, present and future holders of the 1992 Bonds (the “1992 Bondholders”);

· gives the Bond Trustee, on behalf of the 1992 Bondholders, a $260 million allowed general, unsecured pre-petition claim in our bankruptcy proceedings; and

· provides for our issuance of $66 million principal amount of senior unsecured notes to the Bond Trustee on behalf of the 1992 Bondholders.

A small number of 1992 Bondholders (the “Objecting Bondholders”) is challenging the settlement in the U.S. District Court for the Southern District of New York (the “District Court”). We cannot predict the outcome of this litigation. On May 3, 2007, the parties to the Cincinnati Airport Settlement Agreement implemented that agreement in accordance with its terms.

Other

The Exit Facilities contain certain affirmative, negative and financial covenants, which are described above. In addition, as is customary in the airline industry, our aircraft lease and financing agreements require that we maintain certain levels of insurance coverage, including war-risk insurance. For additional information about our war-risk insurance currently provided by the U.S. Government, see Note 5.

We were in compliance with these covenant requirements at June 30, 2007.

5. PURCHASE COMMITMENTS AND CONTINGENCIES

Aircraft Order Commitments

Future commitments for aircraft on firm order as of June 30, 2007 are estimated to be approximately $3.5 billion. The following table shows the timing of these commitments:

Year Ending December 31, (in millions)	Amount
Six months ending December 31, 2007	$	576
2008		1,207
2009		1,050
2010		712
Total	$	3,545

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Our aircraft order commitments as of June 30, 2007 consist of firm orders to purchase six B-777-200LR aircraft, 10 B-737-700 aircraft, 46 B-737-800 aircraft and 28 CRJ-900 aircraft as discussed below. Our firm orders to purchase 46 B-737-800 aircraft include 44 B-737-800 aircraft, which we have entered into definitive agreements to sell to third parties immediately following delivery of these aircraft to us by the manufacturer. These sales will reduce our future commitments by approximately $1.8 billion during the period from the six months ending December 31, 2007 through 2010.

We entered into agreements with Bombardier (1) in January 2007 to purchase 30 CRJ-900 aircraft for delivery between September 2007 and February 2010 (the “January 2007 Agreement”) and (2) in May 2007 to purchase 14 CRJ-900 aircraft for delivery between August 2007 and February 2008. These aircraft will be delivered in two-class, 76 seat configuration. We have available to us long-term, secured financing commitments to fund a substantial portion of the aircraft purchase price for these orders.

We expect these aircraft will be operated by regional air carriers under our contract carrier agreements. Our agreements with Bombardier permit us to assign to other carriers our CRJ-900 aircraft orders and related support provisions. In April 2007, we assigned to a regional air carrier our orders to purchase 16 CRJ-900 aircraft under the January 2007 Agreement (the “CRJ-900 Assigned Aircraft”). The remaining 14 CRJ-900 aircraft under the January 2007 Agreement will be delivered between September 2007 and May 2009.

The above table does not include any commitments by us for the CRJ-900 Assigned Aircraft because the regional air carrier is required to purchase and make the related payments for those aircraft. While we would be required to purchase the CRJ-900 Assigned Aircraft in the event of a default by the regional air carrier of its purchase obligation, we currently believe such an event is not likely.

We have also entered into agreements to lease 10 B-757-200ER aircraft. We took delivery of two of these aircraft in July 2007. The remaining eight aircraft will be delivered to us from July 2007 through November 2007. We will lease each of these aircraft for seven years and three months.

We have also signed a letter of intent with a third party to lease three B-757-200ER aircraft, which would be delivered to us in the first quarter of 2008, or such earlier dates as the parties may agree, and will be leased for five years. This transaction is subject to the completion of definitive documentation.

In July 2007, we exercised an option to purchase an additional B-777-200LR aircraft.

Contract Carrier Agreements

Delta Connection Carriers

As of June 30, 2007, we had contract carrier agreements with ten regional air carriers (“Connection Carriers”), including our wholly owned subsidiary, Comair, and nine unaffiliated carriers.

Capacity Purchase Agreements. During the two months ended June 30, 2007 and the four months ended April 30, 2007, six carriers operated as contract carriers for us (in addition to Comair) pursuant to capacity purchase agreements. Under these agreements, the regional air carriers operate some or all of their aircraft using our flight code, and we schedule those aircraft, sell the seats on those flights and retain the related revenues. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. We have entered into more than one capacity purchase agreement with two of these carriers.

The following table shows, by carrier and contract, (1) the number of aircraft in Delta Connection operation as of June 30, 2007, (2) the number of aircraft scheduled to be in Delta Connection operation as of December 31, 2007, (3) the number of aircraft scheduled to be in Delta Connection operation immediately prior to the expiration date of the agreement and (4) the expiration date of the agreement:

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Carrier	Aircraft in Operation as of June 30, 2007		Number of Aircraft  Scheduled  to be in Operation as of  December 31, 2007		Number of Aircraft Scheduled to be in Operation Immediately Prior to the Expiration Date of the Agreement		Expiration Date of Agreement
Atlantic Southeast Airlines, Inc. (“ASA”)		153		153		149		2020
SkyWest Airlines, Inc. (“SkyWest”)		78		82		82		2020
SkyWest/ASA		8		12		12		2012
Chautauqua		39		39		24		2016
Freedom (ERJ-145 aircraft)(1)		33		36		22		2017
Freedom (CRJ-900 aircraft)(1)		—		2		14		2017
Freedom (Dash 8 Turboprop aircraft)(1)		9		—		9		2007
Shuttle America		16		16		16		2019
ExpressJet Airlines, Inc. (“ExpressJet”)		7		10		10		2009
Pinnacle Airlines, Inc.		—		1		16		2019

The table above was not subject to the review procedures of our Independent Registered Public Accounting Firm.

⁽¹⁾ We have separate agreements with Freedom that involve different aircraft types, expiration dates and terms. These agreements are shown separately to illustrate the variance in the number of aircraft that will be operated during the term of each agreement.

The following table shows the available seat miles (“ASMs”) and revenue passenger miles (“RPMs”) operated for us under capacity purchase agreements with the following six unaffiliated regional air carriers for the three and six months ended June 30, 2007 and June 30, 2006:

· ASA, SkyWest, Chautauqua, Freedom and Shuttle America for all periods presented; and

· ExpressJet from February 27, 2007 to June 30, 2007.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2007		2006		2007		2006
ASMs		4,427		3,805		8,682		7,277
RPMs		3,528		3,004		6,779		5,714
Number of aircraft operated, end of period		343		289		343		289

The table above was not subject to the review procedures of our Independent Registered Public Accounting Firm.

Revenue Proration Agreements. We have revenue proration agreements with American Eagle Airlines, Inc., Big Sky Airlines and ExpressJet. These agreements establish a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries.

Contingencies Related to Termination of Contract Carrier Agreements

We may terminate the Chautauqua and Shuttle America agreements without cause at any time after May 2010 and January 2013, respectively, by providing certain advance notice. If we terminate either the Chautauqua or Shuttle America agreements without cause, Chautauqua or Shuttle America, respectively, has the right to (1) assign to us leased aircraft that the airline operates for us, provided we are able to continue the leases on the same terms the airline had prior to the assignment and (2) require us to purchase or lease any of the aircraft that the airline owns and operates for us at the time of the termination. If we are required to purchase aircraft owned by Chautauqua or Shuttle America, the purchase price would be equal to the amount necessary to (1) reimburse Chautauqua or Shuttle America for the equity it provided to purchase the aircraft and (2) repay in full any debt outstanding at such time that is not being assumed in connection with such purchase. If we are required to lease aircraft owned by Chautauqua or Shuttle America, the lease would have (1) a rate equal to the debt payments of Chautauqua or Shuttle America for the debt financing of the aircraft calculated as if 90% of the aircraft was debt financed by Chautauqua or Shuttle America and (2) other specified terms and conditions.

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We estimate that the total fair values, determined as of June 30, 2007, of the aircraft that Chautauqua or Shuttle America could assign to us or require that we purchase if we terminate without cause our contract carrier agreements with those airlines (the “Put Right”) are $497 million and $353 million, respectively. The actual amount that we may be required to pay in these circumstances may be materially different from these estimates. If the Chautauqua or Shuttle America Put Right is exercised, we must also pay to the exercising carrier 10% interest (compounded monthly) on the equity the carrier provided when it purchased the put aircraft. These equity amounts for Chautauqua and Shuttle America total $44 million and $66 million, respectively.

Legal Contingencies

We are involved in various legal proceedings relating to antitrust matters, employment practices, environmental issues and other matters concerning our business. We cannot reasonably estimate the potential loss for certain legal proceedings because, for example, the litigation is in its early stages or the plaintiff does not specify the damages being sought.

Comair Flight 5191

On August 27, 2006, Comair Flight 5191 crashed shortly after take-off in a field near the Blue Grass Airport in Lexington, Kentucky. All 47 passengers and two members of the flight crew died in the accident. The third crew member survived with severe injuries. Lawsuits arising out of this accident have been filed against our wholly owned subsidiary, Comair, on behalf of 43 passengers. A number of lawsuits also name Delta as a defendant. Additional lawsuits on behalf of the four remaining passengers are anticipated. The lawsuits generally assert claims for wrongful death and related personal injuries, and seek unspecified damages, including punitive damages in most cases. As of June 30, 2007, settlements have been reached with the families of six of the 43 passengers on whose behalf lawsuits were filed. Lawsuits are currently pending in the U.S. District Court for the Eastern District of Kentucky on behalf of 13 passengers, and in state court in Fayette County, Kentucky, on behalf of 23 passengers. One lawsuit was filed in state court in Broward County, Florida, and removed to the U.S. District Court for the Southern District of Florida by Comair. A motion is currently pending in federal court in Florida to transfer the case filed in Florida to the federal court in Kentucky. Those matters pending in the Eastern District of Kentucky have been consolidated as “In Re Air Crash at Lexington, Kentucky, August 27, 2006, Master File No. 5:06-CV-316.”

Comair and Delta continue to pursue settlement negotiations with the plaintiffs in these lawsuits. The six settled cases have been dismissed with prejudice.

Comair has filed actions in the U.S. District Court for the Eastern District of Kentucky against the United States (based on the actions of the FAA), and in state court in Fayette County, Kentucky, against the Lexington Airport Board and certain other Lexington airport defendants. These actions seek to apportion liability for damages arising from this accident among all responsible parties.

During 2006, we recorded a long-term liability with a corresponding long-term receivable from our insurance carriers in other noncurrent liabilities and assets, respectively, on our Consolidated Balance Sheet relating to the Comair Flight 5191 accident. These amounts may be revised as additional information becomes available and as settlements are finalized. We carry aviation risk liability insurance and believe that this insurance is sufficient to cover any liability likely to arise from this accident.

Credit Card Processing Agreements

Visa/Mastercard Processing Agreement

On June 8, 2007, we entered into an amended and restated Visa/MasterCard credit card processing agreement (the “Amended Processing Agreement”) that, among other things, resulted in the release by the Processor of the Reserve under the agreement and extended the term of the agreement to October 31, 2008.

Prior to the amendment, the Processor was permitted to withhold payment from our receivables for the Reserve. The Processing Agreement also allowed us to substitute a letter of credit, which was issued by Merrill Lynch, for a portion of the Reserve equal to the lesser of $300 million and 45% of the unflown ticket liability.

Including the letter of credit, the Reserve, which adjusted daily, totaled approximately $1.1 billion prior to entering into the Amended Processing Agreement. On May 31, 2007, Delta and the Processor entered into a letter agreement pursuant to which the Processor surrendered the letter of credit and correspondingly reduced the amount of the Reserve. Upon entering into the Amended Processing Agreement, the Processor returned to us the remaining $804 million Reserve.

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The Amended Processing Agreement provides that no future Reserve is required except in certain circumstances, including events that in the reasonable determination of the Processor would have a material adverse effect on us.

Further, if either we or the Processor determines not to extend the term of the Amended Processing Agreement beyond October 31, 2008, then the Processor may maintain a Reserve during the period of 90 days before the expiration date of the agreement. The Reserve would equal approximately 100% of the value of tickets for which we had received payment under the Amended Processing Agreement, but which have not been used for travel, unless we have unrestricted cash above a level specified in the Amended Processing Agreement. Such a Reserve would be released to us following termination of the Amended Processing Agreement as tickets are used for travel.

American Express

Our American Express credit card processing agreement, entered into in 2004 and amended in 2005, provides that American Express is permitted to withhold our receivables in certain circumstances. These circumstances include a material increase in the risk that we will be unable to meet our obligations under the agreement or our business undergoing a material adverse change.  No amounts were withheld as of June 30, 2007 and December 31, 2006.

Other Contingencies

Regional Airports Improvement Corporation (“RAIC”)

We have obligations under a facilities agreement with the RAIC to pay the bond trustee amounts sufficient to pay the debt service on $47 million in Facilities Sublease Refunding Revenue Bonds. These bonds were issued in 1996 to refinance bonds that financed the construction of certain airport and terminal facilities we use at Los Angeles International Airport. We also provide a guarantee to the bond trustee covering payment of the debt service.

General Indemnifications

We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor’s related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at or in connection with the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence and their willful misconduct.

Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the condition, use or operation of the aircraft or such other equipment.

We believe that our insurance would cover most of our exposure to such liabilities and related indemnities associated with the types of lease and financing agreements described above, including real estate leases. However, our insurance does not typically cover environmental liabilities, although we have certain policies in place to meet the requirements of applicable environmental laws.

Certain of our aircraft and other financing transactions include provisions which require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes.

We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

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Employees Under Collective Bargaining Agreements

At June 30, 2007, we had a total of 55,542 full-time equivalent employees. Approximately 17% of these employees, including all of our pilots, are represented by labor unions. The following table presents certain information concerning the union representation of our active domestic employees as of June 30, 2007.

Employee Group	Approximate Number of Employees Represented	Union	Date on which Collective Bargaining Agreement Becomes Amendable
Delta Pilots	6,050	ALPA	December 31, 2009
Delta Flight Superintendents	180	PAFCA(1)	January 1, 2010
Comair Pilots	1,560	ALPA	March 2, 2011
Comair Maintenance Employees	520	IAM(2)	December 31, 2010
Comair Flight Attendants	910	IBT(3)	December 31, 2010

The table above was not subject to the review procedures of our Independent Registered Public Accounting Firm.

⁽¹⁾ PAFCA - Professional Airline Flight Controllers’ Association

⁽²⁾ IAM - International Association of Machinists and Aerospace Workers

⁽³⁾ IBT - International Brotherhood of Teamsters

War-Risk Insurance Contingency

As a result of the terrorist attacks on September 11, 2001, aviation insurers significantly reduced the maximum amount of insurance coverage available to commercial air carriers for liability to persons (other than employees or passengers) for claims resulting from acts of terrorism, war or similar events. At the same time, aviation insurers significantly increased the premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S. government has been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground damage) and the aircraft hull. The coverage currently extends to September 30, 2007, and the Secretary of Transportation may extend coverage through December 31, 2007. The withdrawal of government support of airline war-risk insurance would require us to obtain war-risk insurance coverage commercially, if available. Such commercial insurance could have substantially less desirable coverage than currently provided by the U.S. government, may not be adequate to protect our risk of loss from future acts of terrorism, may result in a material increase to our operating expenses or may not be obtainable at all, resulting in an interruption to our operations.

Fuel Inventory Supply Agreement

In 2006, we entered into an agreement with J. Aron & Company (“Aron”), an affiliate of Goldman Sachs & Co., pursuant to which Aron became the exclusive jet fuel supplier for our operations at the Atlanta airport, the Cincinnati airport and the three major airports in the New York City area. The agreement with Aron has six-month terms that automatically renew unless terminated by either party thirty days prior to the end of any six-month period, and the agreement will terminate on its third anniversary. Upon termination of the agreement, we will be required to purchase, at market prices at the time of termination, all jet fuel inventory that Aron is holding in the storage facilities that support our operations at the Atlanta and Cincinnati airports and all jet fuel inventory that is in transit to these airports as well as to the three New York City area airports.   Our cost to purchase such inventory may be material. 

Other

We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.

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6. FLEET INFORMATION

Our active fleet, orders, options and rolling options at June 30, 2007 are summarized in the following table. Options have scheduled delivery slots. Rolling options replace options and are assigned delivery slots as options expire or are exercised.

	Current Fleet
Aircraft Type	Owned	Capital Lease	Operating Lease	Total	Average Age	Orders		Options	Rolling Options
B-737-700	—	—	—	—	—	10		—	—
B-737-800	71	—	—	71	6.7	46	(1)	60	120
B-757-200	68	34	19	121	15.8	—		—	—
B-767-300	4	—	20	24	16.9	—		—	—
B-767-300ER	50	—	9	59	11.3	—		10	1
B-767-400ER	21	—	—	21	6.3	—		17	—
B-777-200ER	8	—	—	8	7.4	—		—	—
B-777-200LR	—	—	—	—	—	6		11	12
MD-88	63	32	25	120	17.0	—		—	—
MD-90	16	—	—	16	11.6	—		—	—
CRJ-100	10	38	51	99	9.7	—		—	—
CRJ-200	5	—	12	17	5.0	—		25	—
CRJ-700	17	—	—	17	3.7	—		29	—
CRJ-900	—	—	—	—	—	28	(2)	30	—
Total	333	104	136	573	12.2	90		182	133

The table above was not subject to the review procedures of our Independent Registered Public Accounting  Firm.

⁽¹⁾ Includes 44 aircraft which we have entered into definitive agreements to sell to third parties immediately following delivery of these aircraft to us by the manufacturer.

⁽²⁾ Excludes 16 aircraft orders we assigned to a regional air carrier in April 2007.  See “Aircraft Order Commitments” in Note 5 for additional information regarding this matter.

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7. EMPLOYEE BENEFIT PLANS

Net Periodic (Benefit) Cost

Net periodic (benefit) cost for the two months ended June 30, 2007, one month and four months ended April 30, 2007 and the three and six months ended June 30, 2006 included the following components: 

	Pension Benefits
	Successor			Predecessor						Successor			Predecessor
	Two Months			One Month			Three Months			Two Months			Four Months			Six Months
	Ended			Ended			Ended			Ended			Ended			Ended
	June 30,			April 30,			June 30,			June 30,			April 30,			June 30,
(in millions)	2007			2007			2006			2007			2007			2006
Service cost	$	-		$	-		$	-		$	-		$	-		$	35
Interest cost		74			36			178			74			145			356
Expected return on plan assets		(70	)		(32	)		(130	)		(70	)		(129	)		(260	)
Amortization of prior service cost		-			-			-			-			-			1
Recognized net actuarial loss		-			5			57			-			19			114
Settlement gain on termination		-			(30	)		-			-			(30	)		-
Revaluation of liability		-			(143	)		-			-			(143	)		-
Net periodic (benefit) cost	$	4		$	(164	)	$	105		$	4		$	(138	)	$	246

	Other Postretirement Benefits
	Successor		Predecessor						Successor		Predecessor
	Two Months		One Month			Three Months			Two Months		Four Months			Six Months
	Ended		Ended			Ended			Ended		Ended			Ended
	June 30,		April 30,			June 30,			June 30,		April 30,			June 30,
(in millions)	2007		2007			2006			2007		2007			2006
Service cost	$	2	$	1		$	5		$	2	$	4		$	10
Interest cost		10		5			25			10		21			49
Amortization of prior service benefit		-		(8	)		(10	)		-		(31	)		(21	)
Recognized net actuarial loss		-		2			2			-		8			4
Revaluation of liability		-		49			-			-		49			-
Net periodic cost	$	12	$	49		$	22		$	12	$	51		$	42

	Other Postemployment Benefits
	Successor			Predecessor						Successor			Predecessor
	Two Months			One Month			Three Months			Two Months			Four Months			Six Months
	Ended			Ended			Ended			Ended			Ended			Ended
	June 30,			April 30,			June 30,			June 30,			April 30,			June 30,
(in millions)	2007			2007			2006			2007			2007			2006
Service cost	$	5		$	3		$	13		$	5		$	8		$	27
Interest cost		21			10			31			21			41			62
Expected return on plan assets		(26	)		(13	)		(41	)		(26	)		(51	)		(81	)
Amortization of prior service benefit		-			-			-			-			(2	)		-
Recognized net actuarial loss		-			1			3			-			5			6
Revaluation of liability		-			(273	)		-			-			(273	)		-
Net periodic (benefit) cost	$	-		$	(272	)	$	6		$	-		$	(272	)	$	14

Revaluation of Benefit Plans

In accordance with fresh start reporting, we completed a revaluation of the pension, postretirement, and postemployment liabilities upon emergence from bankruptcy on April 30, 2007, resulting in a net reorganization gain of $367 million. The weighted average discount rate used in our revaluation at April 30, 2007 was 5.96%, as compared to the weighted average discount rate of 5.88% as of our last measurement date, September 30, 2006. In connection with this revaluation, we also early adopted the requirements under SFAS No. 158, “Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of SFAS Nos. 87, 88, 106 and 132(R)” (“SFAS 158”), to measure the funded status of our plans as of the date of the remeasurement, eliminating our early measurement date.

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Non-Qualified Plans

We sponsored non-qualified defined benefit pension plans for eligible non-pilot employees (“Non-Qualified Plans”). Almost all pension benefits under the Non-Qualified Plans accrued prior to our Chapter 11 filing. Because we did not seek authority from the Bankruptcy Court to pay those pre-petition benefits, we were precluded from doing so during our Chapter 11 proceedings. We rejected the Non-Qualified Plans as a part of our Plan. As a result, no further benefits will be paid from the Non-Qualified Plans.

In April 2007, we recorded a settlement gain of $30 million in reorganization items, net, related to the rejection of the Non-Qualified Plans, derecognizing the accrued pension liability and amounts in other comprehensive loss. We also adjusted our accrual for the allowed general, unsecured claim that participants in the Non-Qualified Plans received by recording a charge of $41 million to reorganization items, net. The $30 million reversal of the pension liability and the recording of the additional $41 million in claims resulted in net increase of $11 million in liabilities subject to compromise.

Cash Flows

For the six months ended June 30, 2007, we contributed $50 million to our Non-pilot Plan and $8 million to a separate frozen qualified defined benefit pension plan for certain pilots formerly employed by Western Air Lines (the “Western Plan”). Pursuant to our settlement agreement with the PBGC, we have initiated a standard termination of the Western Plan.

For the six months ended June 30, 2007, we contributed $75 million to our defined contribution pension plans. This does not include the portion of the proceeds of ALPA’s allowed general, unsecured claim that we contributed to the Delta Family-Care Savings Plan under our agreement with ALPA.

For additional information about our benefit plans, see Note 10 of the Notes to the Consolidated Financial Statements in our Form 10-K.

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8. INCOME TAXES

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. The following table shows significant components of our deferred tax assets and liabilities at June 30, 2007 and December 31, 2006. The components are estimates and are subject to revision, which could be significant.

	Successor			Predecessor
(in millions)	June 30, 2007			December 31, 2006
Deferred tax assets:
Net operating loss carryforwards	$	3,217		$	2,921
Additional minimum pension liability		—			615
AMT credit carryforward		346			346
Employee benefits		1,078			2,898
Deferred revenue		1,318			311
Other temporary differences (primarily reorganization charges)		2,566			2,183
Valuation allowance		(4,835	)		(5,169	)
Total deferred tax assets	$	3,690		$	4,105
Deferred tax liabilities:
Depreciation	$	3,158		$	3,870
Intangibles		1,092			(20	)
Other		211			259
Total deferred tax liabilities	$	4,461		$	4,109

The following table shows the current and noncurrent deferred tax assets (liabilities) recorded on our Consolidated Balance Sheets at June 30, 2007 and December 31, 2006:

	Successor			Predecessor
(in millions)	June 30, 2007			December 31, 2006
Current deferred tax assets, net	$	731		$	402
Noncurrent deferred tax liabilities, net		(1,502	)		(406	)
Net deferred tax liabilities	$	(771	)	$	(4	)

The current and noncurrent components of our deferred tax balances are generally based on the balance sheet classification of the asset or liability creating the temporary difference. If the deferred tax asset or liability is not based on a component of our balance sheet, such as our NOL carryforwards, the classification is presented based on the expected reversal date of the temporary difference. Our valuation allowance has been classified as current or noncurrent based on the percentages of current and noncurrent deferred tax assets to total deferred tax assets.

The provision for income taxes has been calculated and presented on our Consolidated Statements of Operations for the two months ended June 30, 2007 as if our earnings were fully taxable.  The amount of income taxes payable is determined after utilizing pre-emergence bankruptcy NOL carryforwards.  Under SOP 90-7, the tax benefit for the utilization of these NOL carryforwards must be recognized as a reduction of intangibles rather than a reduction of the provision for income taxes.

At June 30, 2007, we had (1) $346 million of federal alternative minimum tax (“AMT”) credit carryforwards, which do not expire, and (2) approximately $8.5 billion of federal and state pretax NOL carryforwards, substantially all of which will not begin to expire until 2022. As a result of our emergence from bankruptcy, the federal and state NOL carryforwards were reduced by discharge of indebtedness income of approximately $2.4 billion. We have not finalized our assessment of the tax effects of the bankruptcy emergence and this estimate, as well as the Plan’s overall effect on all tax attributes, is subject to revision, which could be significant.

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As a result of the issuance of new common stock upon emergence from bankruptcy, we realized a change of ownership for purposes of Section 382 of the Internal Revenue Code.  We do not currently expect this change to significantly limit our ability to utilize our AMT credit or NOLs in the carryforward period.

We adopted FIN 48 on January 1, 2007, at which time the total amount of unrecognized tax benefit on the Consolidated Balance Sheet was $217 million. Included in the total unrecognized tax benefits was $86 million of tax benefits that, if recognized, would affect the effective tax rate. 

The total amount of unrecognized tax benefits on the Consolidated Balance Sheet at June 30, 2007 is $215 million.  Included in the total unrecognized tax benefits are $49 million of tax benefits that if recognized, would affect the effective tax rate.

We accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.  As of January 1, 2007, we had $65 million for the payment of interest accrued and $5 million for the payment of penalties.  Upon adoption of FIN 48 on January 1, 2007, we increased our accrual for interest and penalties by $4 million.

We are currently under audit by the Internal Revenue Service for the 2001 to 2004 tax years. It is reasonably possible the audit will conclude in 2007, resulting in a change to our total unrecognized tax benefit of approximately $130 million.

It is also reasonably possible that during 2007 the settlement of bankruptcy claims and audits will result in significant changes to the amount of unrecognized tax benefits on the Consolidated Balance Sheet. At this time, we cannot estimate the range of the reasonably possible outcomes.

9. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) primarily includes (1) our reported net income (loss), (2) changes in our unrecognized pension, postretirement, and postemployment benefit liabilities, (3) changes in our deferred tax asset valuation allowance related to our unrecognized pension, postretirement, and postemployment liabilities and (4) changes in the effective portion of our open fuel hedge contracts, which qualify for hedge accounting.

2007

The following table shows our comprehensive income (loss) for the two months ended June 30, 2007 and one month and four months ended April 30, 2007.

(in millions)	Unrecognized Pension Liability			Fuel Derivative Instruments			Marketable Equity Securities			Valuation Allowance			Total
Balance at January 1, 2007 (Predecessor)	$	(727	)	$	(23	)	$	2		$	230		$	(518	)
Unrealized gain		—			68			—			—			68
Realized loss		—			9			—			—			9
Balance at March 31, 2007 (Predecessor)		(727	)		54			2			230			(441	)
SFAS 158		6			—			—			—			6
Unrealized gain		—			2			—			—			2
Realized gain		—			(10	)		—			—			(10	)
Balance at April 30, 2007 (Predecessor)		(721	)		46			2			230			(443	)
Elimination of Predecessor other comprehensive loss		721			(46	)		(2	)		(230	)		443
Unrealized gain		—			5			—			—			5
Realized gain		—			3			—			—			3
Tax effect		—			(3	)		—			3			—
Net of tax		—			5			—			3			8
Balance at June 30, 2007 (Successor)	$	—		$	5		$	—		$	3		$	8

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2006

The following table shows our comprehensive (loss) for the three and six months ended June 30, 2006.

	Predecessor
(in millions)	Additional Minimum Pension Liability			Unrecognized Pension Liability		Fuel Derivative Instruments			Marketable Equity Securities		Valuation Allowance			Total
Balance at January 1, 2006	$	(2,553	)	$	—	$	—		$	1	$	(170	)	$	(2,722	)
Unrealized gain		—			—		1			—		—			1
Balance at March 31, 2006		(2,553	)		—		1			1		(170	)		(2,721	)
Unrealized gain		—			—		3			—		—			3
Realized gain		—			—		(2	)		—		—			(2	)
Balance at June 30, 2006	$	(2,553	)	$	—	$	2		$	1	$	(170	)	$	(2,720	)

10. EQUITY AND EQUITY BASED COMPENSATION

Equity

Common Stock. On the Effective Date, all common stock issued by the Predecessor was cancelled. In connection with our emergence from bankruptcy, we began issuing shares of new common stock, par value $0.0001 per share, pursuant to the Plan. The new common stock is subject to the terms of our Amended and Restated Certificate of Incorporation (the “New Certificate”), which supersedes the Certificate of Incorporation in effect prior to the Effective Date.

The New Certificate authorizes us to issue a total of 2.0 billion shares of capital stock, of which 1.5 billion may be shares of common stock and 500 million may be shares of preferred stock. The Plan contemplates the issuance of 400 million shares of common stock, consisting of 386 million shares to holders of allowed general, unsecured claims and 14 million shares under the compensation program for our non-contract, non-management employees (the “Non-contract Program”) described below. The Plan also contemplates the issuance of common stock under the compensation program for management employees (the “Management Program”) described below. For additional information regarding the distribution of new common stock under the Plan, see Note 1.

Preferred Stock. The New Certificate provides that preferred stock may be issued in one or more series. It authorizes the Board of Directors (1) to fix the descriptions, powers (including voting powers), preferences, rights, qualifications, limitations and restrictions with respect to any series of preferred stock and (2) to specify the number of shares of any series of preferred stock. At June 30, 2007, no preferred stock was issued and outstanding.

Treasury Stock. In connection with the issuance of common stock to employees under the Plan, we withheld the portion of these shares necessary to cover the employees’ portion of required tax withholdings. See “Stock Grants” below for additional information on the issuance of the common stock under the Non-contract Program. These shares are valued at cost, which equals the market price of the common stock on the date of issuance. At June 30, 2007, there were 6,193,411 shares held in treasury at costs ranging from $18.98 to $20.98 per share.

Equity-Based Compensation

Predecessor. We concluded that all of our stock options would be cancelled as part of our emergence from Chapter 11. Accordingly, in March 2006, we filed with the Bankruptcy Court a motion to reject our then outstanding stock options to avoid the administrative and other costs associated with these awards. The Bankruptcy Court granted our motion, which resulted in substantially all of our stock options being rejected effective March 31, 2006. As of April 30, 2007, we did not have any stock options outstanding.

Successor. Upon emergence from Chapter 11, we adopted with Bankruptcy Court approval new compensation programs, the Non-contract Program and the Management Program. The Non-contract Program includes the grant of common stock to our approximately 39,000 non-contract, non-management employees. The Management Program covers our approximately 1,200 officers, director level employees and management personnel. Under the Management Program, officers received restricted stock, stock options and performance shares; director level employees received restricted stock and stock options; and management personnel received restricted stock. All of these awards have been made under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the “2007 Plan”) described below. During the two months ended June 30, 2007, the total compensation cost related to the Management Program was $26 million.

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The Bankruptcy Court approved the 2007 Plan. Subject to adjustment, up to 30 million shares of common stock are available for awards under the 2007 Plan.

Shares of common stock to be issued under the 2007 Plan may be made available from authorized but unissued common stock or common stock we acquire. If any shares of our common stock are covered by an award under the 2007 Plan that is cancelled, forfeited or otherwise terminates without delivery of shares (including shares surrendered or withheld for payment of the exercise price of an award or taxes related to an award), then such shares will again be available for issuance under the 2007 Plan. The following table shows the equity transactions under the 2007 Plan during the two months ended June 30, 2007:

	Shares (000)
Authorized under the 2007 Plan		30,000
Awarded(1)		(25,281	)
Forfeited		13
Returned to Treasury		5,176
Available for Future Grants		9,908

⁽¹⁾ Awards include stock grants, restricted stock, stock options and performance shares.

Stock Grants. Under the Plan, 14 million shares of common stock are issuable as a part of the Non-contract Program. As of June 30, 2007, we distributed in excess of 13 million shares of common stock to eligible employees under the Non-contract Program. We will distribute the remaining shares of common stock under the Non-contract Program as eligible employees return to work during 2007. Employees may hold or sell these shares without restriction.

Restricted Stock. We granted approximately seven million shares of restricted stock to eligible employees under the Management Program. Restricted stock is common stock that may not be sold or otherwise transferred for a period of time (the “Restriction”), and that is subject to forfeiture in certain circumstances until the Restriction lapses. The Restriction will lapse in three equal installments six, 18 and 30 months after the Effective Date, subject to the employee’s continued employment on that date. The Restriction on the third installment of the restricted stock will instead lapse 18 months after the Effective Date if, during the period beginning six months and ending 18 months after the Effective Date, the aggregate market value of our outstanding common stock is at least $14.0 billion for ten consecutive trading days.

The following table summarizes restricted stock activity for the two months ended June 30, 2007:

	Shares (000)			Weighted Average Grant-Date Fair Value
Granted		7,015		$	20.43
Vested		-			-
Forfeited		(13	)		-
Non-vested at June 30, 2007		7,002		$	20.43

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Stock Options. We granted options to purchase a total of approximately three million shares of common stock to eligible employees under the Management Program. These options (1) have an exercise price equal to the closing price of the common stock on the grant date, (2) generally become exercisable in three equal installments on the first, second, and third anniversary of the Effective Date, subject to the employee’s continued employment and (3) expire on the tenth anniversary of the Effective Date.

The fair value of stock options are determined at the grant date using a Black-Scholes model, which requires us to make several assumptions. The risk-free rate is based on the U.S. Treasury yield curve in effect for the expected term of the options at the time of grant. The dividend yield on our common stock is assumed to be zero since we do not pay dividends and have no current plans to do so. Due to the impact of our bankruptcy on our stock price and employees, our historical volatility data and employee stock option exercise patterns were not considered in determining the volatility and expected life assumptions. The volatility assumptions were based on (1) historical volatilities of the stock of comparable airlines whose shares are traded using daily stock price returns equivalent to the expected term of the options and (2) implied volatility. The expected life of an option was determined based on a simplified assumption that the option will be exercised evenly from the time it becomes exercisable to expiration, as allowed by Staff Accounting Bulletin No. 107, “Share Based Payments.”

The weighted average fair value of options granted during the two months ended June 30, 2007 was determined based on the following weighted average assumptions.

Assumption
Risk-free interest rate		4.9	%
Average expected life of stock options (in years)		6.0
Expected volatility of common stock		55.0	%
Weighted average fair value of a stock option granted	$	10.76

The following table summarizes stock option activity for the two months ended June 30, 2007:

	Shares (000)		Weighted Average Exercise  Price
Outstanding at the beginning of the period		-	$	-
Granted		3,024		18.84
Exercised		-		-
Forfeited		-		-
Outstanding at the end of the period		3,024	$	18.84
Exercisable at the end of the period		-		-

Performance Shares. We granted to eligible employees under the Management Program performance shares with an aggregate target payout opportunity covering approximately one million shares of common stock. These awards are long-term incentives payable in common stock and are contingent upon our achieving certain financial goals for the years ending December 31, 2007, 2008 and 2009, and the occurrence of a contemporaneous payout under the Profit Sharing Program.

11. EARNINGS (LOSS) PER SHARE

We calculate basic earnings (loss) per share by dividing the net income (loss) attributable to common shareowners by the weighted average number of common shares outstanding.  In accordance with SFAS No. 128, “Earnings per Share,” shares issuable upon the satisfaction of certain conditions pursuant to a contingent stock agreement, such as those contemplated by the Plan, are considered outstanding common shares and included in the computation of basic earnings per share.  Accordingly, the 386 million shares contemplated by the Plan to be distributed to holders of allowed general, unsecured claims are included in the calculation of basic earnings per share for the two months ended June 30, 2007.  For additional information regarding these shares, see Notes 1 and 10.

Diluted earnings (loss) per share include the dilutive effects of stock options and restricted stock. To the extent stock options and restricted stock are anti-dilutive, they are excluded from the calculation of diluted earnings (loss) per share.

The following table shows our computation of basic and diluted earnings (loss) per share for the two months ended June 30, 2007, the one month and four months ended April 30, 2007 and the three and six months ended June 30, 2006: 

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	Successor		Predecessor						Successor		Predecessor
	Two Months		One Month			Three Months			Two Months		Four Months			Six Months
	Ended		Ended			Ended			Ended		Ended			Ended
	June 30,		April 30,			June 30,			June 30,		April 30,			June 30,
(in millions, except per share data)	2007		2007			2006			2007		2007			2006
Basic:
Net income (loss)	$	164	$	1,428		$	(2,205	)	$	164	$	1,298		$	(4,274	)
Dividends on allocated Series B ESOP
Convertible Preferred Stock		-		-			-			-		-			(2	)
Net income (loss) attributable to
common shareowners	$	164	$	1,428		$	(2,205	)	$	164	$	1,298		$	(4,276	)
Basic weighted average shares outstanding		393.6		197.3			197.3			393.6		197.3			195.6
Basic earnings (loss) per share	$	0.42	$	7.24		$	(11.18	)	$	0.42	$	6.58		$	(21.86	)
Diluted:
Net income (loss) attributable to
common shareowners	$	164	$	1,428		$	(2,205	)	$	164	$	1,298		$	(4,276	)
Gain recognized on the forgiveness
of convertible debt		-		(216	)		-			-		(216	)		-
Net income (loss) attibutable to common
shareowners assuming conversion	$	164	$	1,212		$	(2,205	)	$	164	$	1,082		$	(4,276	)
Basic weighted average shares outstanding		393.6		197.3			197.3			393.6		197.3			195.6
Additional shares assuming:
Restricted shares		0.2		-			-			0.2		-			-
Conversion of 8.0% Convertible
Senior Notes		-		12.5			-			-		12.5			-
Conversion of 2 7/8% Convertible
Senior Notes		-		23.9			-			-		23.9			-
Weighted average shares outstanding,
as adjusted		393.8		233.7			197.3			393.8		233.7			195.6
Dilutive earnings (loss) per share	$	0.42	$	5.19		$	(11.18	)	$	0.42	$	4.63		$	(21.86	)

For the two months ended June 30, 2007, we excluded from our earnings per share calculations all common stock equivalents if their effect is anti-dilutive. These common stock equivalents include options to purchase three million shares of common stock.

For the three and six months ended June 30, 2006, we excluded from our loss per share calculations all common stock equivalents because their effect on earnings per share was anti-dilutive.  These common stock equivalents include 12.5 million and 23.9 million shares of common stock issuable upon conversion of our 8.0% Convertible Senior Notes due 2023 and our 2 7/8% Convertible Senior Notes due 2024, respectively.

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12. FAIR VALUE MEASUREMENTS

As described in Note 2, we adopted SFAS 157 upon emerging from bankruptcy. SFAS 157, among other things, defines fair value establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. SFAS 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  As such fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques noted in SFAS 157. The three valuation techniques are identified in the tables below. Where more than one technique is noted, individual assets or liabilities were valued using one or more of the noted techniques. The valuation techniques are as follows:

(a) Market approach - prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities

(b) Cost approach - amount that would be required to replace the service capacity of an asset (replacement cost)

(c) Income approach - techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).

Assets and liabilities measured at fair value on a recurring basis

(in millions)	Successor June 30, 2007		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Valuation Technique
Short term investments	$	1,549	$	1,549	$	-	(a)
Fuel hedging derivatives		37		-		37	(a)

There were no changes in our valuation technique used to measure asset fair values on a recurring basis.

Assets and liabilities measured at fair value on a nonrecurring basis

(in millions)	Successor May 1, 2007		Significant other observable inputs (Level 2)		Significant (1) unobservable inputs (Level 3)		Valuation technique
Expendable parts and supplies inventories	$	241	$	241	$	-	(a) (b)
Prepaid expense and other		349		349		-	(a) (b) (c)
Net flight equipment and net flight equipment under capital lease		9,833		9,833		-	(a) (b)
Other property and equipment		1,713		1,713		-	(a) (b)
Indefinite-lived intangible assets (2)		1,997		-		1,997	(c)
Definite-lived intangible assets (2)		956		-		956	(c)
Other noncurrent assets		875		875		-	(a) (b) (c)
Debt and obligations under capital lease		6,899		6,899		-	(a) (c)
SkyMiles deferred revenue (3)		3,482		-		3,482	(a)
Accounts payable and other noncurrent liabilities		405		405		-	(a) (c)

⁽¹⁾ These valuations were based on the present value of future cash flows for specific assets derived from our projections of future revenue, expense and airline market conditions. These cash flows were then discounted to their present value using a rate of return that considers the relative risk of not realizing the estimated annual cash flows and time value of money.

⁽²⁾ Intangible assets are identified by asset type in Note 2.

⁽³⁾ The fair value of our SkyMiles frequent flyer award liability was determined based on the estimated price we would pay a third party to assume the obligation for miles expected to be redeemed under our SkyMiles program. These miles were valued based upon the weighted average of the equivalent ticket value of similar fares on Delta and the amounts paid to other SkyTeam alliance partners. See Note 2 for the accounting policy related to our SkyMiles frequent flyer program.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Background

On September 14, 2005 (the “Petition Date”), we and substantially all of our subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The reorganization cases were jointly administered under the caption “In re Delta Air Lines, Inc., et al., Case No. 05-17923-ASH.” On April 25, 2007, the Bankruptcy Court approved the Debtors’ Joint Plan of Reorganization (the “Plan”).

On April 30, 2007 (the “Effective Date”), we emerged from bankruptcy as a competitive airline with a global network. Our business strategy touches all facets of our operations - the destinations we serve, the way we serve our customers, and the fleet we operate - in order to earn customer preference and continue to improve revenue performance. We intend to remain focused on maintaining the competitive cost structure we obtained from our reorganization to improve our financial position further and achieve long-term stability.

Our reorganization in Chapter 11 involved a fundamental transformation of our business. Shortly after the Petition Date, we outlined a business plan intended to make Delta a simpler, more efficient and more customer focused airline with an improved financial condition. Under this plan, we were seeking $3.0 billion in annual financial improvements by the end of 2007 through revenue increases and cost reductions. As of December 31, 2006, we reached that goal and these improvements are reflected in our Consolidated Financial Statements for 2006. We have achieved and expect to continue to achieve additional financial improvements in 2007.

For additional information regarding our Chapter 11 proceedings, see Note 1 of the Notes to the Condensed Consolidated Financial Statements.

Basis of Presentation

Our unaudited Condensed Consolidated Financial Statements and the accompanying Notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K.

Upon emergence from Chapter 11, we adopted fresh start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Financial Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”). The adoption of fresh start reporting results in our becoming a new entity for financial reporting purposes. Accordingly our Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to our Condensed Consolidated Financial Statements prior to that date.

Fresh start reporting requires resetting the historical net book value of assets and liabilities to fair value by allocating the entity’s reorganization value to its assets and liabilities pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations”. The excess reorganization value over the fair value of tangible and identifiable intangible assets is recorded as goodwill on our Consolidated Balance Sheet. Deferred taxes are determined in conformity with SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”). For additional information regarding the impact of fresh start reporting on our Consolidated Balance Sheet as of the Effective Date, see “Fresh Start Consolidated Balance Sheet” in Note 1 of the Notes to the Condensed Consolidated Financial Statements.

References in this Form 10-Q to “Successor” refer to Delta on or after May 1, 2007, after giving effect to (1) the cancellation of Delta common stock issued prior to the Effective Date; (2) the issuance of new Delta common stock and certain debt securities in accordance with the Plan; and (3) the application of fresh start reporting. References to “Predecessor” refer to Delta prior to May 1, 2007.

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Combined Quarterly Financial Results of the Predecessor and Successor

Due to our adoption of fresh start reporting on April 30, 2007, the accompanying Consolidated Statements of Operations include the results of operations for (1) the one month and four months ended April 30, 2007 of the Predecessor and (2) the two months ended June 30, 2007 of the Successor.

For purposes of management’s discussion and analysis of the results of operations in this Form 10-Q, we combined the results of operations for (1) the one month ended April 30, 2007 of the Predecessor with the two months ended June 30, 2007 of the Successor and (2) the four months April 30, 2007 of the Predecessor with the two months ended June 30, 2007 of the Successor. We then compare the combined results of operations for the three and six months ended June 30, 2007 with the corresponding periods in the prior year.

We believe the combined results of operations for the three and six months ended June 30, 2007 provide management and investors with a more meaningful perspective on Delta’s ongoing financial and operational performance and trends than if we did not combine the results of operations of the Predecessor and the Successor in this manner. Similarly, we combine the financial results of the Predecessor and the Successor when discussing our sources and uses of cash for the six months ended June 30, 2007.

Fresh Start Adjustments

During the two months ended June 30, 2007, we recorded fresh start reporting adjustments (“Fresh Start Adjustments”) on our Condensed Consolidated Financial Statements that are reflected in our results for the three and six months ended June 30, 2007. These adjustments resulted in a $13 million increase to pre-tax income on our Consolidated Statement of Operations, consisting of:

SkyMiles Frequent Flyer Program. We revalued our frequent flyer award liability to estimated fair value. Fair value represents the estimated price we would pay a third party to assume the obligation of redeeming miles under the SkyMiles program. Fresh Start Adjustments for the SkyMiles program (including the change in accounting policy for that program) increased operating revenue by $42 million. See “Critical Accounting Estimates” below for additional information on the accounting for our SkyMiles program.

Fuel Hedging Gains. Prior to the adoption of fresh start reporting on April 30, 2007, we recorded as a component of shareowners' deficit in other comprehensive income (loss) $46 million of deferred gains related to our fuel hedging program. This gain would have been recognized as an offset to fuel expense as the underlying fuel hedge contracts were settled. However, as required by fresh start reporting, accumulated other comprehensive loss prior to emergence from Chapter 11 was reset to zero. Accordingly, Fresh Start Adjustments resulted in a non-cash increase to fuel expense of $25 million.

Depreciation. We revalued property and equipment to fair value, which reduced the net book value of these assets by $1.0 billion. In addition, we increased the depreciable lives of flight equipment to reflect revised estimated useful lives. As a result, depreciation expense decreased by $31 million.

Amortization of Intangible Assets. We revalued our intangible assets to fair value, which increased the net book value of intangible assets (excluding goodwill) by $2.9 billion, of which $956 million relates to amortizable intangible assets. As a result, we recorded amortization expense of $35 million. For additional information on our intangible assets, see Note 2 of our Notes to the Condensed Consolidated Financial Statements.

Aircraft Maintenance Materials and Outside Repairs. We changed the way we account for certain maintenance parts that were previously capitalized and depreciated.  After emergence, we will expense these parts as they are placed on the aircraft. This change resulted in an increase in aircraft maintenance materials and outside repairs expense of $15 million.

Interest Expense. The revaluation of our debt and capital lease obligations resulted in a decrease in interest expense due to the amortization of premiums from adjusting these obligations to fair value. As a result, interest expense decreased by $7 million.

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Other Fresh Start Reporting Adjustments. We recorded other Fresh Start Adjustments relating primarily to the revaluation of our aircraft leases that increased our pre-tax income by $8 million.

Accounting Adjustments

During the March 2006 quarter, we recorded certain out-of-period adjustments (“Accounting Adjustments”) in our Condensed Consolidated Financial Statements that affect the comparability of our results for the six months ended June 30, 2007 and 2006. These adjustments resulted in a net non-cash charge of $310 million to our Consolidated Statement of Operations, consisting of:

· A $112 million charge in landing fees and other rents. This adjustment is associated primarily with our airport facility leases at John F. Kennedy International Airport in New York (“JFK”). It resulted from historical differences associated with recording escalating rent expense based on actual rent payments instead of on a straight-line basis over the lease term as required by SFAS No. 13, “Accounting for Leases.”

· A $108 million net charge related to the sale of mileage credits under our SkyMiles frequent flyer program. This includes an $83 million decrease in passenger revenues, a $106 million decrease in other, net operating revenues, and an $81 million decrease in other operating expenses. This net charge primarily resulted from the reconsideration of our position with respect to the timing of recognizing revenue associated with the sale of mileage credits that we expect will never be redeemed for travel.

· A $90 million charge in salaries and related costs to adjust our accrual for postemployment healthcare benefits. This adjustment is due to healthcare payments applied to this accrual over several years, which should have been expensed as incurred.

Reclassifications

As described in Note 5 of the Notes to the Condensed Consolidated Financial Statements, we amended our Visa/MasterCard processing agreement to provide for the return of the then existing holdback. For information about the reclassification of changes in the cash portion of the holdback on our Condensed Consolidated Statements of Cash Flows prior to the amendment, see Note 2 of the Notes to the Condensed Consolidated Financial Statements.

Upon emergence and as a result of fresh start reporting, we changed the classification of certain items on our Consolidated Statements of Operations. We also reclassified prior period amounts to conform to current period presentations. These changes have no impact on net income in any period prior to or subsequent to our emergence from bankruptcy. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for more information about these reclassifications.

Combined Results of Operations — June 2007 and 2006 Quarters

Net Income (Loss)

We had consolidated net income of $1.6 billion for the June 2007 quarter and a consolidated net loss of $2.2 billion for the June 2006 quarter. The June 2007 quarter results include a $1.3 billion gain to reorganization items, net, primarily reflecting a $2.1 billion gain in connection with our emergence from bankruptcy. The June 2006 quarter results include a charge from the $2.1 billion allowed general, unsecured claim received by the Air Line Pilots Association, International (“ALPA”) under our comprehensive agreement reducing pilot labor costs.

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Operating Revenue

	Combined		Predecessor
	Three Months		Three Months					%
	Ended		Ended		Increase			Increase
(in millions)	June 30, 2007		June 30, 2006		(Decrease)			(Decrease)
Operating Revenue:
Passenger:
Mainline	$	3,384	$	3,176	$	208			7	%
Regional affiliates		1,109		1,035		74			7	%
Total passenger revenue		4,493		4,211		282			7	%
Cargo		118		128		(10	)		(8	)%
Other, net		392		402		(10	)		(2	)%
Total operating revenue	$	5,003	$	4,741	$	262			6	%

Operating revenue totaled $5.0 billion for the June 2007 quarter, a $262 million, or 6%, increase compared to the June 2006 quarter. Passenger revenue increased 7% on a 1% increase in capacity and 3.1 point increase in load factor. The increase in passenger revenue is primarily due to a rise of 2% and 6% in passenger mile yield and passenger revenue per available seat mile (“PRASM”), respectively. Mainline passenger revenue increased primarily due to (1) strong passenger demand, (2) our increased service to international destinations and (3) increased SkyMiles revenue due to certain Fresh Start Adjustments discussed above. Passenger revenue of regional affiliates increased primarily due to increased flying by our contract carriers, which resulted in a 9% increase in revenue passenger miles (“RPMs”), or traffic, on 7% greater capacity for our regional affiliates.

			Increase (Decrease)
	Combined		Three Months Ended June 30, 2007 vs. 2006
	Three Months											Passenger
	Ended		Passenger									Mile						Load
(in millions)	June 30, 2007		Revenue			RPMs			ASMs			Yield			PRASM			Factor
Passenger Revenue:
North America	$	3,208		1	%		1	%		(5	)%		(1	)%		6	%		5.0
International		1,260		26	%		14	%		15	%		11	%		10	%		(0.7	)
Charter revenue		25		12	%		75	%		25	%		(36	)%		(10	)%		10.9
Total passenger revenue	$	4,493		7	%		5	%		1	%		2	%		6	%		3.1

North American Passenger Revenue. North American passenger revenue increased 1%, driven by a 5.0 point increase in load factor and 6% increase in PRASM on a 5% decline in capacity. The passenger mile yield decreased 1%. The increases in passenger revenue and PRASM reflect (1) strong passenger demand and (2) revenue and network productivity improvements, including right-sizing capacity to better meet customer demand and the continued restructuring of our route network to reduce less productive short haul domestic flights and reallocate widebody aircraft to international routes. As a result of our efforts to right-size capacity in domestic markets, we increased flying by our contract carriers. For additional information regarding our contract carriers, see Note 5 of the Notes to the Condensed Consolidated Financial Statements.

International Passenger Revenue. International passenger revenue increased 26%, generated by a 14% increase in RPMs from a 15% increase in capacity. The passenger mile yield and PRASM increased 11% and 10%, respectively. These results reflect increases in service to international destinations, primarily in the Atlantic and Latin America markets, from the restructuring of our route network. Our mix of domestic versus international capacity was 66% and 34%, respectively, in the June 2007 quarter, compared to 70% and 30%, respectively, in the June 2006 quarter.

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Operating Expense

	Combined		Predecessor
	Three Months		Three Months					%
	Ended		Ended		Increase			Increase
(in millions)	June 30, 2007		June 30, 2006		(Decrease)			(Decrease)
Operating Expense:
Aircraft fuel and related taxes	$	1,112	$	1,142	$	(30	)	(3	)%
Salaries and related costs		1,039		1,070		(31	)	(3	)%
Contract carrier arrangements		769		660		109		17	%
Depreciation and amortization		288		318		(30	)	(9	)%
Contracted services		243		218		25		11	%
Aircraft maintenance materials and outside repairs		247		232		15		6	%
Passenger commissions and other selling expenses		253		234		19		8	%
Landing fees and other rents		182		194		(12	)	(6	)%
Passenger service		85		81		4		5	%
Aircraft rent		56		73		(17	)	(23	)%
Profit sharing		79		-		79		NM
Other		160		150		10		7	%
Total operating expense	$	4,513	$	4,372	$	141		3	%

Operating expense was $4.5 billion for the June 2007 quarter, a $141 million, or 3%, increase compared to the June 2006 quarter. As discussed below, the increase in operating expense was primarily due to an increase in contract carrier arrangements expense, an accrual for profit sharing, and certain Fresh Start Adjustments discussed above. These increases were partially offset by decreases in salaries and related costs, aircraft fuel and related taxes and depreciation and amortization.

Operating capacity increased 1% to 38.1 billion available seat miles (“ASMs”) primarily due to higher contract carrier flying from our business plan initiatives to right-size capacity. Operating cost per available seat mile (“CASM”) increased 2% to 11.83¢.

Salaries and related costs. The decrease in salaries and related costs reflects a decline of 9% due to benefit cost reductions for our pilot and non-pilot employees partially offset by a 5% increase associated with (1) an 8% increase in Mainline headcount due to our expansion at JFK and our assumption of Atlantic Southeast Airlines, Inc. (“ASA”) ramp operations at Hartsfield-Jackson Atlanta International Airport and (2) compensation program benefits primarily associated with emergence share-based compensation.

Aircraft fuel and related taxes. Aircraft fuel and related taxes decreased primarily due to (1) lower average fuel prices and (2) fuel tax refunds received, partially offset by certain Fresh Start Adjustments discussed above. Fuel prices averaged $2.09 per gallon, including fuel hedge gains of $14 million, for the June 2007 quarter, compared to $2.14 per gallon, including fuel hedge gains of $1 million, for the June 2006 quarter.

Contract carrier arrangements. Contract carrier arrangements expense increased primarily due to a 19% growth in contract carrier flying from our business plan initiatives to right-size capacity in domestic markets.

Depreciation and amortization. The decrease in depreciation and amortization primarily relates to a lower depreciable asset base from restructuring initiatives during our Chapter 11 proceedings, partially offset by certain Fresh Start Adjustments described above.

Contracted services. The increase in contracted services is primarily due to higher outsourcing related to our technology center and cargo handling services.

Profit sharing. Our broad-based employee profit sharing plan provides that, for each year in which we have an annual pre-tax profit we will pay at least 15% of that profit to eligible employees. Based on our pre-tax earnings for the June 2007 quarter, we accrued $79 million under the profit sharing plan.

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Operating Income and Operating Margin

We reported operating income of $490 million in the June 2007 quarter, compared to $369 million for the June 2006 quarter. Operating margin, which is the ratio of operating income to operating revenues, was 10% and 8% for the June 2007 and 2006 quarters, respectively.

Other (Expense) Income

Other expense, net for the June 2007 quarter was $138 million, compared to $190 million for the June 2006 quarter. This change is substantially attributable to (1) a 20%, or $45 million, net decrease in interest expense primarily due to the repayment of our two then outstanding debtor-in-possession financing facilities (the “DIP Facility”) in connection with our emergence from Chapter 11, partially offset by borrowings under our senior secured exit financing facility (the “Exit Facilities”) and (2) a $19 million increase in interest income primarily from interest earned on cash savings from restructuring initiatives during bankruptcy, partially offset by a $12 million charge to miscellaneous, net primarily associated with losses related to the ineffective portion of our fuel hedge positions.

Reorganization Items, Net

Reorganization items, net totaled a $1.3 billion gain for the June 2007 quarter, primarily consisting of the following:

· Emergence gain. A net $2.1 billion gain due to our emergence from bankruptcy, comprised of (1) a $4.4 billion gain related to the discharge of liabilities subject to compromise in connection with the settlement of claims, (2) a $2.6 billion charge associated with the revaluation of our SkyMiles frequent flyer obligation and (3) a $238 million gain from the revaluation of our remaining assets and liabilities to fair value. For additional information regarding this emergence gain, see Note 1 of the Notes to the Condensed Consolidated Financial Statements.

· Aircraft financing renegotiations and rejections. $438 million of estimated claims primarily associated with the restructuring of the financing arrangements of 127 aircraft and adjustments to prior claims estimates.

· Emergence compensation. In accordance with the Plan, we made $130 million in lump-sum cash payments to approximately 39,000 eligible non-contract, non-management employees.  We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan, of approximately 14 million shares of common stock to those employees. For additional information regarding the common stock issuance, see Note 10 of the Notes to the Condensed Consolidated Financial Statements.

· Facility leases. A net $80 million charge from an allowed general, unsecured claim in connection with the settlement relating to the restructuring of certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (“CVG”). For additional information regarding this settlement, see Note 4 of the Notes to the Condensed Consolidated Financial Statements.

Reorganization items, net totaled a $2.4 billion charge in the June 2006 quarter. This net charge primarily reflects a $2.1 billion allowed general, unsecured claim that we agreed to in our comprehensive agreement with ALPA reducing our pilot labor costs. For additional information about our reorganization items, see Note 1 of the Notes to the Condensed Consolidated Financial Statements.

Income Tax Provision

For the June 2007 quarter, we recorded an income tax provision totaling $99 million.  We have recorded a full valuation allowance against the net deferred tax asset, excluding the effect of the deferred tax liability that is unable to be used as a source of income against these deferred tax assets, based on our belief that it is more likely than not that the asset will not be realized in the future.  This determination was made in a prior fiscal year and is still applicable for the current period.  We will continue to assess the need for a full valuation allowance in future quarters.  In accordance with SOP 90-7, if we utilize pre-emergence bankruptcy net operating loss (“NOL”) carryforwards, we will sequentially reduce the cost of goodwill followed by other indefinite-lived assets until the net carrying cost of these assets is zero.  Accordingly, during the June 2007 quarter, we reduced goodwill by $103 million with respect to utilization of pre-emergence NOL carryforwards.

During the June 2006 quarter, we recorded an income tax provision totaling $4 million. This amount reflected an adjustment to our estimated required valuation allowance at December 31, 2006. For additional information about the income tax valuation allowance, see Note 8 of the Notes to the Condensed Consolidated Financial Statements.

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Combined Results of Operations — Six Months Ended June 2007 and 2006

Net Income (Loss)

We had consolidated net income of $1.5 billion for the six months ended June 30, 2007, and a consolidated net loss of $4.3 billion for the six months ended June 30, 2006. The results for the six months ended June 30, 2007 include a $1.2 billion gain to reorganization items, net, primarily reflecting a $2.1 billion gain in connection with our emergence from bankruptcy. The results for the six months ended June 30, 2006 include a $3.8 billion charge to reorganization items, net, primarily from (1) a $2.1 billion allowed general, unsecured claim received by ALPA under our comprehensive agreement reducing our pilot labor costs, (2) $1.6 billion of estimated claims primarily associated with restructuring the financing arrangements for 143 aircraft and (3) a $310 million charge associated with the Accounting Adjustments discussed above.

Operating Revenue

	Combined		Predecessor
	Six Months		Six Months					%
	Ended		Ended		Increase			Increase
(in millions)	June 30, 2007		June 30, 2006		(Decrease)			(Decrease)
Operating Revenue:
Passenger:
Mainline	$	6,167	$	5,669	$	498			9	%
Regional affiliates		2,056		1,893		163			9	%
Total passenger revenue		8,223		7,562		661			9	%
Cargo		230		251		(21	)		(8	)%
Other, net		791		722		69			10	%
Total operating revenue	$	9,244	$	8,535	$	709			8	%

Operating revenue totaled $9.2 billion for the six months ended June 30, 2007, a $709 million, or 8%, increase compared to the six months ended June 30, 2006. Passenger revenue increased 9% on a 2% increase in capacity and 2.1 point increase in load factor. The increase in passenger revenue is primarily due to a rise of 4% and 7% in passenger mile yield and PRASM, respectively. Mainline passenger revenue increased primarily due to (1) strong passenger demand, (2) our increased service to international destinations and (3) higher SkyMiles revenue associated with certain Fresh Start Adjustments discussed above. Passenger revenue of regional affiliates increased primarily due to increased flying by our contract carriers, which resulted in a 9% increase in RPMs on 9% greater capacity for our regional affiliates. For the six months ended June 30, 2006, passenger revenue and other, net revenue were negatively impacted by certain Accounting Adjustments discussed above. 

			Increase (Decrease)
	Combined		Six Months Ended June 30, 2007 vs. 2006
	Six Months											Passenger
	Ended		Passenger									Mile						Load
(in millions)	June 30, 2007		Revenue			RPMs			ASMs			Yield			PRASM			Factor
Passenger Revenue:
North American	$	5,996		3	%		(2	)%		(5	)%		4	%		8	%		3.0
International		2,176		32	%		19	%		19	%		10	%		11	%		0.1
Charter revenue		51		(12	)%		(8	)%		(8	)%		(4	)%		(4	)%		(0.1	)
Total passenger revenue	$	8,223		9	%		4	%		2	%		4	%		7	%		2.1

North American Passenger Revenue. North American passenger revenue increased 3%, driven by a 3.0 point increase in load factor and 8% increase in PRASM on a 5% decline in capacity. The passenger mile yield increased 4%. The increases in passenger revenue and PRASM reflect (1) strong passenger demand, and (2) revenue and network productivity improvements, including right-sizing capacity to better meet customer demand and the continued restructuring of our route network to reduce less productive short haul domestic flights and reallocate widebody aircraft to international routes. As a result of our efforts to right-size capacity in domestic markets, we increased flying by our contract carriers. For additional information regarding our contract carriers, see Note 5 of the Notes to the Condensed Consolidated Financial Statements.

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International Passenger Revenue. International passenger revenue increased 32%, generated by a 19% increase in RPMs from a 19% increase in capacity. The passenger mile yield and PRASM increased 10% and 11%, respectively. These results reflect increases in service to international destinations, primarily in the Atlantic and Latin America markets, from the restructuring of our route network. Our mix of domestic versus international capacity was 68% and 32%, respectively, in the six months ended June 30, 2007, compared to 73% and 27%, respectively, for the six months ended June 30, 2006.

Operating Expense

	Combined		Predecessor
	Six Months		Six Months					%
	Ended		Ended		Increase			Increase
(in millions)	June 30, 2007		June 30, 2006		(Decrease)			(Decrease)
Operating Expense:
Aircraft fuel and related taxes	$	2,060	$	2,101	$	(41	)	(2	)%
Salaries and related costs		2,010		2,293		(283	)	(12	)%
Contract carrier arrangements		1,486		1,269		217		17	%
Depreciation and amortization		579		619		(40	)	(6	)%
Contracted services		486		440		46		10	%
Aircraft maintenance materials and outside repairs		485		459		26		6	%
Passenger commissions and other selling expenses		473		446		27		6	%
Landing fees and other rents		372		491		(119	)	(24	)%
Passenger service		156		154		2		1	%
Aircraft rent		126		168		(42	)	(25	)%
Profit sharing		79		-		79		NM
Other		287		211		76		36	%
Total operating expense	$	8,599	$	8,651	$	(52	)	(1	)%

Operating expense was $8.6 billion for the six months ended June 30, 2007, a $52 million, or 1%, decrease compared to the six months ended June 30, 2006. As discussed below, the decrease in operating expense was primarily due to a decrease in salaries and related costs, landing fees and other rents, and certain Fresh Start Adjustments discussed above. These decreases were partially offset by an increase in contract carrier arrangements expense and an accrual for profit sharing. For the six months ended June 30, 2006, operating expense was negatively impacted by certain Accounting Adjustments discussed above.

Operating capacity increased 2% to 73.4 billion ASMs primarily due to higher contract carrier flying from our business plan initiatives to right-size capacity. CASM decreased 2% to 11.71¢.

Salaries and related costs. The decrease in salaries and related costs reflects a decline of (1) 12% due to benefit cost reductions for our pilot and non-pilot employees and (2) 4% as a result of a charge during the six months ended June 30, 2006 associated with certain Accounting Adjustments discussed above. These decreases were partially offset by a 2% increase related to (2) a 4% increase in Mainline headcount due to our expansion at JFK and our assumption of ASA ramp operations at Hartsfield-Jackson Atlanta International Airport and (2) compensation program benefits primarily associated with emergence share-based compensation.

Aircraft fuel and related taxes. Aircraft fuel and related taxes decreased primarily due to a 1% decrease in consumption and fuel tax refunds received, partially offset by certain Fresh Start Adjustments discussed above. Fuel prices remained relatively constant averaging $2.02 per gallon, including fuel hedge losses of $4 million, for the six months ended June 30, 2007, compared to $2.03 per gallon, including fuel hedge gains of $4 million, for the six months ended June 30, 2006.

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Contract carrier arrangements. Contract carrier arrangements expense increased primarily due to a 19% growth in contract carrier flying from our business plan initiatives to right-size capacity in domestic markets.

Contracted services.  The increase in contracted services is primarily due to higher outsourcing related to our technology center, cargo handling services and certain of our aircraft cleaning services.

Landing fees and other rents. Landing fees and other rents decreased because we recorded a charge during the six months ended June 30, 2006 associated with certain Accounting Adjustments discussed above.

Aircraft rent. The decline in aircraft rent expense is due to the renegotiation and rejection of certain leases in connection with our restructuring under Chapter 11.

Profit sharing. Our broad based profit sharing plan provides that, for each year in which we have an annual pre-tax profit, we will pay at least 15% of that profit to eligible employees. Based on our pre-tax earnings for the June 2007 quarter, we accrued $79 million under the profit sharing plan.

Other. The increase in other operating expense was primarily due to a credit we recorded during the six months ended June 30, 2006 related to certain Accounting Adjustments discussed above.

Operating Income (Loss) and Operating Margin

We reported operating income of $645 million for the six months ended June 30, 2007, compared to an operating loss of $116 million for the six months ended June 30, 2006. Operating margin, which is the ratio of operating income (loss) to operating revenues, was 7% and (1)% for the six months ended June 30, 2007 and 2006, respectively.

Other (Expense) Income

Other expense, net for the six months ended June 30, 2007 was $299 million, compared to $392 million for the six months ended June 30, 2006. This change is substantially attributable to (1) a 13%, or $59 million, net decrease in interest expense primarily due to the repayment of the DIP Facility in connection with our emergence from Chapter 11, partially offset by borrowings under the Exit Facilities, (2) a $17 million increase in interest income from interest earned on cash savings from restructuring initiatives during bankruptcy and (3) a $17 million gain to miscellaneous, net primarily associated with gains related to the ineffective portion of our fuel hedge positions.

Reorganization Items, Net

Reorganization items, net totaled a $1.2 billion gain for the six months ended June 30, 2007, primarily consisting of the following:

· Emergence gain. A net $2.1 billion gain due to our emergence from bankruptcy. For additional information regarding this gain, see “Combined Results of Operations - June 2007 and June 2006 Quarters - Reorganization Items, Net” above.

· Aircraft financing renegotiations and rejections. $440 million of estimated claims primarily associated with the restructuring of the financing arrangements for 143 aircraft and adjustments to prior claims estimates.

· Contract carrier agreements. A net charge of $163 million in connection with amendments to certain contract carrier agreements. For additional information regarding this charge and our contract carrier agreements, see Notes 1 and 5, respectively, of the Notes to the Condensed Consolidated Financial Statements.

· Emergence compensation. In accordance with the Plan, we made $130 million in lump-sum cash payments to approximately 39,000 eligible non-contract, non-management employees.  We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan, of approximately 14 million shares of common stock to those employees. For additional information regarding the common stock issuance, see Note 10 of the Notes to the Condensed Consolidated Financial Statements.

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· Pilot collective bargaining agreement. An $83 million allowed general, unsecured claim in connection with Comair’s agreement with ALPA to reduce Comair’s pilot labor costs.

· Facility leases. A net $43 million gain, which primarily reflects (1) a $126 million net gain related to our settlement agreement with the Massachusetts Port Authority offset by (2) a net $80 million charge from an allowed general, unsecured claim in connection with the settlement relating to the restructuring of certain of our lease and other obligations at CVG. For additional information regarding these matters, see Notes 1 and 4 of the Notes to the Condensed Consolidated Financial Statements.

Reorganization items, net totaled a $3.8 billion charge for the six months ended June 30, 2006.  This primarily reflects (1) a $2.1 billion allowed general, unsecured claim that we agreed to in our comprehensive agreement with ALPA to reduce pilot labor costs and (2) $1.6 billion of estimated claims primarily associated with the restructuring of the financing arrangements for 143 aircraft.

For additional information about our reorganization items, see Note 1 of the Notes to the Condensed Consolidated Financial Statements.

Income Tax Provision

For the six months ended June 30, 2007, we recorded an income tax provision totaling $99 million.  We have recorded a full valuation allowance against the net deferred tax asset, excluding the effect of the deferred tax liability that is unable to be used as a source of income against these deferred tax assets, based on our belief that it is more likely than not that the asset will not be realized in the future.  This determination was made in a prior fiscal year and is still applicable for the current period.  We will continue to assess the need for a full valuation allowance in future quarters.  In accordance with SOP 90-7, if we utilize pre-emergence bankruptcy NOL carryfowards, we will sequentially reduce the cost of goodwill followed by other indefinite-lived assets until the net carrying cost of these assets is zero.  Accordingly, during the six months ended June 30, 2007, we reduced goodwill by $103 million with respect to utilization of pre-emergence NOL carryforwards.

During the six months ended June 30, 2006, we recorded an income tax benefit totaling $17 million. This amount reflected an adjustment to our estimated required valuation allowance at December 31, 2006. For additional information about the income tax valuation allowance, see Note 8 of the Notes to the Condensed Consolidated Financial Statements.

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Operating Statistics

The following table sets forth our operating statistics for the three and six months ended June 30, 2007 and 2006.

	Combined			Predecessor			Combined			Predecessor
	Three Months Ended June 30, 2007			Three Months  Ended June 30, 2006			Six Months Ended June 30, 2007			Six Months Ended June 30, 2006
Consolidated Combined:
Revenue Passenger Miles (millions) (1)		31,578			30,053			58,790			56,437
Available Seat Miles (millions) (1)		38,127			37,718			73,407			72,321
Passenger Mile Yield (1)		14.23	¢		14.01	¢		13.99	¢		13.40	¢
Passenger Revenue Per Available Seat Mile (1)		11.78	¢		11.16	¢		11.20	¢		10.46	¢
Operating Cost Per Available Seat Mile (1)		11.83	¢		11.59	¢		11.71	¢		11.96	¢
Passenger Load Factor (1)		82.8	%		79.7	%		80.1	%		78.0	%
Breakeven Passenger Load Factor (1)		73.8	%		72.7	%		73.8	%		79.2	%
Fuel Gallons Consumed (millions)		531			534			1,022			1,034
Average Price Per Fuel Gallon, Net of Hedging activity	$	2.09		$	2.14		$	2.02		$	2.03
Number of Aircraft in Fleet, End of Period		573			625			573			625
Full-Time Equivalent Employees, End of Period		55,542			51,736			55,542			51,736
Mainline:
Revenue Passenger Miles (millions)		26,776			25,658			49,769			48,139
Available Seat Miles (millions)		32,130			32,101			61,684			61,529
Operating Cost Per Available Seat Mile		10.69	¢		10.49	¢		10.53	¢		10.91	¢
Number of Aircraft in Fleet, End of Period		440			457			440			457

(1) Includes the operations under contract carrier agreements with unaffiliated regional air carriers:

l ASA, Chautauqua Airlines, Inc., Freedom Airlines, Inc., Shuttle America Corporation and SkyWest Airlines, Inc. for all periods presented and

l ExpressJet Airlines, Inc. from February 27, 2007 to June 30, 2007.

For additional information about our contract carrier agreements, see Note 5 of the Notes to the Condensed Consolidated Financial Statements.

Financial Condition and Liquidity

On the Effective Date, we entered into the Exit Facilities to borrow up to $2.5 billion from a syndicate of lenders. We used a portion of the proceeds from the Exit Facilities and existing cash to repay the DIP Facility. Our Exit Facilities, as defined and described in Note 4 of the Notes to the Condensed Consolidated Financial Statements, include certain affirmative, negative and financial covenants. We were in compliance with these covenant requirements at June 30, 2007.

On June 8, 2007, we entered into an amended and restated Visa/MasterCard credit card processing agreement that, among other things, resulted in the release by the Processor of the then existing $804 million cash holdback under the agreement and extended the term of the agreement to October 31, 2008. For additional information regarding this agreement, see Note 5 of the Notes to the Condensed Consolidated Financial Statements.

Combined Sources and Uses of Cash

We expect to meet our cash needs for 2007 from cash flows from operations, cash and cash equivalents and short-term investments and financing arrangements. As discussed above, we entered into Exit Facilities to borrow up to $2.5 billion from a syndicate of lenders. We used a portion of the proceeds from the Exit Facilities and existing cash to repay our then outstanding DIP Facility. The Exit Facilities also includes a $1.0 billion revolving credit facility, which has not been drawn upon. Additionally, as discussed above, $804 million was released from restricted cash as a result of the amendment and restatement of our Visa/Mastercard credit card processing agreement.

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Our cash and cash equivalents and short-term investments were $3.4 billion at June 30, 2007, compared to $2.9 billion at June 30, 2006. Restricted cash totaled $348 million and $1.1 billion at June 30, 2007 and 2006, respectively.

Cash flows from operating activities

Cash provided by operating activities was $815 million for the six months ended June 30, 2007, an increase of $45 million compared to the same period in 2006. Cash provided by operating activities in 2007 primarily reflects (1) revenue increases and cost reductions we achieved during our Chapter 11 reorganization from revenue and network productivity improvements, in-court restructuring initiatives and labor cost reductions and (2) the release of $804 million in restricted cash associated with the amendment and restatement of our Visa/Mastercard credit card processing agreement, as discussed above. These increases were partially offset by increases of $935 million in investments in auction rate securities.

Cash flows from investing activities

Cash used in investing activities totaled $153 million and $125 million for the six months ended June 30, 2007 and 2006, respectively. The six months ended June 30, 2007 reflects a $154 million increase in our investment in flight equipment and advanced payments for aircraft commitments partially offset by (1) a $106 million decrease in restricted cash requirements and (2) $34 million from our sale of an investment in priceline.com. 

Cash flows from financing activities

Cash used in financing activities totaled $866 million and $222 million for the six months ended June 30, 2007 and 2006, respectively. This increase is primarily due to the repayment of the DIP Facility with a portion of the proceeds from the Exit Facilities and existing cash. For additional information regarding the Exit Facilities, see Note 4 of the Notes to the Condensed Consolidated Financial Statements.

Defined Benefit Pension Plan

We sponsor a qualified defined benefit pension plan for eligible non-pilot employees and retirees (“Non-pilot Plan”). Our funding obligation for this plan is governed by the Employee Retirement Income Security Act of 1974.

During the six months ended June 30, 2007, we contributed $50 million to the Non-pilot Plan. Effective April 1, 2007, we elected the alternative funding schedule under section 402(a)(1) of the Pension Protection Act of 2006. This election permits us to extend over a longer period of time our required funding obligations for the Non-pilot Plan, thereby reducing these funding obligations over the next several years. While factors outside our control may continue to impact the funding requirements for this plan, this legislation will make those funding requirements more predictable.

 Estimates of future funding requirements for the Non-pilot Plan are based on various assumptions. These assumptions include, among other things, the actual and projected market performance of assets; statutory requirements; and demographic data for participants. We estimate that we will contribute approximately $115 million to the Non-pilot Plan in 2007 (including $50 million discussed above) and that our funding requirements for the Non-pilot Plan will aggregate approximately $100 million for each of 2008 and 2009.

For additional information about our pension plans, see Note 10 of the Notes to the Consolidated Financial Statements in our Form 10-K and Note 7 of the Notes to the Condensed Consolidated Financial Statements.

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Contractual Obligations

The table in the “Contractual Obligations” section of  “Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K contains a line item titled “Long-term debt classified as liabilities subject to compromise,” which totals $4.9 billion.  As  a result of our emergence from Chapter 11, $3.8 billion of this amount was discharged.

The following paragraphs provide information about our additional contractual obligations:

Pilot Obligation.  Under our comprehensive agreement with ALPA reducing pilot labor costs, we are required to issue by August 27, 2007, for the benefit of Delta pilots, $650 million principal amount of senior unsecured notes.  We may replace all or a portion of this obligation with cash prior to issuance of the notes.

Airport Settlement.  We issued $66 million principal amount of senior unsecured notes in connection with our settlement agreement relating to the restructuring of certain of our lease and other obligations at CVG.

Critical Accounting Estimates

For additional information regarding our Critical Accounting Estimates, see “Application of Critical Accounting Polices” in Managements Discussion and Analysis of Financial Condition and Liquidity in our Form 10-K. The following information describes significant changes to our critical accounting policies.

Fresh-Start reporting

As previously noted, upon emergence from Chapter 11, we adopted fresh start reporting, which required us to revalue our assets and liabilities to fair value. In estimating fair value, we based our estimates and assumptions on the guidance prescribed by SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which we adopted in conjunction with our adoption of fresh start reporting. SFAS 157, among other things, defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. For additional information about SFAS 157, see Note 2 of the Notes to the Condensed Consolidated Financial Statements.

Estimates of fair value are based on independent appraisals and valuations, some of which are not final. Where independent appraisals and valuations are not available, we estimate fair value using industry data and trends and refer to relevant market rates and transactions. As new or improved information on asset and liability appraisals and valuations becomes available, we may adjust our preliminary allocation of fair value within one year from the Effective Date. Adjustments to the recorded fair values of these assets and liabilities may impact the amount of recorded goodwill.

To facilitate the calculation of the enterprise value of the Successor, management developed a set of financial projections for the Successor using a number of estimates and assumptions. With the assistance of financial advisors, management determined the enterprise and corresponding equity value of the Successor based on the financial projections using various valuation methods, including (1) a comparison of our projected performance to the market values of comparable companies; (2) a review and analysis of several recent transactions in the airline industry; and (3) a calculation of the present value of future cash flows based on our projections. Utilizing this methodology, the equity value of the Successor was estimated to be in the range of $9.4 billion to $12.0 billion. The enterprise value, and corresponding equity value, are dependent upon achieving the future financial results set forth in our projections as well as the realization of certain other assumptions. There can be no assurance that the projections will be achieved or that the assumptions will be realized. The excess equity value (using the low end of the range) over the fair value of tangible and identifiable intangible assets has been reflected as goodwill in the Consolidated Fresh Start Balance Sheet.  The financial projections and estimates of enterprise and equity value are not incorporated into this Form 10-Q.

All estimates, assumptions, valuations, appraisals and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, appraisals and the financial projections will be realized, and actual results could vary materially.

See Note 1 of the Notes to the Condensed Consolidated Financial Statements for the impact the adoption of fresh start reporting had on our Consolidated Balance Sheet.

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Revenue Recognition and Frequent Flyer Program

We recognize revenue from the sale of passenger tickets as air transportation is provided or when the ticket expires unused. Our SkyMiles program offers participants the opportunity to earn travel awards primarily by flying on Delta, Delta Connection carriers and participating airlines. We also sell mileage credits in our frequent flyer program to participating companies such as credit card companies, hotels and car rental agencies.

As a result of the adoption of fresh start reporting, we revalued our SkyMiles frequent flyer award liability to estimated fair value. In accordance with SFAS 157, fair value represents the estimated amount we would pay a third party to assume the obligation for miles expected to be redeemed under the SkyMiles program. We calculated fair value based on a blended rate comprised of (1) our weighted average equivalent ticket rate which considers, among other factors, differing class of service and domestic and international itineraries and (2) the weighted average of amounts paid to other SkyTeam alliance members. At April 30, 2007, we recorded deferred revenue equal to $0.0083 for each mile we estimate will ultimately be redeemed under the SkyMiles program.

We previously accounted for frequent flyer miles earned on Delta flights on an incremental cost basis as an accrued liability and as operating expense, while miles sold to airline and non-airline businesses were accounted for on a deferred revenue basis. For additional information concerning the accounting for the SkyMiles program prior to May 1, 2007, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation - Application of Critical Accounting Policies - Frequent Flyer Program” in our Form 10-K.

We now account for all miles earned and sold as separate deliverables in a multiple element revenue arrangement as prescribed by EITF 00-21 “Revenue Arrangements with Multiple Deliverables”. Our revenues are generated from the sale of passenger tickets, which includes air transportation and mileage credits. Our revenues are also generated from the sale of mileage credits to other airline and non-airline businesses, which include a marketing premium.

We use the residual method for revenue recognition.  The fair value of the mileage credit component is determinable based on the selling rate per mile to other SkyTeam alliance members.  The fair values of the air transportation and marketing premium components are not determinable because they are not sold without mileage credits.  Under the residual method, the fair value of the mileage credits is deferred and the remaining portion of the sale is allocated to air transportation or the marketing premium component, as applicable, and is recognized as revenue when the related services are provided.

The fair value of the mileage credit earned is based on the low end of the range for our inter-airline SkyMiles selling rates to partner carriers, which is currently $0.0054 per mile. Revenue associated with these mileage credits is recognized when miles are redeemed and services are provided based on the weighted average rate of all miles that have been deferred. Miles earned after April 30, 2007, will be valued and the related revenue deferred using a rate of $0.0054 per mile, which will be evaluated annually.

Estimating mileage credits that will not be redeemed (“Breakage”) requires significant management judgment. We consider historical patterns to be a useful indicator when estimating future Breakage. Under our deferred revenue policy, the value associated with mileage credits due to Breakage is amortized over the period the redemptions are estimated to occur and recognized in passenger revenue. Changes to program rules and redemption opportunities can significantly alter customer behavior from historical patterns with respect to inactive accounts. Such changes may result in material changes to the deferred revenue balance, as well as recognized revenue from our SkyMiles program.  At June 30, 2007, the aggregate deferred revenue balance associated with the SkyMiles program was $3.5 billion.  A hypothetical 1% change in our outstanding number of miles estimated to be redeemed would result in a $33 million impact on our deferred revenue liability.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in the “Market Risks Associated with Financial Instruments” section of “Item 7. Management’s Discussion and Analysis of Financial condition and Results of Operations” in our Form 10-K other than those discussed below.

Aircraft Fuel Price Risk

Our results of operations may be materially impacted by changes in the price of aircraft fuel. To manage this risk, we periodically enter into derivative contracts comprised of heating oil and jet fuel swap and collar contracts to hedge a portion of our projected aircraft fuel requirements.

For the six months ended June 30, 2007, aircraft fuel and related taxes accounted for 24% of our total operating expenses. Aircraft fuel and related taxes for the six months ended June 30, 2007 decreased 2% compared to the corresponding period in the prior year primarily due to a 1% decrease in consumption and certain fuel tax refunds received, partially offset by certain Fresh Start Adjustments discussed above. Fuel prices remained relatively constant averaging $2.02 per gallon, including fuel hedge losses of $4 million, for the six months ended June 30, 2007 compared to $2.03 per gallon, including fuel hedge gains of $4 million, for the six months ended June 30, 2006.

As of June 30, 2007, we had hedged 22% of our projected fuel requirements for the September 2007 quarter using heating oil zero-cost collar contracts with weighted average contract cap and floor prices of $1.80 and $1.62, respectively. As of June 30, 2007, our open fuel hedge contracts had an estimated fair market value gain of $37 million. We have not entered into any hedges for the December 2007 quarter or thereafter. We estimate that a 10% rise in the price per gallon of heating oil would increase the estimated fair market value associated with our outstanding contracts at settlement by $29 million to a $66 million gain.

We project that our aircraft fuel consumption will be 1.1 billion gallons from July 1, 2007 to December 31, 2007. Based on a projected average jet fuel price of $2.25 per gallon for that period, a 10% rise in jet fuel prices would increase our aircraft fuel expense by $182 million, inclusive of the impact of effective hedge instruments that are outstanding as of June 30, 2007.

For additional information regarding our other exposures to market risks, see “Market Risks Associated with Financial Instruments” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as Note 4 of the Notes to the Condensed Consolidated Financial Statements in our Form 10-K.

Item 4. Controls and Procedures

Our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. Our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, concluded that the controls and procedures were effective as of June 30, 2007 to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Except as set forth below, during the three months ended June 30, 2007, we made no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the June 2007 quarter, upon emergence from bankruptcy on April 30, 2007, we established controls over (1) the implementation of fresh start reporting and (2) a change in accounting for our SkyMiles frequent flyer program to a deferred revenue model. 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Delta Air Lines, Inc.

We have reviewed the consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of June 30, 2007 (Successor), and the related consolidated statements of operations for the two-month period ended June 30, 2007 (Successor), one-month and four-month periods ended April 30, 2007 (Predecessor), and the three-month and six-month periods ended June 30, 2006 (Predecessor), and the condensed consolidated statements of cash flows for the two-month period ended June 30, 2007 (Successor), four-month period ended April 30, 2007 (Predecessor) and six-month period ended June 30, 2006 (Predecessor). These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Delta Air Lines, Inc. as of December 31, 2006 (Predecessor), and the related consolidated statements of operations, shareowners' deficit, and cash flows for the year then ended (Predecessor) and in our report dated March 1, 2007, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2006 (Predecessor), is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

Atlanta, Georgia

August 2, 2007

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Chapter 11 Proceedings

As discussed elsewhere in this Form 10-Q, on September 14, 2005, we and certain of our subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. On April 26, 2007, the Bankruptcy Court entered an order (the “Confirmation Order”) approving and confirming the Debtors Joint Plan of Reorganization. On April 30, 2007, the Debtors emerged from bankruptcy.  The reorganization cases were jointly administered under the caption “In re Delta Air Lines, Inc., et al., Case No. 05-17923-ASH.” The Confirmation Order provided for the discharge upon the Effective Date of the Debtors from all Claims (as defined in the Plan) based upon acts or omissions that occurred prior to the Effective Date.  In addition, as provided in the Confirmation Order, holders of pre-Effective Date claims are enjoined from commencing or continuing any action or proceeding against the Reorganized Debtors with respect to such claims. 

On April 24, 2007, the Bankruptcy Court approved the Cincinnati Airport Settlement Agreement with the Kenton County Airport Board (“KCAB”) and UMB Bank, N.A., the trustee (the “Bond Trustee”) for the Series 1992 Bonds (as defined below), to restructure certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (the “Cincinnati Airport”). The Series 1992 Bonds include: (1) the $419 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series A (Delta Air Lines, Inc. Project), $397 million of which were then outstanding; and (2) the $19 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series B (Delta Air Lines, Inc. Project), $16 million of which were then outstanding.

The Cincinnati Airport Settlement Agreement, among other things:

· provides for agreements under which we will continue to use certain facilities at the Cincinnati Airport at substantially reduced costs;

· settles all disputes among us, the KCAB, the Bond Trustee and the former, present and future holders of the 1992 Bonds (the “1992 Bondholders”);

· gives the Bond Trustee, on behalf of the 1992 Bondholders, a $260 million allowed general, unsecured pre-petition claim in our bankruptcy proceedings; and

· provides for our issuance of $66 million principal amount of senior unsecured notes to the Bond Trustee on behalf of the 1992 Bondholders.

A small number of 1992 Bondholders (the “Objecting Bondholders”) is challenging the settlement in the U.S. District Court for the Southern District of New York (the “District Court”). We cannot predict the outcome of this litigation. On May 3, 2007, the parties to the Cincinnati Airport Settlement Agreement implemented that agreement in accordance with its terms.

Delta Family-Care Savings Plan Litigation

On March 16, 2005, a retired Delta employee filed an amended class action complaint in the U.S. District Court for the Northern District of Georgia against Delta, certain current and former Delta officers and certain current and former Delta directors on behalf of himself and other participants in the Delta Family-Care Savings Plan (“Savings Plan”). The amended complaint alleges that the defendants were fiduciaries of the Savings Plan and, as such, breached their fiduciary duties under ERISA to the plaintiff class by (1) allowing class members to direct their contributions under the Savings Plan to a fund invested in Delta common stock; and (2) continuing to hold Delta’s contributions to the Savings Plan in Delta’s common and preferred stock. The amended complaint seeks damages unspecified in amount, but equal to the total loss of value in the participants’ accounts from September 2000 through September 2005 from the investment in Delta stock. Defendants deny that there was any breach of fiduciary duty, and have moved to dismiss the complaint. The District Court stayed the action against Delta due to the bankruptcy filing and granted the motion to dismiss filed by the individual defendants. The plaintiffs appealed to the United States Court of Appeals for the Eleventh Circuit the District Court’s decision to dismiss the complaint against the individual defendants but voluntarily dismissed this appeal, pending resolution of the automatic stay of their claim against Delta. The parties have reached an agreement in principle to resolve this matter on a class-wide basis under which the plaintiffs would receive a $4.5 million allowed general, unsecured claim in Delta’s Chapter 11 proceedings. The settlement is subject to the completion of definitive documentation and Bankruptcy Court approval.

Comair Flight 5191

On August 27, 2006, Comair Flight 5191 crashed shortly after take-off in a field near the Blue Grass Airport in Lexington, Kentucky. All 47 passengers and two members of the flight crew died in the accident. The third crew member survived with severe injuries. Lawsuits arising out of this accident have been filed against our wholly owned subsidiary, Comair, on behalf of 43 passengers. A number of lawsuits also name Delta as a defendant. Additional lawsuits on behalf of the four remaining passengers are anticipated. The lawsuits generally assert claims for wrongful death and related personal injuries, and seek unspecified damages, including punitive damages in most cases. As of June 30, 2007, settlements have been reached with the families of six of the 43 passengers on whose behalf lawsuits were filed. Lawsuits are currently pending in the U.S. District Court for the Eastern District of Kentucky on behalf of 13 passengers, and in state court in Fayette County, Kentucky, on behalf of 23 passengers. One lawsuit was filed in state court in Broward County, Florida, and removed to the U.S. District Court for the Southern District of Florida by Comair. A motion is currently pending in federal court in Florida to transfer the case filed in Florida to the federal court in Kentucky. Those matters pending in the Eastern District of Kentucky have been consolidated as “In Re Air Crash at Lexington, Kentucky, August 27, 2006, Master File No. 5:06-CV-316.”

Comair and Delta continue to pursue settlement negotiations with the plaintiffs in these lawsuits. The six settled cases have been dismissed with prejudice.

Comair has filed actions in the U.S. District Court for the Eastern District of Kentucky against the United States (based on the actions of the Federal Aviation Administration), and in state court in Fayette County, Kentucky, against the Lexington Airport Board and certain other Lexington airport defendants. These actions seek to apportion liability for damages arising from this accident among all responsible parties.

57

We carry aviation risk liability insurance and believe that this insurance is sufficient to cover any liability likely to arise from this accident.

* * *

For additional information about other legal proceedings, see “Item 3. Legal Proceedings” in our Form 10-K.

Item 1A. Risk Factors

“Item 1A. Risk Factors,” of our Form 10-K includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K Except as presented below, there have been no material changes from the risk factors described in our Form 10-K.

Risk Factors Relating to Delta

Our credit card processors have the ability to take significant holdbacks in certain circumstances. The initiation of such holdbacks likely would have a material adverse effect on our financial condition.

We sell a substantial number of tickets that are paid for by customers who use credit cards. We recently amended our Visa/MasterCard credit card processing agreement, which, among other things, resulted in the release of the holdback under the agreement by the Visa/MasterCard credit card processor. The amended agreement provides that no future holdback of receivables or reserve is required except in certain circumstances.  Under its processing agreement with us, Amex has the right, in certain circumstances, to impose a holdback of our receivables for tickets purchased using an American Express credit card. If circumstances were to occur that would allow either processor to initiate a holdback, the negative impact on our liquidity likely would be significant.

Risk Factors Relating to the Airline Industry

The airline industry is highly competitive and, if we cannot successfully compete in the marketplace, our business, financial condition and operating results will be materially adversely affected.

We face significant competition with respect to routes, services and fares. Our domestic routes are subject to competition from both new and established carriers, some of which have lower costs than we do and provide service at low fares to destinations served by us. In particular, we face significant competition at our hub airports in Atlanta and JFK from other carriers. In addition, our operations at our hub airports also compete with operations at the hubs of other airlines that are located in close proximity to our hubs. We also face increasing competition in smaller to medium-sized markets from rapidly expanding regional jet operators.

The continuing growth of low-cost carriers, including Southwest, AirTran and JetBlue, in the United States has placed significant competitive pressure on us and other network carriers in the domestic market. In addition, other network carriers have also significantly reduced their costs over the last several years. Our ability to compete effectively depends, in part, on our ability to maintain a competitive cost structure. If we cannot maintain our costs at a competitive level, then our business, financial condition and operating results could be materially adversely affected.

In addition, we compete with foreign carriers, both on interior U.S. routes, due to marketing and codesharing arrangements, and in international markets. International marketing alliances formed by domestic and foreign carriers, including the Star Alliance (among United Airlines, Lufthansa German Airlines and others) and the oneworld Alliance (among American Airlines, British Airways and others) have significantly increased competition in international markets. Through marketing and codesharing arrangements with U.S. carriers, foreign carriers have obtained access to interior U.S. passenger traffic. Similarly, U.S. carriers have increased their ability to sell international transportation, such as transatlantic services to and beyond European cities, through alliances with international carriers.

The airline industry is subject to extensive government regulation, and new regulations may increase our operating costs.

Airlines are subject to extensive regulatory and legal compliance requirements that result in significant costs. For instance, the FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that necessitate significant expenditures. We expect to continue incurring expenses to comply with the FAA’s regulations.

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Other laws, regulations, taxes and airport rates and charges have also been imposed from time to time that significantly increase the cost of airline operations or reduce revenues. For example, the Aviation and Transportation Security Act, which became law in November 2001, mandates the federalization of certain airport security procedures and imposes additional security requirements on airports and airlines, most of which are funded by a per ticket tax on passengers and a tax on airlines. The federal government has on several occasions proposed a significant increase in the per ticket tax. Due to the weak revenue environment that existed for several years after the implementation of this tax, the existing tax negatively impacted our revenues because we have generally not been able to increase our fares to pass taxes and fees of this sort on to our customers. Similarly, the proposed ticket tax increase, if implemented, could negatively impact our revenues. Furthermore, recent events related to extreme weather delays may cause Congress or the DOT to consider proposals related to airlines’ handling of lengthy flight delays during extreme weather conditions. The enactment of such proposals could have a significant negative impact on our operations.

Furthermore, we and other U.S. carriers are subject to domestic and foreign laws regarding privacy of passenger and employee data that are not consistent in all countries in which we operate. In addition to the heightened level of concern regarding privacy of passenger data in the United States, certain European government agencies are initiating inquiries into airline privacy practices. Compliance with these regulatory regimes is expected to result in additional operating costs and could impact our operations and any future expansion.

Our insurance costs have increased substantially as a result of the September 11 terrorist attacks, and further increases in insurance costs or reductions in coverage could have a material adverse impact on our business and operating results.

As a result of the terrorist attacks on September 11, 2001, aviation insurers significantly reduced the maximum amount of insurance coverage available to commercial air carriers for liability to persons (other than employees or passengers) for claims resulting from acts of terrorism, war or similar events. At the same time, aviation insurers significantly increased the premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S. government has been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground damage) and the aircraft hull. The coverage currently extends through September 30, 2007, and the Secretary of Transportation may extend coverage through December 31, 2007. The withdrawal of government support of airline war-risk insurance would require us to obtain war-risk insurance coverage commercially, if available. Such commercial insurance could have substantially less desirable coverage than that currently provided by the U.S. government, may not be adequate to protect our risk of loss from future acts of terrorism, may result in a material increase to our operating expenses or may not be obtainable at all, resulting in an interruption to our operations.

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Item 6. Exhibits

(a)	Exhibits
10.1(a)	First Lien Revolving Credit and Guaranty Agreement, dated as of April 30, 2007, among Delta Air Lines, Inc., as Borrower, the subsidiaries of the Borrower named, as Guarantors, each of the Lenders from time to time party, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, J.P. Morgan Securities, Inc. and Lehman Brothers Inc., as co-lead arrangers and joint bookrunners, UBS Securities LLC, as syndication agent and as joint bookrunner, and Calyon New York Branch and RBS Securities Corporation, as co-documentation agents
10.1(b)	Second Lien Term Loan and Guaranty Agreement, dated as of April 30, 2007, among Delta Air Lines, Inc., as Borrower, the subsidiaries of the Borrower named, as Guarantors, each of the Lenders from time to time party, Goldman Sachs Credit Partners L.P. (“GSCP”), as administrative agent and as collateral agent, GSCP and Merrill Lynch Commercial Finance Corp., as co-lead arrangers and joint bookrunners, Barclays Capital, as syndication agent and as joint bookrunner, and Credit Suisse Securities (USA) LLC and C.I.T. Leasing Corporation, as co-documentation agents
10.2	Description of Certain Benefits of Executive Officers
15	Letter from Ernst & Young LLP regarding unaudited interim financial information
31.1	Certification by Delta’s Chief Executive Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007
31.2	Certification by Delta’s Executive Vice President and Chief Financial Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007
32	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta’s Chief Executive Officer and Executive Vice President and Chief Financial Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delta Air Lines, Inc. (Registrant)
By:	/s/ Edward H. Bastian
Edward H. Bastian Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

August 2, 2007

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EX-10.1(A)

Exhibit 10.1(a)

FIRST LIEN REVOLVING CREDIT AND GUARANTY AGREEMENT

Among

DELTA AIR LINES, INC.,

as Borrower,

and

THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,

as Guarantors

and

THE LENDERS PARTY HERETO,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent

UBS SECURITIES LLC,

as Syndication Agent

J.P. MORGAN SECURITIES INC.,

as Co-Lead Arranger and Joint Bookrunner

LEHMAN BROTHERS INC.,

as Co-Lead Arranger and Joint Bookrunner

UBS SECURITIES LLC,

as Joint Bookrunner

CALYON New York Branch,

as Co-Documentation Agent

RBS Securities Corporation,

as Co-Documentation Agent

Dated as of April 30, 2007

Table of Contents

		Page
SECTION 1. DEFINITIONS		2
SECTION 1.01.	Defined Terms.	2
SECTION 1.02.	Terms Generally	42
SECTION 1.03.	Accounting Terms; GAAP	43
SECTION 2. AMOUNT AND TERMS OF CREDIT		43
SECTION 2.01.	Commitments of the Lenders; Credit-Linked Deposit Loans.	43
SECTION 2.02.	Letters of Credit	44
SECTION 2.03.	Requests for Borrowings.	52
SECTION 2.04.	Funding of Borrowings	54
SECTION 2.05.	Interest Elections	55
SECTION 2.06.	Limitation on Eurodollar Tranches	56
SECTION 2.07.	Interest on Loans.	56
SECTION 2.08.	Default Interest	56
SECTION 2.09.	Alternate Rate of Interest	57
SECTION 2.10.	Amortization of Credit-Linked Deposits; Repayment of Loans; Evidence of Debt.	57
SECTION 2.11.	Optional Termination or Reduction of Commitment; Reduction of Credit-Linked Deposits.	58
SECTION 2.12.	Mandatory Prepayment; Commitment Termination.	59
SECTION 2.13.	Optional Prepayment of Loans.	61
SECTION 2.14.	Increased Costs	61
SECTION 2.15.	Break Funding Payments	63
SECTION 2.16.	Taxes	64
SECTION 2.17.	Payments Generally; Pro Rata Treatment.	65
SECTION 2.18.	Mitigation Obligations; Replacement of Lenders	67
SECTION 2.19.	Certain Fees	67
SECTION 2.20.	Commitment Fee	68
SECTION 2.21.	Letter of Credit Fees	68
SECTION 2.22.	Nature of Fees	69
SECTION 2.23.	Right of Set-Off	69
SECTION 2.24.	Security Interest in Letter of Credit Account	69
SECTION 2.25.	Payment of Obligations	69
SECTION 2.26.	Defaulting Lenders	70
SECTION 2.27.	Credit-Linked Deposit Account	70
SECTION 2.28.	Currency Equivalents	71
SECTION 3. REPRESENTATIONS AND WARRANTIES		72
SECTION 3.01.	Organization and Authority	72
SECTION 3.02.	Air Carrier Status	72

i

SECTION 3.03.	Due Execution	72
SECTION 3.04.	Statements Made	73
SECTION 3.05.	Financial Statements; Material Adverse Change.	73
SECTION 3.06.	Ownership	74
SECTION 3.07.	Liens	74
SECTION 3.08.	Use of Proceeds	74
SECTION 3.09.	Litigation and Environmental Matters	74
SECTION 3.10.	FAA Slot Utilization	75
SECTION 3.11.	Primary Foreign Slot Utilization	75
SECTION 3.12.	Primary Route Utilization	75
SECTION 3.13.	Margin Regulations; Investment Company Act.	76
SECTION 3.14.	ERISA	76
SECTION 3.15.	Properties.	76
SECTION 3.16.	Perfected Security Interests	77
SECTION 3.17.	Payment of Taxes	77
SECTION 3.18.	Section 1110	78
SECTION 4. CONDITIONS OF LENDING		78
SECTION 4.01.	Conditions Precedent to Initial Loans and Initial Letters of Credit	78
SECTION 4.02.	Conditions Precedent to Each Loan and Each Letter of Credit	84
SECTION 5. AFFIRMATIVE COVENANTS		85
SECTION 5.01.	Financial Statements, Reports, etc.	85
SECTION 5.02.	Existence	89
SECTION 5.03.	Insurance.	89
SECTION 5.04.	Maintenance of Properties	90
SECTION 5.05.	Obligations and Taxes	90
SECTION 5.06.	Notice of Event of Default, etc.	91
SECTION 5.07.	Access to Books and Records	91
SECTION 5.08.	Compliance with Laws.	92
SECTION 5.09.	Appraisal Reports and Field Audits	93
SECTION 5.10.	FAA and DOT Matters; Citizenship	93
SECTION 5.11.	FAA Slot Utilization	93
SECTION 5.12.	Primary Foreign Slot Utilization	94
SECTION 5.13.	Primary Route Utilization	94
SECTION 5.14.	Additional Subsidiaries	94
SECTION 5.15.	[Reserved].	95
SECTION 5.16.	Additional Collateral; Additional Grantors.	95
SECTION 5.17.	Pledged Spare Parts	95
SECTION 5.18.	Further Assurances	96
SECTION 5.19.	Post Closing Items	96

ii

SECTION 6. NEGATIVE COVENANTS		97
SECTION 6.01.	Liens	97
SECTION 6.02.	Merger, etc.	100
SECTION 6.03.	Indebtedness	100
SECTION 6.04.	Fixed Charge Coverage	103
SECTION 6.05.	Unrestricted Cash Reserve	103
SECTION 6.06.	Coverage Ratio	103
SECTION 6.07.	Dividends; Capital Stock	105
SECTION 6.08.	Transactions with Affiliates	105
SECTION 6.09.	Investments, Loans and Advances	106
SECTION 6.10.	Disposition of Assets	109
SECTION 6.11.	Nature of Business	109
SECTION 6.12.	Fiscal Year	109
SECTION 7. EVENTS OF DEFAULT		109
SECTION 7.01.	Events of Default	109
SECTION 8. THE AGENTS		113
SECTION 8.01.	Administration by Agents	113
SECTION 8.02.	Rights of Administrative Agent and Collateral Agent	113
SECTION 8.03.	Liability of Agents.	113
SECTION 8.04.	Reimbursement and Indemnification	114
SECTION 8.05.	Successor Agents	115
SECTION 8.06.	Independent Lenders	115
SECTION 8.07.	Advances and Payments.	116
SECTION 8.08.	Sharing of Setoffs	116
SECTION 8.09.	Other Agents	117
SECTION 9. GUARANTY		117
SECTION 9.01.	Guaranty.	117
SECTION 9.02.	No Impairment of Guaranty	118
SECTION 9.03.	Continuation and Reinstatement, etc.	118
SECTION 9.04.	Subrogation	119
SECTION 10. MISCELLANEOUS		119
SECTION 10.01.	Notices	119
SECTION 10.02.	Successors and Assigns	120
SECTION 10.03.	Confidentiality	124
SECTION 10.04.	Expenses; Indemnity; Damage Waiver	124
SECTION 10.05.	Governing Law; Jurisdiction; Consent to Service of Process	126
SECTION 10.06.	No Waiver	126
SECTION 10.07.	Extension of Maturity	126
SECTION 10.08.	Amendments, etc.	126

iii

SECTION 10.09.	Severability	128
SECTION 10.10.	Headings	128
SECTION 10.11.	Survival	128
SECTION 10.12.	Execution in Counterparts; Integration; Effectiveness	128
SECTION 10.13.	USA Patriot Act	129
SECTION 10.14.	Registrations with International Registry	129
SECTION 10.15.	WAIVER OF JURY TRIAL	129

iv

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

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

v

FIRST LIEN REVOLVING CREDIT AND GUARANTY AGREEMENT

Dated as of April 30, 2007

FIRST LIEN REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of April 30, 2007, among DELTA AIR LINES, INC., a Delaware corporation (the “Borrower”), the direct and indirect domestic subsidiaries of the Borrower (other than Excluded Subsidiaries and, at the option of the Borrower, Immaterial Subsidiaries) signatory hereto (each a “Guarantor” and collectively the “Guarantors”), each of the Lenders from time to time party hereto, JPMORGAN CHASE BANK, N.A., a national banking corporation (“JPMCB”), as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent for the Lenders (in such capacity, the “Collateral Agent”), J.P. MORGAN SECURITIES INC. (“JPMSI”) and LEHMAN BROTHERS INC. (“LBI”), as co-lead arrangers and joint bookrunners, UBS SECURITIES LLC, as syndication agent (in such capacity, the “Syndication Agent”) and as joint bookrunner, and CALYON NEW YORK BRANCH and RBS SECURITIES CORPORATION, as co-documentation agents (in such capacity, the “Co-Documentation Agents”).

INTRODUCTORY STATEMENT

The Borrower has applied to the Lenders for a loan facility of up to $1,600,000,000 comprised of (a) a revolving credit and revolving letter of credit facility in an aggregate principal amount (or Dollar Amount, in the case of Revolving LC Exposure) not to exceed $1,000,000,000 as set forth herein and (b) a synthetic revolving credit and revolving letter of credit facility in an aggregate principal amount up to $600,000,000 as set forth herein, all of the Borrower’s obligations under each of which are to be guaranteed by the Guarantors.

The proceeds of the Loans, as well as the proceeds of the Second Lien Term Loans and cash on hand, will be used to repay in full all of the obligations of the Borrower and the Guarantors under and in connection with the Existing DIP Facilities, for working capital and other general corporate purposes of the Borrower and its Subsidiaries and for the other purposes described in Section 3.08.

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

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

1

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

Accordingly, the parties hereto hereby agree as follows:

SECTION 1.

DEFINITIONS

SECTION 1.01.Defined Terms.

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

“Account” shall mean all “accounts” as defined in the UCC, and all rights to payment for interest (other than with respect to debt and credit card receivables).

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

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

“Affiliate” shall mean, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person (a “Controlled Person”) shall be deemed to be “controlled by” another Person (a “Controlling Person”) if the Controlling Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of the Controlled Person whether by contract or otherwise; provided, that the PBGC shall not be an Affiliate of the Borrower or any Guarantor.

“Agents” shall mean the Administrative Agent, the Collateral Agent, the Syndication Agent, the Documentation Agents, the Joint Bookrunners and the Joint Lead Arrangers.

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

“Aggregate Exposure” shall mean, with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender’s Credit-Linked Deposit then outstanding or, if the Termination Date shall have occurred, such Lender’s Credit-Linked Deposit Outstanding Exposure, and (ii) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.

2

“Aggregate Exposure Percentage” shall mean, with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

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

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

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

“Airport Authority” shall mean any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities, which in each case is an owner, administrator, operator or manager of one or more airports or related facilities.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the sum of the Federal Funds Effective Rate in effect on such day plus½ of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Alternative Currency” shall mean (a) Euros and (b) any currency other than Dollars or Euros in which the Issuing Lender is willing to issue a Letter of Credit.

“ALPA Notes” shall mean the senior unsecured notes in an aggregate principal amount not to exceed $650,000,000 to be issued by the Borrower for the benefit of the Air Line Pilots Association in accordance with the Plan of Reorganization and the Bankruptcy Restructuring Agreement referred to therein.

“Amex” shall mean American Express Travel Related Services Company, Inc.

“Applicable Margin” shall mean the rate per annum set forth under the relevant column heading below:

	ABR Loans	Eurodollar Loans
Revolving Loans	1.00%	2.00%
Credit-Linked Deposit Loans	1.00%	2.00%

“Applicable Participation Fee” shall mean 2.00%.

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

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“Appraised Collateral” shall mean Collateral that is Mortgaged Collateral, Primary Routes, Appraised FAA Slots, Flight Simulators, Tooling, Ground Support Equipment, Real Property Assets or any other individual asset that, in each case is included in an Appraisal Report.

“Appraised FAA Slots” shall mean FAA Slots that are included in an Appraisal Report.

“Appraised Value” shall mean (a) in the case of Appraised Collateral, the fair market value thereof as reflected in the most recent Appraisal Report obtained in respect of such Collateral or assets in accordance with this Agreement; provided that, with respect to Mortgaged Collateral, “Appraised Value” shall mean the average of the Appraised Value (as otherwise calculated pursuant to this definition) reflected in the Appraisal Reports obtained from three separate Appraisers with respect to such Collateral and (b) in the case of Eligible Accounts Receivable, Eligible Accounts Receivable, as reflected in the most recent Officer’s Certificate delivered pursuant to Section 5.01(n), each such value referred to in this definition to be (A) determined in a manner reasonably satisfactory to the Administrative Agent and (B) subject to reserves and other criteria established by the Administrative Agent in its commercially reasonable discretion.

“Appraisers” shall mean (a) Simat, Helliesen & Eichner, Inc., as to the FAA Slots, Primary Routes, Primary Foreign Slots, Ground Support Equipment, Tooling and Flight Simulators, (b) Simat, Helliesen & Eichner, AVITAS, Inc. and BK Associates, Inc., as to Mortgaged Collateral and (c) such other appraisal firm or firms as may be retained by the Administrative Agent, in consultation with the Borrower, from time to time.

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

“ARB Indebtedness” shall mean, with respect to the Borrower or any of its Subsidiaries, without duplication, all Indebtedness or obligations of the Borrower or such Subsidiary created or arising with respect to any limited recourse revenue bonds issued for the purpose of financing or refinancing improvements to, or the construction or acquisition of, airport and other related facilities and equipment, the use or construction of which qualifies and renders interest on such bonds exempt from certain federal or state taxes.

“Asset Sale” shall mean any sale of Collateral or series of related sales of Collateral (excluding any Permitted Disposition other than any sale of Eligible Collateral) that yields Net Cash Proceeds to the Borrower or any of its Subsidiaries in excess of $1,000,000.

“Assignment” shall have the meaning given in the Cape Town Convention.

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

“Associated Rights” shall have the meaning given in the Cape Town Convention.

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

“Bankruptcy Court” shall mean the United States Bankruptcy Court for the Southern District of New York.

“Barclays” shall mean Barclays Bank PLC.

“Barclays Capital” shall mean Barclays Capital, the investment banking division of Barclays.

“Benchmark LIBOR Rate” shall have the meaning set forth in Section 2.27(b).

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

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

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

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

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

“Cape Town Convention” shall mean the official English language texts of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment which were signed in Cape Town, South Africa, as in effect in any applicable jurisdiction, as the same may be amended from time to time.

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

“Cases” shall mean the voluntary petitions for relief filed by the Borrower and each of the Guarantors with the Bankruptcy Court pursuant to chapter 11 of the Bankruptcy Code.

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

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

“Change in Law” shall mean, after the date hereof, (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law (including pursuant to any treaty or, for purposes of Section 5.09, any other agreement governing the right to fly international routes), rule or regulation or in the interpretation or application thereof by any Governmental Authority, Airport Authority, or Foreign Aviation Authorities after the date of this Agreement applicable to the Borrower or any of the Guarantors or (c) compliance by any Lender or the Issuing Lender (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s or the Issuing Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Change of Control” shall mean (a) the acquisition after the Closing Date (other than pursuant to a Permitted Change of Control Transaction) of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; or (b) during any period of twelve consecutive months, a majority of the board of directors (excluding vacant seats) of the Borrower shall cease to consist of Continuing Directors.

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

“Closing Date Transactions” shall mean the Transactions other than (x) the borrowing of Loans after the Closing Date and the use of the proceeds thereof and (y) the request for and issuance of Letters of Credit hereunder after the Closing Date.

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

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

“Collateral” shall mean all of the “Collateral” referred to in the Collateral Documents, which shall not include (a) the Excluded Accounts or (b) other items as set forth in the Collateral Documents.

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

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“Collateral Coverage Ratio” shall mean the First Lien Collateral Coverage Ratio or the Total Collateral Coverage Ratio.

“Collateral Documents” shall mean, collectively, the First Lien Security Agreement, the First Lien Pledge Agreement, the First Lien Aircraft Mortgage (including, without limitation, any Mortgage Supplement), the First Lien Real Estate Mortgages, the First Lien SGR Security Agreement, the First Lien Trademark Security Agreement, the First Lien Patent Security Agreement, the First Lien Copyright Security Agreement, any Control Agreements and other agreements, instruments or documents that create or purport to create a Lien in favor of the Collateral Agent for the benefit of the First Priority Secured Parties.

“Collateral Event” shall mean, with respect to an item of Appraised Collateral, any of the events described below:

(a) with respect to any and all Appraised FAA Slots affected thereby, the occurrence of any event, including the Borrower’s or any applicable Guarantor’s abandonment or failure to comply with any applicable Use or Lose Rule, that would allow the FAA or other Governmental Authority or Foreign Aviation Authority to withdraw, cancel, suspend or terminate the Borrower’s or such Guarantor’s authority to hold or use 15% or more of the Appraised FAA Slots at any one airport (with the resulting appraisal under Section 5.09 being of the Appraised FAA Slots at such airport); or

(b) with respect to any Primary Route, abandonment by the Borrower or any applicable Guarantor thereof or the occurrence of any event that would allow the DOT, any Governmental Authority, or any Foreign Aviation Authority to withdraw, cancel, suspend or terminate the authority granted to the Borrower or any applicable Guarantor that authorizes the Borrower or any applicable Guarantor to operate scheduled foreign air transportation of persons, property and mail over such Primary Route or to use any associated Primary Foreign Slot(s) other than (i) in cases where such Primary Route or Primary Foreign Slot(s) has been transferred or otherwise disposed of as permitted in this Agreement or the First Lien SGR Security Agreement or (ii) in the case of any suspension or loss of a Primary Foreign Slot(s), such suspension or loss could not reasonably be expected to have a material adverse effect on the value of the relevant Primary Route taken as a whole; or

(c) the failure of any material assumption contained in any Appraisal Report to be true, except to the extent such failure could not reasonably be expected to affect in a materially adverse manner the Appraised Value of the applicable Appraised Collateral.

“Comair” shall mean Comair, Inc., an Ohio corporation.

“Commitment” shall mean, as to any Lender, the sum of the Revolving Commitment and the Credit-Linked Deposit of such Lender or any combination thereof (as the context requires), it being understood that the “Commitment” of a Lender in respect of the Credit-Linked Deposit shall remain in effect until the Total Credit-Linked Deposit has been reduced to $0 in accordance with this Agreement.

“Commitment Fee” shall have the meaning set forth in Section 2.20.

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“Commitment Fee Rate” shall mean ½ of 1% per annum; provided that at all times during which the Borrower has a corporate family rating of B1 or higher from Moody’s and a corporate credit rating of B+ or higher from S&P, in each case with stable outlook or better, the Commitment Fee Rate shall be ⅜ of 1% per annum.

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

“Connection Carrier” shall mean any regional carrier that operates flights using the “DL” designation code pursuant to contractual arrangements with the Borrower.

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

“Continuing Directors” shall mean the directors of the Borrower on the Closing Date, after giving effect to the Plan of Reorganization and the other transactions contemplated hereby, and each other director, if, in each case, such other director’s nomination for election to the board of directors of the Borrower is recommended by at least a majority of the then Continuing Directors.

“Control Agreements” shall mean the Shifting Control Deposit Account Agreements, the Full Control Deposit Account Agreements, the Shifting Control Securities Account Agreements and the Full Control Securities Account Agreements.

“Credit-Linked Deposit” shall mean, as to each Credit-Linked Deposit Lender, the cash deposit made by such Lender pursuant to Section 2.01(b), as such deposit may be reduced or increased from time to time pursuant to this Agreement. For the avoidance of doubt, the Credit-Linked Deposit of each Credit-Linked Deposit Lender shall not be reduced by the making of any Credit-Linked Deposit Loans or reimbursement of drawings under Credit-Linked Deposit Letters of Credit as a result of the withdrawal of any amounts then on deposit in the Credit-Linked Deposit Account. The amount of each Credit-Linked Deposit Lender’s original Credit-Linked Deposit is set forth under the heading “Credit-Linked Deposit” opposite its name in Annex A hereto or in the Assignment and Acceptance pursuant to which such Credit-Linked Deposit Lender shall have acquired its Credit-Linked Deposit, as applicable. The initial amount of the Credit-Linked Deposits is $600,000,000.

“Credit-Linked Deposit Account” shall mean the account established by the Administrative Agent under its sole and exclusive control maintained at the office of JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, NY 10017, designated as the “Credit-Linked Deposit Account” that shall be used solely to hold the Credit-Linked Deposits.

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

“Credit-Linked Deposit Facility” shall have the meaning set forth in the definition of “Facility” in this Section 1.01.

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

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

“Credit-Linked Deposit Lender” shall mean a Lender having a Credit-Linked Deposit or holding Credit-Linked Deposit Loans.

“Credit-Linked Deposit Letters of Credit” shall mean, at any time, letters of credit issued pursuant to Section 2.02 in an amount equal to the lesser of (i) the Total Credit-Linked Deposit LC Available Amount and (ii) the aggregate amount of outstanding Letters of Credit denominated in Dollars at such time. Credit-Linked Deposit Letters of Credit shall be (a) standby letters of credit, (b) issued for general corporate purposes of the Borrower or any Subsidiary, (c) denominated in Dollars and (d) otherwise in such form as may be reasonably approved from time to time by the Administrative Agent and the applicable Issuing Lender.

“Credit-Linked Deposit Loan” shall have the meaning set forth in Section 2.01(b).

“Credit-Linked Deposit Outstanding Exposure” shall mean, at any time, the aggregate principal amount of the Credit-Linked Deposit Loans then outstanding plus the then outstanding Credit-Linked Deposit LC Exposure.

“Credit-Linked Deposit Participation Amount” shall mean, at any time, the excess, if any of (a) the Total Credit-Linked Deposit over (b) the aggregate principal amount of the Credit-Linked Deposit Loans then outstanding. The Credit-Linked Deposit Participation Amount of any Credit-Linked Deposit Lender at any time shall be its Credit-Linked Deposit Percentage of the total Credit-Linked Deposit Participation Amount at such time.

“Credit-Linked Deposit Participation Fee” shall mean the participation fee payable to the Credit-Linked Deposit Lenders pursuant to Section 2.21(b).

“Credit-Linked Deposit Percentage” shall mean, with respect to any Credit-Linked Deposit Lender, the percentage which such Lender’s Credit-Linked Deposit then constitutes of the Total Credit-Linked Deposit.

“Cure Collateral” shall mean (a) cash collateral and Qualified Permitted Investments pledged to the Collateral Agent (and held in segregated accounts at the Administrative Agent subject to Full Control Deposit Account Agreements and/or Full Control Securities Account Agreements, as the case may be), (b) amounts deemed to have been received by the Borrower and designated as Cure Collateral pursuant to Section 6.06(c) and (c) other assets (including aircraft, airframes, engines, spare parts, Group Support Equipment and Flight Simulators) of the Borrower or any Guarantor which shall be reasonably satisfactory to the Collateral Agent, and all of which assets shall (i) (other than Cure Collateral of the type described in clause (a) and (b) above) be valued by a new Appraisal Report or Field Audit, as the case may be, at the time the Borrower designates such assets as Cure Collateral and (ii) be subject to a perfected first priority (subject to Specified Permitted Collateral Liens) Lien and/or mortgage (or comparable Lien) in favor of the Collateral Agent and otherwise subject only to Permitted Collateral Liens.

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“CVG Notes” shall mean the unsecured notes in an aggregate principal amount not to exceed $85,000,000 to be issued by the Borrower to the trustee under the Trust Indenture dated as of February 1, 1992 between Kenton County Airport Board and UMB Bank N.A., as trustee (the “CVG Bond Indenture”), on behalf of the holders of bonds issued under the CVG Bond Indenture in accordance with the Plan of Reorganization and the CVG Settlement Agreement referred to therein.

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

“Designated Cash Management Obligations” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services and automated clearing house transfers of funds services provided by a Lender or any of its banking Affiliates, as permitted by Section 6.03(h), including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith, in each case as designated by the Borrower from time to time by notice to the Administrative Agent as constituting “Designated Cash Management Obligations”.

“Designated Hedging Agreement” means any Hedging Agreement to the extent that the Indebtedness related thereto is owing to a Lender or any of its Affiliates and is permitted by Section 6.03(f) or (g), designated by the Borrower from time to time by notice to the Administrative Agent as a “Designated Hedging Agreement”.

“Disposition” shall mean, with respect to any property, any sale, lease, sale and leaseback, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollar Amount” shall mean, at any time, for any amount, (i) if denominated in Dollars, the amount thereof and (ii) if denominated in an Alternative Currency, the amount thereof converted to Dollars in accordance with Section 2.28.

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

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

“Earned Revenue Percentage” shall mean, a percentage, representing the estimated portion of credit card revenue which has been earned by performance at any point in time, based on a rolling twelve-month analysis of ticket sales versus “booking curve” (i.e., tickets used for actual flights) experienced by the Borrower during the most recent Rolling Twelve Month period for which such information is available at the time of such determination. The Earned Revenue Percentage shall be subject to re-determination by the Administrative Agent based upon information contained in each Officer’s Certificate delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(n), as updated from time to time, in the reasonable discretion of the Administrative Agent, by the most recent Field Audit.

“EBITDAR” shall mean, for any period, all as determined in accordance with GAAP, without duplication, an amount equal to (a) the consolidated net income (or net loss) of the Borrower and its Subsidiaries for such period, plus (b) the sum of (i) any provision for income taxes, (ii) Interest Expense for such period, (iii) extraordinary, non-recurring or unusual losses for such period, (iv) depreciation and amortization for such period, (v) amortized debt discount for such period, (vi) the amount of any deduction to consolidated net income as the result of any grant to any employee of the Borrower or its Subsidiaries of any Equity Interests, (vii) depreciation, amortization and aircraft rent expense for such period, in each case to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP, (viii) any aggregate net loss during such period arising from a Capital Asset Sale (as defined below), (ix) all other non-cash charges for such period, (x) costs and expenses, including fees, incurred directly in connection with the consummation of the transactions contemplated under the Loan Documents to the extent included in the calculation of consolidated net income, (xi) expenses incurred with respect to the Chapter 11 reorganization as set forth on the Borrower’s consolidated statement of income for such period, including (A) professional and other fees, (B) key employee retention program payments, (C) financing fees, (D) severance costs and (E) any litigation expenses incurred during or in connection with the Cases and (xii) any charges arising from Fresh Start Reporting adjustments that do not impact the cash flows of the Borrower and its Subsidiaries to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP, minus (c) the sum of (i) income tax credits, (ii) interest income, (iii) extraordinary, non-recurring or unusual gains for such period, (iv) any aggregate net gain during such period arising from the sale, exchange or other disposition of capital assets by the Borrower or its Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) (a “Capital Asset Sale”), (v) any gains arising from Fresh Start Reporting adjustments that do not impact the cash flows of the Borrower and its Subsidiaries and (vi) any other non-cash gains that have been added in determining consolidated net income, in each case to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP. For purposes of this definition, the following items shall be excluded in determining consolidated net income of the Borrower and its Subsidiaries: (1) the income (or deficit) of any other Person accrued prior to the date it became a Subsidiary of, or was merged or consolidated into, the Borrower or and of its Subsidiaries; (2) the income (or deficit) of any other Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has an

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ownership interest, except to the extent any such income has actually been received by the Borrower or such Subsidiary, as applicable, in the form of cash dividends or distributions; (3) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period; (4) any write-up of any asset; (5) any net gain from the collection of the proceeds of life insurance policies; (6) any net gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Borrower or any of its Subsidiaries; (7) in the case of a successor to the Borrower by consolidation or merger or as a transferee of its assets, any earnings of such successor prior to such consolidation, merger or transfer of assets; and (8) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition of such Subsidiary over the cost to the Borrower or any of its Subsidiaries of the investment in such Subsidiary.

“Eligible Accounts”shall mean, at the time of any determination thereof, all of the Accounts owned by the Borrower and the Guarantors and reflected in the most recent Officer’s Certificate (substantially in the form of Exhibit K) delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(n). Criteria and eligibility standards used in determining Eligible Accounts may be fixed and revised from time to time by the Administrative Agent, in its reasonable discretion, and in the Administrative Agent’s reasonable exclusive judgment, with any changes in such criteria to be effective upon the date of the next Field Audit to be conducted pursuant to the terms herein. Unless otherwise approved from time to time in writing by the Administrative Agent, no Account shall be an Eligible Account if, without duplication:

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

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

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

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

(e) the Account is not payable in Dollars or the Account Debtor is either not organized under the laws of the United States of America, any state of the United States of America or the District of Columbia or is located outside or has its principal place of business or substantially all of its assets outside the United States; provided the restrictions in this clause (e) shall not apply to any Account if the Account Debtor related thereto is a travel agency that is a member of Bank Settlement Plan so long as the method used for converting such Account payables into Dollars for purposes of valuation is reasonably acceptable to the Administrative Agent; or

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

(g) the associated revenue from such Account has not been earned by the Borrower or the Guarantor (it being understood that Accounts arising from Travel Agency Cash Transactions shall be deemed earned at the time such receivable is recorded); or

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

(i) the Account is a non-trade Account (other than any interest with respect to deposit accounts or Permitted Investments); or

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

(k) such Account was not paid in full, and the Borrower or a Guarantor created a new receivable for the unpaid portion of the Account, and other Accounts constituting chargebacks, debit memos and other adjustments for unauthorized deductions; or

(l) such Account is subject to any counterclaim, deduction, defense, setoff or dispute, but only to the extent of the amount of such counterclaim, deduction, defense, setoff or dispute, unless the Administrative Agent, in its sole discretion, has established an appropriate reserve and determines to include such Account as an Eligible Account; or

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

(n) such Account is a clearinghouse interline Account.

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

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

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“Eligible Collateral” shall mean (a) all Mortgaged Collateral, Ground Support Equipment, Tooling, Flight Simulators, Primary Routes, FAA Slots, Eligible Accounts Receivable and Real Property Assets, in each case to the extent owned or held by the Borrower or a Guarantor and on which the Collateral Agent shall have a valid and perfected first priority (subject to Specified Permitted Collateral Liens) Lien and/or mortgage (or comparable Lien) and which is otherwise subject only to Permitted Collateral Liens, provided that if an Aircraft is Parked for more than thirty (30) days, such Aircraft shall be excluded from Eligible Collateral in its entirety unless three new Appraisal Reports establishing the current Appraised Value of such Aircraft in its Parked condition are delivered to the Administrative Agent, (b) cash collateral and Permitted Investments in an aggregate amount not to exceed $750,000,000 pledged to the Collateral Agent and held in accounts subject to Control Agreements, (c) cash collateral and Permitted Investments maintained in accounts with the Administrative Agent pursuant to Section 2.12(a) and (d) any Cure Collateral designated (or deemed designated pursuant to Section 6.06(c)) by the Borrower at its discretion.

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

“Entry Point Filing Forms” shall mean each of the FAA form AC 8050-135 forms to be filed with the FAA on the Closing Date.

“Environmental Laws” shall mean all laws (including common law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or legally binding requirements or agreements issued, promulgated or entered into by or with any Governmental Authority, relating to the environment, preservation or reclamation of natural resources, the handling, treatment, storage, disposal, Release or threatened Release of, or the exposure of any Person (including employees) to, any pollutants, contaminants or any toxic, radioactive or otherwise hazardous materials.

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

“Environmental Permits” shall mean any and all permits, licenses, approvals, registrations, notifications, exemptions and any other authorization issued pursuant to or required under any Environmental Law or by any Airport Authority with respect to environmental matters.

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

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

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as (i) a single employer under Section 414(b) or (c) of the Code, or (ii) solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code, or that is under common control with the Borrower within the meaning of Section 4001 of ERISA.

“Escrow Accounts” shall mean (1) accounts of the Borrower or any Subsidiary, solely to the extent any such accounts hold funds set aside by the Borrower or any Subsidiary to manage the collection and payment of amounts collected, withheld or incurred by the Borrower or such Subsidiary for the benefit of third parties relating to: (a) federal income tax withholding and backup withholding tax, employment taxes, transportation excise taxes and security related charges, (b) any and all state and local income tax withholding, employment taxes and related charges and fees and similar taxes, charges and fees, including, but not limited to, state and local payroll withholding taxes, unemployment and supplemental unemployment taxes, disability taxes, workman’s or workers’ compensation charges and related charges and fees, (c) state and local taxes imposed on overall gross receipts, sales and use taxes, fuel excise taxes and hotel occupancy taxes, (d) passenger facility fees and charges collected on behalf of and owed to various administrators, institutions, authorities, agencies and entities, (e) other similar federal, state or local taxes, charges and fees (including without limitation any amount required to be withheld or collected under applicable law) and (f) other funds held in trust for an identified beneficiary in an aggregate amount pursuant to this clause (f) not to exceed $150,000,000; in each case, held in escrow accounts, trust funds or other segregated accounts, plus accrued interest; or (2) accounts, capitalized interest accounts, debt service reserve accounts, escrow accounts and other similar accounts or funds established in connection with the ARB Indebtedness.

“Estimated Credit Card Receivables Component” shall mean an amount representing the estimated portion (determined in accordance with the other provisions of this definition) of receivables owing to the Borrower in connection with ticket purchases from and other goods and services provided by the Borrower on major credit cards (including, without limitation, Visa, MasterCard, American Express, Diners Club, Discover and Carte Blanche) which have been earned by performance by the Borrower but not yet paid to the Borrower by the credit card issuer or by the Borrower’s credit card processing bank, as applicable, as determined monthly in accordance with the following formula and set forth in the most recent Officer’s Certificate delivered to the Administrative Agent pursuant to Section 5.01(n). Such amount shall be equal to (i) the average number of days the relevant credit card receivables remained outstanding in the most recent fiscal month multiplied by (ii) the average daily credit card sales earned for the most recent fiscal month. The average daily credit card sales earned for the most recent fiscal month shall be equal to (a) the gross retail credit card sales for the most recent fiscal

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month available at the time of determination (it being understood that such number shall only include the Specified Dollar Receivables (as defined below) if the circumstances described in clause (2) below shall exist) multiplied by (b) the Applicable Earned Percentage divided by (c) the number of days in such month. For all purposes hereof, except as set forth in the last sentence of this definition, “Applicable Earned Percentage” shall be equal to the Earned Revenue Percentage. The Estimated Credit Card Receivables Component shall be subject to such adjustments as may be deemed appropriate by the Administrative Agent based upon the results of each Field Audit of the Borrower conducted after the Closing Date. Notwithstanding the foregoing, (1) until the occurrence of a Visa/MasterCard Dollar Trigger Event that results in a reserve held by the credit card processing bank (the “Applicable Reserve”) that is less than 100% of the value of airline tickets and other goods and services sold on Visa or MasterCard but not yet flown or used or otherwise earned by performance by the Borrower (the “Unearned Value”), or that is not calculated based on the Unearned Value, retail credit card receivables due from the credit card processing bank for Visa or MasterCard that are denominated in Dollars (the “Specified Dollar Receivables”) shall not be subject to the formula set forth above and the Applicable Earned Percentage to be applied to such receivables shall be equal to 100%, (2) after the occurrence of a Visa/MasterCard Dollar Trigger Event that results in an Applicable Reserve that is equal to 0% of the Unearned Value, or that is not calculated based upon the Unearned Value, the Specified Dollar Receivables shall be subject to the formula set forth above (i.e., the Applicable Earned Percentage to be applied to such receivables shall be equal to the Earned Revenue Percentage), and (3) after the occurrence of a Visa/MasterCard Dollar Trigger Event that results in an Applicable Reserve that is greater than 0% but less than 100% of the Unearned Value, the Applicable Earned Percentage to be applied to the Specified Dollar Receivables shall be determined on a straight line basis between the percentages set forth in clauses (1) and (2) above (it being understood that the Applicable Earned Percentage to be applied to such Specified Dollar Receivables shall be equal to 100% minus the product of (A) the Applicable Reserve and (B) the excess, if any, of (I) 100% over (II) the Earned Revenue Percentage).

“Euro” or “€” shall mean the official currency of the European Union.

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

“Eurodollar Tranche” shall mean the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

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

“Event of Loss” shall have the meaning given such term in the First Lien Aircraft Mortgage.

“Excess Credit-Linked Deposits” shall mean, at any time, the excess, if any, of the Total Credit-Linked Deposit over the Credit-Linked Deposit LC Exposure at such time.

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“Exchange Rate” means on any day with respect to any currency other than Dollars, the rate at which such currency may be exchanged into Dollars, as set forth at approximately 11:00 a.m. (London time) on such day on the Reuters World Currency Page for such currency; in the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower, or, in the absence of such agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 10:00 a.m. (New York City time) on such date for the purchase of Dollars for delivery two Business Days later; provided, however, that if at any time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

“Excluded Accounts” shall mean (i) the Escrow Accounts, (ii) the Payroll Accounts, (iii) the Petty Cash Accounts, (iv) the Restricted Accounts and (v) any other deposit accounts or securities accounts subject to Permitted Liens of the type described in clauses (c) or (e) of the definition thereof or liens permitted under clauses (a), (d), (j), (p), (v), (w), (bb), (dd), (ee) or (s) (to the extent relating to any of the foregoing clauses) of Section 6.01.

“Excluded Subsidiaries” shall mean Aero Assurance, Ltd. and its subsidiaries.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, Collateral Agent, any Lender, any Issuing Lender or any other recipient of any payment to be made by or on account of any Obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed by any jurisdiction other than the United States of America or any state thereof or is imposed by the United States of America on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.16(f), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a).

“Existing Amex DIP Facility” shall mean the Second Amended and Restated Advance Payment Supplements to Delta’s Co-Branded Credit Card Program Agreement and Membership Rewards Agreement (as amended, restated, amended and restated, supplemented, extended or otherwise modified to the date hereof), dated as of March 27, 2006, among the Borrower, the direct and indirect subsidiaries of the Borrower party thereto, Amex and American Express Bank, F.S.B.

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“Existing DIP Facilities” shall mean the Existing GE DIP Facility and the Existing Amex DIP Facility.

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

“Existing GE DIP Facility” shall mean that certain Amended and Restated Secured Super-Priority Debtor in Possession Credit Agreement (as amended, restated, amended and restated, supplemented, extended or otherwise modified to the date hereof), dated as of March 27, 2006, among the Borrower, the direct and indirect subsidiaries of the Borrower party thereto, the lenders from time to time party thereto, and General Electric Capital Corporation, as administrative agent and collateral agent.

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

“FAA Slots” shall mean all “slots” as defined in 14 CFR § 93.213(a)(2), as that section may be amended or re-codified from time to time, or, in the case of slots at New York LaGuardia, as defined in the Final Order, Operating Limitations at New York LaGuardia Airport, Docket No. FAA 2006-25755-82 dated December 13, 2006, as such order may be amended or re-codified from time to time, and in any subsequent order issued by the FAA related to New York’s LaGuardia Airport, as such order may be amended or re-codified from time to time,in each case of the Borrower and, if applicable, any other Guarantor, now held or hereafter acquired (other than “slots” which have been permanently allocated to another air carrier and in which the Borrower and, if applicable, any Guarantor holds temporary use rights).

“Facility” shall mean each of (a) the Revolving Commitments and the Revolving Loans made thereunder (the “Revolving Facility”) and (b) the Credit-Linked Deposit Commitments and the extensions of credit made thereunder (the “Credit-Linked Deposit Facility”).

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

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

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

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“Field Auditor” shall mean the Administrative Agent or its Affiliates, appraisers or other advisors who may be retained by the Administrative Agent to conduct a Field Audit.

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

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

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

“First Lien Collateral Coverage Ratio” shall have the meaning set forth in Section 6.06(a).

“First Lien Obligations” shall have the meaning set forth in Section 6.06(a).

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

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

“First Lien Real Estate Mortgages” shall mean, collectively, (a) that certain First Lien Real Estate Deed to Secure Debt, Assignment of Leases and Rents and Security Agreement, dated the date hereof, by the Borrower to the Collateral Agent, in substantially the form of Exhibit A and (b) each other mortgage granted pursuant to the terms hereof, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

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

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

“First Lien Trademark Security Agreement” shall mean that certain First Lien Trademark Security Agreement as defined in Section 5.19(a), as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

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“First Priority Obligations” shall have the meaning set forth in the Intercreditor Agreement.

“First Priority Obligations Payment Date” shall have the meaning set forth in the Intercreditor Agreement.

“First Priority Secured Parties” shall have the meaning set forth in the Intercreditor Agreement.

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

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

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

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

“Foreign Slot” shall mean all of the rights and operational authority, now held or hereafter acquired, of the Borrower and, if applicable, a Guarantor, to conduct one landing or takeoff at a specific time or in a specific time period on a specific day of the week at each non-U.S. airport served in conjunction with the Borrower’s, or, if applicable, a Guarantor’s operations over a Route, other than “slots” which have been permanently allocated to another air carrier and in which the Borrower and, if applicable, any Guarantor, hold temporary use rights.

“Fresh Start Reporting” shall mean the preparation of consolidated financial statements of the Borrower in accordance with American Institute of Certified Public Accountants Statement of Position (90-7), which reflects the consummation of the transactions contemplated by the Plan of Reorganization on a presumed effective date of April 30, 2007.

“Full Control Agreement” shall mean any Full Control Deposit Account Agreement or any Full Control Securities Account Agreement.

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“Full Control Deposit Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent, and any bank at which the relevant deposit account of the Borrower or any Guarantor, as the case may be, is at any time maintained.

“Full Control Securities Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent and any securities intermediary in respect of the relevant securities account.

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

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

“Goldman Sachs” shall mean Goldman Sachs Credit Partners L.P.

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

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

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include (i) endorsements for collection or deposits or (ii) customary contractual indemnities in commercial agreements, in each case in the ordinary course of business and consistent with past practice. The amount of any obligation relating to a Guarantee

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shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (or, if less, the maximum reasonably anticipated liability for which such Person may be liable pursuant to the terms of the instrument evidencing such Guarantee) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform) as determined by the guarantor in good faith.

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

“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature that are regulated pursuant to, or could reasonably be expected to give rise to liability under, any Environmental Law.

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

“Immaterial Subsidiaries” shall mean one or more Subsidiaries of the Borrower, for which, (a) the assets of all such designated Subsidiaries constitute, in the aggregate, no more than 2½% of the total assets of the Borrower and its Subsidiaries on a consolidated basis (determined as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01), and (b) the revenues of such Subsidiaries account for no more than 2½% of the total revenues of the Borrower and its Subsidiaries on a consolidated basis for the twelve-month period ending on the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01. The domestic Immaterial Subsidiaries as of the Closing Date that are not Guarantors on the Closing Date shall be listed on Schedule 1.01(b).

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

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

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

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

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated the date hereof among the Administrative Agent, the Collateral Agent, Goldman Sachs, as administrative agent and collateral agent under the Second Lien Credit Agreement, the Borrower and the Guarantors party thereto in substantially the form attached as Exhibit I.

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

“Interest Expense” shall mean, for any period, the gross cash interest expense (including the interest component of Capitalized Leases), of the Borrower and its Subsidiaries on a consolidated basis for such period, all as determined in accordance with GAAP.

“Interest Payment Date” shall mean (a) as to any Eurodollar Loan having an Interest Period of one, two or three months (or any other Interest Period shorter than three months), the last day of such Interest Period, (b) as to any Eurodollar Loan having an Interest Period of more than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (c) with respect to ABR Revolving Loans, the last Business Day of each March, June, September and December.

“Interest Period” shall mean, as to any Borrowing of Eurodollar Loans, the period commencing on the date of such Borrowing (including as a result of a conversion from ABR Loans) or on the last day of the preceding Interest Period applicable to such Borrowing and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three or six months thereafter (or the appropriate date thereafter for any other Interest Period available to all the Lenders under the relevant Facility), as the Borrower may elect in the related notice delivered pursuant to Sections 2.03 or 2.05; provided, that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) no Interest Period shall end later than the Termination Date.

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“International Interest” shall mean “International Interest” as defined in the Cape Town Convention.

“International Registry” shall mean “International Registry” as defined in the Cape Town Convention.

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

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

“Jet Fuel Assets” shall mean (a) the existing jet fuel inventory of the Borrower’s or its Subsidiaries’, or any Connection Carrier’s or SkyTeam Partner’s, operations in or pipelines in transit to Atlanta, Cincinnati and New York that is to be sold to the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement, or other jet fuel subject to the Jet Fuel Inventory Supply Agreement, (b) the Borrower’s or its Subsidiaries’ rights in certain existing supply and third-party sale agreements to be assigned or assumed by the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement, (c) the Borrower’s or its Subsidiaries’ rights in certain existing infrastructure agreements to be transferred to the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement and (d) proceeds of the foregoing.

“Jet Fuel Counterparty” shall mean J. Aron & Company, a New York general partnership, or any of its Affiliates, or any other Person that becomes a party to the Jet Fuel Inventory Supply Agreement.

“Jet Fuel Inventory Supply Agreement” shall mean the Jet Fuel Inventory Supply Agreement among the Borrower, the Jet Fuel Counterparty and Epsilon Trading, Inc., dated as of August 31, 2006, as amended, renewed or replaced from time to time.

“Joint Bookrunners” shall mean JPMSI, LBI and UBS, in their capacities as joint bookrunners.

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“Joint Lead Arrangers” shall mean JPMSI and LBI, in their capacities as co-lead arrangers.

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

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

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

“LC Disbursement” shall mean a Revolving LC Disbursement or a Credit-Linked Deposit LC Disbursement.

“LC Exposure” shall mean, at any time, the Revolving LC Exposure and the Credit-Linked Deposit LC Exposure at such time.

“LCPI” shall mean Lehman Commercial Paper Inc.

“Lenders” shall mean the Revolving Lenders and the Credit-Linked Deposit Lenders.

“Letters of Credit” shall mean the collective reference to the Revolving Letters of Credit and the Credit-Linked Deposit Letters of Credit. Letters of Credit will from time to time be deemed to be Credit-Linked Deposit Letters of Credit or Revolving Letters of Credit in accordance with the provisions of Section 2.02(a).

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

“Letter of Credit Fees” shall mean the fees payable in respect of Letters of Credit pursuant to Section 2.21.

“LIBO Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Revolving Loan, the rate per annum appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Revolving Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

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“Lien” shall mean (a) any mortgage, deed of trust, pledge, deed to secure debt, hypothecation, security interest, easement (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-ways, reservations, encroachments, zoning and other land use restrictions, claim or any other title defect, lease, encumbrance, restriction, lien or charge of any kind whatsoever and (b) the interest of a vendor or a lessor under any conditional sale, capital lease or other title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing).

“Loans” shall mean, collectively, the Revolving Loans and the Credit-Linked Deposit Loans.

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

“Margin Stock” shall have the meaning set forth in Section 3.13(a).

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

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

“Material Indebtedness” shall mean Indebtedness (other than the Obligations and Letters of Credit), of any one or more of the Borrower and the Guarantors in an aggregate principal amount exceeding $50,000,000.

“Maturity Date” shall mean April 30, 2012.

“Merrill Lynch” shall mean Merrill Lynch Commercial Finance Corp.

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

“Mortgaged Collateral” shall mean all of the “Collateral” as defined in the First Lien Aircraft Mortgage (including any Mortgage Supplement).

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

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

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

“Net Cash Proceeds” shall mean, in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Permitted Investments (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of (i) attorneys’ fees, accountants’ fees, investment banking fees and brokerage fees, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event or otherwise required to be repaid upon such sale (other than any Lien pursuant to a Collateral Document), (iii) proceeds of insurance or condemnation awards maintained for the benefit of any third party applied to restore assets as required by the terms of any agreement with such third party, (iv) other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (v) reserves provided, to the extent required by GAAP, against any liabilities that are directly attributed to such Asset Sale; provided that any such unutilized reserves shall constitute Net Cash Proceeds at any time and to the extent that the maintenance of such reserves is no longer required by GAAP and, providedfurther, that, in the case of any Asset Sale of fuel that has been pre-ordered in the ordinary course of business occurring substantially concurrently with the purchase of such fuel subject to such Asset Sale, “Net Cash Proceeds” shall be deemed net of the purchase price of such fuel.

“Obligations” shall mean the unpaid principal of and interest on (including interest, reasonable fees and reasonable out-of-pocket costs accruing after the maturity of the Loans and interest, reasonable fees and reasonable out-of-pocket costs accruing after the filing of any petition of bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest, fees or costs is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to any Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, reasonable fees, indemnities, reasonable out-of-pocket costs, reasonable out-of-pocket expenses (including all reasonable fees, charges and disbursements of counsel to any Agent or any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

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

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

“Parked” shall mean, as to any Aircraft, that such Aircraft has been removed from service, other than Aircraft temporarily grounded for maintenance being actively conducted.

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

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

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

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

“Pension Act” shall mean the Pension Protection Act of 2006, as it presently exists or as it may be amended from time to time.

“Permitted Acquisition” shall mean any acquisition, whether by purchase, merger, consolidation or otherwise, by the Borrower or any Guarantor of all or substantially all the assets of, or all the Equity Interests (or, so long as the acquired Person becomes a Guarantor pursuant to Section 5.14 hereof, Equity Interests sufficient to cause the acquired Person to become a Subsidiary) in, a Person or a division, line of business or other business unit of a Person but only so long as:

(a)(i) no Event of Default shall have occurred and be continuing immediately prior or immediately after giving effect to such Permitted Acquisition and (ii) all transactions related thereto shall have been consummated in all material respects in accordance with applicable laws;

(b)with respect to any acquisition in excess of $25,000,000, the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate to the effect set forth in clause (a) above, together with the relevant financial information for the Person or assets to be acquired, promptly after consummation of such acquisition; and

(c)with respect to any acquisition in excess of $25,000,000, the Borrower shall have provided the Administrative Agent with written notice and with copies of the material acquisition documents promptly after consummation of such acquisition.

“Permitted Change of Control Transaction” shall mean any transaction, whether by purchase, merger, consolidation or otherwise, pursuant to which a Permitted Holder acquires all or substantially all the assets of, or all the Equity Interests in, the Borrower but only so long as:

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(a) (i) no Event of Default shall have occurred and be continuing immediately prior or immediately after giving effect to such Permitted Change of Control Transaction and (ii) all transactions related thereto shall have been consummated in all material respects in accordance with applicable laws;

(b) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate to the effect set forth in clause (a) above, together with the relevant financial information for the Permitted Holder, promptly after consummation of such transaction;

(c) the Borrower shall have provided the Administrative Agent with written notice and with copies of the material acquisition documents promptly after consummation of such transaction; and

(d) the operations of the Borrower are not merged with the operations of any other major U.S. airline owned by such Permitted Holder.

“Permitted Collateral Liens” shall mean those Liens permitted pursuant to clauses (b), (e), (f), (g), (i) (solely with respect to interests of airport operators in the assets located at the applicable facilities), (k) (solely to the extent relating to the underlying credit card receivables and related assets), (l), (m), (n), (q), (r), (u), (cc)(i) (solely to the extent relating to the applicable underlying accounts or amounts or other assets deposited therein, in each case arising in the ordinary course of business) or (s) (to the extent relating to any of the foregoing clauses) of Section 6.01.

“Permitted Disposition” shall mean any of the following:

(a) (i) the sale of inventory in the ordinary course of business, (ii) the sale of Spare Parts in the ordinary course of business, and (iii) swaps, exchanges, interchange or pooling of assets or, in the case of Mortgaged Collateral, other transfers of possession (subject to the limitations set forth in the Collateral Documents) in the ordinary course of business;

(b) the sale or other disposition of Permitted Investments for cash or in exchange for Permitted Investments;

(c) sales or dispositions of surplus, obsolete, negligible or uneconomical assets (other than Mortgaged Collateral that are not Parts (as defined in the First Lien Aircraft Mortgage)) no longer used in the business of Borrower and the Guarantors;

(d) sales or dispositions of assets among the Borrower and the Guarantors; provided that, with respect to any such asset that constitutes Collateral, such asset remains subject to a Lien in favor of the Collateral Agent for the benefit of the First Priority Secured Parties following such sale or disposition (it being understood that the Borrower and the Guarantors shall execute any documents and take any actions reasonably required to create, grant, establish, preserve or perfect such Lien in accordance with the other provisions of this Agreement or the other Collateral Documents dealing with the creation, granting, establishment, preservation or perfection of Liens);

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(e) (i) abandonment of Intellectual Property; provided, that such abandonment is (A) in the ordinary course of business consistent with past practices and (B) with respect to Intellectual Property that is not material to the business of Borrower and it Subsidiaries and (ii) licensing or sublicensing of Intellectual Property in the ordinary course of business consistent with past practices;

(f) the sale or discount of Accounts to a collection agency in connection with collections of delinquent receivables;

(g) (i) abandonment of FAA Slots, Gate Interests, Routes or Supporting Route Facilities; provided, that such abandonment is (A) in connection with the downsizing of any hub or other facility located in Cincinnati as reflected in the budgets provided pursuant to Section 5.01(e), (B) in connection with the downsizing of any other hub or facility as reflected in the budgets provided pursuant to Section 5.01(e), which does not materially and adversely affect the business of Borrower and its Subsidiaries, taken as a whole, or (C) in the ordinary course of business consistent with past practices and does not materially and adversely affect the business of Borrower and its Subsidiaries, taken as a whole, (ii) transfer or other disposition in the ordinary course of business of FAA Slots, Foreign Slots, Gate Interests, Routes or Supporting Route Facilities, in each case, to the extent not constituting Eligible Collateral or utilized in connection therewith, (iii) exchange of FAA Slots in the ordinary course of business that in the Borrower’s reasonable judgment are of reasonably equivalent value, and (iv) assignments of leases or granting of leases of (A) Aircraft or Engines to the extent permitted pursuant to the First Lien Aircraft Mortgage and (B) other aircraft or engines (that do not constitute Collateral), in each case, in the ordinary course of business;

(h) the sale or other disposition of any 737-800 aircraft substantially concurrently with the consummation of the purchase of such aircraft to the extent such purchase occurs pursuant to a purchase agreement to which the Borrower or a Subsidiary was a party as of the Closing Date;

(i) to the extent not prohibited by any of the Collateral Documents, the disposition of leasehold or similar interests in real property that is not Real Property Assets, including through assignment, sublease or lease termination or rejection, in whole or in part, or the return, surrender, exchange or abandonment of any property subject thereto;

(j) any sale of Margin Stock for fair value as determined in good faith by Borrower;

(k) (i) any loss of or damage to property of the Borrower or any Guarantor, (ii) any taking of property of the Borrower or any Guarantor, or (iii) an Event of Loss;

(l) the sale, assignment and/or other transfer of the Jet Fuel Assets to the Jet Fuel Counterparty, in each case pursuant to the Jet Fuel Inventory Supply Agreement;

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(m) Permitted Liens of the type described in clause (d) of the definition thereof; and

(n) the lease or sublease of assets and properties in the ordinary course of business.

“Permitted Holder” shall mean any corporation or limited liability company organized under the laws of the United States of America or any state thereof organized for the purpose of consummating any Permitted Change of Control Transaction so long as such entity is a holding company which has (or simultaneously with such Change of Control Transaction will acquire) as its other principal investment another major U.S. airline.

“Permitted Investments” shall mean:

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

(b) direct obligations of state and local government entities in each case maturing within one year from the date of acquisition thereof, which have a rating of at least A- (or the equivalent thereof) from S&P or A3 (or the equivalent thereof) from Moody’s;

(c) obligations of domestic or foreign companies and their subsidiaries (including, without limitation, agencies, sponsored enterprises or instrumentalities chartered by an Act of Congress, which are not backed by the full faith and credit of the United States of America), including, without limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in each case maturing within one year from the date of acquisition thereof and which have a rating of at least A- (or the equivalent thereof) from S&P or A-3 (or the equivalent thereof) from Moody’s;

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

(e) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $250,000,000 and which has a long term unsecured debtrating of at least A from S&P and A2 from Moody’s (or is the principal banking Subsidiary of a bank holding company that has such ratings);

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

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

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

(i) investments, in accordance with investment policies approved by the board of directors of the Borrower, in the ordinary course of business.

“Permitted Liens” shall mean: (a) Liens imposed by law (other than Liens imposed under Environmental Laws and any Lien imposed under ERISA) for taxes, assessments, levies or charges of any Governmental Authority for claims not yet delinquent or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (b) Liens of landlords, carriers, warehousemen, consignors, mechanics, materialmen and other Liens (other than Liens imposed under Environmental Laws and any Lien imposed under ERISA) in existence on the Closing Date (which, in the case of Real Property Assets, are specified in the applicable First Lien Real Estate Mortgage) or imposed by law and created in the ordinary course of business and securing obligations that are not overdue or are being contested in compliance with Section 5.05; (c) (i) Liens (other than any Lien imposed under ERISA) incurred or (ii) or deposits made (including, without limitation, surety bonds and appeal bonds), in each case, in connection with workers’ compensation, unemployment insurance and other types of social security benefits (or benefits arising under other public liability laws or similar legislation) or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (d) leases, subleases, licenses, use agreements, usufructs, easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, reservations, encroachments, land use restrictions or encumbrances, which, in the case of Real Property Assets, (i) do not interfere materially with the ordinary conduct of the business of the Borrower or any Guarantor, as the case may be, (ii) do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Borrower or any Guarantor, as the case may be and (iii) do not materially adversely affect the marketability of the applicable property; (e) letters of credit or deposits in the ordinary course to secure leases; (f) Liens imposed by applicable law on the assets of the Borrower or any Guarantor located at an airport for the benefit of any nation or government or national or governmental authority of any nation, state, province or other political subdivision thereof, and any agency, department, regulator, airport authority, air navigation authority or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government in respect of the regulation of commercial aviation or the registration, airworthiness or operation of civil aircraft and having jurisdiction over the Borrower or such Guarantor including, without limitation, the FAA or DOT, (g) Liens in favor of depositary banks arising as a matter of law encumbering deposits (including the right of setoff) and that are within

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the general parameters customary in the banking industry, (h) in the case of Real Property Assets, those Liens specified in the applicable First Lien Real Estate Mortgage; (i) in the case of any Mortgaged Collateral, those Liens specified in the applicable First Lien Aircraft Mortgage; and (j) extensions, renewals or replacements of any Lien referred to in paragraphs (a) through (g) above, provided, that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby.

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

“Petty Cash Accounts” shall mean domestic or foreign deposit or securities accounts of the Borrower and Guarantors holding aggregate balances in an amount not to exceed $50,000,000 with respect to domestic accounts and $150,000,000 with respect to foreign accounts at any one time.

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

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

“Pledged Spare Parts” shall mean Spare Parts which are maintained by or on behalf of the Borrower or any Guarantor at a Spare Parts Location.

“Post-Petition Aircraft Agreement” shall have the meaning set forth in the Plan of Reorganization.

“Primary Foreign Slots” shall mean the Foreign Slots set forth on Schedule 4(f) to the First Lien SGR Security Agreement, as such Schedule may be amended from time to time pursuant to the First Lien SGR Security Agreement.

“Primary Routes” shall mean the Routes set forth on Schedule 4(h) to the First Lien SGR Security Agreement, as such Schedule may be amended from time to time pursuant to the First Lien SGR Security Agreement.

“Primary Supporting Route Facilities” shall mean the Supporting Route Facilities of the Borrower and, if applicable, a Guarantor, at the airports listed on Schedule 4(i) to the First Lien SGR Security Agreement.

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

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“Prospective Assignment” shall have the meaning given in the Cape Town Convention.

“Prospective International Interest” shall have the meaning given in the Cape Town Convention.

“Prospective Sale” shall have the meaning given in the Cape Town Convention.

“Protocol” shall mean the Protocol referred to in the defined term “Cape Town Convention.”

“Qualified Judgment” shall mean any judgment arising from the resolution of disputed pre-petition claims, so long as, and to the extent that, a reserve has been established therefor (including a reserve of Equity Interests of the Borrower to satisfy certain pre-petition claims pursuant to the Plan of Reorganization).

“Qualified Permitted Investments” shall mean Permitted Investments of the type described in clause (e) of the definition thereof issued, guaranteed or placed with the Administrative Agent and other Permitted Investments of the type from time to time generally permitted in money market deposit accounts at JPMCB.

“Qualified Restructuring Indebtedness” shall mean any Indebtedness of the Borrower or any of its Subsidiaries with respect to any Restructuring Aircraft other than any such Indebtedness (i) created by any Post-Petition Aircraft Agreement that has been entered into relating to such Restructuring Aircraft or (ii) arising out of the assumption without modification of pre-petition agreements related to such Restructuring Aircraft.

“Real Estate Appraiser” shall mean, in the case of the Real Property Assets, (a) American Appraisal Associates with respect to those certain parcels of real property described in Schedule 3.15(a) or (b) such other appraisal firms as may be retained by the Administrative Agent, in consultation with the Borrower, from time to time.

“Real Property Assets” shall mean those certain parcels of real property owned in fee by the Borrower and described in Schedule 3.15(a) and together with, in each case, all buildings, improvements, facilities, appurtenant fixtures and equipment, easements and other property and rights incidental or appurtenant to the ownership of such parcel of real property (as each such real property is more particularly described in the applicable First Lien Real Estate Mortgage) (including, without limitation, all Collateral described in the applicable First Lien Real Estate Mortgage), and, from time to time, all Collateral identified in a First Lien Real Estate Mortgage granted pursuant to Section 5.14, Section 5.16 or any other provision of this Agreement (including in connection with the designation of such real property or related asset as Cure Collateral).

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“Recovery Event” shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any Collateral or any Event of Loss.

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

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

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

“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, or disposing into the indoor or outdoor environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any hazardous substance or pollutant or contaminant).

“Replacement Airframe” shall have the meaning given to such term in the First Lien Aircraft Mortgage.

“Replacement Engine” shall have the meaning given to such term in the First Lien Aircraft Mortgage.

“Required Credit-Linked Deposit Lenders” shall mean the Credit-Linked Deposit Lenders holding more than 50% of the sum of (i) until the Closing Date, the Total Credit-Linked Deposit then in effect and (ii) thereafter, the Total Credit-Linked Deposit then in effect (or, if the Total Credit-Linked Deposit shall have been reduced to zero pursuant to Section 2.11 or Section 2.12), Lenders holding more than 50% of the sum of (x) the aggregate principal amount of all Credit-Linked Deposit Loans outstanding and (y) the Credit-Linked Deposit LC Exposure.

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the sum of (i) (A) the Total Credit-Linked Deposit or (B) following the termination of the Credit-Linked Deposits, the aggregate principal amount of all Credit-Linked Deposit Loans outstanding plus the Credit-Linked Deposit LC Exposure, and (ii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding.

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

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“Restricted Accounts” shall mean the accounts identified as Restricted Accounts on Schedule 1.01(c);

“Restricted Captive Insurance Company Subsidiary” shall mean a Subsidiary that is a captive insurance company and is prohibited from becoming a Guarantor hereunder pursuant to applicable rules and regulations.

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

“Restructuring Aircraft” shall mean each of the aircraft listed on Schedule 1.01(d).

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

“Revolving Commitment” shall mean the commitment of each Revolving Lender to make Revolving Loans and participate in Revolving Letters of Credit hereunder in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite its name in Annex A hereto or in the Assignment and Acceptance pursuant to which such Revolving Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original aggregate amount of the Total Revolving Commitments is $1,000,000,000.

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

“Revolving Extensions of Credit” shall mean, as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding and (b) such Lender’s Revolving Commitment Percentage of the Revolving LC Exposure then outstanding.

“Revolving Facility” shall have the meaning set forth in the definition of “Facility” in this Section 1.01.

“Revolving LC Commitment” shall mean a Dollar Amount not to exceed $400,000,000.

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

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

“Revolving Lender” shall mean each Lender having a Revolving Commitment.

“Revolving Letter of Credit” shall mean any irrevocable letter of credit issued pursuant to Section 2.02 (other than Credit-Linked Deposit Letters of Credit), which letter of credit shall be (i) a standby letter of credit, (ii) issued for general corporate purposes of the Borrower or any Subsidiary, (iii) denominated in Dollars or any Alternative Currency and (iv) otherwise in such form as may be reasonably approved from time to time by the Administrative Agent and the applicable Issuing Lender.

“Revolving Letter of Credit Available Amount” shall mean, at any time, the lesser of (i) the excess, if any, of (x) the Revolving LC Commitment in effect at such time over (y) the Revolving LC Exposure at such time and (ii) the excess, if any, of (x) the Total Revolving Commitment in effect at such time over (y) the Total Revolving Extensions of Credit outstanding at such time.

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

“Rolling Twelve Months” shall mean, with respect to any date of determination, the month most recently ended and the eleven (11) immediately preceding months for which, in each case, financial statements are available considered as a single period.

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

“Sale” shall have the meaning given in the Cape Town Convention.

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

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

“Second Lien Administrative Agent” shall mean the “Administrative Agent” under and as defined in the Second Lien Credit Agreement.

“Second Lien Collateral Agent” shall mean the “Collateral Agent” under and as defined in the Second Lien Credit Agreement.

“Second Lien Credit Agreement” shall mean that certain Second Lien Term Loan and Guaranty Agreement (as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time), dated as of April 30, 2007, among the Borrower, the Guarantors, the lenders party thereto, Goldman Sachs, as administrative agent and collateral agent, and the other parties thereto.

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“Second Lien Obligations” shall have the meaning given to the term “Obligations” in the Second Lien Credit Agreement.

“Second Lien Term Loans” shall mean the “Second Lien Term Loans” as such term is defined in the Second Lien Credit Agreement.

“Second Priority Obligations” shall have the meaning set forth in the Intercreditor Agreement.

“Shifting Control Agreement” shall mean any Shifting Control Deposit Account Agreement or any Shifting Control Securities Account Agreement.

“Shifting Control Deposit Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent, and the relevant bank at which the relevant deposit account of the Borrower or any Guarantor, as the case may be, is at any time maintained.

“Shifting Control Securities Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent and any securities intermediary in respect of the relevant securities account.

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

“SkyTeam Partner” shall mean any airline that is a member of the SkyTeam international airline alliance.

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

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

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

“Specified Jet Fuel Action” shall mean, if the transactions effected pursuant to the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower, any action by the Jet Fuel Counterparty, as secured party, to the extent such action seeks to foreclose (or obtain a lien) on the Jet Fuel Assets.

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“Specified Permitted Collateral Liens” shall mean Permitted Collateral Liens (other than Liens permitted under clauses (c)(i) (other than any such Liens that are non-consensual or imposed by law), (c)(ii) and (e) of the definition of Permitted Liens and clause (j) of the definition of Permitted Liens (to the extent related to such other specified clauses of such definition) and clauses (m), (n) and (u) of Section 6.01 and clause (s) of Section 6.01 (to the extent related to such other specified clauses of Section 6.01)).

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

“Subordinations” shall have the meaning given in the Cape Town Convention.

“Subsidiary” shall mean, with respect to any Person (in this definition referred to as the “parent”), any corporation, association or other business entity (whether now existing or hereafter organized) of which at least a majority of the securities or other ownership or membership interests having ordinary voting power for the election of directors is, at the time as of which any determination is being made, owned or controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

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

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

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

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

“Termination Date” shall mean the earlier to occur of (a) the Maturity Date and (b) the acceleration of the Loans and the termination of the Commitments (which, in the case of the Credit-Linked Deposit, means that the obligation to issue Credit-Linked Deposit Letters of Credit or make Credit-Linked Deposit Loans shall terminate and the Credit-Linked Deposits shall be returned to the Credit-Linked Deposit Lenders) in accordance with the terms hereof.

“Termination Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. 4043), (b) an event described in Section 4068 of ERISA, (c) the withdrawal of the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a “substantial employer,” as such term is defined in Section 4001(a)(2) of ERISA, (d) the incurrence of liability by the Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, (e) the imposition of Withdrawal Liability or receipt of notice from a Multiemployer Plan that such liability may be imposed, (f) a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA, (g) providing notice of intent to terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, if such amendment requires the provision of security, (h) the institution of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, (i) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) and, on and after the effectiveness of the Pension Act, any failure by any Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (j) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, or (k) any other event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the imposition of any liability under Title IV of ERISA (other than for the payment of premiums to the PBGC in the ordinary course). Notwithstanding the above, for purposes of this definition, the sale by the Borrower of its interest in Comair shall not be considered a “reportable event” under clause (a) above.

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

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

“Tooling” shall mean tooling inventory, including but not limited to dies, molds, tooling, casting patterns, gauges, jigs, racks and stands for engines, cowls, radome and wheels, aircraft jacks, test benches, test equipment, lathes, welders, grinders, presses, punches and hoists and other similar items (whether or not completed or fixed or handheld).

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“Total Collateral Coverage Ratio” shall have the meaning set forth in Section 6.06(b).

“Total Credit-Linked Deposit” shall mean, at any time, the sum of all Credit-Linked Deposits at such time, as the same may be reduced from time to time pursuant to this Agreement.

“Total Credit-Linked Deposit LC Available Amount” shall mean, at any time, the excess, if any, of the Total Credit-Linked Deposit over the then outstanding aggregate principal amount of the Credit-Linked Deposit Loans.

“Total Obligations” shall have the meaning set forth in Section 6.06(b).

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

“Total Revolving Extensions of Credit” shall mean, at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time.

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

“Travel Agency Cash Transaction” shall mean any purchase in cash or check of a ticket through a travel agency that is a member of Bank Settlement Plan or Airline Reporting Corporation, as applicable, it being understood and agreed that the account receivable in respect of such purchase that is included in the calculation of Eligible Account shall be net of any set-off for commissions or refunds and shall be included only to the extent such travel agency is unconditionally required to pay such net amount to the applicable clearinghouse or for the account of the Borrower.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment or Credit-Linked Deposit.

“UBS” shall mean UBS Securities LLC.

“UBS Finance” shall mean UBS Loan Finance LLC.

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“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time.

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

“Unrestricted Cash” shall mean all cash and Permitted Investments of the Borrower and the Guarantors held in accounts (other than the Escrow Accounts, Payroll Accounts and Restricted Accounts) which are the subject of Control Agreements that have been executed and delivered to the Collateral Agent.

“Unused Total Revolving Commitment” shall mean, at any time, (a) the Total Revolving Commitment less (b) the Total Revolving Extensions of Credit.

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

“Visa/MasterCard Dollar Trigger Event” shall mean any amendment to the existing processing agreement or the Borrower entering into any replacement processing agreement with respect to Visa and MasterCard receivables denominated in Dollars that changes the percentage or calculation of reserves held by the credit card processing bank in respect of such receivables (solely, in the case of any such change in calculation, to the extent resulting in a calculation that is no longer based upon Unearned Value (as such term is defined in the definition of “Estimated Credit Card Receivables Component” contained herein)).

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

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

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SECTION 1.03.Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Upon any such request for an amendment, the Borrower, the Required Lenders and the Administrative Agent agree to consider in good faith any such amendment in order to amend the provisions of this Agreement so as to reflect equitably such accounting changes so that the criteria for evaluating the Borrower’s financial condition shall be the same after such accounting changes as if such accounting changes had not occurred.

SECTION 2.

AMOUNT AND TERMS OF CREDIT

SECTION 2.01.Commitments of the Lenders; Credit-Linked Deposit Loans.

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

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

(b) Making of Credit-Linked Deposit Loans. Each Credit-Linked Deposit Lender shall pay to the Administrative Agent its Credit-Linked Deposit in full in Dollars on the Closing Date. Upon the terms and subject to the conditions herein set forth (including, without limitation, the provisions of Section 2.27 and Section 4) each Credit-Linked Deposit Lender, severally and not jointly with the other Credit-Linked Deposit Lenders, agrees to make loans

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(each a “Credit-Linked Deposit Loan” and collectively, the “Credit-Linked Deposit Loans”) in Dollars to the Borrower at any time and from time to time during the Credit-Linked Deposit Availability Period; provided that, after giving effect to any such Credit-Linked Deposit Loan, (i) the aggregate outstanding principal amount of the Credit-Linked Deposit Loans of such Credit-Linked Deposit Lender plus such Credit-Linked Deposit Lender’s Credit-Linked Deposit LC Exposure does not exceed such Credit-Linked Deposit Lender’s Credit-Linked Deposit and (ii) the Credit-Linked Deposit Outstanding Exposure does not exceed the Total Credit-Linked Deposit. Credit-Linked Deposit Loans made pursuant to this subsection (b) may be repaid and reborrowed in accordance with the provisions of this agreement.

(c) Pro Rata Funding. Each Credit-Linked Deposit Borrowing shall be funded by the Credit-Linked Deposit Lenders pro rata in accordance with their respective Credit-Linked Deposit Percentages, solely from amounts on deposit in the Credit-Linked Deposit Account pursuant to the terms and conditions set forth herein.

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

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

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

SECTION 2.02.   Letters of Credit. (a) General. Subject to the terms and conditions set forth herein (including, with respect to issuances of Credit-Linked Deposit Letters of Credit, Section 2.27), the Borrower may request the issuance of (and, subject to the penultimate sentence of clause (b) below, the Issuing Lender shall issue) (1) Credit-Linked Deposit Letters of Credit, at any time and from time to time during the Credit-Linked Deposit Availability Period, and (2) Revolving Letters of Credit, at any time and from time to time during the Revolving Availability Period, in each case, for the Borrower’s own account or the account of the Borrower or any Subsidiary, in a form reasonably acceptable to the Administrative Agent, the Issuing Lender and the Borrower. For purposes hereof, (i) Letters of Credit shall at all times and from time to time be deemed to be (x) Credit-Linked Deposit Letters

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of Credit (other than any Letter of Credit denominated in an Alternative Currency) to the extent the aggregate principal amount of such Letters of Credit does not exceed the Total Credit-Linked Deposit LC Available Amount and (y) Revolving Letters of Credit (A) to the extent, and in the amount by which, the aggregate principal amount of all outstanding Letters of Credit denominated in Dollars exceeds the Total Credit-Linked Deposit LC Available Amount and (B) if such Letters of Credit are denominated in any Alternative Currency, (ii) drawings under any Letter of Credit denominated in any Alternative Currency shall be deemed to have been made under Revolving Letters of Credit, (iii) drawings under any Letter of Credit denominated in Dollars shall be deemed to have been made under Revolving Letters of Credit for so long as, and to the extent that, there are any undrawn Revolving Letters of Credit denominated in Dollars outstanding (and thereafter shall be deemed to have been made under Credit-Linked Deposit Letters of Credit) and (iv) any Letter of Credit denominated in Dollars that expires or terminates will be deemed to be a Revolving Letter of Credit, for so long as, and to the extent that, there are outstanding Revolving Letters of Credit denominated in Dollars immediately prior to such expiration or termination; provided, however, that, at any time during which an Event of Default shall have occurred and be continuing and the Required Credit-Linked Deposit Lenders shall have notified the Administrative Agent of their election to trigger the terms of this proviso, (I) Letters of Credit denominated in Dollars shall be deemed to be Revolving Letters of Credit and Credit-Linked Deposit Letters of Credit, (II) drawings under Letters of Credit denominated in Dollars shall be deemed to have been made under Revolving Letters of Credit and Credit-Linked Deposit Letters of Credit and (III) any Letter of Credit that expires or terminates shall be deemed to be a Revolving Letter of Credit and a Credit-Linked Deposit Letter of Credit, in each case pro rata based upon (1) the Revolving LC Exposure immediately prior to such Event of Default determined in accordance with the foregoing provisions of this Section 2.02(a) and (2) the Credit-Linked Deposit LC Exposure immediately prior to such Event of Default determined in accordance with the foregoing provisions of this Section 2.02(a). To the extent necessary to implement the foregoing, the identification of a Letter of Credit as a Revolving Letter of Credit or a Credit-Linked Deposit Letter of Credit may change from time to time and a portion of a Letter of Credit may be deemed to be a Credit-Linked Deposit Letter of Credit and the remainder be deemed to be a Revolving Letter of Credit. Any such reallocations shall be made in a manner to be determined by the Administrative Agent. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall either provide (i) telephonic notice promptly followed by written notice or (ii) hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Lender (which approval shall not be unreasonably withheld, delayed or conditioned)) to the Issuing Lender and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying (1) the date of issuance, amendment, renewal or extension (which shall be a Business Day), (2) the date on which such

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Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), (3) the amount of such Letter of Credit, (4) for Revolving Letters of Credit, the currency of such Letter of Credit, (5) the name and address of the beneficiary thereof and (6) such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Lender, the Borrower also shall submit a letter of credit application on the Issuing Lender’s standard form in connection with any request for a Letter of Credit; provided, that to the extent such standard form is inconsistent with the Loan Documents, the Loan Documents shall control. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (v) the LC Exposure shall not exceed the sum of the Revolving LC Commitment and the Total Credit-Linked Deposit, (w) the Revolving LC Exposure shall not exceed the Revolving LC Commitment, (x) the aggregate amount of the Unused Total Revolving Commitment shall not be less than zero, (y) the Credit-Linked Deposit LC Exposure shall not exceed the Total Credit-Linked Deposit and (z) the Credit-Linked Deposit Outstanding Exposure shall not exceed the Total Credit-Linked Deposit. No Issuing Lender (other than an Affiliate of the Administrative Agent) shall permit any such issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent that it is then permitted under this Agreement.

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

(d) Participations. (A) By the issuance of a Revolving Letter of Credit (or an amendment, renewal or extension of a Revolving Letter of Credit, including any amendment increasing the amount thereof, or in connection with any part of any Letter of Credit being deemed to be a Revolving Letter of Credit pursuant to Section 2.02(a)), and without any further action on the part of the Issuing Lender or the Revolving Lenders, the Issuing Lender hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Lender, a participation in such Revolving Letter of Credit equal to such Revolving Lender’s Revolving Commitment Percentage of the Dollar Amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Lender, such Revolving Lender’s Revolving Commitment Percentage of the Dollar Amount of each Revolving LC Disbursement made by the Issuing Lender and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Revolving Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Revolving Letter of Credit or the occurrence of an Event of Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

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(B) By the issuance of a Credit-Linked Deposit Letter of Credit (or an amendment, renewal or extension of a Credit-Linked Deposit Letter of Credit, including any amendment increasing the amount thereof, or in connection with any part of any Letter of Credit being deemed to be a Credit-Linked Deposit Letter of Credit pursuant to Section 2.02(a)) and without any further action on the part of the Issuing Lender or the Credit-Linked Deposit Lenders, the Issuing Lender hereby grants to each Credit-Linked Deposit Lender, and each Credit-Linked Deposit Lender hereby acquires from the Issuing Lender, a participation in such Credit-Linked Deposit Letter of Credit equal to such Credit-Linked Deposit Lender’s Credit-Linked Deposit Percentage of the aggregate principal amount available to be drawn under such Credit-Linked Deposit Letter of Credit. In consideration and in furtherance of the foregoing, each Credit-Linked Deposit Lender hereby absolutely and unconditionally agrees that if the Issuing Lender makes a Credit-Linked Deposit LC Disbursement which is not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or is required to refund any reimbursement payment in respect of a Credit-Linked Deposit LC Disbursement to the Borrower for any reason, the Administrative Agent shall reimburse the Issuing Lender for the amount of such Credit-Linked Deposit LC Disbursement from the Credit-Linked Deposit Lenders’ Credit-Linked Deposits on deposit in the Credit-Linked Deposit Account on a pro rata basis in accordance with each Credit-Linked Deposit Lender’s Credit-Linked Deposit Percentage of such Credit-Linked Deposit LC Disbursement. In the event any such Credit-Linked Deposits are withdrawn by the Administrative Agent from the Credit-Linked Deposit Account to reimburse the Issuing Lender for an unreimbursed Credit-Linked Deposit LC Disbursement, the Borrower shall have the right, but not the obligation, at any time prior to the Maturity Date, to pay over to the Administrative Agent in reimbursement thereof an amount equal to the amount so charged, and such payment shall be deposited by the Administrative Agent in the Credit-Linked Deposit Account. A certificate of the Issuing Lender submitted to any Credit-Linked Deposit Lender with respect to any amounts owing under this section shall be conclusive in the absence of manifest error. Each Credit-Linked Deposit Lender acknowledges and agrees that its obligation to acquire and fund participations in respect of Credit-Linked Deposit Letters of Credit pursuant to this subparagraph (B) is absolute, unconditional and irrevocable and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Credit-Linked Deposit Letter of Credit or the occurrence of an Event of Default or the return of the Credit-Linked Deposits, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Without limiting the foregoing, each Credit-Linked Deposit Lender irrevocably authorizes the Administrative Agent to apply amounts of its Credit-Linked Deposit as provided in this subparagraph (B), whether or not the conditions to borrow set forth in Section 4.02 are satisfied. Each Credit-Linked Deposit Lender hereby grants, without prejudice to the other provisions of this Agreement, to the Issuing Lender a security interest in its interest in the Credit-Linked Deposit Account and all amounts on deposit therein as collateral security for its obligations to the Issuing Lender under this Agreement and agrees that the Issuing Lender may exercise all rights and remedies of a secured party under the UCC or any other applicable law.

(e) Reimbursement. If the Issuing Lender shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to the Dollar Amount of such LC Disbursement or (subject to the two immediately succeeding sentences), with respect to any Revolving Letter of Credit denominated in an Alternative Currency, an amount equal to the amount of such

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Revolving LC Disbursement in the applicable Alternative Currency not later than the first Business Day following the date the Borrower receives notice of such LC Disbursement; provided, that, in the case of any LC Disbursement made in Dollars, to the extent not reimbursed and, subject to the satisfaction (or waiver) of the conditions to borrowing set forth herein, including, without limitation, making a request in accordance with Section 2.03(a) or 2.02(e)(B) that such payment shall be financed with an ABR Revolving Borrowing or Credit-Linked Deposit Loans, as the case may be, in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Credit-Linked Deposit Loans, as the case may be. If the Borrower’s reimbursement of, or obligation to reimburse, any amounts in any Alternative Currency would subject the Administrative Agent, the applicable Issuing Lender or any Lender to any stamp duty, ad valorem charge or similar tax that would not be payable if such reimbursement were made or required to be made in Dollars, the Borrower shall pay the amount of any such tax requested by the Administrative Agent, the relevant Issuing Lender or Lender. If the Borrower fails to make such payment when due, then (i) if such payment relates to an Alternative Currency Revolving Letter of Credit, automatically and with no further action required, the Borrower’s obligation to reimburse the applicable Revolving LC Disbursement shall be permanently converted into an obligation to reimburse the Dollar Amount of such Revolving LC Disbursement and (ii) the Administrative Agent shall promptly notify the applicable Issuing Lender of the applicable Revolving LC Disbursement and the Dollar Amount thereof.

(A) If the Borrower fails to make any payment due under paragraph (e) above with respect to a Revolving Letter of Credit when due (including by a Borrowing), the Administrative Agent shall notify each Revolving Lender of the applicable Revolving LC Disbursement (as converted to Dollars, if applicable), the payment then due from the Borrower in respect thereof and such Revolving Lender’s Revolving Commitment Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Revolving Commitment Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.04 with respect to Revolving Loans made by such Revolving Lender (and Section 2.04 shall apply, mutatismutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Lender the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.02(e) with respect to any Revolving LC Disbursement, the Administrative Agent shall distribute such payment to the Issuing Lender or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Lender, then to such Revolving Lenders and the Issuing Lender as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Lender for any Revolving LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Revolving Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

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(B) If the Borrower is obligated to make any payment due under paragraph (e) above with respect to a Credit-Linked Deposit Letter of Credit when due (including by a Borrowing), the Administrative Agent shall notify each Credit-Linked Deposit Lender of the applicable Credit-Linked Deposit LC Disbursement, the payment then due from the Borrower in respect thereof and such Credit-Linked Deposit Lender’s Credit-Linked Deposit Percentage thereof, and the Administrative Agent shall promptly withdraw and pay to the Issuing Lender each Credit-Linked Deposit Lender’s Credit-Linked Deposit Percentage of the Dollar Amount of such Credit-Linked Deposit LC Disbursement from such Credit-Linked Deposit Lender’s Credit-Linked Deposit. Upon telephonic notice to the Administrative Agent, the Borrower may elect that amounts so withdrawn be deemed Credit-Linked Deposit Loans made on such date by each such Credit-Linked Deposit Lender in an amount equal to its Credit-Linked Deposit Percentage of the amount of such withdrawal; provided that at the time of such election the conditions to borrowing set forth in Section 4.02 shall have been met with respect to any such Credit-Linked Deposit Loan. Promptly following receipt by the Administrative Agent of any payment by the Borrower in respect of any Credit-Linked Deposit LC Disbursement, the Administrative Agent shall credit such payment to the Credit-Linked Deposit Account to be added to the Credit-Linked Deposits of the Credit-Linked Deposit Lenders in accordance with their Credit-Linked Deposit Percentages. The Borrower acknowledges that each payment made pursuant to this subparagraph (B) in respect of any Credit-Linked Deposit LC Disbursement is required to be made for the benefit of the distributees indicated in the immediately preceding sentence.Any payment made from the Credit-Linked Deposit Account, or from funds of the Administrative Agent, pursuant to this paragraph to reimburse the Issuing Lender for any Credit-Linked Deposit LC Disbursement (other than the funding of Credit-Linked Deposit Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such Credit-Linked Deposit LC Disbursement.

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

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

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

(h) Interim Interest. If the Issuing Lender shall make any LC Disbursement, then, unless the Borrower shall reimburse (including by a Borrowing) such LC Disbursement in full not later than the first Business Day following the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided, that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.08 shall apply; providedfurther that, in the case of a Revolving LC Disbursement made under a Revolving Letter of Credit in an Alternative Currency, the amount of interest due with respect thereto shall (i) in the case of any Revolving LC Disbursement that is reimbursed on the Business Day immediately succeeding such Revolving LC Disbursement, (A) be payable in the applicable Alternative Currency and (B) if not reimbursed on the date of such Revolving LC Disbursement, bear interest at a rate equal to the rate reasonably determined by the applicable Issuing Lender to be the cost to such Issuing Lender of funding such Revolving LC Disbursement plus the Applicable Margin applicable to Eurodollar Revolving Loans at such time and (ii) in the case of any Revolving LC Disbursement that is reimbursed after the Business Day immediately succeeding such Revolving LC Disbursement (A) be payable in Dollars, (B) accrue on the Dollar Amount of such Revolving LC Disbursement and (C) bear interest as provided above. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Lender, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e)(A) of this Section or from the Credit-Linked Deposit of any Credit-Linked Deposit Lender pursuant to paragraph (e)(B) of this Section to reimburse the Issuing Lender shall be for the account of such Lender to the extent of such payment.

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(i) Replacement of the Issuing Lender. Any Issuing Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender. The Administrative Agent shall notify the Revolving Lenders and the Credit-Linked Deposit Lenders of any such replacement of the Issuing Lender. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Lender pursuant to Section 2.21. From and after the effective date of any such replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Replacement of Letters of Credit; Cash Collateralization. The Borrower shall (i) upon or prior to the occurrence of the Termination Date (x) cause all Letters of Credit which expire after the Termination Date (the “Outstanding Letters of Credit”) to be returned to the Issuing Lender undrawn and marked “cancelled” or (y) if the Borrower does not do so in whole or in part either (A) provide one or more “back-to-back” letters of credit to each applicable Issuing Lender with respect to any such Outstanding Letters of Credit in a form reasonably satisfactory to each such Issuing Lender and the Administrative Agent, issued by a bank reasonably satisfactory to each such Issuing Lender and the Administrative Agent, and/or (B) deposit cash in the Letter of Credit Account, as collateral security for the Borrower’s reimbursement obligations in connection with any such Outstanding Letters of Credit (such deposit in the amounts set forth below “Cash Collateralization”), such cash (or any applicable portion thereof) to be promptly remitted to the Borrower (provided no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default has occurred or is continuing) upon the expiration, cancellation or other termination or satisfaction of the Borrower’s reimbursement obligations with respect to such Outstanding Letters of Credit, in whole or in part; in an aggregate principal amount for all such “back-to-back” letters of credit and any such Cash Collateralization equal to 102% of the then outstanding amount of all LC Exposure (less the amount, if any, on deposit in the Letter of Credit Account prior to taking any action pursuant to clauses (A) or (B) above) and (ii) if required pursuant to Section 2.28(b), deposit in the Letter of Credit Account, an amount required pursuant to Section 2.28(b); provided that the portions of such amount attributable to undrawn Alternative Currency Revolving Letters of Credit or Revolving LC Disbursements in an Alternative Currency that the Borrower is not late in reimbursing shall be deposited in the applicable Alternative Currencies in the actual amounts of such undrawn Revolving Letters of Credit and Revolving LC Disbursements. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the Letter of Credit Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent (in accordance with its usual and customary practices for investments of

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this type) and at the Borrower’s risk and reasonable expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Lender for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.28(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after Section 2.28(b) no longer requires the provision of such cash collateral.

(k) Issuing Lender Agreements. Unless otherwise requested by the Administrative Agent, each Issuing Lender shall report in writing to the Administrative Agent (i) on the first Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such Issuing Lender expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, the aggregate face amount of the Letters of Credit to be issued, amended, renewed, or extended by it (and whether, subject to Section 2.02(b), the face amount of any such Letter of Credit was changed thereby) and the aggregate face amount of such Letters of Credit outstanding after giving effect to such issuance, amendment, renewal or extension, (iii) on each Business Day on which such Issuing Lender makes any LC Disbursement, the date of such LC Disbursement and the amount of such LC Disbursement, (iv) on any Business Day on which a Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Lender on such day, the date of such failure, and the amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request.

(l) Conversion. In the event that the Loans become immediately due and payable on any date pursuant to Section 7.01, all amounts (i) that the Borrower is at the time or thereafter becomes required to reimburse or otherwise pay to the Administrative Agent in respect of Revolving LC Disbursements made under any Alternative Currency Letter of Credit (other than amounts in respect of which such Borrower has deposited cash collateral pursuant to Section 2.02(j), if such cash collateral is deposited in the applicable Alternative Currency to the extent so deposited or applied), (ii) that the Revolving Lenders are at the time or thereafter become required to pay to the Administrative Agent and the Administrative Agent is at the time or thereafter becomes required to distribute to the applicable Issuing Lender pursuant to Section 2.02(e) in respect of unreimbursed Revolving LC Disbursements made under any Alternative Currency Revolving Letter of Credit and (iii) of each Revolving Lender’s participation in any Alternative Currency Letter of Credit under which a Revolving LC Disbursement has been made shall, automatically and with no further action required, be converted into the Dollar Amount of such amounts. On and after such conversion, all amounts accruing and owed to the Administrative Agent, the applicable Issuing Lender or any Lender in respect of the Obligations described in this paragraph shall accrue and be payable in Dollars at the rates otherwise applicable hereunder.

SECTION 2.03.Requests for Borrowings.

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(a) Revolving Loans. Unless otherwise agreed to by the Administrative Agent in connection with making the initial Revolving Loans, to request a Borrowing of Revolving Loans, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three (3) Business Days before the date of the proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing; provided, that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.02(e) may be given not later than 12:00 noon, New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.01(a):

(i)the aggregate amount of the requested Borrowing (which shall comply with Section 2.01(e));

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

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

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

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

(b) Credit-Linked Deposit Loan. To request the Borrowing of Credit-Linked Deposit Loans, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three (3) Business Days (or, in the case of a Borrowing on the Closing Date, two (2) Business Days) before the date of the proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing; provided, that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.02(e) may be given not later than 12:00 noon, New York City time, on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01:

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(i)the aggregate amount of the requested Borrowing (which shall comply with Section 2.01(e));

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

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

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

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

SECTION 2.04.   Funding of Borrowings. (a) Each Revolving Lender shall make each Revolving Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., New York City time, or such earlier time as may be reasonably practicable, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.02(e) shall be remitted by the Administrative Agent to the Issuing Lender.

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

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(c) Each Credit-Linked Deposit Lender hereby irrevocably authorizes the Administrative Agent to make available to the Borrower an amount on deposit in the Deposit Account equal to such Credit Linked Deposit Lender’s Percentage of such Credit-Linked Deposit Borrowing (it being understood that the funding obligation of each Credit-Linked Deposit Lender with respect to such Borrowing shall be required to be satisfied solely by making such amount available, and the Borrower shall have no recourse against such Credit-Linked Deposit Lender with respect to the satisfaction of such funding obligation). The Administrative Agent shall disburse the relevant portions of the amounts on deposit in the Credit-Linked Deposit Accounts in the manner specified in the applicable Borrowing Request.

SECTION 2.05.Interest Elections.  (a) The Borrower may elect from time to time to (i) convert ABR Loans to Eurodollar Loans, (ii) convert Eurodollar Loans to ABR Loans, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto or (iii) continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto

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

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

(i)the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

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

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

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

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

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

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

SECTION 2.06.Limitation on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than twenty Eurodollar Tranches shall be outstanding at any one time.

SECTION 2.07.Interest on Loans.

(a) Subject to the provisions of Section 2.08, each ABR Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days or, when the Alternate Base Rate is based on the Prime Rate, a year with 365 days or 366 days in a leap year) at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

(b) Subject to the provisions of Section 2.08, each Eurodollar Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal, during each Interest Period applicable thereto, to the LIBO Rate for such Interest Period in effect for such Borrowing plus the Applicable Margin.

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

SECTION 2.08.Default Interest. If the Borrower or any Guarantor, as the case may be, shall default in the payment of the principal of or interest on any Loan or in the payment of any other amount becoming due hereunder (including, without limitation, the reimbursement pursuant to Section 2.02(e) of any LC Disbursements), whether at stated maturity, by acceleration or otherwise, the Borrower or such Guarantor, as the case may be, shall on written demand of the Administrative Agent from time to time pay interest, to the extent permitted by law, on all overdue amounts up to (but not including) the date of actual payment (after as well as

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before judgment) at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days or when the Alternate Base Rate is applicable and is based on the Prime Rate, a year with 365 days or 366 days in a leap year) equal to (a) with respect to any Loan, the rate then applicable for such Borrowings plus 2.0%, (b) in the case of overdue unreimbursed amounts with respect to any Credit-Linked Deposit LC Disbursement, the rate otherwise applicable to such Credit-Linked Deposit LC Disbursement as provided in Section 2.02(h) plus 2% and (c) in the case of all other amounts, the rate applicable for ABR Loans plus 2.0%.

SECTION 2.09.Alternate Rate of Interest. In the event, and on each occasion, that on the date that is two Business Days prior to (i) the commencement of any Interest Period for a Eurodollar Loan or (ii) the determination of the Benchmark LIBOR Rate, the Administrative Agent shall have reasonably determined (which determination shall be conclusive and binding upon the Borrower absent manifest error) that reasonable means do not exist for ascertaining the applicable LIBO Rate or the Benchmark LIBOR Rate, the Administrative Agent shall, as soon as practicable thereafter, give written, facsimile or telegraphic notice of such determination to the Borrower and the Lenders and, until the circumstances giving rise to such notice no longer exist, (i) any request by the Borrower for a Borrowing of Eurodollar Loans hereunder (including pursuant to a refinancing with Eurodollar Loans and including any request to continue, or to convert to, Eurodollar Loans) shall be deemed a request for a Borrowing of ABR Loans and (ii) the Credit-Linked Deposits shall be invested so as to earn a return equal to the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and, for purposes of Section 2.27(b), shall equal the then applicable ABR.

SECTION 2.10.Amortization of Credit-Linked Deposits; Repayment of Loans; Evidence of Debt.

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

(b) The Administrative Agent shall return Credit-Linked Deposits in the aggregate amount of $6,000,000 to the Credit-Linked Deposit Lenders on March 31 of each year, beginning on March 31, 2008. To the extent not previously returned and subject to the Borrower’s compliance with Section 2.12(c), all Credit-Linked Deposits shall be returned to the Credit-Linked Deposit Lenders on the Maturity Date. Any optional return of Credit-Linked Deposits effected pursuant to Section 2.11 shall be applied to reduce the subsequent scheduled returns of Credit-Linked Deposits as directed by the Borrower. Each return of Credit-Linked Deposits pursuant to this Section 2.10(b) shall be accompanied by accrued interest on the amount of Credit-Linked Deposits so returned to but excluding the date of return.

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

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

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

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

SECTION 2.11.Optional Termination or Reduction of Commitment; Reduction of Credit-Linked Deposits. (a) Upon at least one (1) Business Day prior written notice to the Administrative Agent, the Borrower may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Unused Total Revolving Commitment; provided that each such notice shall be revocable to the extent such termination or reduction would have resulted from a refinancing of the Obligations, which refinancing shall not be consummated or shall otherwise be delayed. Each such reduction of the Unused Total Revolving Commitment shall be in the principal amount not less than $5,000,000 and in an integral multiple of $1,000,000. Simultaneously with each reduction or termination of the Revolving Commitment, the Borrower shall pay to the Administrative Agent for the account of each Revolving Lender the Commitment Fee accrued and unpaid on the amount of the Revolving Commitment of such Revolving Lender so terminated or reduced through the date thereof. Any reduction of the Total Revolving Commitment pursuant to this Section shall be applied to reduce the Revolving Commitment of each Revolving Lender on a pro rata basis.

(b) Upon at least one (1) Business Day prior written notice, the Borrower may at any time or from time to time direct the Administrative Agent to permanently reduce the Total Credit-Linked Deposits; provided that each such notice shall be revocable to the extent such termination or reduction would have resulted from a refinancing of the Obligations, which refinancing shall not be consummated or shall otherwise be delayed; and providedfurther that (i) each reduction of the Credit-Linked Deposits shall be in a principal amount not less than $5,000,000 and in an integral multiple of $1,000,000 and (ii) the Borrower shall not direct the Administrative Agent to reduce the Credit-Linked Deposits if, after giving effect to such

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reduction (and to the provisions of Section 2.02(a)), the aggregate Credit-Linked Deposit Outstanding Exposure would exceed the Total Credit-Linked Deposit. In the event the Credit-Linked Deposits shall be reduced as provided in the preceding sentence, such reduction shall be applied ratably to the Credit-Linked Deposits of the Credit-Linked Deposit Lenders and the Administrative Agent will return all amounts in the Credit-Linked Deposit Account in excess of the reduced Total Credit-Linked Deposit to the Credit-Linked Deposit Lenders, ratably in accordance with their Credit-Linked Deposit Percentages of the Total Credit-Linked Deposit (as determined immediately prior to such reduction).

SECTION 2.12.Mandatory Prepayment; Commitment Termination.

(a) Within three (3) Business Days of the Borrower or any Guarantor receiving any Net Cash Proceeds as a result of an Asset Sale or Recovery Event (including, without limitation, an Event of Loss concerning an Airframe, Engine, Spare Engine or Spare Parts), the Borrower or such Guarantor shall, if the Borrower shall not be in compliance with Section 6.06(a) or 6.06(b) on the date such Net Cash Proceeds are received, deposit such received Net Cash Proceeds(solely to the extent necessary to maintain compliance with Section 6.06(a) and (b)) into an account that is maintained with the Administrative Agent for such purpose and subject to a Full Control Agreement; provided that (i) in the case of the Net Cash Proceeds of any Event of Loss so deposited and involving an Airframe, Engine or Spare Engine, the Borrower shall be permitted to use such Net Cash Proceeds to replace such Airframe, Engine or Spare Engine, as the case may be, with a Replacement Airframe or Replacement Engine, as the case may be, in accordance with the requirements of the First Lien Aircraft Mortgage, with such Replacement Airframe or Replacement Engine to be subject to the Lien of the Collateral Agent for the benefit of the First Priority Secured Parties pursuant to the First Lien Aircraft Mortgage and otherwise satisfying the requirements of the First Lien Aircraft Mortgage at the time of (or substantially simultaneously with) the release of such Net Cash Proceeds, (ii) in the case of Net Cash Proceeds of any  Recovery Event (other than Net Cash Proceeds covered by clause (i) above) so deposited, the Borrower may use such Net Cash Proceeds to repair or replace the assets which are the subject of such Recovery Event with comparable assets, (iii) in the case of any Net Cash Proceeds of any Asset Sale so deposited, the Borrower may use such Net Cash Proceeds to  replace the assets which are the subject of such Asset Sale with comparable assets within 365 days after such deposit is made, (iv) all such Net Cash Proceeds shall be subject to release as provided in Section 6.06(d) or, at the option of the Borrower at any time, may be applied in accordance with the requirements of Section 2.12(b), and (v) upon the occurrence of an Event of Default, the amount of any such deposit may be applied, subject to the Intercreditor Agreement, by the Administrative Agent in accordance with Section 2.12(b)), provided that any release of Net Cash Proceeds pursuant to clause (iii) of this Section shall be conditioned on the Borrower being in compliance with Section 6.06(a) and 6.06(b), after giving effect thereto (it being understood that the failure to be in compliance with Section 6.06(a) or 6.06(b) shall not prevent the release of any Net Cash Proceeds in connection with any repair or replacement of assets permitted hereunder so long as no decrease in either Collateral Coverage Ratio will result therefrom).  

(b) Amounts to be applied in connection with prepayments and Commitment reductions made pursuant to this Section 2.12 shall be applied, first, to the permanent prepayment of the Credit-Linked Deposit Loans (with a corresponding reduction in the Total

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Credit-Linked Deposit) on a prorata basis (it being understood that such payments shall be delivered to the Credit-Linked Deposit Lenders on a prorata basis and that, notwithstanding anything to the contrary contained in Section 2.10(a), there shall be no ability to reborrow amounts prepaid pursuant to this Section 2.12), second, to the permanent reduction of the Total Credit-Linked Deposit in an amount equal to the Excess Credit-Linked Deposits (with a corresponding return of Credit-Linked Deposits equal to such amount to be delivered to the Credit-Linked Deposit Lenders on a prorata basis), third, to the reallocation of Credit-Linked Deposit Letters of Credit as Revolving Letters of Credit (subject to the satisfaction of the conditions to borrowing set forth herein) in an amount equal to the lesser of (x) the Revolving Letter of Credit Available Amount and (y) the Credit-Linked Deposit Letters of Credit outstanding prior to giving effect to any such reallocation (any such reallocation to be accompanied by a corresponding permanent reduction in the Credit-Linked Deposit, with a corresponding return of Credit-Linked Deposits equal to such amount to be delivered to the Credit-Linked Deposit Lenders on a prorata basis), fourth, to Cash Collateralize the outstanding Credit-Linked Deposit LC Exposure (any such Cash Collateralization to be accompanied by a corresponding permanent reduction in the Credit-Linked Deposit in an amount equal to the Credit-Linked Deposit LC Exposure so collateralized and a return of Credit-Linked Deposits equal to such amount to the Credit-Linked Deposit Lenders on a prorata basis), fifth, subject to the Intercreditor Agreement, to the prepayment of the Revolving Loans on a prorata basis (any such prepayment to be accompanied by a corresponding permanent reduction in the Revolving Commitments) and, sixth, subject to the Intercreditor Agreement, to Cash Collateralize the outstanding Revolving LC Exposure, after giving effect to the reallocation described above (any such Cash Collateralization to be accompanied by a permanent reduction in the Revolving Commitments in an amount equal to the Revolving LC Exposure so collateralized; such reduction (or any part thereof, as applicable) to be effective upon any release or application of such cash collateral in an amount equal to the amount so released or applied). The application of any prepayment pursuant to Section 2.12 shall be made, first, to ABR Loans and, second, to Eurodollar Loans.

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

(d) All prepayments under this Section 2.12 shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any Fees and any losses, costs and expenses, as more fully described in Section 2.15 and 2.19 hereof.

SECTION 2.13.Optional Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to prepay any Loans, in whole or in part, (i) with respect to Eurodollar Loans, upon (A) telephonic notice followed promptly by written or facsimile notice or (B) written or facsimile notice received by 1:00 p.m.,New York City time, three Business Days prior to the proposed date of prepayment and (ii) with respect to ABR Loans and Credit-Linked Deposit Loans, upon written or facsimile notice received by 1:00 p.m.,New York City time, one Business Day prior to the

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proposed date of prepayment; provided that ABR Loans may be prepaid on the same day notice is given if such notice is received by the Administrative Agent by 12:00 noon, New York City time; providedfurther, however, that (A) each such partial prepayment shall be in an amount not less than $5,000,000 and in integral multiples of $1,000,000, (B) no prepayment of Eurodollar Loans shall be permitted pursuant to this Section 2.13(a) other than on the last day of an Interest Period applicable thereto unless such prepayment is accompanied by the payment of the amounts described in Section 2.15, and (C) no partial prepayment of a Borrowing of Eurodollar Loans shall result in the aggregate principal amount of the Eurodollar Loans remaining outstanding pursuant to such Borrowing being less than $10,000,000.

(b) Any prepayments under Section 2.13(a) shall be applied at the Borrower’s option, to (i) repay the outstanding Revolving Loans of the Revolving Lenders (without any reduction in the Total Revolving Commitment) and Cash Collateralize the outstanding Revolving Letters of Credit until all Revolving Loans shall have been paid in full (plus any accrued but unpaid interest and fees thereon) and no Revolving Letters of Credit shall be outstanding, or, if outstanding, then backed by Cash Collateralization and/or (ii) prepay the Credit-Linked Deposit Loans of the Credit-Linked Deposit Lenders (with such prepayments to be deposited in the Credit-Linked Deposit Account for the Credit-Linked Deposit Lenders on a prorata basis and without any reduction in the Credit-Linked Deposits). All prepayments under Section 2.13(a) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any Fees and any losses, costs and expenses, as more fully described in Sections 2.15 and 2.19 hereof.

(c) Each notice of prepayment shall specify the prepayment date, the principal amount of the Loans to be prepaid and, in the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable and shall commit the Borrower to prepay such Loan by the amount and on the date stated therein; provided, that the Borrower may revoke any notice of prepayment under this Section 2.13 if such prepayment would have resulted from a refinancing of the Obligations hereunder, which refinancing shall not be consummated or shall otherwise be delayed. The Administrative Agent shall, promptly after receiving notice from the Borrower hereunder, notify each Lender of the principal amount of the Loans held by such Lender which are to be prepaid, the prepayment date and the manner of application of the prepayment.

SECTION 2.14.Increased Costs. (a) If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement subject to Section 2.14(c)) or the Issuing Lender; or

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

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

(b) If any Lender or the Issuing Lender reasonably determines in good faith that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts, in each case as documented by such Lender or Issuing Lender to the Borrower as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered; it being understood that to the extent duplicative of the provisions in Section 2.16, this Section 2.14(b) shall not apply to Taxes.

(c) The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurodollar funds or deposits, additional interest on the unpaid principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Loans or the Credit-Linked Deposit, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment, Credit-Linked Deposit or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least fifteen (15) days’ prior notice (with a copy to the Administrative Agent, and which notice shall specify the Statutory Reserve Rate, if any, applicable to such Lender) of such additional interest or cost from such Lender. If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

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

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

SECTION 2.15.Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of the occurrence and continuance an Event of Default), (b) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, (c) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18 or Section 10.08(b) or (d) the return of any Credit-Linked Deposit to any Credit-Linked Deposit Lender other than on the last day of the period covered by the Benchmark LIBOR Rate then in effect, then, in any such event, at the request of such Lender (or, in the case of clause (d) above, the Issuing Lender) the Borrower shall compensate such Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount reasonably determined in good faith by such Lender or Issuing Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the applicable rate of interest for such Loan (excluding, however the Applicable Margin included therein, if any), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.

SECTION 2.16.Taxes. (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct

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any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) Any and all payments by or on account of any obligation of the Administrative Agent pursuant to Section 2.27(b) hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Administrative Agent shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the Administrative Agent shall so notify the Borrower and advise it of the additional amount required to be paid so that the sum payable by the Administrative Agent pursuant to Section 2.27(b) after making all required deductions (including deductions applicable to additional sums payable under this Section) to the Credit-Linked Deposit Lenders is an amount equal to the sum they would have received from the Administrative Agent had no deductions been made, (ii) the Borrower shall pay such additional amount to the Administrative Agent, (iii) the Administrative Agent shall make all required deductions, (iv) the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law and (v) the Borrower shall indemnify, within 30 days after written demand therefor, the Administrative Agent for the full amount of any deductions paid by the Administrative Agent with respect to any payments made on account of any obligation of the Administrative Agent pursuant to Section 2.27(b).

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

(d) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Lender, within thirty (30) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Lender, as the case may be, on or with respect to any payment by or on account of any

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obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.

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

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

(g) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.16 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

SECTION 2.17.Payments Generally; Pro Rata Treatment.

(a) The Borrower shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14 or 2.15, or otherwise) prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the reasonable discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for

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purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, pursuant to wire instructions to be provided by the Administrative Agent, except payments to be made directly to the Issuing Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15 and 10.04 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in the applicable currency.

(b) If at any time insufficient funds are received by and available to the Administrative Agent or to the Collateral Agent to pay fully all First Priority Obligations then due hereunder, such funds shall be applied (i) first, towards payment of Fees and expenses then due under Sections 2.19 and 10.04 payable to the Administrative Agent and the Collateral Agent, in their respective capacities as such, ratably among the parties entitled thereto in accordance with the amounts of Fees and expenses then due to such parties, (ii) second, towards payment of Fees and expenses then due under Sections 2.20, 2.21 and 10.04 payable to the Agents, the Lenders and the Issuing Lender and towards payment of interest then due on account of the Revolving Loans and Letters of Credit, ratably among the parties entitled thereto in accordance with the amounts of such Fees and expenses and interest then due to such parties, and (iii) third, towards payment of (A) principal of the Revolving Loans, unreimbursed LC Disbursements and Credit-Linked Deposit Loans then due hereunder, and (B) any obligations owing to any Lender or its banking Affiliates in connection with Designated Cash Management Obligations, to the extent such Designated Cash Management Obligations are secured as permitted by Section 6.01(e), and any Indebtedness under any Designated Hedging Agreement, to the extent such Indebtedness is secured as permitted by Section 6.01(f) (prorata among the holders of such Indebtedness), ratably among the parties entitled thereto in accordance with the amounts of principal, unreimbursed LC Disbursements, Designated Cash Management Obligations and Indebtedness under any Designated Hedging Agreement then due to such parties.

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

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

SECTION 2.18.Mitigation Obligations; Replacement of Lenders. (a) If the Borrower is required to pay any additional amount to any Lender under Section 2.14 or to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans or Credit-Linked Deposits hereunder, to assign its rights and obligations hereunder to another of its offices, branches or affiliates or to file any certificate or document reasonably requested by the Borrower, if, in the judgment of such Lender, such designation, assignment or filing (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If, after the date hereof, any Lender requests compensation under Section 2.14 or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender defaults in its obligation to fund Loans or Credit-Linked Deposits hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.02), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, that (i) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts due, owing and payable to it hereunder at such time, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (ii) in the case of payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.19.Certain Fees. The Borrower shall pay to the Administrative Agent, (a) for the respective accounts of the Administrative Agent and the Lenders, the fees set forth in that certain Arrangers Fee Letter dated as of January 29, 2007 among the Administrative Agent, JPMSI, Goldman Sachs, LBI, LCPI, Merrill Lynch, UBS, UBS Finance, Barclays, Barclays Capital and the Borrower at the times set forth therein, and as otherwise heretofore agreed and (b) the fees set forth in that certain Administrative Agent Fee Letter dated as of January 29, 2007 among the Administrative Agent and the Borrower at the times set forth therein, and as otherwise heretofore agreed.

SECTION 2.20.Commitment Fee. The Borrower shall pay to the Administrative Agent for the accounts of the Revolving Lenders a commitment fee (the “Commitment Fee”) for the period commencing on the Closing Date to the Termination Date or the earlier date of termination of the Revolving Commitment, computed (on the basis of the actual number of days elapsed over a year of 360 days) at the Commitment Fee Rate on the average daily Unused Total Revolving Commitment. Such Commitment Fee, to the extent then accrued, shall be payable (a) on the last Business Day of each March, June, September and December, (b) on the Termination Date, and (c) as provided in Section 2.11 hereof, upon any reduction or termination in whole or in part of the Total Revolving Commitment.

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SECTION 2.21.Letter of Credit Fees. (a) The Borrower shall pay with respect to each Revolving Letter of Credit (i) to the Administrative Agent on behalf of the Revolving Lenders a fee calculated (on the basis of the actual number of days elapsed over a year of 360 days) at the per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility on the daily average Revolving LC Exposure (excluding any portion thereof attributable to unreimbursed Revolving LC Disbursements), to be shared ratably among the Revolving Lenders and (ii) to the Issuing Lender such Issuing Lender’s customary fees for issuance, amendments and processing referred to in Section 2.02. In addition, the Borrower agrees to pay each Issuing Lender for its account a fronting fee of 0.125% per annum in respect of each Revolving Letter of Credit issued by such Issuing Lender, for the period from and including the date of issuance of such Revolving Letter of Credit to and including the date of termination of such Revolving Letter of Credit. Accrued fees described in this paragraph in respect of each Revolving Letter of Credit shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Termination Date.

(b) The Borrower agrees to pay (i) in addition to the fees payable to the Credit-Linked Deposit Lenders pursuant to Section 2.27(b), to the Administrative Agent for the account of each Credit-Linked Deposit Lender a participation fee with respect to its participations in Credit-Linked Deposit Letters of Credit, which shall accrue at the Applicable Participation Fee on the daily amount of such Credit-Linked Deposit Lender's Credit-Linked Deposit Participation Amount during the period from and including the Closing Date to but excluding the date on which the entire amount of such Lender's Credit-Linked Deposit is returned to it and (ii) to the Issuing Lender such Issuing Lender’s customary fees for issuance, amendments and processing referred to in Section 2.02. In addition, the Borrower agrees to pay each Issuing Lender for its account a fronting fee of 0.125% per annum on the outstanding amount of each Credit-Linked Deposit Letter of Credit issued by such Issuing Lender from and including the date of issuance thereof to but excluding the date of termination, expiration or drawing in full of such Credit-Linked Deposit Letter of Credit. Accrued participation fees and fronting fees described in this paragraph shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December and on the date on which the Credit-Linked Deposits are returned to the Credit-Linked Deposit Lenders and any such fees accruing after the date on which the Credit-Linked Deposits are returned to the Credit-Linked Deposit Lenders shall be payable on demand. Any other fees payable to any Issuing Lender pursuant to this paragraph shall be payable within 10 days after demand. All such participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

SECTION 2.22.Nature of Fees. All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent, as provided herein and in the fee letters described in Section 2.19. Once paid, none of the Fees shall be refundable under any circumstances.

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SECTION 2.23.Right of Set-Off. Upon the occurrence and during the continuance of any Event of Default pursuant to Section 7.01(b), the Administrative Agent and each Lender (and their respective banking Affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final but excluding deposits in the Escrow Accounts, Payroll Accounts and other accounts, in each case, held in trust for an identified beneficiary) at any time held and other indebtedness at any time owing by the Administrative Agent and each such Lender (or any of such banking Affiliates) to or for the credit or the account of the Borrower or any Guarantor against any and all of any such overdue amounts owing under the Loan Documents, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand under any Loan Document. Each Lender and the Administrative Agent agree promptly to notify the Borrower and Guarantors after any such set-off and application made by such Lender or the Administrative Agent (or any of such banking Affiliates), as the case may be, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and the Administrative Agent under this Section are in addition to other rights and remedies which such Lender and the Administrative Agent may have upon the occurrence and during the continuance of any Event of Default.

SECTION 2.24.Security Interest in Letter of Credit Account. The Borrower and the Guarantors hereby pledge to the Collateral Agent, for its benefit and for the benefit of the other First Priority Secured Parties, and hereby grant to the Collateral Agent, for its benefit and for the benefit of the other First Priority Secured Parties, a first priority security interest, senior to all other Liens, if any, in all of the Borrower’s and the Guarantors’ right, title and interest in and to the Letter of Credit Account and any direct investment of the funds contained therein and any proceeds thereof. Cash held in the Letter of Credit Account shall not be available for use by the Borrower, and shall be released to the Borrower only as described in clause (ii)(B) of Section 2.02(j).

SECTION 2.25.Payment of Obligations. Subject to the provisions of Section 7.01, upon the maturity (whether by acceleration or otherwise) of any of the Obligations under this Agreement or any of the other Loan Documents of the Borrower and the Guarantors, the Lenders shall be entitled to immediate payment of such Obligations.

SECTION 2.26.Defaulting Lenders. (a) If at any time any Lender becomes a Defaulting Lender, then the Borrower may, on ten (10) Business Days’ prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.02(b) (with the assignment fee to be paid by the Borrower in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person.

(b) Any Lender being replaced pursuant to Section 2.26(a) above shall (i) execute and deliver an Assignment and Acceptance with respect to such Lender’s outstanding Commitments, Loans, Credit-Linked Deposits and participations in Letters of Credit, and (ii) deliver any documentation evidencing such Loans to the Borrower or the Administrative Agent. Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s outstanding Commitments, Loans, Credit-

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

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

SECTION 2.27.Credit-Linked Deposit Account. (a) The Credit-Linked Deposits shall be held by the Administrative Agent in the Credit-Linked Deposit Account, and no party other than the Administrative Agent shall have a right of withdrawal from the Credit-Linked Deposit Account or any other right or power with respect to the Credit-Linked Deposits, except as expressly set forth in Section 2.01, 2.11, or 2.12. Notwithstanding any provision in this Agreement to the contrary, the sole funding obligation of each Credit-Linked Deposit Lender in respect of its participation in Credit-Linked Deposit Letters of Credit and, subject to Section 2.02(d)(B), its Credit-Linked Deposit Loans, shall be satisfied in full upon the funding of its Credit-Linked Deposit on the Closing Date.

(b) Each of the Borrower, the Administrative Agent, the Issuing Lender issuing any Credit-Linked Deposit Letter of Credit and each Credit-Linked Deposit Lender hereby acknowledges and agrees that each Credit-Linked Deposit Lender is funding its Credit-Linked Deposit to the Administrative Agent for application in the manner contemplated by Section 2.01, 2.02 and 2.11 and that the Administrative Agent has agreed to invest the Credit-Linked Deposit Participation Amount so as to earn a return (except during periods when, and to the extent to which, such Credit-Linked Deposits are used to cover unreimbursed Credit-Linked Deposit LC Disbursements, and subject to Section 2.09) for the Credit-Linked Deposit Lenders equal to a rate per annum, reset daily on each Business Day for the period until the next following Business Day, equal to (i) such day's rate for one month LIBOR deposits (the "Benchmark LIBOR Rate") minus (ii) 0.15% (calculated on the basis of a 365-day or 366-day year, as applicable). Such amount will be paid to the Credit-Linked Deposit Lenders by the Administrative Agent quarterly in arrears when Letter of Credit fees are payable pursuant to Section 2.21. In addition to the foregoing payments by the Administrative Agent, the Borrower agrees to make payments to the Credit-Linked Deposit Lenders quarterly in arrears when Letter of Credit fees are payable pursuant to Section 2.21 with respect to any period (and together with the payment of such fees) in an amount equal to 0.15% of the daily amount of the Credit-Linked Deposit Lenders' Credit-Linked Deposit Participation Amount during such period.

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(c) The Borrower shall have no right, title or interest in or to the Credit-Linked Deposits and no obligations with respect thereto (except for the reimbursement obligations provided in Section 2.02), it being acknowledged and agreed by the parties hereto that the making of the Credit-Linked Deposits by the Credit-Linked Deposit Lenders and the provisions of this Section 2.27 constitute agreements among the Administrative Agent, each Issuing Lender issuing any Credit-Linked Deposit Letter of Credit and each Credit-Linked Deposit Lender with respect to the funding obligations of each Credit-Linked Deposit Lender in respect of its participation in Credit-Linked Deposit Loans and Credit-Linked Deposit Letters of Credit and, other than amounts withdrawn pursuant to Section 2.01(b) and Section 2.02(e)(B), do not constitute any loan or extension of credit to the Borrower. Without limiting the generality of the foregoing, each party hereto acknowledges and agrees that no amount on deposit at any time in any Credit-Linked Deposit Account shall be the property of any Loan Party, shall constitute “Collateral” under the Loan Documents, or shall otherwise be available in any manner to satisfy any obligation of any Loan Party under the Loan Documents (other than to finance Credit-Linked Deposit Loans in accordance with Section 2.01 and drawings under the Credit-Linked Deposit Letters of Credit in accordance with Section 2.02).

SECTION 2.28.Currency Equivalents. (a) The Administrative Agent shall determine the Dollar Amount of (x) the Revolving LC Exposure in respect of Revolving Letters of Credit denominated in an Alternative Currency based on the Exchange Rate (i) as of the end of each fiscal quarter of the Borrower and (ii) on or about the date of the related notice requesting the issuance of such Revolving Letter of Credit and (y) any other amount to be converted into Dollars in accordance with the provisions hereof at the time of such conversion.

(b) If after giving effect to any such determination of a Dollar Amount, the Revolving LC Exposure exceeds 105% of the Revolving LC Commitment, the Borrower shall, within five (5) Business Days of receipt of notice thereof from the Administrative Agent setting forth such calculation in reasonable detail, deposit cash collateral in an account with the Administrative Agent pursuant to Section 2.02(j)(ii) in an amount equal to such excess.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

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

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

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

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

SECTION 3.03.Due Execution. The execution, delivery and performance by each of the Borrower and the Guarantors of each of the Loan Documents to which it is a party (a) are within the respective corporate or limited liability company powers of each of the Borrower and the Guarantors, have been duly authorized by all necessary corporate or limited liability company action, including the consent of shareholders or members where required, and do not (i) contravene the charter, by-laws or limited liability company agreement (or equivalent documentation) of any of the Borrower or the Guarantors, (ii) violate any applicable law (including, without limitation, the Securities Exchange Act of 1934) or regulation (including, without limitation, Regulations T, U or X of the Board), or any order or decree of any court or Governmental Authority, other than violations by the Borrower or the Guarantors which would not reasonably be expected to have a Material Adverse Effect, (iii) conflict with or result in a breach of, constitute a default under, or create an adverse liability or rights under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on the Borrower or the Guarantors or any of their properties, which, in the aggregate, would reasonably be expected to have a Material Adverse Effect, or (iv) result in or require the creation or imposition of any Lien upon any of the property of any of the Borrower or the Guarantors other than the Liens granted pursuant to this Agreement or the other Loan Documents; and (b) do not require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority other than (i) the filing of financing statements under the New York Uniform Commercial Code, (ii) the filings and consents contemplated by the Collateral Documents, (iii) approvals, consents and exemptions that have been obtained on or prior to the Closing Date and (iv) consents, approvals and exemptions that the failure to obtain in the aggregate would not be reasonably expected to result in a Material Adverse Effect. This Agreement has been duly executed and delivered by each of the Borrower and the Guarantors. This Agreement is, and each of the other Loan Documents to which the Borrower and each of the Guarantors is or will be a party, when delivered hereunder or thereunder, will be, a legal, valid and binding obligation of the Borrower and each Guarantor, as the case may be, enforceable against the Borrower and the Guarantors, as the case may be, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

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

SECTION 3.05.Financial Statements; Material Adverse Change.

(a) The Borrower has furnished the Administrative Agent on behalf of the Lenders with copies of the audited consolidated financial statement and schedules of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2006, certified by its chief financial officer. Such financial statements present fairly, in all material respects, in accordance with GAAP, the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis as of such date and for such period; such balance sheets and the notes thereto disclose all liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof required to be disclosed by GAAP and such financial statements were prepared in a manner consistent with GAAP in all material respects.

(b) Since January 29, 2007, there has been no Material Adverse Change.

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

SECTION 3.07.Liens. Except for the Liens existing on the Closing Date as reflected on Schedule 3.07, there are no Liens of any nature whatsoever on any assets of the Borrower or any of the Guarantors other than Liens permitted pursuant to Section 6.01 (including any waiver or amendment thereto subsequent to the Closing Date).

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SECTION 3.08.Use of Proceeds. The proceeds of the Loans and Letters of Credit shall be used to repay amounts outstanding under the Existing DIP Facilities or to provide back-to-back letters of credit or cash collateral in respect of the Existing DIP Facility Letters of Credit, to pay certain accrued administrative expenses, for working capital and for other general corporate purposes of the Borrower and the Guarantors (including for the payment of fees and transaction costs as contemplated hereby and as referred to in Section 2.19).

SECTION 3.09.Litigation and Environmental Matters. Other than as set forth on Schedule 3.09:

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

(b) Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, (i) the Borrower and each Guarantor is currently in compliance with all, and has not violated any, Environmental Laws and/or requirements of any Airport Authority with respect to environmental matters and maintains and complies with all, and has not violated any, Environmental Permits and (ii) none of the Borrower or the Guarantors has (x) become subject to any Environmental Liability, or (y) received written or, to the knowledge of the Borrower or the Guarantors, verbal notice of any pending or, to the knowledge of the Borrower or the Guarantors, threatened claim with respect to any Environmental Liability, and there is no reasonable basis for any Environmental Liability.

SECTION 3.10.FAA Slot Utilization. Except for matters which could not reasonably be expected to have a Material Adverse Effect, the Borrower and the Guarantors, as applicable, are utilizing, or causing to be utilized, their respective FAA Slots in a manner consistent with applicable rules, regulations, laws and contracts in order to preserve both their respective right to hold and operate the FAA Slots, taking into account any waivers or other relief granted to the Borrower and any Guarantor by the FAA, other applicable U.S. Governmental Authority or U.S. Airport Authority. Except as otherwise disclosed in the Borrower’s most recent Form 10-K, neither the Borrower nor any Guarantor has received any written notice from the FAA, other applicable U.S. Governmental Authority or U.S. Airport Authority, or are aware of any other event or circumstance, that would be reasonably likely to impair in any material respect their respective right to hold and operate any FAA Slot, except that which would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.11.Primary Foreign Slot Utilization. The Borrower and the Guarantors, as applicable, are utilizing, or causing to be utilized, their respective Primary Foreign Slots in a manner consistent with applicable regulations, foreign laws and contracts in order to preserve their respective right to hold and operate the Primary Foreign Slots. Except as otherwise disclosed in the Borrower’s most recent Form 10-K, neither the Borrower nor any Guarantor, as applicable, has received any written notice from any applicable Foreign Aviation Authorities, or is aware of any other event or circumstance that would be reasonably likely to impair in any material respect their respective right to hold and operate any such Primary Foreign Slot, except that which would not reasonably be expected to have a Material Adverse Effect.

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SECTION 3.12.Primary Route Utilization. The Borrower and the Guarantors, as applicable, hold the requisite authority to operate each of their respective Primary Routes pursuant to Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any applicable Foreign Aviation Authorities, and have, at all times after being awarded each such Primary Route, complied in all material respects with all of the terms, conditions and limitations of each such certificate or order issued by the DOT and the applicable Foreign Aviation Authorities regarding such Primary Route and with all applicable provisions of Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any Foreign Aviation Authorities regarding such Primary Route. There exists no failure of the Borrower and any applicable Guarantor to comply with such terms, conditions or limitations that gives the FAA, DOT or any applicable Foreign Aviation Authorities the right to terminate, cancel, suspend, withdraw or modify in any materially adverse respect the rights of the Borrower and the Guarantors, as applicable, in any such Primary Route, except to the extent that such failure could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13.Margin Regulations; Investment Company Act.

(a) Neither the Borrower nor any Guarantor is engaged, nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board, “Margin Stock”), or extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Loans or proceeds from any Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulation U.

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

SECTION 3.14.ERISA. Except as set forth on Schedule 3.14 and other than in connection with the bankruptcy proceedings of the Borrower and certain of the direct and indirect subsidiaries of the Borrower in the Bankruptcy Court, no Termination Event has occurred or is reasonably expected to occur. Except to the extent the same could not reasonably be expected to have a Material Adverse Effect and except as otherwise disclosed in the Borrower’s most recent Form 10-K (including the Notes to the financial statements contained therein), the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans. As of the date hereof, neither the Borrower nor any of its ERISA Affiliates contributes to or is obligated to contribute to any Multiemployer Plan subject to Title IV of ERISA.

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SECTION 3.15.Properties.

(a) The Borrower and the Guarantors have good title to (and with respect to Real Property Assets, good and marketable title to) each of the properties and assets reflected on the financial statements referred to in Section 3.05 hereof, including, without limitation, the Real Property Assets (other than such properties or assets disposed of in the ordinary course of business since the date of such financial statements or as permitted hereunder). As of the Closing Date, Schedule 3.15(a) is a true and complete description of (i) each parcel of real property owned by the Borrower or any Guarantor and (ii) the entity who owns such real property.

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

(c) As of the Closing Date, neither the Borrower nor any Guarantor has received any written notice of a pending or contemplated condemnation proceeding affecting any Real Property Asset having a fair market value in excess of $5,000,000.

SECTION 3.16.Perfected Security Interests. The Collateral Documents, taken as a whole, are effective to create in favor of the Collateral Agent, for the benefit of the First Priority Secured Parties, a legal, valid and enforceable security interest in all of the Collateral subject as to enforceability to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. At such time as (a) financing statements in appropriate form are filed in the appropriate offices (and the appropriate fees are paid), (b) the First Lien Aircraft Mortgage (including, without limitation, any Mortgage Supplement) is filed for recordation with the FAA (and the appropriate fees are paid) and registrations with respect to the International Interests in the Mortgaged Collateral constituted by the First Lien Aircraft Mortgage are duly made in the International Registry, (c) with respect to identified intellectual property registered in the United States, the First Lien Trademark Security Agreement and the First Lien Patent Security Agreement are filed in the appropriate divisions of the United States Patent and Trademark Office (and the appropriate fees are paid) and the First Lien Copyright Security Agreement is filed in the United States Copyright Office (and the appropriate fees are paid), (d) the First Lien Real Estate Mortgages are filed in the appropriate recording office (and the appropriate fees are paid), (e) execution of the Control Agreements and (f) delivery of pledged securities under the First Lien Pledge Agreement (together with appropriate stock powers) to the Administrative Agent, the Collateral Agent, for the benefit of the First Priority Secured Parties, shall have a first priority perfected security interest and/or mortgage (or comparable Lien) in all of the Collateral to the extent that the Liens on such Collateral may be perfected upon the filings or upon the taking of the actions described in clauses (a) through (f) above, subject in each case only to Liens permitted by Section 6.01 (or, in the case of the Real Property Assets, subject only to the Permitted Liens and other Liens specified in the applicable First Lien Real Estate Mortgage).

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SECTION 3.17.Payment of Taxes. Except as set forth on Schedule 3.17 (and except as otherwise specifically permitted by the Plan of Reorganization and the Bankruptcy Court), each of the Borrower and the Guarantors has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid when due all Taxes required to have been paid by it, except and solely to the extent that, in each case (a) such Taxes are being contested in good faith by appropriate proceedings and the Borrower or such Guarantor, as applicable, has set aside on its books adequate reserves therefor or (b)  the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.18.Section 1110. The Aircraft, Engines and Spare Engines listed on Schedule 3.18 represent each of the Aircraft, Engine and Spare Engine constituting Mortgaged Collateral as of the Closing Date that were first placed in service prior to October 22, 1994.

SECTION 4.

CONDITIONS OF LENDING

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

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

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

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

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

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

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

(b) Credit Agreement. Each party hereto shall have duly executed and delivered to the Administrative Agent this Agreement.

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

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(d) SGR Security Agreement. Each of the Borrower and Comair shall have duly executed and delivered to the Collateral Agent a slot, gate and route security and pledge agreement, in substantially the form of Exhibit D (the “First Lien SGR Security Agreement”), together with (i) in respect of each of the FAA Slots, undated slot transfer documents, executed in blank to be held in escrow by the Collateral Agent and (ii) all financing statements in form and substance reasonably acceptable to the Collateral Agent, as may be required to grant, continue and maintain an enforceable security interest in the applicable Collateral (subject to the terms hereof and of the other Loan Documents) in accordance with the Uniform Commercial Code as enacted in all relevant jurisdictions.

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

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

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

(h) Appraisals and Field Audits. The Administrative Agent shall have received, in form and substance reasonably satisfactory to it, (i) appraisals from (1) the Appraisers in respect of the Appraised Collateral (other than the Real Property Assets) and (2) the Real Estate Appraiser in respect of the Real Property Assets and (ii) a Field Audit in respect of the Eligible Accounts Receivable.

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

(i)     a written opinion of Leslie P. Klemperer, Vice President and Deputy General Counsel for the Borrower;

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

(iii)   a written opinion of each of (A) Kilpatrick Stockton LLP, (B) Keating Muething & Klekamp PLL, (C) Akerman Senterfitt and (D) Morris, Nichols, Arsht & Tunnell LLP, each a special local counsel to the Borrower and the Guarantors, each dated the date of the initial Loans or the issuance of the initial Letters of Credit, whichever first occurs, substantially in the form of Exhibits G-2, G-3, G-4 and G-5, respectively;

(iv)   a written opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special FAA counsel, substantially in the form of Exhibit G-6; and

(v)   a written opinion with respect to each First Lien Real Estate Mortgage reasonably satisfactory to the Administrative Agent of such other local real estate counsel as the Administrative Agent may reasonably request.

(j) Payment of Fees and Expenses. The Borrower shall have paid to the Administrative Agent the then unpaid balance of all accrued and unpaid Fees due, owing and payable under and pursuant to this Agreement, as referred to in Section 2.19 and as heretofore agreed upon by the Borrower and the Administrative Agent, and all reasonable fees and reasonable out-of-pocket expenses of the Administrative Agent, the Lead Arrangers, the Joint Bookrunners and the Collateral Agent (including the reasonable fees and reasonable out-of-pocket expenses of counsel to the Administrative Agent) as to which invoices have been issued and presented.

(k) Lien Searches; International Registry Searches. The Administrative Agent shall have received UCC searches conducted in the jurisdictions in which the Borrower and the Guarantors are incorporated or such other jurisdictions as the Administrative Agent may reasonably require and Lien searches conducted in the recording office of the Federal Aviation Administration and, with respect to the applicable Mortgaged Collateral, “priority search certificates” (as defined in the Regulations and Procedures for the International Registry), all as may be reasonably satisfactory to the Administrative Agent (dated as of a date reasonably satisfactory to the Administrative Agent), reflecting the absence of Liens and encumbrances on the assets of the Borrower and the Guarantors other than Liens permitted hereunder and as may be reasonably satisfactory to the Administrative Agent and the absence of registrations on the International Registry with respect to the applicable Mortgaged Collateral other than the registrations contemplated herein, and (in the case of the searches conducted at the recording office of the FAA) indicating that the Borrower (or a Guarantor) is the registered owner of each of the aircraft which is intended to be covered by the First Lien Aircraft Mortgage.

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

(ii)    The Collateral Agent shall have been named as loss payees and/or additional insured, as applicable, with respect to the Collateral on such policies of insurance of the Borrower and the Guarantors as the Collateral Agent may have reasonably requested (or as otherwise specified in the Collateral Documents).

(m) Title/Survey. The Collateral Agent shall have received title insurance policies with respect to each Real Property Asset from Lawyers Title Insurance Company or another title company reasonably acceptable to the Collateral Agent and real property surveys with respect to the Real Property Assets, all in form and substance reasonably satisfactory to the Collateral Agent.

(n) Order; Plan of Reorganization. (i) The Confirmation Order shall have been entered in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, any applicable orders of the Bankruptcy Court and any applicable local rules and the provisions relating to the Facilities contained therein shall be reasonably satisfactory to the Administrative Agent, (ii) the Confirmation Order shall be in full force and effect, shall not, without the consent of the Agents (such consent not to be unreasonably withheld, conditioned or delayed), have been reversed or modified or be subject to stay or a motion to stay, (iii) all conditions to the effectiveness of the Plan of Reorganization shall have been satisfied or waived (the waiver thereof (other than the waiver of the condition that the Confirmation Order shall have become a Final Order), if materially adverse to the Lenders, having been approved by the Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed)) and the Consummation of the Plan of Reorganization shall occur on the Closing Date contemporaneously with the making of the initial Loans hereunder, and (iv) the pro forma capital and ownership structure shall be substantially as described in the Joint Plan of Reorganization of the Borrower and its domestic Subsidiaries filed with the Bankruptcy Court on April 25, 2007 and such plan shall not have been amended in any manner materially adverse to the Lenders without the consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned or delayed).

(o) Repayment of Existing DIP Facility. Upon Consummation of the Plan of Reorganization and the making of the initial Loans or the initial Letters of Credit, the Existing DIP Facilities shall have been repaid in full (or, in the case of any Existing DIP Facility Letter of Credit, cash-collateralized or guaranteed by a back-to-back letter of credit), and all action necessary to release all collateral pledged to secure the Loans shall have been taken, in form and substance reasonably satisfactory to the Administrative Agent. Substantially all other existing Indebtedness of the Borrower and its Subsidiaries, other than any Indebtedness otherwise permitted hereunder, shall have been repaid, restructured or reinstated as expressly contemplated by the Plan of Reorganization.

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(p) Consents. All material governmental and third party consents and approvals necessary in connection with the financing contemplated hereby shall have been obtained, in form and substance reasonably satisfactory to the Administrative Agent, and be in full force and effect.

(q) Financial Statements. The Lenders shall have received (i) audited consolidated financial statements of the Borrower for the three most recent fiscal years ended prior to the Closing Date, (ii) unaudited interim consolidated financial statements of the Borrower for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this Section 4.01(q) and 60 days or more prior to the Closing Date, (iii) a proforma consolidated balance sheet of the Borrower as of the date of the most recent consolidated balance sheet delivered pursuant to the preceding clauses (i) or (ii), giving effect to the consummation of the Plan of Reorganization and the financings contemplated hereby and thereby, and (iv) a business plan of the Borrower including quarterly projections through December 31, 2007 and annual projections through December 31, 2010. Documents required to be delivered pursuant to clauses (i) and (ii) hereof which are made available via EDGAR, or any successor system of the SEC, in the Borrower’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, shall be deemed delivered to the Lenders on the date such documents are made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent.

(r) No Illegality. No law or regulation shall be applicable in the reasonable judgment of the Administrative Agent or the Lenders that restrains, prevents or imposes materially adverse conditions upon the Closing Date Transactions.

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

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

(u) Intercreditor Agreement. The Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, and the Second Lien Collateral Agent shall have executed the Intercreditor Agreement.

(v) Eligible Collateral. At the time the Lenders make the initial Loans or fund the Credit-Linked Deposit or the Issuing Lender issues the initial Letter of Credit, whichever may occur first, and after giving effect thereto, the Appraised Value of the Eligible Collateral shall not (A) be less than 175% of the aggregate First Lien Obligations outstanding on the Closing Date and (B) be less than 125% of the sum of (i) the aggregate First Lien Obligations outstanding on the Closing Date and (ii) the aggregate outstanding principal amount of the Second Lien Term Loans.

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(w) Restructuring Aircraft Certificate. The Borrower shall have delivered an Officer’s Certificate certifying that there have been no material adverse developments or changes in the status of the Qualified Restructuring Indebtedness from the information previously disclosed to the Administrative Agent.

(x) Eligible Accounts Receivable Certificate. The Borrower shall have delivered an Officer’s Certificate, substantially in the form of Exhibit K, setting forth the amount of the Eligible Accounts Receivable as of the Closing Date, together with all supporting documents with respect to such Eligible Accounts Receivable as the Administrative Agent may reasonably request.

(y) Corporate Ratings. The Borrower shall have obtained a corporate credit rating from S&P and a corporate family rating from Moody’s.

(z) No Material Adverse Effect. Since January 29, 2007, no Material Adverse Effect shall have occurred.

(aa)          Second Lien Credit Agreement. The Second Lien Credit Agreement shall have become effective in accordance with its terms and the Borrower shall have received $900,000,000 in gross proceeds from the borrowing of Second Lien Term Loans thereunder.

(bb)         Other Documentation and Information. The Administrative Agent shall have received (i) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower and each Guarantor and the authorization of the Transactions and (ii) a fully executed copy of the Second Lien Credit Agreement.

SECTION 4.02.Conditions Precedent to Each Loan and Each Letter of Credit. The obligation of the Lenders to make each Loan, fund its Credit-Linked Deposit and of the Issuing Lender to issue each Letter of Credit, including the initial Loan and the initial Letter of Credit, is subject to the satisfaction (or waiver in accordance with Section 10.08) of the following conditions precedent:

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

(b) Representations and Warranties. All representations and warranties contained in this Agreement and the other Loan Documents (other than, with respect to Loans made or Letters of Credit issued after the Closing Date, the representations and warranties set forth in Sections 3.05(b) and 3.09(a)) shall be true and correct in all material respects on and as of the date of each Borrowing or the issuance of each Letter of Credit hereunder with the same effect as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date and in such case, such representations and warranties shall be true and correct in all material respects as of such date.

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

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

SECTION 5.

AFFIRMATIVE COVENANTS

From the date hereof and for so long as the Commitments remain in effect, any Letter of Credit remains outstanding (in a face amount in excess of the sum of (i) the amount of cash then held in the Letter of Credit Account and (ii) the face amount of back-to-back letters of credit delivered pursuant to Section 2.02(j)), any Credit-Linked Deposit remains outstanding, or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than contingent indemnification obligations not due and payable), the Borrower and each of the Guarantors agree to:

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

(a) Within 90 days after the end of each fiscal year, the Borrower’s consolidated balance sheet and related statement of income and cash flows, showing the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of the close of such fiscal year and the results of their respective operations during such year, the consolidated statement of the Borrower to be audited for the Borrower by Ernst & Young LLP or other independent public accountants of recognized national standing and accompanied by an opinion of such accountants (without a “going concern” or like qualification or exception and without any qualification or exception (other than with respect to the 2005 audit and the 2006 audit) as to the scope of such audit) and to be certified by a Responsible Officer of the Borrower to the effect that such consolidated financial statements fairly present in all material respects the financial condition and results of operations of the Borrowerand its Subsidiaries on a consolidated basis in accordance with GAAP. Documents required to be delivered pursuant to this clause (a) which are made available via EDGAR, or any successor system of the SEC, in the Borrower’s Annual Report on Form 10-K, shall be deemed delivered to the Lenders on the date such documents are made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent;

(b) Within 45 days after the end of each of the first three fiscal quarters of each fiscal year, the Borrower’s consolidated balance sheets and related statements of income

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and cash flows, showing the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of the close of such fiscal quarter and the results of their operations during such fiscal quarter and the then elapsed portion of the fiscal year, each certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes. Documents required to be delivered pursuant to this clause (b) which are made available via EDGAR, or any successor system of the SEC, in the Borrower’s Quarterly Report on Form 10-Q, shall be deemed delivered to the Lenders on the date such documents are made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent;

(c) (i) concurrently with any delivery of financial statements under (a) and (b) above, a certificate of a Responsible Officer of the Borrower (A) certifying that no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default has occurred, or, if such an Event of Default or event has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, (B) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the provisions of Sections 6.04, 6.05 and 6.06 and (C) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.05 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; and (ii) concurrently with any delivery of financial statements under (a) above, a certificate (which certificate may be limited to accounting matters and disclaim responsibility for legal interpretations) of the accountants auditing the consolidated financial statements delivered under (a) above certifying that, in the course of the regular audit of the business of the Borrower and its Subsidiaries, such accountants have obtained no knowledge that an Event of Default pursuant to Section 7.01(c) due to any failure to comply with Section 6.04 or 6.05 has occurred and is continuing or if, in the opinion of such accountants, such an Event of Default has occurred and is continuing, specifying the nature thereof and all relevant facts with respect thereto;

(d) promptly after the same become publicly available, copies of all registration statements and all periodic and other reports, proxy statements and other materials filed by it with the SEC, or any governmental authority succeeding to any of or all the functions of said commission, or with any national securities exchange, as the case may be. Documents required to be delivered pursuant to this clause (d) which are made available via EDGAR, or any successor system of the SEC, shall be deemed delivered when made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent;

(e) Within ninety (90) days from the last Business Day of the immediately preceding fiscal year, a detailed consolidated budget for the following 12-month period (including projected statements of operations and cash flow for such period);

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

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

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

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

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

(k) promptly after a Responsible Officer obtains knowledge of (i) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary that could reasonably be expected to result in a Material Adverse Effect; or (ii) the receipt of any environmental audits and reports, whether prepared by personnel of the Borrower or any Guarantor or by independent consultants, which relate to an Environmental Liability which could be expected to have a Material Adverse Effect, notification thereof (together with, in the case of clause (ii) above, copies of such audits and reports), each such notice to be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto;

(l) promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Guarantor as the Administrative Agent, at the request of any Lender, may reasonably request;

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(m) within (i) twenty (20) Business Days following the end of each calendar month, a certificate of a Responsible Officer of the Borrower or, if applicable, a Guarantor, (x) stating that at all times since the last certificate delivered under this Section 5.01(m) (or, in the case of the first certificate to be delivered after the Closing Date, at all times since the Closing Date) the Borrower or Guarantor, as the case may be, has utilized the Primary Routes and the Primary Foreign Slots in a manner consistent in all material respects with applicable regulations, rules, law, foreign law and contracts in order to preserve their respective rights in and to use each of the Primary Routes and Primary Foreign Slots and (y) setting forth (A) any permanent disposition or transfer by the Borrower or such Guarantor of any Appraised FAA Slot, Primary Foreign Slot or Primary Route and (B) airports associated with additional Primary Routes allocated to or assigned by the Borrower or such Guarantor which airports are not already listed on Schedule 4(g) to the First Lien SGR Security Agreement or Schedule 4(i) to the First Lien SGR Security Agreement and (ii) five (5) Business Days following the end of each calendar month, copies of any report filed by the Borrower or any Guarantor in such calendar month with the FAA, DOT or any other applicable Governmental Authority or Airport Authority or any Foreign Aviation Authorities regarding utilization of Primary Routes or Primary Foreign Slots or access to the Primary Supporting Route Facilities, as well as a summary thereof, in a format reasonably acceptable to the Administrative Agent;

(n) at any time that Eligible Accounts Receivable shall be included as Eligible Collateral, promptly and in any event within 30 days after the end of each month while Eligible Accounts Receivable are part of Eligible Collateral, an Officer’s Certificate from the Borrower, substantially in the form of Exhibit K, setting forth the amount of Eligible Accounts Receivable as of such date, together with all supporting documents with respect to Eligible Accounts Receivable as the Administrative Agent may reasonably request;

(o) promptly after a Responsible Officer obtains knowledge thereof, notice of any Collateral Event;

(p) promptly after a Responsible Officer obtains knowledge thereof, notice of any Event of Loss;

(q) promptly after a Responsible Officer obtains knowledge of any Visa/MasterCard Dollar Trigger Event, notification thereof (accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of such Visa/MasterCard Dollar Trigger Event).

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

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

SECTION 5.02.Existence. Preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business except (a)(i) if in the reasonable business judgment of the Borrower it is no longer necessary for the Borrower and the Guarantors to preserve and maintain such rights, privileges, qualifications, permits, licenses and franchises, and (ii) such failure to preserve the same could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, and (b) as otherwise permitted in connection with (i) sales of assets permitted by Section 6.10 or (ii) mergers, liquidations and dissolutions permitted by Section 6.02.

SECTION 5.03.Insurance.

(a) In addition to the requirements of Section 5.03(b) or as set forth in each Real Property Mortgage, (i) keep its properties (other than the Mortgaged Collateral, as to which only the insurance provisions of the First Lien Aircraft Mortgage shall be applicable) insured at all times, against such risks, including fire and other risks insured against by extended coverage, and on such term and conditions, as is prudent and customary with U.S. based companies of the same or similar size in the same or similar businesses; (ii) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by the Borrower or any Guarantor, as the case may be, in such amounts and with such deductibles as are customary with companies of the same or similar size in the same or similar businesses and in the same geographic area; and (iii) maintain such other insurance or self insurance as may be required by law.

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

(c) All such insurance referred to in Section 5.03(a) with respect to the Collateral (other than the Mortgaged Collateral as to which only the provisions of the Aircraft Mortgage shall be applicable) shall (i) contain a Lender’s Loss Payable Endorsement in favor of the Collateral Agent, on behalf of the First Priority Secured Parties, in all loss or damage insurance policies, (ii) provide that no cancellation thereof shall be effective until at least thirty (30) days after written notice thereof to the Collateral Agent, on behalf of the First Priority Secured Parties, permitting the Collateral Agent to cure any default with respect to applicable outstanding premiums, (iii) name the Collateral Agent, for the benefit of the First Priority Secured Parties, as loss payees for physical damage insurance with respect to property which constitutes Collateral (other than the Mortgaged Collateral as to which only the provisions of the Aircraft Mortgage shall be applicable) or a Real Property Asset as to which a Lien has been granted to the Collateral Agent, and as additional insureds for liability insurance,(iv) provide that once the Collateral Agent has given notice of the occurrence of an Event of Default, no loss in excess of $5,000,000 shall be adjusted or otherwise settled without the prior written consent of the Collateral Agent, and (v) state that none of the Collateral Agent, any of the Lenders, nor any other First Priority Secured Party shall be responsible for premiums, commissions, club calls, assessments or advances.

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

(e) No less frequently than annually, but in any event prior to expiration of any insurance policy maintained in connection herewith or in connection with any Collateral Document, furnish to the Collateral Agent certificates of insurance with respect to insurance maintained by the Borrower or any Guarantor, as the case may be, which certificates evidence compliance by the Borrower and the Guarantors with the insurance requirements set forth herein and in any of the Collateral Documents and contain signatures of duly authorized representatives of AON Risk Services or such other insurance broker as may be reasonably acceptable to the Collateral Agent, at all times prior to policy termination, cessation or cancellation.

(f) Make available at the Borrower’s headquarters, upon the reasonable request of the Collateral Agent and upon reasonable prior notice, all insurance policies maintained by the Borrower and the Guarantors for the review of the Collateral Agent and any agents or representatives thereof.

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

SECTION 5.05.Obligations and Taxes. Pay all its material obligations (other than any obligations with respect to any Restructuring Aircraft, except obligations under any Post-Petition Aircraft Agreement applicable to such Restructuring Aircraft) promptly and in accordance with their terms and pay and discharge promptly all taxes, assessments and governmental charges, levies or claims (other than such taxes, assessments and governmental charges, levies and claims to the extent addressed in the Plan of Reorganization, which shall be paid in accordance with the Plan of Reorganization) imposed upon it or upon its income or profits or in respect of its property, before the same shall become more than ninety (90) days delinquent, except in each case where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; provided, however, that the Borrower and each Guarantor shall not be required to pay and discharge or to cause to be paid and discharged any such obligation, tax, assessment, charge, levy or claim so long as (i) the validity or amount thereof shall be contested in good faith by appropriate proceedings and (ii) the Borrower and the Guarantors shall have set aside on their books adequate reserves therefor in accordance with GAAP.

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

SECTION 5.07.Access to Books and Records. (a) Maintain or cause to be maintained at all times true and complete books and records in all material respects in a manner consistent with GAAP in all material respects of the financial operations of the Borrower and the Guarantors and provide the Administrative Agent, the Collateral Agent and their respective representatives and advisors reasonable access to all such books and records (subject to requirements under any confidentiality agreements, if applicable), as well as any appraisals of the Collateral, during regular business hours, in order that the Administrative Agent and the Collateral Agent may upon reasonable prior notice and with reasonable frequency, but in any event, so long as no Event of Default has occurred and is continuing, no more than one time per year, examine and make abstracts from such books, accounts, records, appraisals and other papers, and permit the Administrative Agent, the Collateral Agent and their respective representatives and advisors to confer with the officers of the Borrower and the Guarantors and representatives (provided that the Borrower shall be given the right to participate in such discussions with such representatives) of the Borrower and the Guarantors, all for the purpose of verifying the accuracy of the various reports delivered by the Borrower or the Guarantors to the Administrative Agent or the Lenders pursuant to this Agreement or for otherwise ascertaining compliance with this Agreement; and at any reasonable time and from time to time during regular business hours, upon reasonable notice to the Borrower, permit the Administrative Agent, the Collateral Agent, and any agents or representatives (including, without limitation, appraisers) thereof to visit the properties of the Borrower and the Guarantors and to conduct examinations of and to monitor the Collateral held by the Collateral Agent, in each case at the expense of the Borrower (provided, that the Borrower shall not be required to pay the expenses of more than one such visit a year unless an Event of Default has occurred and is continuing).

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

SECTION 5.08.Compliance with Laws.

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

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

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

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SECTION 5.09.Appraisal Reports and Field Audits. Cooperate with the Appraiser, Real Estate Appraiser or Field Auditor, as the case may be, such that the Administrative Agent shall receive one or more Appraisal Reports or Field Audits, as the case may be, establishing the value of the Appraised Collateral or Eligible Accounts Receivable, as the case may be, (a) in the case of Appraisal Reports, by no later than thirty (30) days prior to each anniversary of the Closing Date, (b) on the date upon which any additional property or assets that constitutes Appraised Collateral (including, without limitation, applicable Cure Collateral) is pledged as Collateral to the Collateral Agent to secure the First Priority Obligations, but only with respect to such additional Collateral, (c) promptly at the request of the Administrative Agent upon the occurrence and during the continuation of an Event of Default, (d) in the case of Field Audits, promptly at the request of the Administrative Agent (which are not contemplated to occur more than once per year, but in any event, so long as no Event of Default has occurred and is continuing, no more than once per year) and (e) upon a Change in Law with respect to any assets which constitute Collateral, which change could reasonably be expected to result in the Borrower’s failure to maintain the required coverage ratios pursuant to Section 6.06. In addition to the requirements set forth in this Section 5.09, if at any time the Collateral Agent in its reasonable good faith business judgment believes that a Collateral Event has occurred, it may request the delivery of an updated Appraisal Report with respect to the affected Collateral, and the Borrower and the Guarantors shall cooperate with the Appraiser to ensure that the Collateral Agent receives the same. The Borrower may from time to time cause to be delivered subsequent Appraisal Reports if it believes that the affected item of Collateral has a higher Appraised Value than that reflected in the most recent Appraisal Report delivered.

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

SECTION 5.11.FAA Slot Utilization. Subject to transfers, exchanges and other dispositions permitted by this Agreement and the First Lien SGR Security Agreement, utilize (or arrange for utilization by exchanging FAA Slots with other air carriers) the FAA Slots (except FAA Slots which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, laws and contracts in order to preserve its right to hold and operate the FAA Slots, taking into account any waivers or other relief granted to the Borrower by the FAA, any other applicable Governmental Authority or any Airport Authority.

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SECTION 5.12.Primary Foreign Slot Utilization. Subject to transfers, exchanges and other dispositions permitted by this Agreement and the First Lien SGR Security Agreement, utilize (or arrange for utilization by exchanging Primary Foreign Slots with other air carriers) the Primary Foreign Slots (except Primary Foreign Slots which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, foreign law and contracts in order to preserve its right to hold and operate the Primary Foreign Slots, taking into account any waivers or other relief granted to the Borrower by any applicable Foreign Aviation Authorities.

SECTION 5.13.Primary Route Utilization. Subject to transfers, exchanges and other dispositions permitted by this Agreement and the First Lien SGR Security Agreement, utilize the Primary Routes (except Primary Routes which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, treaties, foreign law and contracts in order to preserve its right to hold and operate the Primary Routes and maintain access to the Primary Supporting Route Facilities sufficient to ensure its ability to retain its rights in and to the Primary Routes, taking into account any waivers or other relief granted to the Borrower by the FAA, any other applicable Governmental Authority, any Airport Authority or any applicable Foreign Aviation Authorities.

SECTION 5.14.Additional Subsidiaries. If any additional Subsidiary of the Borrower is formed or acquired after the Closing Date, the Borrower will promptly, and in any event within twenty (20) Business Days after such Subsidiary is formed or acquired, (a) to the extent such Subsidiary is an entity incorporated or organized in the United States and is not an Immaterial Subsidiary, an Excluded Subsidiary or a Restricted Captive Insurance Company Subsidiary, cause such Subsidiary to become a party to the Guarantee contained in Section 9 hereof, each applicable Collateral Document and all other agreements, instruments or documents that create or purport to create and perfect a Lien in favor of the Collateral Agent for the benefit of the First Priority Secured Parties, by executing an Instrument of Assumption and Joinder substantially in the form attached hereto as Exhibit H and, subject to preexisting Liens on such Subsidiary’s assets and the terms thereof (to the extent the same are permitted under this Agreement), promptly take such actions to create and perfect Liens on such Subsidiary’s assets to secure the First Priority Obligations to the extent required under the applicable Collateral Documents and (c) cause any Equity Interests or promissory notes evidencing Indebtedness of such Subsidiary that, in each case, are owned by or on behalf of the Borrower or any Guarantor to be pledged to the extent required by the Collateral Documents, provided that, if such Subsidiary is directly owned by the Borrower or any Guarantor and is organized under the laws of a jurisdiction other than the United States of America or any state thereof or the District of Columbia, Equity Interests of such Subsidiary to be pledged shall be limited to 65% of the outstanding voting Equity Interests of such Subsidiary.

SECTION 5.15.[Reserved].

SECTION 5.16.Additional Collateral; Additional Grantors.

(a) If any aircraft, engines, spare parts or owned real property (including, in the case of owned real property, only owned real property valued individually in excess of

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$5,000,000 or $20,000,000 in the aggregate from the Closing Date, but excluding any leasehold interests) are acquired by the Borrower or any Guarantor after the Closing Date (other than any spare parts that become subject to a Lien pursuant to the Aircraft Mortgage upon acquisition thereof), the Borrower will promptly notify the Administrative Agent thereof and at the Administrative Agent’s request within forty-five (45) days of such notice, will cause such assets to be subjected to a Lien securing the First Priority Obligations to the extent not excluded from the definition of “Collateral” under the Loan Documents, subject to preexisting Liens on such assets permitted hereunder and any other Liens permitted hereunder, and will take, and cause the Guarantors to take, such actions as shall be necessary to grant and perfect such Liens, including actions described in this paragraph (a), all at the expense of the Borrower and Guarantors; provided, however, that this clause (a) shall not apply (i) if and to the extent that, on the date of and after giving effect to such acquisition, the Borrower shall be in compliance with Section 6.06(a) and Section 6.06(b) and shall have delivered to the Administrative Agent an Officer’s Certificate certifying to such compliance or (ii) to any aircraft, engines, spare parts or owned real property to the extent that the Administrative Agent has received, on or before the date of such acquisition, a copy of an executed commitment letter, letter of intent, memorandum or understanding or other similar document that evidences a commitment to consummate a financing of such aircraft, engines, spare parts or owned real property within forty-five (45) days of the date of such acquisition and such financing actually occurs within forty-five (45) days (it being understood that the Lenders hereby authorize the Collateral Agent to withhold or delay such filing if the Collateral Agent shall be satisfied in its sole discretion that the applicable financing shall be consummated within a reasonable timeframe thereafter); providedfurther that the Administrative Agent shall not require the execution or delivery of any Mortgage Supplement, or require the Borrower or any Guarantor to take any actions with respect to the FAA, relating to any of the 737-800 aircraft to be sold pursuant to agreements described on Schedule 5.16 hereof.

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

SECTION 5.17.Pledged Spare Parts. Segregate all of its Pledged Spare Parts from any Spare Parts which are subject to any consignment arrangement, and shall keep all Spare Parts not so subject to a consignment arrangement in Spare Parts Locations, except to the extent permitted in the First Lien Aircraft Mortgage. The Pledged Spare Parts will be maintained by or on behalf of the Borrower and Comair, as required by the First Lien Aircraft Mortgage.

SECTION 5.18.Further Assurances. Execute any and all further documents and instruments, and take all further actions, that may be required or advisable under applicable law, the Cape Town Convention or by the FAA, or that the Collateral Agent may reasonably request, in order to create, grant, establish, preserve, protect and perfect the validity, perfection and priority of the Liens and security interests created or intended to be created by the Collateral Documents, to the extent required under this Agreement or the Collateral Documents, including, without limitation, amending, amending and restating, supplementing, assigning or otherwise modifying, renewing or replacing the First Lien Aircraft Mortgage or other agreements, instruments or documents relating thereto, in each case as may be reasonably requested by the

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Collateral Agent, in order to (i) create interests (including, but not limited to, International Interests, Assignments, Prospective International Interests, Prospective Assignments, Sales, Prospective Sales, Assignments of Associated Rights and Subordinations) that may be registered and/or assigned under the Cape Town Convention, (ii) create, grant, establish, preserve, protect and perfect the Liens in favor of the Collateral Agent for the benefit of the First Priority Secured Parties to the fullest extent possible under the Cape Town Convention, including, where necessary, the subordination of other rights or interests and (iii) realize the benefit of the remedial provisions that are contemplated by the Cape Town Convention, subject to the provisions of Section 4.07 of the First Lien Aircraft Mortgage.

Without limiting the generality of the foregoing or any other provisions of the Loan Documents, the Borrower hereby (a) agrees to exclude the application of Article XVI(1)(a) of the Protocol and (b) consents, pursuant to Article XV of the Protocol, to any Assignment of Associated Rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the applicable Loan Documents and further agrees that the provisions of the preceding paragraph shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such Assignment of Associated Rights.

SECTION 5.19.Post Closing Items. (a) Within thirty (30) days of the Closing Date, the Borrower and each applicable Guarantor shall have duly executed and delivered to the Collateral Agent a Trademark Security Agreement in substantially the form of Exhibit F-1 (the “First Lien Trademark Security Agreement”), together with all documents, certificates, forms and filing fees that the Collateral Agent may deem reasonably necessary to perfect and protect the Liens and security interests created in the identified intellectual property in the First Lien Trademark Security Agreement.

(b) Within thirty (30) days of the Closing Date (or such later date as the Administrative Agent may, in its reasonable discretion, consent to in writing), the Borrower and each applicable Guarantor shall have delivered to the Collateral Agent a Shifting Control Agreement or any other Control Agreement, properly executed by the Borrower or any Guarantor, as the case may be, and each bank or other financial institution (as may be specified by the Borrower) at which the Borrower or any Guarantor, as the case may be, maintains a deposit account or securities account (it being understood that no Control Agreement shall be required to be delivered with respect to any Excluded Account).

(c) Within thirty (30) days of the Closing Date (or such later date as the Administrative Agent may, in its reasonable discretion, consent to in writing), the Borrower and each applicable Guarantor shall have delivered evidence of the registrations in the International Registry of International Interests in the Airframes, Engines and Spare Engines constituted by the First Lien Aircraft Mortgage.

SECTION 6.

NEGATIVE COVENANTS

From the date hereof and for so long as the Commitments remain in effect, any Letter of Credit remains outstanding (in a face amount in excess of the sum of (i) the amount of cash then held in the Letter of Credit Account and (ii) the face amount of back-to-back letters of credit delivered pursuant to Section 2.02(j)), any Credit-Linked Deposit remains outstanding, or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than contingent indemnification obligations not due and payable), the Borrower and each of the Guarantors will not:

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SECTION 6.01.Liens. Incur, create, assume or suffer to exist any Lien on any asset of the Borrower or the Guarantors, now owned or hereafter acquired by the Borrower or any of such Guarantors, other than:

(a) Liens which were existing on the Closing Date as reflected on Schedule 3.07;

(b) Permitted Liens;

(c) Liens in favor of the Collateral Agent and the Lenders pursuant to the Loan Documents;

(d) Liens securing Indebtedness or Capitalized Leases permitted by Section 6.03(l) or any permitted refinancing thereof, provided that such Lien attach only to the assets of the Borrower or Guarantor (including related leases thereof and, in the case of personal property, other assets integral to the use thereof including security deposits from any sublessee collaterally assigned for the benefit of lessors) subject to such acquisition or financing;

(e) Liens on the Collateral that are pari passu with the Liens in favor of the Collateral Agent securing the Designated Cash Management Obligations;

(f) Liens on the Collateral that are pari passu with the Liens in favor of the Collateral Agent securing Indebtedness permitted by Section 6.03(f) or (g) and relating to Designated Hedging Agreements; provided that the maximum amount of such Indebtedness that constitutes First Priority Obligations shall not exceed $200,000,000 at any time;

(g) licenses, leases and subleases of (A) Mortgaged Collateral and Collateral (as defined in the First Lien SGR Security Agreement) granted to others but only to the extent permitted by the First Lien Aircraft Mortgage with respect to Mortgaged Collateral and to the extent permitted by the First Lien SGR Security Agreement with respect to Collateral as defined therein and (B) all other assets to the extent such license, sublicense, lease or sublease does not interfere in any material respect with the business of the Borrower and the Guarantors, taken as a whole;

(h) Liens arising from precautionary UCC financing statements regarding operating leases permitted by this Agreement;

(i) any interest or title of a licensor, sublicensor, lessor, sublessor or airport operator under any lease, license or use agreement;

(j) Liens on real and personal property acquired in connection with acquisitions permitted by this Agreement to the extent such Liens exist on such acquired property at the time of acquisition or Liens existing on any property or asset of any Person that becomes a Guarantor after the date hereof prior to the time such Person becomes a Guarantor, provided, (1) such Liens are not created in contemplation of or in connection with such acquisition or such Person becoming a Guarantor, as the case may be, (2) such Liens shall not apply to any other property or assets of the Borrower or any Guarantor and (3) such Liens shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Guarantor, as the case may be;

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(k) Liens in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business and consistent with past practices;

(l) Liens on (1) the Borrower’s right to receive a refund of unearned insurance premiums and (2) insurance policies and the proceeds thereof, to secure the Borrower’s payment of such insurance premiums financed by Indebtedness permitted pursuant to Section 6.03(e);

(m) junior Liens (subject and fully subordinate to the Liens granted to the Collateral Agent on behalf of the First Priority Secured Parties hereunder and under the Collateral Documents in accordance with the Intercreditor Agreement) on the Collateral in favor of Second Lien Collateral Agent securing the Second Lien Obligations, provided, that (1) such Liens shall be subject in all respects to terms set forth in the Intercreditor Agreement and (2) the instruments and agreements pursuant to which such Liens are created are reasonably satisfactory in form and substance to the Administrative Agent;

(n) junior Liens on the Collateral securing the Indebtedness permitted pursuant to Section 6.03(m), provided, that such Liens shall be subject in all respects to an intercreditor agreement substantially in the form of the Intercreditor Agreement;

(o) Liens consisting of setoff or netting rights in connection with Hedging Agreements;

(p) Liens securing reimbursement obligations in respect of standby or documentary letters of credit or bankers acceptances, provided that in the case of (1) documentary letters of credit or bankers acceptances, such Liens attach only to the documents, goods covered thereby and proceeds thereof and (2) in the case of standby letters of credit, such Liens may only be on cash in an amount not to exceed $150,000,000;

(q) Liens on the underlying commodity trading accounts or other brokerage accounts incurred in the ordinary course of business;

(r) Liens which arise under Article 2 of the UCC;

(s) replacement, extension and renewal of any Lien permitted hereby, provided that any such replacement, extension, or renewal of any Lien shall not extend to any property or assets of the Borrower or any Guarantor which was not subject to the Lien being replaced, extended or renewed;

(t) Liens in favor of any of the Borrower or a Guarantor that do not encumber any Collateral;

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(u) Liens arising by operation of law in connection with judgments, attachment or awards which do not constitute an Event of Default hereunder;

(v) other Liens incurred by the Borrower and the Guarantors (except with respect to Real Property Assets) so long as the Indebtedness and other obligations secured thereby does not exceed Indebtedness permitted by Section 6.03(ee);

(w)           Liens on cash collateral and fuel inventory (and the proceeds thereof) or letters of credit in each case securing Indebtedness permitted pursuant to Section 6.03(f), and Indebtedness permitted by Section 6.03(g) in an aggregate amount at any one time for all such cash and letters of credit in excess of the amount thereof that is secured as permitted by Section 6.01(f), not in excess (other than with respect to Liens on fuel inventory and the proceeds thereof) of $500,000,000;

(x)            Liens on Margin Stock, if and to the extent the value of all Margin Stock of the Borrower and its Subsidiaries exceeds 25% of the total assets subject to this Section 6.01;

(y)           Liens on any Restructuring Aircraft created by or pursuant to any Post-Petition Aircraft Agreement;

(z)           Liens on the Excluded Accounts and amounts on deposit therein in favor of the beneficiaries of the amounts on deposit therein to the extent such Liens secure obligations owed to such beneficiaries;

(aa)          the Lien of the Jet Fuel Counterparty on the Jet Fuel Assets, in the event that the transactions underlying the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower;

(bb)         Liens attaching solely to cash earnest money deposits in connection with Investments permitted pursuant to Section 6.09;

(cc)          Liens securing Indebtedness permitted by (i) Section 6.03(h) and (ii) Section 6.03(y);

(dd)         Liens on cash collateral securing surety and appeal bonds in an aggregate amount for all such cash collateral not exceeding $150,000,000; and

(ee)          other Liens so long as the obligations secured thereby do not exceed $25,000,000 at any time.

SECTION 6.02.Merger, etc.  Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except (kk) that any Subsidiary (so long as such Subsidiary is not the Borrower) may merge into the Borrower or any other Guarantor in a transaction in which the Borrower or any Guarantor is the surviving corporation, provided that (i) immediately after giving effect thereto no Event of Default or event with which upon notice

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or the passage of time or both would constitute an Event of Default shall have occurred and be continuing and (ii) any such merger involving a Person whose Equity Interests are not 100% owned by the Borrower directly or indirectly immediately prior to such merger shall not be permitted unless also permitted by Section 6.10; (ll) that any Subsidiary (so long as such Subsidiary is not the Borrower) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders, provided that an Event of Default does not result from such liquidation or dissolution, (mm) any Person (other than the Borrower) may merge into the Borrower or any Guarantor pursuant to a Permitted Acquisition in which the Borrower or such Guarantor is the surviving corporation, (nn) asset sales permitted hereunder and (oo) any Permitted Change of Control Transaction.

SECTION 6.03.Indebtedness. Contract, create, incur, assume or suffer to exist any Indebtedness, except for:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness incurred pursuant to the Second Lien Credit Agreement or any refinancing thereof in accordance with the Intercreditor Agreement; provided that the principal amount of Indebtedness incurred in connection with any such refinancing shall not exceed the principal amount of the Indebtedness so refinanced;

(c) Indebtedness incurred prior to the Closing Date or with respect to which an option exists (including existing Capitalized Leases) as set forth on Schedule 6.03;

(d) intercompany Indebtedness between the Borrower and the Guarantors, which Indebtedness shall be pledged to the Collateral Agent pursuant to the First Lien Pledge Agreement, to the extent required pursuant to the terms thereof;

(e) Indebtedness of the Borrower or any Guarantor owed to one or more Persons in connection with the financing of certain insurance premiums;

(f) Indebtedness owed to any Lender (or any of its banking Affiliates) or any other Person in respect of fuel hedges and other derivatives contracts, in each case to the extent that such agreement or contract is entered into for bona fide hedging purposes and, in the case of such other derivatives contracts, in the ordinary course of business;

(g) Indebtedness owed to any Lender or any of its banking Affiliates or any other Person in respect of (i) foreign exchange contracts, currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign exchange rates and currency values and (ii) interest rate swap, cap or collar agreements, interest rate future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates, in each case to the extent that such agreement or contract is entered into in the ordinary course of business for bona fide hedging purposes;

(h) Indebtedness owed to any Lender or any of its banking Affiliates or any other Person in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;

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(i) Indebtedness of any of the Borrower and the Guarantors consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business and consistent with past practices of the Borrower and the Guarantors;

(j) Indebtedness of any of the Borrower and the Guarantors arising in the ordinary course of business of the relevant party and owing to Citibank, N.A., its banking Affiliates and other financial institutions providing netting services permitted to be incurred and outstanding pursuant to this Agreement so long as such Indebtedness does not remain outstanding for more than three (3) Business Days from the date of its incurrence;

(k) Indebtedness of any of the Borrower and the Guarantors to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Borrower and the Guarantors;

(l) (i) Indebtedness incurred to finance the acquisition of aircraft, engines, spare parts or other operating assets; provided that no such Indebtedness may be incurred more than twelve (12) months after such acquisition if, after giving effect to such Indebtedness, an Event of Default shall have occurred and be continuing under Section 6.06; and (ii) other Indebtedness secured by aircraft, engines, spare parts or other operating assets that are not subject to Liens described in Section 6.01(c) (including without limitation as a result of any release of such Liens pursuant to Section 6.06(d));

(m)          Indebtedness of the Borrower and the Guarantor in an aggregate amount not to exceed $1,000,000,000, provided that such Indebtedness shall have a final maturity six months after the Maturity Date and shall be on terms reasonably satisfactory to the Administrative Agent;

(n) Indebtedness consisting of promissory notes issued to current or former directors, consultants, managers, officers and employees or their spouses or estates to purchase or redeem capital stock of the Borrower issued to such director, consultant, manager, officer or employee in an aggregate amount not to exceed $1,000,000 annually;

(o) Indebtedness to the extent permitted by an Investment permitted by Section 6.09(j);

(p) Indebtedness of a person or acquired assets that is the subject of a Permitted Acquisition which Indebtedness was in existence at the time of such Permitted Acquisition and not incurred in contemplation thereof;

(q) intercompany Indebtedness owed by the Borrower and any Guarantor to another Subsidiary, which is not a Guarantor, in an amount not to exceed $50,000,000 in the aggregate at any one time outstanding;

(r) any Indebtedness extending, renewing, replacing or refinancing (collectively, “Refinancing”) all or any portion of any Indebtedness permitted under paragraph (c), (l), (m), (p), (x), (y) or (z), provided that (1) any such Refinancing of Indebtedness permitted under clause (m) which is subordinated to the Obligations shall remain subordinated on substantially the same basis, and (2) the weighted average life to maturity of such Indebtedness, in the case of clause (m), shall not be shortened, providedfurther that any such Refinancing of Indebtedness permitted under clause (c) or (l)(i) may exceed the amount being Refinanced so long as the Lien securing such Refinancing does not extend to any property or asset of the Borrower or any Guarantor which was not subject to the Lien securing the Indebtedness being Refinanced;

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(s) other unsecured Indebtedness incurred subsequent to the Closing Date;

(t) Indebtedness in respect of Redeemable Stock;

(u) Indebtedness in respect of deferred rent;

(v) Indebtedness in respect of deferred taxes;

(w)           Indebtedness permitted to be secured pursuant to Section 6.01(p);

(x) Indebtedness under the ALPA Notes and the CVG Notes;

(y) Indebtedness secured by purchase money security interests and Capitalized Leases (including in the form of sale-leaseback, synthetic lease or similar transactions) to the extent such Indebtedness was incurred in connection with ARB Indebtedness; provided, that the amount of such Indebtedness does not exceed 100% of the purchase price or construction cost (including any capitalized interest and issuance fees and expenses) of the subject asset;

(z) Indebtedness relating to any Restructuring Aircraft created by or pursuant to any Post-Petition Aircraft Agreement;

(aa)          Indebtedness consisting of indemnification obligations owed by Comair to Bombardier Inc., a Canadian national corporation, relating to certain CRJ leases, in an amount not to exceed $9,000,000 in the aggregate;

(bb)          in the event that the transactions underlying the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower, such Indebtedness;

(cc)          reimbursement obligations in respect of standby or documentary letters of credit or bankers acceptances that are secured by Liens permitted pursuant to Section 6.01(p);

(dd)         surety and appeal bonds secured by Liens permitted pursuant to Section 6.01(dd); and

(ee)          Indebtedness not to exceed $25,000,000 at any one time outstanding for Indebtedness of the Borrower or any Guarantor incurred subsequent to the Closing Date that will be secured Indebtedness.

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

Fiscal quarter ending	Ratio
June 2007	1.00:1.00
September 2007	1.00:1.00
December 2007	1.00:1.00
March 2008 and thereafter for each fiscal quarter ending through the Maturity Date	1.20:1.00

SECTION 6.05.Unrestricted Cash Reserve. Permit the aggregate amount of Unrestricted Cash to be less than $750,000,000 at any time after the 30^th day following the Closing Date.

SECTION 6.06.Coverage Ratio. (a) Permit at any time the ratio (the “First Lien Collateral Coverage Ratio”) of (i) the Appraised Value of the Eligible Collateral to (ii) the sum of (x) the aggregate outstanding principal amount of the Loans plus (y) the LC Exposure (other than LC Exposure which has been Cash Collateralized in accordance with Section 2.12(b)plus (z) the Swap Termination Value of all Designated Hedging Agreements to the extent secured as permitted by Section 6.01(f) (such sum, the “First Lien Obligations”) to be less than 175%, provided, that if, (A) upon (1) delivery of an Appraisal Report or a Field Audit (as applicable) pursuant to Section 5.09 or (2) the establishment of reserves pursuant to clause (B) of the definition of “Appraised Value” contained herein and (B) solely with respect to determining compliance with this Section as a result thereof, it is determined that the Borrower shall not be in compliance with this Section 6.06(a), the Borrower shall, within forty-five (45) days of the date of such Appraisal Report, Field Audit or establishment of reserves (as applicable), (I) designate Cure Collateral as additional Eligible Collateral in accordance with clause (d) of the definition of Eligible Collateral in Section 1.01 or (II) prepay the Loans, in each case in an amount sufficient to enable the Borrower to comply with this Section 6.06(a); providedfurther that the preceding proviso shall be disregarded for purposes of Section 4.02(c).

(b) Permit at any time the ratio (the “Total Collateral Coverage Ratio”) of (i) the Appraised Value of the Eligible Collateral to (ii) the sum of the aggregate outstanding principal amount of the First Lien Obligations plus the outstanding principal amount of the Second Lien Term Loans (such sum the “Total Obligations”) to be less than 125%, provided, that if, (A) upon (1) delivery of an Appraisal Report or a Field Audit (as applicable) pursuant to Section 5.09 hereof or (2) the establishment of reserves pursuant to clause (B) of the definition of “Appraised Value” contained herein and (B) solely with respect to determining compliance with this Section as a result thereof, it is determined that the Borrower shall not be in compliance with this Section 6.06(b), the Borrower shall, within forty-five (45) days of the date of such Appraisal Report, Field Audit or establishment of reserves (as applicable), (I) designate Cure Collateral as additional Eligible Collateral in accordance with clause (d) of the definition of Eligible Collateral in Section 1.01 or (II) prepay the Loans, in each case in an amount sufficient to enable the Borrower to comply with this Section 6.06(b); providedfurther that the preceding proviso shall be disregarded for purposes of Section 4.02(c).

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(c) Notwithstanding anything to the contrary contained herein, if the Borrower shall fail at any time to be in compliance with this Section 6.06 solely as a result of an Event of Loss (as defined in the First Lien Aircraft Mortgage) or other Recovery Event, in each case, covered by insurance (pursuant to which the Collateral Agent is named as loss payee and with respect to which payments are to be delivered directly to the Collateral Agent) for which the insurer thereof has been notified of the relevant claim and has not challenged such coverage, any calculation made pursuant to this Section 6.06 shall deem the Borrower to have received Net Cash Proceeds (and to have taken all steps necessary to designate, and to have designated, such Net Cash Proceeds as Cure Collateral) in an amount equal to the expected coverage amount (as determined by the Borrower in good faith and updated from time to time to reflect any agreements reached with the applicable insurer and net of any amounts required to be paid out of such proceeds and secured by a Lien permitted pursuant to Section 6.01(l)) until the earlier of (i) the date any such Net Cash Proceeds are actually received by the Collateral Agent, (ii) the date that is 270 days after such Event of Loss or Recovery Event and (iii) the date on which any such insurer denies such claim; provided that, prior to giving effect to this clause (c), the Appraised Value of the Eligible Collateral shall be no less than (x) 150% of the First Lien Obligations or (y) 100% of the Total Obligations. It is understood and agreed that if the Collateral Agent should receive any Net Cash Proceeds directly from the insurer in respect of an Event of Loss or a Recovery Event and at the time of such receipt, (A) no Event of Default shall have occurred and be continuing and the Borrower is in compliance with Section 6.06(a) and (b) (without giving effect to the receipt of such Net Cash Proceeds), the Collateral Agent shall promptly cause such proceeds to be paid to the Borrower or the applicable Guarantor and (B) an Event of Default shall have occurred and be continuing or the Borrower fails to be in compliance with Section 6.06(a) or (b) (without giving effect to the receipt of such Net Cash Proceeds), the Collateral Agent shall promptly cause such proceeds to be deposited into the account of the Borrower or the applicable Guarantor maintained for such purpose with the Administrative Agent that is subject to a Full Control Agreement and such proceeds shall be applied or released from such account in accordance with Section 2.12(a).

(d) At the Borrower’s request, (i) the Lien on an operating asset constituting Collateral in connection with any financing permitted pursuant to (x) Section 6.03(l) secured by such operating asset or (y) Section 6.03(y) or (ii) the Lien on an asset constituting Eligible Collateral will be promptly released, provided, in each case, that the following conditions are satisfied or waived: (A) no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default shall have occurred and be continuing, (B) either (x) after giving effect to such release, the remaining Eligible Collateral shall continue to satisfy this Section 6.06, (y) the Borrower shall prepay the Loans in an amount required to comply with this Section 6.06, or (z) the Borrower shall deliver to the Collateral Agent Cure Collateral in an amount required to comply with this Section 6.06, and (C) the Borrower shall deliver an Officer’s Certificate demonstrating compliance with this Section 6.06 following such release. In connection herewith, the Collateral Agent agrees to promptly provide any documents or releases reasonably requested by the Borrower to evidence such release.

SECTION 6.07.Dividends; Capital Stock. Declare or pay, directly or indirectly, or otherwise make any Restricted Payment or set apart any sum for the aforesaid purposes, except (a) dividends or other distributions or transfers to the Borrower or another Guarantor; (b) dividends by any Guarantor to any other holder of its equity on a pro rata basis;

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(c) dividends in the form of capital stock or increases in the aggregate liquidation value of any preferred stock; (d) repurchases of Equity Interests deemed to occur upon (i) the exercise of stock options if the Equity Interests represent a portion of the exercise price thereof or (ii) the withholding of a portion of Equity Interests issued to (A) employees under the Plan of Reorganization and (B) employees and other participants under an equity compensation program of the Borrower or its Subsidiaries, in each case to cover withholding tax obligations of such persons in respect of such issuance; (e) dividends or repurchases of Equity Interests with the proceeds from the issuance of additional Equity Interests or subordinated Indebtedness permitted hereunder, provided that no Event of Default shall have occurred and be continuing at the time of payment of such dividend; (f) to the extent not otherwise permitted under clauses (c) or (e) of this Section, dividends or other distributions or transfers pursuant to stock option plans, other benefit plans or other arrangements for management or employees of the Borrower and its Subsidiaries in a maximum aggregate amount not to exceed $2,000,000; and (g) other Restricted Payments in an aggregate amount not to exceed $1,000,000 annually.

SECTION 6.08.Transactions with Affiliates. Sell or transfer any property or assets to, or otherwise engage in any other material transactions with, any of its Affiliates (other than the Borrower and its Subsidiaries), other than (a) on overall terms and conditions not less favorable to the Borrower or such Guarantor than could be obtained on an arm’s-length basis from unrelated third parties; (b) transactions contemplated by the Plan of Reorganization; (c) fees and compensation paid to, and indemnities provided on behalf of, officers, directors or employees of the Borrower or any Guarantor as reasonably determined by the board of directors or senior management, as the case may be, of the Borrower or any Guarantor; (d) any dividends, other distributions or payments permitted by Section 6.07; (e) the existence of, and the performance by a Guarantor or the Borrower of its obligations under the terms of, any limited liability company, limited partnership or other organization document or securityholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party on the Closing Date and set forth on Schedule 6.08, and similar agreements that it may enter into thereafter; (f) the provision of any legal, accounting or administrative services to the Borrower or any of its Subsidiaries in the ordinary course of business in accordance with past practices; and (g) transactions with Affiliates set forth on Schedule 6.08.

SECTION 6.09.Investments, Loans and Advances. Purchase, hold or acquire any Investments, except for:

(a) ownership by the Borrower and the Guarantors of the capital stock of each of the Subsidiaries subject in each case to Section 6.02;

(b) Permitted Investments;

(c) advances and loans among the Borrower and the Guarantors;

(d) Investments in the Escrow Accounts and other trust accounts;

(e) Investments existing on the date hereof and described on Schedule 6.09 hereto;

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(f) Investments in connection with (i) foreign exchange contracts, currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign interest rates and currency values, (ii) interest rate swap, cap or collar agreements and interest rate future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates, and (iii) fuel hedges and other derivatives contracts, in each case to the extent that such agreement or contract is entered into for bona fide hedging purposes and (other than in the case of fuel hedges) in the ordinary course of business;

(g) Investments received (x) in settlement of amounts due to any of the Borrower and the Guarantors effected in the ordinary course of business (including as a result of dispositions permitted by this Agreement) or (y) in connection with the bankruptcy or the reorganization of any customers or suppliers;

(h) Investments in an amount not to exceed $150,000,000 in the aggregate at any one time outstanding in connection with (1) Investments in travel or airline related businesses made in connection with marketing and promotion agreements, alliance agreements, distribution agreements, agreements with respect to fuel consortiums, agreements relating to flight training, agreements relating to insurance arrangements, agreements relating to parts management systems and other similar agreements, (2) additional Investments in joint ventures listed on Schedule 6.09 or Investments in new joint ventures made after the Closing Date, and (3) Investments by the Borrower and the Guarantors not otherwise permitted under this Agreement;

(i) advances to officers, directors and employees of the Borrower and the Guarantors in an aggregate not to exceed (i) $250,000 at any time outstanding to any individual officer, director or employee or (ii) $5,000,000 in the aggregate at any time outstanding for all such advances;

(j) Investments held or invested in by any of the Borrower and the Guarantors in the form of foreign cash equivalents in the ordinary course of business;

(k) advances to officers, directors and employees of the Borrower and the Guarantors in connection with relocation expenses or signing bonuses for newly hired officers, directors or employees of the Borrower and the Guarantors;

(l) Investments in the form of lease, utility and other similar deposits or any other deposits permitted hereunder in the ordinary course of business;

(m) pledges and deposits by the Borrower and the Guarantors permitted under Sections 6.01 or 6.03;

(n) (i) Investments and guarantees by the Borrower and the Guarantors permitted under Sections 6.01 or 6.03, (ii) Guarantees in the ordinary course of business of obligations that do not constitute Indebtedness of (A) the Borrower or any of its Subsidiaries or (B) any regional air carrier that is a member of the Delta Connection program owed to airport operators in connection with its activities under the Delta Connection program and (iii) advances to airport operators of landing fees and other customary airport charges on behalf of carriers for which the Borrower or any of its Subsidiaries provides ground handling services;

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(o) loans or Investments by the Borrower or any Guarantor that could otherwise be made as a distribution permitted under Section 6.07; provided that for purposes of Section 6.07 such loan or Investment shall be treated as a distribution thereunder;

(p) Investments held by the Borrower or any Guarantor to the extent such Investments reflect an increase in the value of Investments;

(q) Investments by the Borrower and the Guarantors creating new Subsidiaries so long as they comply with Section 5.14 hereof;

(r) Investments in Subsidiaries which are not Guarantors in an aggregate amount not to exceed $25,000,000 in the aggregate at any one time outstanding;

(s) Investments in Aero Assurance, Ltd. or New Sky, Ltd., to the extent reasonably necessary to support the working capital insurance obligations of the Borrower and the Guarantors;

(t) any Permitted Acquisition by the Borrower or any Guarantor so long as (1) on a pro forma basis after giving effect to such Permitted Acquisition, the Borrower and the Guarantors shall be in compliance with Sections 6.04, 6.05 and 6.06 and (2) in the event the purchase price for such Permitted Acquisition exceeds $750,000,000, the sum of (A) the unrestricted cash of the Borrower and its Subsidiaries and (B) the Unused Total Revolving Commitment, in each case, as determined immediately prior to such acquisition, shall be no less than $1,500,000,000;

(u) any Investments acquired in connection with Permitted Acquisitions;

(v) capitalization or forgiveness of any Indebtedness owed to the Borrower by any Guarantor or owed to any Guarantor by the Borrower or any other Guarantor;

(w) cancellation, forgiveness, set-off, or acceptance of prepayments by the Borrower or any Guarantor with respect to debt, other obligations and/or equity securities in the ordinary course of business and to the extent not otherwise prohibited by the terms of this Agreement;

(x) Investments consisting of the acquisition of equity interests pursuant to Sections 6.07(d) and 6.07(e);

(y) the Borrower and the Guarantors may hold Investments comprised of notes payable, or stock or other securities issued by Account Debtors to the Borrower or such Guarantor, as the case may be, pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(z)  the Borrower and the Guarantors may make Investments with the funds held in the Excluded Accounts;

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(aa)          the Borrower may make any Investment in any Guarantor, any Guarantor may make any Investment in the Borrower and any Guarantor may make any Investment in any other Guarantor;

(bb)          the Borrower may make Investments in the form of advances under a revolving loan facility in an aggregate principal amount not to exceed $25,000,000 outstanding at any time, to the Borrower’s Plans or any similar benefit plans of the Borrower (together, the “Benefits Plans”) for the payment of ordinary operating expenses of the Benefits Plans (including the payment of benefits in accordance with the terms of the Benefits Plans and periodic premiums under insurance or annuity contracts) or for the purposes incidental to the ordinary operation of the Benefits Plans;

(cc)          Investments resulting from any sale or other Disposition of assets otherwise permitted by Section 6.10; and

(dd)          the Borrower and the Guarantors may make other Investments in an aggregate amount outstanding at any one time not to exceed $25,000,000 for all Investments made pursuant to this clause(cc).

The amount of any investment or loan shall be the initial amount of such investment less all returns of principal, capital, dividends and other cash returns thereof and less all liabilities expressly assumed by another person in connection with the sale of such investment.

SECTION 6.10.Disposition of Assets. Sell or otherwise Dispose of any Collateral (including, without limitation, the capital stock of any Subsidiary, but excluding any Permitted Disposition), except that such sale or other Disposition of Collateral shall be permitted provided that upon consummation of any such sale or other Disposition (i) no Event of Default shall have occurred and be continuing and (ii) the Borrower is in compliance, after giving effect to the grace periods referred to in Section 6.06 and after giving effect to such sale or other Disposition (including any deposit of any Net Cash Proceeds received upon consummation thereof in an account subject to a Full Control Agreement), with Section 6.06 hereof; provided that nothing contained in this Section 6.10 is intended to excuse performance by the Borrower or any Guarantor of any requirement of any Collateral Document that would be applicable to a Disposition permitted hereunder.

SECTION 6.11.Nature of Business. Enter into any business that is materially different from those conducted by the Borrower and the Guarantors on the Closing Date, except for any business ancillary to the businesses conducted by the Borrower and the Guarantors on the Closing Date.

SECTION 6.12.Fiscal Year. Change the last day of its fiscal year from December 31.

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SECTION 7.

EVENTS OF DEFAULT

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

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

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

(c) default shall be made by the Borrower or any Guarantor in the due observance or performance of any covenant, condition or agreement contained in Section 6 hereof (subject to the Borrower’s right to cure non-compliance with the covenants contained in Section 6.06(a) and 6.06(b) as described therein); or

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

(e) other than with respect to (x) any Qualified Restructuring Indebtedness and (y) any Specified Jet Fuel Action, the Borrower or any Guarantor or any of their respective Subsidiaries shall fail to make any payment of principal, interest or premium in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace periods or waivers or amendments); or

(f) other than with respect to (x) any Qualified Restructuring Indebtedness, (y) any Specified Jet Fuel Action and (z) the Regional Airports Improvement Corporation Facilities Sublease Refunding Revenue Bonds, Issue of 1996, Delta Air Lines, Inc. (Los Angeles International Airport), any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (after giving effect to any grace periods) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that the

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foregoing shall not apply to Indebtedness that becomes due as a result of (i) the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of any property or assets pursuant to the terms of such Indebtedness to the extent that (A) such sale, transfer or other disposition does not give rise to a default thereunder and (B) the payment of such Indebtedness is made in accordance with the terms of such Indebtedness with the proceeds of such sale, transfer or other disposition or (ii) in the case of any ARB Indebtedness, a change in law causing a determination of taxability-related call in respect of such ARB Indebtedness; or

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

(h) the Borrower or any Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; or

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

(j) a Change of Control shall occur; or

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

(l) any final judgment in excess of $50,000,000 (exclusive of any Qualified Judgment, any Specified Jet Fuel Action and any judgment or order the amounts of which are fully covered by insurance less any applicable deductible and as to which the insurer has been notified of such judgment and has not denied coverage) shall be rendered against the Borrower or any of the Guarantors and the enforcement thereof shall not have been stayed, vacated, satisfied, discharged or bonded pending appeal within sixty (60) consecutive days; or

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

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

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

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

(q) all or substantially all of the Borrower’s flights and operations are suspended for more than two (2) consecutive days (other than as a result of an FAA suspension due to force majeure or any other extraordinary event similarly affecting major United States air carriers having both substantial domestic and international operations);

then, and in every such event and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders, the Administrative Agent shall, by written notice to the Borrower, take one or more of the following actions, at the same or different times: (i) terminate forthwith the Commitments (which, in the case of the Credit-Linked Deposit, means that the obligation to issue Credit-Linked Deposit Letters of Credit or make Credit-Linked Deposit Loans shall terminate and the Credit-Linked Deposits shall be returned to the Credit-Linked Deposit Lenders in accordance with the terms of this Agreement); (ii) declare the Loans or any portion thereof then outstanding to be forthwith due and payable, whereupon the principal of the Loans together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding; (iii) require the Borrower and the Guarantors promptly upon written demand to

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deposit in the Letter of Credit Account Cash Collateralization for the LC Exposure (and to the extent the Borrower and the Guarantors shall fail to furnish such funds as demanded by the Administrative Agent, the Administrative Agent shall be authorized to debit the accounts of the Borrower and the Guarantors maintained with the Administrative Agent in such amounts); (iv) set-off amounts in the Letter of Credit Account or any other accounts (other than Escrow Accounts, Payroll Accounts or other accounts held in trust for an identified beneficiary) maintained with the Administrative Agent or the Collateral Agent (or any of their respective affiliates) and apply such amounts to the obligations of the Borrower and the Guarantors hereunder and in the other Loan Documents; and (v) exercise any and all remedies under the Loan Documents and under applicable law available to the Administrative Agent, the Collateral Agent and the Lenders. In case of any event with respect to the Borrower described in clause (g) or (h) of this Section, the actions and events described in (i), (ii) and (iii) above shall be required or taken automatically, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Any payment received as a result of the exercise of remedies hereunder shall be applied in accordance with Section 2.17(b).

SECTION 8.

THE AGENTS

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

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

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

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

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

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

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

SECTION 8.03.Liability of Agents.

(a) The Administrative Agent and the Collateral Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Administrative Agent and the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent and the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that each such agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08), and (iii) except as expressly set forth herein, the Administrative Agent and the Collateral Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the institution serving as an Administrative Agent or Collateral Agent or any of its Affiliates in any capacity. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08) or in the absence of its own gross negligence, bad faith or willful misconduct. The Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent and the Collateral Agent by the Borrower or a Lender, and the Administrative Agent and the Collateral Agent shall not be responsible for, or have any duty to ascertain or inquire into, (A) any statement, warranty or representation made in or in connection with this Agreement, (B) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (D) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (E) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent and the Collateral Agent.

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

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

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

SECTION 8.05.Successor Agents. Subject to the appointment and acceptance of a successor agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Lender and the Borrower. Upon any such resignation by the Administrative Agent, the Required Lenders shall have the right, with the consent (provided no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default has occurred or is continuing) of the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, in consultation with the Borrower, on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent which shall be a bank institution with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as an Administrative Agent.

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

SECTION 8.07.Advances and Payments.

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

(b) Any amounts received by the Administrative Agent in connection with this Agreement (other than amounts to which the Administrative Agent is entitled pursuant to Sections 2.18, 8.04 and 10.04), the application of which is not otherwise provided for in this Agreement, shall be applied in accordance with Section 2.17(b). All amounts to be paid to a Lender by the Administrative Agent shall be credited to that Lender, after collection by the Administrative Agent, in immediately available funds either by wire transfer or deposit in that Lender’s correspondent account with the Administrative Agent, as such Lender and the Administrative Agent shall from time to time agree.

SECTION 8.08.Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise either by it or any of its banking Affiliates of a right of banker’s lien, setoff or counterclaim against the Borrower or a Guarantor, including, but not limited to, a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim and received by such Lender (or any of its banking Affiliates) under any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain payment in respect of its Loans or LC Exposure as a result of which the unpaid portion of its Loans or LC Exposure is proportionately less than the unpaid portion of the Loans or LC Exposure of any other Lender (a) it shall promptly purchase at par (and shall be deemed to have thereupon purchased) from such other Lender a participation in the Loans or LC Exposure of such other Lender, so that the aggregate unpaid principal amount of each Lender’s Loans and LC Exposure and its participation in Loans and LC Exposure of the other Lenders shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding and LC Exposure as the principal amount of its Loans and LC Exposure prior to the obtaining of such payment was to the principal amount of all Loans outstanding and LC Exposure prior to the obtaining of such payment and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payment pro-rata, provided, that if any such non-pro-rata payment is thereafter recovered or otherwise set aside, such purchase of participations shall be rescinded (without interest). The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding (or deemed to be holding) a participation in a Loan or LC Exposure acquired pursuant to this Section or any of its banking Affiliates may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to such Lender as fully as if such Lender was the original obligee thereon, in the amount of such participation.

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SECTION 8.09.Other Agents. No Agent (other than the Administrative Agent and the Collateral Agent) shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, no such Agent shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any such Agent in deciding to enter into this Agreement or in taking or not taking action hereunder. Each such Agent shall be entitled to the benefit of the exculpation and indemnification provided in this Section 8 to the same extent as the Administrative Agent and the Collateral Agent.

SECTION 9.

GUARANTY

SECTION 9.01.Guaranty.

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

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

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

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

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

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

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

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

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

SECTION 10.

MISCELLANEOUS

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

(i)     if to the Borrower or any Guarantor, to it at Delta Air Lines, Inc., 1030 Delta Boulevard, Atlanta, GA 30354, Attention of: (x) Treasurer, Dept. 856, Telecopier No.: (404) 715-4862, Telephone No.: (404) 714-1724 and (y) General Counsel, Dept. 971, Telecopier No.: (404) 715-2233, Telephone No.: (404) 715-2611;

(ii)    if to JPMCB as Administrative Agent, to it at JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of: Maryann T Bui (Telecopy No.: 713-750-2358), with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, New York 10017, Attention of: Matthew Massie (Telecopy No.: 212-270-5100);

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

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

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

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

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

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment, Credit-Linked Deposit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of Credit-Linked Deposits to an assignee that is (I) immediately prior to giving effect to such assignment a Lender, (II) an Affiliate of a Lender, or (III) an Approved Fund;

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(B) the Issuing Lender; and

(C) the Borrower; provided that no consent of the Borrower shall be required for an assignment (I) if an Event of Default has occurred and is continuing or (II) if the assignee is a Lender, an Affiliate of a Lender or an Approved Fund.

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

(A) any assignment of any portion of the Total Revolving Commitment, Revolving Loans and LC Exposure shall be made to an Eligible Assignee;

(B) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment, Credit-Linked Deposits or Loans, the amount of such Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 (with respect to Credit-Linked Deposits) or $5,000,000 (with respect to Revolving Commitments or Revolving Loans), and after giving effect to such assignment, the portion of the Loan or Commitment held by the assigning Lender of the same tranche as the assigned portion of the Loan or Commitment shall not be less than $1,000,000 (with respect to Credit-Linked Deposits) or $5,000,000 (with respect to Revolving Commitments or Revolving Loans), in each case unless the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

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

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

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(E) the assignee, if it was not a Lender immediately prior to such assignment, shall deliver to the Administrative Agent an administrative questionnaire in a form as the Administrative Agent may require.

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

(iii)   Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Revolving Lender and/or Credit-Linked Deposit Lender, as the case may be, under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and 10.04). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.02 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section. Without the consent of the Borrower (which consent shall not be unreasonably withheld) and the Administrative Agent, the Credit-Linked Deposit of any Credit-Linked Deposit Lender shall not be released in connection with any assignment by such Credit-Linked Deposit Lender, but shall instead be purchased by the relevant assignee and continue to be held for application (to the extent not already applied) in accordance with Section 2.02 to satisfy such assignee’s obligations in respect of Credit-Linked Deposit LC Disbursements.

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

(c) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed administrative questionnaire in a form as the Administrative Agent may require (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of

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this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register; provided, that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.02(d) or (e), 2.04(b) or 10.04(c), the Administrative Agent shall have no obligation to accept such Assignment and Acceptance and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(d) (i)    Any Lender may, without the consent of the Borrower, the Administrative Agent or the Issuing Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans and Credit-Linked Deposits and participations in Credit-Linked Deposit Letters of Credit owing to it); provided, that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.08(a)that affects such Participant. Subject to paragraph (d)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14 and 2.16to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.08 as though it were a Lender, provided such Participant agrees to be subject to the requirements of Section 8.08 as though it were a Lender.

(ii)    A Participant shall not be entitled to receive any greater payment under Section 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(f) as though it were a Lender.

(e) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 10.02 shall not apply to any such pledge or assignment of a security interest; provided, that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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(f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.02, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower or any of the Guarantors furnished to such Lender by or on behalf of the Borrower or any of the Guarantors; provided, that prior to any such disclosure, each such assignee or participant or proposed assignee or participant are advised of and agree to be bound by either the provisions of Section 10.03 or other provisions at least as restrictive as Section 10.03.

SECTION 10.03.Confidentiality. Each Lender agrees to keep any information delivered or made available by the Borrower or any of the Guarantors to it confidential from anyone other than persons employed or retained by such Lender who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans, and who are advised by such Lender of the confidential nature of such information; provided, that nothing herein shall prevent any Lender from disclosing such information (a) to any of its Affiliates (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential) or to any other Lender, (b) upon the order of any court or administrative agency, (c) upon the request or demand of any regulatory agency or authority, (d) which has been publicly disclosed other than as a result of a disclosure by the Administrative Agent or any Lender which is not permitted by this Agreement, (e) in connection with any litigation to which the Administrative Agent, any Lender, or their respective Affiliates may be a party to the extent reasonably required, (f) to the extent reasonably required in connection with the exercise of any remedy hereunder, (g) to such Lender’s legal counsel and independent auditors, and (h) to any actual or proposed participant or assignee of all or part of its rights hereunder or to any direct or indirect contractual counterparty (or the professional advisors thereto) to any swap or derivative transaction relating to the Borrower and its obligations, in each case, subject to the proviso in Section 10.02(f). If any Lender is in any manner requested or required to disclose any of the information delivered or made available to it by the Borrower or any of the Guarantors under clauses (b) or (e) of this Section, such Lender will, to the extent permitted by law, provide the Borrower with prompt notice, to the extent reasonable, so that the Borrower may seek, at its sole expense, a protective order or other appropriate remedy or may waive compliance with this Section.

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

122

(ii)    The Borrower shall pay or reimburse (A) all reasonable fees and reasonable expenses of the Administrative Agent and its internal and third-party auditors, the Appraisers, the Real Estate Appraiser and consultants incurred in connection with the Administrative Agent’s (a) periodic field examinations and appraisals and (b) other monitoring of assets as allowed hereunder and (B) all reasonable fees and reasonable expenses of the Issuing Lenders in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand or any payment thereunder.

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

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

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

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

123

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

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

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

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

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

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

SECTION 10.08.Amendments, etc.

124

(a) No modification, amendment or waiver of any provision of this Agreement or any Collateral Document (other than any Control Agreement), and no consent to any departure by the Borrower or any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given; provided, however, that no such modification or amendment shall without the written consent of (i) each Lender directly affected thereby (A) increase the Commitment of any Lender or extend the expiry of the Commitment of any Lender (it being understood that a waiver of an Event of Default shall not constitute an increase in or extension of the expiry of the Commitment of a Lender), (B) reduce the principal amount of any Loan, any reimbursement obligation in respect of any Letter of Credit, or the rate of interest payable thereon (provided that only the consent of the Required Lenders shall be necessary for a waiver of default interest referred to in Section 2.08), extend the date on which the Credit-Linked Deposits are required to be returned to the Credit-Linked Deposit Lenders or extend any date for the payment of interest hereunder or reduce any Fees payable hereunder or extend the final maturity of the Borrower’s obligations hereunder or (C) amend, modify or waive any provision of Section 2.17(b) or (ii) all of the Lenders (A) amend or modify any provision of this Agreement which provides for the unanimous consent or approval of the Lenders, (B) amend this Section 10.08 or modify the percentage of the Lenders required in the definition of Required Lenders or (C) release all or substantially all of the Liens granted to the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document, or release all or substantially all of the Guarantors. No such amendment or modification shall adversely affect the rights and obligations of the Administrative Agent or any Issuing Lender or the Collateral Agent hereunder without its prior written consent. No notice to or demand on the Borrower or any Guarantor shall entitle the Borrower or any Guarantor to any other or further notice or demand in the same, similar or other circumstances. Each assignee under Section 10.02(b) shall be bound by any amendment, modification, waiver, or consent authorized as provided herein, and any consent by a Lender shall bind any Person subsequently acquiring an interest on the Loans held by such Lender. No amendment to this Agreement shall be effective against the Borrower or any Guarantor unless signed by the Borrower or such Guarantor, as the case may be.

(b) Notwithstanding anything to the contrary contained in Section 10.08(a), (i) in the event that the Borrower requests that this Agreement be modified or amended in a manner which would require the unanimous consent of all of the Lenders and such modification or amendment is agreed to by the Required Lenders, then the Borrower may replace any such non-consenting Lender in accordance with Section 10.02; provided that such amendment or modification can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this clause (i)); (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Loans held or deemed held by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder requiring any consent of the Lenders) and (iii) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days notice thereof.

125

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

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

SECTION 10.11.Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Lender or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.04 and Section 8 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the return of the Credit-Linked Deposits, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

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

SECTION 10.13.USA Patriot Act. Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrower and each Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and each Guarantor and other information that will allow such Lender to identify the Borrower and each Guarantor in accordance with the Patriot Act.

126

SECTION 10.14.Registrations with International Registry. Each of the parties hereto consents to the registrations with the International Registry of the International Interest constituted by the First Lien Aircraft Mortgage, and each party hereto covenants and agrees that it will take all such action reasonably requested by Borrower or Collateral Agent in order to make any registrations with the International Registry, including becoming a registry user entity with the International Registry and providing consents to any registration as may be contemplated by the Loan Documents.

SECTION 10.15.WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

127

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

DELTA AIR LINES, INC.

By:     /s/ Paul A. Jacobson

Name: Paul A. Jacobson

Title: Vice President and Treasurer

ASA HOLDINGS, INC.

By:     /s/ Paul A. Jacobson

Name: Paul A. Jacobson

Title:President

COMAIR HOLDINGS, LLC

By:     /s/ Dan Dixon

Name: Dan Dixon

Title: Vice President, Chief Financial Officer

                       and Treasurer

COMAIR, INC.

By:      /s/ Dan Dixon                                                

Name: Dan Dixon

Title: Vice President and CFO

COMAIR SERVICES, INC.

By:     /s/ Dan Dixon                                               

Name: Dan Dixon

Title: Vice President

CROWN ROOMS, INC.

By:     /s/ Mona Warwar                                         

Name: Mona Warwar

Title: Assistant Treasurer

DAL GLOBAL SERVICES, LLC

By:     /s/ Mona Warwar                                        

Name: Mona Warwar

Title: Assistant Treasurer

128

DAL MOSCOW, INC.

By:     /s/ Mona Warwar                                                

Name: Mona Warwar

Title: Treasurer

DELTA AIRELITE BUSINESS JETS, INC.

By:     /s/ Michael B. Green                                             

Name: Michael B. Green

Title: President

DELTA BENEFITS MANAGEMENT, INC.

By:     /s/ Michael O. Randolfi                                        

Name: Michael O. Randolfi

Title: Treasurer

DELTA CONNECTION ACADEMY, INC.

By:     /s/ Jason Dauderman                                          

Name: Jason Dauderman

Title: VP of Finance and CFO

DELTA LOYALTY MANAGEMENT SERVICES, LLC

By:     /s/ Michael O. Randolfi                                         

Name: Michael O. Randolfi

Title: Treasurer

DELTA TECHNOLOGY, LLC

By:     /s/ E. Alan Arnold                                                 

Name: E. Alan Arnold

Title: Secretary

EPSILON TRADING, LLC

By:     /s/ Edward M. Smith                                            

Name: Edward M. Smith

Title: Treasurer and Comptroller

129

KAPPA CAPITAL MANAGEMENT, INC.

By:     /s/ Michael O. Randolfi                                          

Name: Michael O. Randolfi

Title: President

130

JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent and Lender

By:     /s/ Matthew H. Massie                                      

Name: Matthew H. Massie

Title: Managing Director

JPMORGAN SECURITIES, INC., as Co-Lead Arranger and Joint Bookrunner

By:     /s/ John C. Riordan                                              

Name: John C. Riordan

Title: Vice President

BARCLAYS BANK PLC, as Lender

By:     /s/ Diane F. Rolfe                                               

Name: Diane F. Rolfe

Title: Director

CALYON NEW YORK BRANCH, as Co-Documentation Agent and Lender

By:     /s/ Brian Bolotin                                                     

Name: Brian Bolotin

Title: Managing Director

By:     /s/ Angel Naranjo                                                   

Name: Angel Naranjo

Title: Director

C.I.T. LEASING CORPORATION, as Lender

By:     /s/Nicholas Pastushan                                            

Name: Nicholas Pastushan

Title: Senior Vice President

131

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as Lender

By:     /s/ Edward C.A. Forsberg, Jr.                                                  

Name: Edward C. A. Forsberg, Jr.

Title: Senior Vice President & Manager

By:     /s/ Peter Wesemeier                                                                 

Name: Peter Wesemeier

Title: Assistant Treasurer

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Lender

By:     /s/ Karl Studer                                                                     

Name: Karl Studer

Title: Director

By:/s/ Bernhard Schmid

Name: Bernhard Schmid

Title: Assistant Vice President

GOLDMAN SACHS CREDIT PARTNERS L.P., as Lender

By:     /s/ Bruce H. Mendelsohn                                                   

Name: Bruce H. Mendelsohn

Title: Authorized Signatory

ING CAPITAL LLC, as Lender

By:     /s/ Mallika Kambhampati                                                    

Name: Mallika Kambhampati

Title: Director

By:     /s/ Anthony Rivera                                                              

Name: Anthony Rivera

Title: Vice President

132

LEHMAN BROTHERS INC., as Co-Lead Arranger and Joint Bookrunner

By:     /s/ Jeff Ogden                                                   

Name: Jeff Ogden

Title: Managing Director

LEHMAN COMMERCIAL PAPER INC., as Lender

By:     /s/ Jeff Ogden                                                     

Name: Jeff Ogden

Title: Managing Director

MERRILL LYNCH COMMERCIAL FINANCE CORP, as Lender

By:     /s/ Joshua A. Green                                           

Name: Joshua A. Green

Title: Managing Director

RBS SECURITIES CORPORATION, as Co-Documentation Agenet

By:     /s/ L. Peter Yetman                                            

Name: L. Peter Yetman

Title: SVP

ROYAL BANK OF SCOTLAND PLC, as Lender

By:     /s/ L. Peter Yetman                                              

Name: L. Peter Yetman

Title: SVP

133

UBS LOAN FINANCE LLC, as Lender

By:     /s/ Richard L Tavrow                                                        

Name: Richard L. Tavrow

Title:   Director

            Banking Products Services, US

By:     /s/ Mary E. Evans                                                            

Name: Mary E. Evans

Title:   Associate Director

             Banking Products Services, US

UBS SECURITIES LLC, as Syndication Agent and Joint Bookrunner

By:    /s/ Richard L Tavrow                                                      

Name: Richard L. Tavrow

Title:   Director

            Banking Products Services, US

By:     /s/ Mary E. Evans                                                            

Name: Mary E. Evans

Title: Associate Director

         Banking Products Services, US

U.S. BANK NATIONAL ASSOCIATION, as Lender

By:     /s/ Ziad W. Amra                                                          

Name: Ziad W. Amra

Title: Assistant Vice President

WACHOVIA BANK NATIONAL ASSOCIATION, as Lender

By:    /s/ Thomas A. Martin                                                 

Name: Thomas A. Martin

Title: Director

134

WEBSTER BUSINESS CREDIT CORPORATION, as Lender

By:     /s/ Walter K. Stockhecker                                                      

Name: Walter K. Stockhecker

Title: Vice President and Authorized

           Signatory

135

EX-10.1(B)

EXHIBIT 10.1(b)

SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT

Among

DELTA AIR LINES, INC.,

as Borrower,

and

THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,

as Guarantors

and

THE LENDERS PARTY HERETO,

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Administrative Agent and Collateral Agent

BARCLAYS CAPITAL,

as Syndication Agent

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Co-Lead Arranger and Joint Bookrunner

MERRILL LYNCH COMMERCIAL FINANCE CORP.,

as Co-Lead Arranger and Joint Bookrunner

BARCLAYS CAPITAL,

as Joint Bookrunner

CREDIT SUISSE SECURITIES (USA) LLC,

as Co-Documentation Agent

C.I.T. LEASING CORPORATION

as Co-Documentation Agent

Dated as of April 30, 2007

Table of Contents

Page

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

i

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

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

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

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

iv

SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT

Dated as of April 30, 2007

SECOND LIEN TERM LOAN AND GUARANTY AGREEMENT, dated as of April 30, 2007, among DELTA AIR LINES, INC., a Delaware corporation (the “Borrower”), the direct and indirect domestic subsidiaries of the Borrower (other than Excluded Subsidiaries and, at the option of the Borrower, Immaterial Subsidiaries) signatory hereto (each a “Guarantor” and collectively the “Guarantors”), the several banks and other financial institutions or entities from time to time party hereto (the “Lenders”), GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent for the Lenders (in such capacity, the “Collateral Agent”), GSCP and MERRILL LYNCH COMMERCIAL FINANCE CORP. (“Merrill Lynch”), as co-lead arrangers and joint bookrunners, BARCLAYS CAPITAL (“Barclays Capital”), the investment banking division of BARCLAYS BANK PLC, as syndication agent (in such capacity, the “Syndication Agent”) and as joint bookrunner, and CREDIT SUISSE SECURITIES (USA) LLC and C.I.T. LEASING CORPORATION, as co-documentation agents (in such capacity, the “Co-Documentation Agents”).

INTRODUCTORY STATEMENT

The Borrower has applied to the Lenders for a term loan facility in an aggregate principal amount not to exceed $900,000,000 as set forth herein. All of the Borrower’s obligations under such facility are to be guaranteed by the Guarantors.

The proceeds of the Loans, as well as the proceeds of the First Lien Loans and cash on hand, will be used to repay in full all of the obligations of the Borrower and the Guarantors under and in connection with the Existing DIP Facilities, for working capital and other general corporate purposes of the Borrower and its Subsidiaries and for the other purposes described in Section 3.08.

To provide guarantees and security for the repayment of the Loans, and the payment of the other obligations of the Borrower and the Guarantors hereunder and under the other Loan Documents, the Borrower and the Guarantors will, among other things, provide to the Administrative Agent, the Collateral Agent and the Lenders the following (each as more fully described herein):

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

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

Accordingly, the parties hereto hereby agree as follows:

SECTION 1.

DEFINITIONS

SECTION 1.01.Defined Terms.

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

“Account” shall mean all “accounts” as defined in the UCC, and all rights to payment for interest (other than with respect to debt and credit card receivables).

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

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

“Affiliate” shall mean, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person (a “Controlled Person”) shall be deemed to be “controlled by” another Person (a “Controlling Person”) if the Controlling Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of the Controlled Person whether by contract or otherwise; provided, that the PBGC shall not be an Affiliate of the Borrower or any Guarantor.

“Agents” shall mean the Administrative Agent, the Collateral Agent, the Syndication Agent, the Co-Documentation Agents, the Joint Bookrunners and the Joint Lead Arrangers.

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

“Aggregate Exposure” shall mean, with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Second Lien Term Loan Commitments at such time and (b) thereafter, the aggregate then unpaid principal amount of such Lender’s Second Lien Term Loans.

“Aggregate Exposure Percentage” shall mean, with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

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

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

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

“Airport Authority” shall mean any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities, which in each case is an owner, administrator, operator or manager of one or more airports or related facilities.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the sum of the Federal Funds Effective Rate in effect on such day plus½ of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ALPA Notes” shall mean the senior unsecured notes in an aggregate principal amount not to exceed $650,000,000 to be issued by the Borrower for the benefit of the Air Line Pilots Association in accordance with the Plan of Reorganization and the Bankruptcy Restructuring Agreement referred to therein.

“Amex” shall mean American Express Travel Related Services Company, Inc.

“Applicable Margin” shall mean a rate per annum equal to (i) 2.25% in the case of ABR Loans and (ii) 3.25% in the case of Eurodollar Loans.

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

“Appraised Collateral” shall mean Collateral that is Mortgaged Collateral, Primary Routes, Appraised FAA Slots, Flight Simulators, Tooling, Ground Support Equipment, Real Property Assets or any other individual asset that, in each case is included in an Appraisal Report.

“Appraised FAA Slots” shall mean FAA Slots that are included in an Appraisal Report.

“Appraised Value” shall mean (a) in the case of Appraised Collateral, the fair market value thereof as reflected in the most recent Appraisal Report obtained in respect of such Collateral or assets in accordance with this Agreement; provided that, with respect to Mortgaged Collateral, “Appraised Value” shall mean the average of the Appraised Value (as otherwise calculated pursuant to this definition) reflected in the Appraisal Reports obtained from three separate Appraisers with respect to such Collateral and (b) in the case of Eligible Accounts Receivable, Eligible Accounts Receivable, as reflected in the most recent Officer’s Certificate delivered pursuant to Section 5.01(n), each such value referred to in this definition to be (A) determined in a manner reasonably satisfactory to the Administrative Agent and (B) subject to reserves and other criteria established by the Administrative Agent in its commercially reasonable discretion.

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“Appraisers” shall mean (a) Simat, Helliesen & Eichner, Inc., as to the FAA Slots, Primary Routes, Primary Foreign Slots, Ground Support Equipment, Tooling and Flight Simulators, (b) Simat, Helliesen & Eichner, AVITAS, Inc. and BK Associates, Inc., as to Mortgaged Collateral and (c) such other appraisal firm or firms as may be retained by the Administrative Agent, in consultation with the Borrower, from time to time.

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

“ARB Indebtedness” shall mean, with respect to the Borrower or any of its Subsidiaries, without duplication, all Indebtedness or obligations of the Borrower or such Subsidiary created or arising with respect to any limited recourse revenue bonds issued for the purpose of financing or refinancing improvements to, or the construction or acquisition of, airport and other related facilities and equipment, the use or construction of which qualifies and renders interest on such bonds exempt from certain federal or state taxes.

“Asset Sale” shall mean any sale of Collateral or series of related sales of Collateral (excluding any Permitted Disposition other than any sale of Eligible Collateral) that yields Net Cash Proceeds to the Borrower or any of its Subsidiaries in excess of $1,000,000.

“Assignment” shall have the meaning given in the Cape Town Convention.

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

“Associated Rights” shall have the meaning given in the Cape Town Convention.

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

“Bankruptcy Court” shall mean the United States Bankruptcy Court for the Southern District of New York.

“Barclays” shall mean Barclays Bank PLC.

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

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

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

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

“Borrowing Request” shall mean a request by the Borrower for a Borrowing in accordance with Section 2.02.

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

“Cape Town Convention” shall mean the official English language texts of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment which were signed in Cape Town, South Africa, as in effect in any applicable jurisdiction, as the same may be amended from time to time.

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

“Cases” shall mean the voluntary petitions for relief filed by the Borrower and each of the Guarantors with the Bankruptcy Court pursuant to chapter 11 of the Bankruptcy Code.

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

“Change in Law” shall mean, after the date hereof, (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law (including pursuant to any treaty or, for purposes of Section 5.09, any other agreement governing the right to fly international routes), rule or regulation or in the interpretation or application thereof by any Governmental Authority, Airport Authority, or Foreign Aviation Authorities after the date of this Agreement applicable to the Borrower or any of the Guarantors or (c) compliance by any Lender (or, for purposes of Section 2.12(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Change of Control” shall mean (a) the acquisition after the Closing Date (other than pursuant to a Permitted Change of Control Transaction) of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; or (b) during any period of twelve consecutive months, a majority of the board of directors (excluding vacant seats) of the Borrower shall cease to consist of Continuing Directors.

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“Closing Date” shall mean the date on which this Agreement has been executed and the conditions precedent to the making of the initial Loans set forth in Section 4.01 have been satisfied or waived.

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

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

“Collateral” shall mean all of the “Collateral” referred to in the Collateral Documents, which shall not include (a) the Excluded Accounts or (b) other items as set forth in the Collateral Documents.

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

“Collateral Documents” shall mean, collectively, the Second Lien Security Agreement, the Second Lien Pledge Agreement, the Second Lien Aircraft Mortgage (including, without limitation, any Mortgage Supplement), the Second Lien Real Estate Mortgages, the Second Lien SGR Security Agreement, the Second Lien Trademark Security Agreement, the Second Lien Patent Security Agreement, the Second Lien Copyright Security Agreement, any Control Agreements and other agreements, instruments or documents that create or purport to create a Lien in favor of the Collateral Agent for the benefit of the Second Priority Secured Parties.

“Collateral Event” shall mean, with respect to an item of Appraised Collateral, any of the events described below:

(a) with respect to any and all Appraised FAA Slots affected thereby, the occurrence of any event, including the Borrower’s or any applicable Guarantor’s abandonment or failure to comply with any applicable Use or Lose Rule, that would allow the FAA or other Governmental Authority or Foreign Aviation Authority to withdraw, cancel, suspend or terminate the Borrower’s or such Guarantor’s authority to hold or use 15% or more of the Appraised FAA Slots at any one airport (with the resulting appraisal under Section 5.09 being of the Appraised FAA Slots at such airport); or

(b) with respect to any Primary Route, abandonment by the Borrower or any applicable Guarantor thereof or the occurrence of any event that would allow the DOT, any Governmental Authority, or any Foreign Aviation Authority to withdraw, cancel, suspend or terminate the authority granted to the Borrower or any applicable Guarantor that authorizes the Borrower or any applicable Guarantor to operate scheduled foreign air transportation of persons, property and mail over such Primary Route or to use any associated Primary Foreign Slot(s) other than (i) in cases where such Primary Route or Primary Foreign Slot(s) has been transferred or otherwise disposed of as permitted in this Agreement or the Second Lien SGR Security Agreement or (ii) in the case of any suspension or loss of a Primary Foreign Slot(s), such suspension or loss could not reasonably be expected to have a material adverse effect on the value of the relevant Primary Route taken as a whole; or

6

(c) the failure of any material assumption contained in any Appraisal Report to be true, except to the extent such failure could not reasonably be expected to affect in a materially adverse manner the Appraised Value of the applicable Appraised Collateral.

“Comair” shall mean Comair, Inc., an Ohio corporation.

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

“Connection Carrier” shall mean any regional carrier that operates flights using the “DL” designation code pursuant to contractual arrangements with the Borrower.

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

“Continuing Directors” shall mean the directors of the Borrower on the Closing Date, after giving effect to the Plan of Reorganization and the other transactions contemplated hereby, and each other director, if, in each case, such other director’s nomination for election to the board of directors of the Borrower is recommended by at least a majority of the then Continuing Directors.

“Control Agreements” shall mean the Shifting Control Deposit Account Agreements, the Full Control Deposit Account Agreements, the Shifting Control Securities Account Agreements and the Full Control Securities Account Agreements.

“Cure Collateral” shall mean (a) cash collateral and Qualified Permitted Investments pledged to the Collateral Agent (and held in segregated accounts at the Administrative Agent or the First Lien Administrative Agent subject to Full Control Deposit Account Agreements and/or Full Control Securities Account Agreements, as the case may be), (b) amounts deemed to have been received by the Borrower and designated as Cure Collateral pursuant to Section 6.06(b) and (c) other assets (including aircraft, airframes, engines, spare parts, Group Support Equipment and Flight Simulators) of the Borrower or any Guarantor which shall be reasonably satisfactory to the Collateral Agent, and all of which assets shall (i) (other than Cure Collateral of the type described in clause (a) and (b) above) be valued by a new Appraisal Report or Field Audit, as the case may be, at the time the Borrower designates such assets as Cure Collateral and (ii) be subject to a perfected second priority (subject to Specified Permitted Collateral Liens) Lien and/or mortgage (or comparable Lien) in favor of the Collateral Agent and otherwise subject only to Permitted Collateral Liens.

“CVG Notes” shall mean the unsecured notes in an aggregate principal amount not to exceed $85,000,000 to be issued by the Borrower to the trustee under the Trust Indenture dated as of February 1, 1992 between Kenton County Airport Board and UMB Bank N.A., as trustee (the “CVG Bond Indenture”), on behalf of the holders of bonds issued under the CVG Bond Indenture in accordance with the Plan of Reorganization and the CVG Settlement Agreement referred to therein.

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“Defaulting Lender” shall mean any Lender that (a) has failed to fund any portion of the Loans required to be funded hereunder within one (1) Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured, (b) has otherwise failed to pay over to the Administrative Agent or any Lender (or its banking Affiliates) any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute or subsequently cured, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

“Designated Cash Management Obligations” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services and automated clearing house transfers of funds services provided by a First Lien Lender or any of its banking Affiliates, as permitted by Section 6.03(h), including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith, in each case as designated by the Borrower from time to time by notice to the Administrative Agent as constituting “Designated Cash Management Obligations”.

“Designated Hedging Agreement” means any Hedging Agreement to the extent that the Indebtedness related thereto is owing to a First Lien Lender or any of its Affiliates and is permitted by Section 6.03(f) or (g), designated by the Borrower from time to time by notice to the Administrative Agent as a “Designated Hedging Agreement”.

“Disposition” shall mean, with respect to any property, any sale, lease, sale and leaseback, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

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

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

“Earned Revenue Percentage” shall mean, a percentage, representing the estimated portion of credit card revenue which has been earned by performance at any point in time, based on a rolling twelve-month analysis of ticket sales versus “booking curve” (i.e., tickets used for actual flights) experienced by the Borrower during the most recent Rolling Twelve Month period for which such information is available at the time of such determination. The Earned Revenue Percentage shall be subject to re-determination by the Administrative Agent based upon information contained in each Officer’s Certificate delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(n), as updated from time to time in the reasonable discretion of the Administrative Agent, by the most recent Field Audit.

“EBITDAR” shall mean, for any period, all as determined in accordance with GAAP, without duplication, an amount equal to (a) the consolidated net income (or net loss) of the Borrower and its Subsidiaries for such period, plus (b) the sum of (i) any provision for income taxes, (ii) Interest Expense for such period, (iii) extraordinary, non-recurring or unusual losses for such period, (iv) depreciation and amortization for such period, (v) amortized debt discount for such period, (vi) the amount of any deduction to consolidated net income as the result of any grant to any employee of the Borrower or its Subsidiaries of any Equity Interests, (vii) depreciation, amortization and aircraft rent expense for such period, in each case to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP, (viii) any aggregate net loss during such period arising from a Capital Asset Sale (as defined below), (ix) all other non-cash charges for such period, (x) costs and expenses, including fees, incurred directly in connection with the consummation of the transactions contemplated under the Loan Documents to the extent included in the calculation of consolidated net income, (xi) expenses incurred with respect to the Chapter 11 reorganization as set forth on the Borrower’s consolidated statement of income for such period, including (A) professional and other fees, (B) key employee retention program payments, (C) financing fees, (D) severance costs and (E) any litigation expenses incurred during or in connection with the Cases and (xii) any charges arising from Fresh Start Reporting adjustments that do not impact the cash flows of the Borrower and its Subsidiaries to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP, minus (c) the sum of (i) income tax credits, (ii) interest income, (iii) extraordinary, non-recurring or unusual gains for such period, (iv) any aggregate net gain during such period arising from the sale, exchange or other disposition of capital assets by the Borrower or its Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) (a “Capital Asset Sale”), (v) any gains arising from Fresh Start Reporting adjustments that do not impact the cash flows of the Borrower and its Subsidiaries and (vi) any other non-cash gains that have been added in determining consolidated net income, in each case to the extent included in the calculation of consolidated net income of the Borrower and its Subsidiaries for such period in accordance with GAAP. For purposes of this definition, the following items shall be excluded in determining consolidated net income of the Borrower and its Subsidiaries: (1) the income (or deficit) of any other Person accrued prior to the date it became a Subsidiary of, or was merged or consolidated into, the Borrower or and of its Subsidiaries; (2) the income (or deficit) of any other Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent any such income has actually been received by the Borrower or such Subsidiary, as applicable, in the form of cash dividends or distributions; (3) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period; (4) any write-up of any asset; (5) any net gain from the collection of the proceeds of life insurance policies; (6) any net gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Borrower or any of its Subsidiaries; (7) in the case of a successor to the Borrower by consolidation or merger or as a transferee of its assets, any earnings of such successor prior to such consolidation, merger or transfer of assets; and (8) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition of such Subsidiary over the cost to the Borrower or any of its Subsidiaries of the investment in such Subsidiary.

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“Eligible Accounts”shall mean, at the time of any determination thereof, all of the Accounts owned by the Borrower and the Guarantors and reflected in the most recent Officer’s Certificate (substantially in the form of Exhibit K) delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(n). Criteria and eligibility standards used in determining Eligible Accounts may be fixed and revised from time to time by the Administrative Agent, in its reasonable discretion, and in the Administrative Agent’s reasonable exclusive judgment, with any changes in such criteria to be effective upon the date of the next Field Audit to be conducted pursuant to the terms herein. Unless otherwise approved from time to time in writing by the Administrative Agent, no Account shall be an Eligible Account if, without duplication:

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

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

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

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

(e) the Account is not payable in Dollars or the Account Debtor is either not organized under the laws of the United States of America, any state of the United States of America or the District of Columbia or is located outside or has its principal place of business or substantially all of its assets outside the United States; provided the restrictions in this clause (e) shall not apply to any Account if the Account Debtor related thereto is a travel agency that is a member of Bank Settlement Plan so long as the method used for converting such Account payables into Dollars for purposes of valuation is reasonably acceptable to the Administrative Agent; or

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

(g) the associated revenue from such Account has not been earned by the Borrower or the Guarantor (it being understood that Accounts arising from Travel Agency Cash Transactions shall be deemed earned at the time such receivable is recorded); or

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

(i) the Account is a non-trade Account (other than any interest with respect to deposit accounts or Permitted Investments); or

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

(k) such Account was not paid in full, and the Borrower or a Guarantor created a new receivable for the unpaid portion of the Account, and other Accounts constituting chargebacks, debit memos and other adjustments for unauthorized deductions; or

(l) such Account is subject to any counterclaim, deduction, defense, setoff or dispute, but only to the extent of the amount of such counterclaim, deduction, defense, setoff or dispute, unless the Administrative Agent, in its sole discretion, has established an appropriate reserve and determines to include such Account as an Eligible Account; or

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

(n) such Account is a clearinghouse interline Account.

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

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

“Eligible Collateral” shall mean (a) all Mortgaged Collateral, Ground Support Equipment, Tooling, Flight Simulators, Primary Routes, FAA Slots, Eligible Accounts Receivable and Real Property Assets, in each case to the extent owned or held by the Borrower or a Guarantor and on which the Collateral Agent shall have a valid and perfected second priority (subject to Specified Permitted Collateral Liens) Lien and/or mortgage (or comparable Lien), and which is otherwise subject only to Permitted Collateral Liens, provided that if an Aircraft is Parked for more than thirty (30) days, such Aircraft shall be excluded from Eligible Collateral in its entirety unless three new Appraisal Reports establishing the current Appraised Value of such Aircraft in its Parked condition are delivered to the Administrative Agent, (b) cash collateral and Permitted Investments in an aggregate amount not to exceed $750,000,000 pledged to the Collateral Agent and held in accounts subject to Control Agreements, (c) cash collateral and Permitted Investments maintained in accounts with the Administrative Agent pursuant to Section 2.10(a) and (d) any Cure Collateral designated (or deemed designated pursuant to Section 6.06(b)) by the Borrower at its discretion.

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

“Entry Point Filing Forms” shall mean each of the FAA form AC 8050-135 forms to be filed with the FAA on the Closing Date.

“Environmental Laws” shall mean all laws (including common law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or legally binding requirements or agreements issued, promulgated or entered into by or with any Governmental Authority, relating to the environment, preservation or reclamation of natural resources, the handling, treatment, storage, disposal, Release or threatened Release of, or the exposure of any Person (including employees) to, any pollutants, contaminants or any toxic, radioactive or otherwise hazardous materials.

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

“Environmental Permits” shall mean any and all permits, licenses, approvals, registrations, notifications, exemptions and any other authorization issued pursuant to or required under any Environmental Law or by any Airport Authority with respect to environmental matters.

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

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

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as (i) a single employer under Section 414(b) or (c) of the Code, or (ii) solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code, or that is under common control with the Borrower within the meaning of Section 4001 of ERISA.

“Escrow Accounts” shall mean (1) accounts of the Borrower or any Subsidiary, solely to the extent any such accounts hold funds set aside by the Borrower or any Subsidiary to manage the collection and payment of amounts collected, withheld or incurred by the Borrower or such Subsidiary for the benefit of third parties relating to: (a) federal income tax withholding and backup withholding tax, employment taxes, transportation excise taxes and security related charges, (b) any and all state and local income tax withholding, employment taxes and related charges and fees and similar taxes, charges and fees, including, but not limited to, state and local payroll withholding taxes, unemployment and supplemental unemployment taxes, disability taxes, workman’s or workers’ compensation charges and related charges and fees, (c) state and local taxes imposed on overall gross receipts, sales and use taxes, fuel excise taxes and hotel occupancy taxes, (d) passenger facility fees and charges collected on behalf of and owed to various administrators, institutions, authorities, agencies and entities, (e) other similar federal, state or local taxes, charges and fees (including without limitation any amount required to be withheld or collected under applicable law) and (f) other funds held in trust for an identified beneficiary in an aggregate amount pursuant to this clause (f) not to exceed $150,000,000; in each case, held in escrow accounts, trust funds or other segregated accounts, plus accrued interest; or (2) accounts, capitalized interest accounts, debt service reserve accounts, escrow accounts and other similar accounts or funds established in connection with the ARB Indebtedness.

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“Estimated Credit Card Receivables Component” shall mean an amount representing the estimated portion (determined in accordance with the other provisions of this definition) of receivables owing to the Borrower in connection with ticket purchases from and other goods and services provided by the Borrower on major credit cards (including, without limitation, Visa, MasterCard, American Express, Diners Club, Discover and Carte Blanche) which have been earned by performance by the Borrower but not yet paid to the Borrower by the credit card issuer or by the Borrower’s credit card processing bank, as applicable, as determined monthly in accordance with the following formula and set forth in the most recent Officer’s Certificate delivered to the Administrative Agent pursuant to Section 5.01(n). Such amount shall be equal to (i) the average number of days the relevant credit card receivables remained outstanding in the most recent fiscal month multiplied by (ii) the average daily credit card sales earned for the most recent fiscal month. The average daily credit card sales earned for the most recent fiscal month shall be equal to (a) the gross retail credit card sales for the most recent fiscal month available at the time of determination (it being understood that such number shall only include the Specified Dollar Receivables (as defined below) if the circumstances described in clause (2) below shall exist) multiplied by (b) the Applicable Earned Percentage divided by (c) the number of days in such month. For all purposes hereof, except as set forth in the last sentence of this definition, “Applicable Earned Percentage” shall be equal to the Earned Revenue Percentage. The Estimated Credit Card Receivables Component shall be subject to such adjustments as may be deemed appropriate by the Administrative Agent based upon the results of each Field Audit of the Borrower conducted after the Closing Date. Notwithstanding the foregoing, (1) until the occurrence of a Visa/MasterCard Dollar Trigger Event that results in a reserve held by the credit card processing bank (the “Applicable Reserve”) that is less than 100% of the value of airline tickets and other goods and services sold on Visa or MasterCard but not yet flown or used or otherwise earned by performance by the Borrower (the “Unearned Value”), or that is not calculated based on the Unearned Value, retail credit card receivables due from the credit card processing bank for Visa or MasterCard that are denominated in Dollars (the “Specified Dollar Receivables”) shall not be subject to the formula set forth above and the Applicable Earned Percentage to be applied to such receivables shall be equal to 100%, (2) after the occurrence of a Visa/MasterCard Dollar Trigger Event that results in an Applicable Reserve that is equal to 0% of the Unearned Value, or that is not calculated based upon the Unearned Value, the Specified Dollar Receivables shall be subject to the formula set forth above (i.e., the Applicable Earned Percentage to be applied to such receivables shall be equal to the Earned Revenue Percentage), and (3) after the occurrence of a Visa/MasterCard Dollar Trigger Event that results in an Applicable Reserve that is greater than 0% but less than 100% of the Unearned Value, the Applicable Earned Percentage to be applied to the Specified Dollar Receivables shall be determined on a straight line basis between the percentages set forth in clauses (1) and (2) above (it being understood that the Applicable Earned Percentage to be applied to such Specified Dollar Receivables shall be equal to 100% minus the product of (A) the Applicable Reserve and (B) the excess, if any, of (I) 100% over (II) the Earned Revenue Percentage).

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

“Eurodollar Tranche” shall mean the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

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

“Event of Loss” shall have the meaning given such term in the Second Lien Aircraft Mortgage.

“Excluded Accounts” shall mean (i) the Escrow Accounts, (ii) the Payroll Accounts, (iii) the Petty Cash Accounts, (iv) the Restricted Accounts and (v) any other deposit accounts or securities accounts subject to Permitted Liens of the type described in clauses (c) or (e) of the definition thereof or liens permitted under clauses (a), (d), (j), (p), (v), (w), (bb), (dd), (ee) or (s) (to the extent relating to any of the foregoing clauses) of Section 6.01.

“Excluded Subsidiaries” shall mean Aero Assurance, Ltd. and its subsidiaries.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, Collateral Agent, any Lender or any other recipient of any payment to be made by or on account of any Obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed by any jurisdiction other than the United States of America or any state thereof or is imposed by the United States of America on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.14(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.14(a).

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“Existing Amex DIP Facility” shall mean the Second Amended and Restated Advance Payment Supplements to Delta’s Co-Branded Credit Card Program Agreement and Membership Rewards Agreement (as amended, restated, amended and restated, supplemented, extended or otherwise modified to the date hereof), dated as of March 27, 2006, among the Borrower, the direct and indirect subsidiaries of the Borrower party thereto, Amex and American Express Bank, F.S.B.

“Existing DIP Facilities” shall mean the Existing GE DIP Facility and the Existing Amex DIP Facility.

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

“Existing GE DIP Facility” shall mean that certain Amended and Restated Secured Super-Priority Debtor in Possession Credit Agreement (as amended, restated, amended and restated, supplemented, extended or otherwise modified to the date hereof), dated as of March 27, 2006, among the Borrower, the direct and indirect subsidiaries of the Borrower party thereto, the lenders from time to time party thereto, and General Electric Capital Corporation, as administrative agent and collateral agent.

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

“FAA Slots” shall mean all “slots” as defined in 14 CFR § 93.213(a)(2), as that section may be amended or re-codified from time to time, or, in the case of slots at New York LaGuardia, as defined in the Final Order, Operating Limitations at New York LaGuardia Airport, Docket No. FAA 2006-25755-82 dated December 13, 2006, as such order may be amended or re-codified from time to time, and in any subsequent order issued by the FAA related to New York’s LaGuardia Airport, as such order may be amended or re-codified from time to time, in each case of the Borrower and, if applicable, any other Guarantor, now held or hereafter acquired (other than “slots” which have been permanently allocated to another air carrier and in which the Borrower and, if applicable, any Guarantor holds temporary use rights).

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

“Fees” shall collectively mean the fees referred to in Section 2.17.

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

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“Field Auditor” shall mean the Administrative Agent or its Affiliates, appraisers or other advisors who may be retained by the Administrative Agent to conduct a Field Audit.

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

“First Lien Administrative Agent” shall mean the “Administrative Agent” under and as defined in the First Lien Credit Agreement.

“First Lien Collateral Agent” shall mean the “Collateral Agent” under and as defined in the First Lien Credit Agreement.

“First Lien Credit Agreement” shall mean that certain First Lien Revolving Credit and Guaranty Agreement (as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time), dated as of April 30, 2007, among the Borrower, the Guarantors, the lenders party thereto, JPMCB, as administrative agent and collateral agent, and the other parties thereto.

“First Lien LC Exposure” shall mean the “LC Exposure” as such term is defined in the First Lien Credit Agreement.

“First Lien Lender” shall mean the “Lenders” as such term is defined in the First Lien Credit Agreement.

“First Lien Loan Documents” shall mean the “Loan Documents” as such term is defined in the First Lien Credit Agreement.

“First Lien Loans” shall mean the “Loans” as such term is defined in the First Lien Credit Agreement.

“First Lien Obligations” shall mean the sum of (i) the aggregate outstanding principal amount of the First Lien Loans plus (ii) the First Lien LC Exposure (other than LC Exposure which has been Cash Collateralized (as defined in the First Lien Credit Agreement)) plus (iii) the Swap Termination Value of all Designated Hedging Agreements to the extent secured as permitted by Section 6.01(f).

“First Priority Obligations” shall have the meaning set forth in the Intercreditor Agreement.

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

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

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

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

“Foreign Slot” shall mean all of the rights and operational authority, now held or hereafter acquired, of the Borrower and, if applicable, a Guarantor, to conduct one landing or takeoff at a specific time or in a specific time period on a specific day of the week at each non-U.S. airport served in conjunction with the Borrower’s, or, if applicable, a Guarantor’s operations over a Route, other than “slots” which have been permanently allocated to another air carrier and in which the Borrower and, if applicable, any Guarantor, hold temporary use rights.

“Fresh Start Reporting” shall mean the preparation of consolidated financial statements of the Borrower in accordance with American Institute of Certified Public Accountants Statement of Position (90-7), which reflects the consummation of the transactions contemplated by the Plan of Reorganization on a presumed effective date of April 30, 2007.

“Full Control Agreement” shall mean any Full Control Deposit Account Agreement or any Full Control Securities Account Agreement.

“Full Control Deposit Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent or the First Lien Collateral Agent, and any bank at which the relevant deposit account of the Borrower or any Guarantor, as the case may be, is at any time maintained.

“Full Control Securities Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the Collateral Agent or the First Lien Collateral Agent and any securities intermediary in respect of the relevant securities account.

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

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

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

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

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

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include (i) endorsements for collection or deposits or (ii) customary contractual indemnities in commercial agreements, in each case in the ordinary course of business and consistent with past practice. The amount of any obligation relating to a Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (or, if less, the maximum reasonably anticipated liability for which such Person may be liable pursuant to the terms of the instrument evidencing such Guarantee) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform) as determined by the guarantor in good faith.

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

“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature that are regulated pursuant to, or could reasonably be expected to give rise to liability under, any Environmental Law.

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

“Immaterial Subsidiaries” shall mean one or more Subsidiaries of the Borrower, for which, (a) the assets of all such designated Subsidiaries constitute, in the aggregate, no more than 2½% of the total assets of the Borrower and its Subsidiaries on a consolidated basis (determined as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01), and (b) the revenues of such Subsidiaries account for no more than 2½% of the total revenues of the Borrower and its Subsidiaries on a consolidated basis for the twelve-month period ending on the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01. The domestic Immaterial Subsidiaries as of the Closing Date that are not Guarantors on the Closing Date shall be listed on Schedule 1.01(b).

“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money (including in connection with deposits or advances), (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accrued expenses incurred and current accounts payable, in each case in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all obligations of such Person in respect of Capitalized Leases, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) all obligations of such person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations, and (k) all obligations in respect of Hedging Agreements valued at the amount equal to what would be payable by such Person to its counterparty to such Hedging Agreements if such Hedging Agreement was terminated early on such date of determination. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

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

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

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“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated the date hereof among the Administrative Agent, the Collateral Agent, JPMCB, as administrative agent and collateral agent under the First Lien Credit Agreement, the Borrower and the Guarantors party thereto in substantially the form attached as Exhibit I.

“Interest Election Request” shall mean a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.04.

“Interest Expense” shall mean, for any period, the gross cash interest expense (including the interest component of Capitalized Leases), of the Borrower and its Subsidiaries on a consolidated basis for such period, all as determined in accordance with GAAP.

“Interest Payment Date” shall mean (a) as to any Eurodollar Loan having an Interest Period of one, two or three months (or any other Interest Period shorter than three months), the last day of such Interest Period, (b) as to any Eurodollar Loan having an Interest Period of more than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (c) with respect to ABR Loans, the last Business Day of each March, June, September and December.

“Interest Period” shall mean, as to any Borrowing of Eurodollar Loans, the period commencing on the date of such Borrowing (including as a result of a conversion from ABR Loans) or on the last day of the preceding Interest Period applicable to such Borrowing and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three or six months thereafter (or the appropriate date thereafter for any other Interest Period available to all the Lenders), as the Borrower may elect in the related notice delivered pursuant to Sections 2.02 or 2.04; provided, that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) no Interest Period shall end later than the Termination Date.

“International Interest” shall mean “International Interest” as defined in the Cape Town Convention.

“International Registry” shall mean “International Registry” as defined in the Cape Town Convention.

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

“Jet Fuel Assets” shall mean (a) the existing jet fuel inventory of the Borrower’s or its Subsidiaries’, or any Connection Carrier’s or SkyTeam Partner’s, operations in or pipelines in transit to Atlanta, Cincinnati and New York that is to be sold to the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement, or other jet fuel subject to the Jet Fuel Inventory Supply Agreement, (b) the Borrower’s or its Subsidiaries’ rights in certain existing supply and third-party sale agreements to be assigned or assumed by the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement, (c) the Borrower’s or its Subsidiaries’ rights in certain existing infrastructure agreements to be transferred to the Jet Fuel Counterparty pursuant to the Jet Fuel Inventory Supply Agreement and (d) proceeds of the foregoing.

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“Jet Fuel Counterparty” shall mean J. Aron & Company, a New York general partnership, or any of its Affiliates, or any other Person that becomes a party to the Jet Fuel Inventory Supply Agreement.

“Jet Fuel Inventory Supply Agreement” shall mean the Jet Fuel Inventory Supply Agreement among the Borrower, the Jet Fuel Counterparty and Epsilon Trading, Inc., dated as of August 31, 2006, as amended, renewed or replaced from time to time.

“Joint Bookrunners” shall mean GSCP, Merrill Lynch and Barclays Capital, in their capacities as joint bookrunners.

“Joint Lead Arrangers” shall mean GSCP and Merrill Lynch, in their capacities as co-lead arrangers.

“JPMCB” shall mean JPMorgan Chase Bank, N.A.

“JPMSI” shall mean J.P. Morgan Securities Inc.

“LBI” shall mean Lehman Brothers Inc.

“LCPI” shall mean Lehman Commercial Paper Inc.

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

“LIBO Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

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“Lien” shall mean (a) any mortgage, deed of trust, pledge, deed to secure debt, hypothecation, security interest, easement (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-ways, reservations, encroachments, zoning and other land use restrictions, claim or any other title defect, lease, encumbrance, restriction, lien or charge of any kind whatsoever and (b) the interest of a vendor or a lessor under any conditional sale, capital lease or other title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing).

“Loans” shall mean the Second Lien Term Loans.

“Loan Documents” shall mean this Agreement, the Collateral Documents, the Intercreditor Agreement and any other instrument or agreement (which is designated as a Loan Document therein) executed and delivered by the Borrower or a Guarantor to the Administrative Agent, the Collateral Agent or any Lender, in each case, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“Margin Stock” shall have the meaning set forth in Section 3.13(a).

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

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

“Material Indebtedness” shall mean Indebtedness (other than the Obligations), of any one or more of the Borrower and the Guarantors in an aggregate principal amount exceeding $57,500,000.

“Maturity Date” shall mean April 30, 2014.

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

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

“Mortgaged Collateral” shall mean all of the “Collateral” as defined in the Second Lien Aircraft Mortgage (including any Mortgage Supplement).

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

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

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

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“Net Cash Proceeds” shall mean, in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Permitted Investments (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of (i)attorneys’ fees, accountants’ fees, investment banking fees and brokerage fees, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event or otherwise required to be repaid upon such sale (other than any Lien pursuant to a Collateral Document), (iii) proceeds of insurance or condemnation awards maintained for the benefit of any third party applied to restore assets as required by the terms of any agreement with such third party, (iv) other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (v) reserves provided, to the extent required by GAAP, against any liabilities that are directly attributed to such Asset Sale; provided that any such unutilized reserves shall constitute Net Cash Proceeds at any time and to the extent that the maintenance of such reserves is no longer required by GAAP and, providedfurther, that, in the case of any Asset Sale of fuel that has been pre-ordered in the ordinary course of business occurring substantially concurrently with the purchase of such fuel subject to such Asset Sale, “Net Cash Proceeds” shall be deemed net of the purchase price of such fuel.

“Obligations” shall mean the unpaid principal of and interest on (including interest, reasonable fees and reasonable out-of-pocket costs accruing after the maturity of the Loans and interest, reasonable fees and reasonable out-of-pocket costs accruing after the filing of any petition of bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest, fees or costs is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to any Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, reasonable fees, indemnities, reasonable out-of-pocket costs, reasonable out-of-pocket expenses (including all reasonable fees, charges and disbursements of counsel to any Agent or any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

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

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

“Parked” shall mean, as to any Aircraft, that such Aircraft has been removed from service, other than Aircraft temporarily grounded for maintenance being actively conducted.

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

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

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

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

“Pension Act” shall mean the Pension Protection Act of 2006, as it presently exists or as it may be amended from time to time.

“Permitted Acquisition” shall mean any acquisition, whether by purchase, merger, consolidation or otherwise, by the Borrower or any Guarantor of all or substantially all the assets of, or all the Equity Interests (or, so long as the acquired Person becomes a Guarantor pursuant to Section 5.14 hereof, Equity Interests sufficient to cause the acquired Person to become a Subsidiary) in, a Person or a division, line of business or other business unit of a Person but only so long as:

(a) (i) no Event of Default shall have occurred and be continuing immediately prior or immediately after giving effect to such Permitted Acquisition and (ii) all transactions related thereto shall have been consummated in all material respects in accordance with applicable laws;

(b) with respect to any acquisition in excess of $25,000,000, the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate to the effect set forth in clause (a) above, together with the relevant financial information for the Person or assets to be acquired, promptly after consummation of such acquisition; and

(c) with respect to any acquisition in excess of $25,000,000, the Borrower shall have provided the Administrative Agent with written notice and with copies of the material acquisition documents promptly after consummation of such acquisition.

“Permitted Change of Control Transaction” shall mean any transaction, whether by purchase, merger, consolidation or otherwise, pursuant to which a Permitted Holder acquires all or substantially all the assets of, or all the Equity Interests in, the Borrower but only so long as:

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(a) (i) no Event of Default shall have occurred and be continuing immediately prior or immediately after giving effect to such Permitted Change of Control Transaction and (ii) all transactions related thereto shall have been consummated in all material respects in accordance with applicable laws;

(b) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate to the effect set forth in clause (a) above, together with the relevant financial information for the Permitted Holder, promptly after consummation of such transaction;

(c) the Borrower shall have provided the Administrative Agent with written notice and with copies of the material acquisition documents promptly after consummation of such transaction; and

(d) the operations of the Borrower are not merged with the operations of any other major U.S. airline owned by such Permitted Holder.

“Permitted Collateral Liens” shall mean those Liens permitted pursuant to clauses (b), (e), (f), (g), (i) (solely with respect to interests of airport operators in the assets located at the applicable facilities), (k) (solely to the extent relating to the underlying credit card receivables and related assets), (l), (m), (n), (q), (r), (u), (cc)(i) (solely to the extent relating to the applicable underlying accounts or amounts or other assets deposited therein, in each case arising in the ordinary course of business) or (s) (to the extent relating to any of the foregoing clauses) of Section 6.01.

“Permitted Disposition” shall mean any of the following:

(a) (i) the sale of inventory in the ordinary course of business, (ii) the sale of Spare Parts in the ordinary course of business, and (iii) swaps, exchanges, interchange or pooling of assets or, in the case of Mortgaged Collateral, other transfers of possession (subject to the limitations set forth in the Collateral Documents) in the ordinary course of business;

(b) the sale or other disposition of Permitted Investments for cash or in exchange for Permitted Investments;

(c) sales or dispositions of surplus, obsolete, negligible or uneconomical assets (other than Mortgaged Collateral that are not Parts (as defined in the Second Lien Aircraft Mortgage)) no longer used in the business of Borrower and the Guarantors;

(d) sales or dispositions of assets among the Borrower and the Guarantors; provided that, with respect to any such asset that constitutes Collateral, such asset remains subject to a Lien in favor of the Collateral Agent for the benefit of the Second Priority Secured Parties following such sale or disposition (it being understood that the Borrower and the Guarantors shall execute any documents and take any actions reasonably required to create, grant, establish, preserve or perfect such Lien in accordance with the other provisions of this Agreement or the other Collateral Documents dealing with the creation, granting, establishment, preservation or perfection of Liens);

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(e) (i) abandonment of Intellectual Property; provided, that such abandonment is (A) in the ordinary course of business consistent with past practices and (B) with respect to Intellectual Property that is not material to the business of Borrower and it Subsidiaries and (ii) licensing or sublicensing of Intellectual Property in the ordinary course of business consistent with past practices;

(f) the sale or discount of Accounts to a collection agency in connection with collections of delinquent receivables;

(g) (i) abandonment of FAA Slots, Gate Interests, Routes or Supporting Route Facilities; provided, that such abandonment is (A) in connection with the downsizing of any hub or other facility located in Cincinnati as reflected in the budgets provided pursuant to Section 5.01(e), (B) in connection with the downsizing of any other hub or facility as reflected in the budgets provided pursuant to Section 5.01(e), which does not materially and adversely affect the business of Borrower and its Subsidiaries, taken as a whole, or (C) in the ordinary course of business consistent with past practices and does not materially and adversely affect the business of Borrower and its Subsidiaries, taken as a whole, (ii) transfer or other disposition in the ordinary course of business of FAA Slots, Foreign Slots, Gate Interests, Routes or Supporting Route Facilities, in each case, to the extent not constituting Eligible Collateral or utilized in connection therewith, (iii) exchange of FAA Slots in the ordinary course of business that in the Borrower’s reasonable judgment are of reasonably equivalent value, and (iv) assignments of leases or granting of leases of (A) Aircraft or Engines to the extent permitted pursuant to the Second Lien Aircraft Mortgage and (B) other aircraft or engines (that do not constitute Collateral), in each case, in the ordinary course of business;

(h) the sale or other disposition of any 737-800 aircraft substantially concurrently with the consummation of the purchase of such aircraft to the extent such purchase occurs pursuant to a purchase agreement to which the Borrower or a Subsidiary was a party as of the Closing Date;

(i) to the extent not prohibited by any of the Collateral Documents, the disposition of leasehold or similar interests in real property that is not Real Property Assets, including through assignment, sublease or lease termination or rejection, in whole or in part, or the return, surrender, exchange or abandonment of any property subject thereto;

(j)any sale of Margin Stock for fair value as determined in good faith by Borrower;

(k) (i) any loss of or damage to property of the Borrower or any Guarantor, (ii) any taking of property of the Borrower or any Guarantor, or (iii) an Event of Loss;

(l) the sale, assignment and/or other transfer of the Jet Fuel Assets to the Jet Fuel Counterparty, in each case pursuant to the Jet Fuel Inventory Supply Agreement;

(m) Permitted Liens of the type described in clause (d) of the definition thereof; and

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(n) the lease or sublease of assets and properties in the ordinary course of business.

“Permitted Holder” shall mean any corporation or limited liability company organized under the laws of the United States of America or any state thereof organized for the purpose of consummating any Permitted Change of Control Transaction so long as such entity is a holding company which has (or simultaneously with such Change of Control Transaction will acquire) as its other principal investment another major U.S. airline.

“Permitted Investments” shall mean:

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

(b) direct obligations of state and local government entities in each case maturing within one year from the date of acquisition thereof, which have a rating of at least A- (or the equivalent thereof) from S&P or A3 (or the equivalent thereof) from Moody’s;

(c) obligations of domestic or foreign companies and their subsidiaries (including, without limitation, agencies, sponsored enterprises or instrumentalities chartered by an Act of Congress, which are not backed by the full faith and credit of the United States of America), including, without limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in each case maturing within one year from the date of acquisition thereof and which have a rating of at least A- (or the equivalent thereof) from S&P or A-3 (or the equivalent thereof) from Moody’s;

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

(e) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $250,000,000 and which has a long term unsecured debtrating of at least A from S&P and A2 from Moody’s (or is the principal banking Subsidiary of a bank holding company that has such ratings);

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

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

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

(i) investments, in accordance with investment policies approved by the board of directors of the Borrower, in the ordinary course of business.

“Permitted Liens” shall mean: (a) Liens imposed by law (other than Liens imposed under Environmental Laws and any Lien imposed under ERISA) for taxes, assessments, levies or charges of any Governmental Authority for claims not yet delinquent or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (b) Liens of landlords, carriers, warehousemen, consignors, mechanics, materialmen and other Liens (other than Liens imposed under Environmental Laws and any Lien imposed under ERISA) in existence on the Closing Date (which, in the case of Real Property Assets, are specified in the applicable Second Lien Real Estate Mortgage) or imposed by law and created in the ordinary course of business and securing obligations that are not overdue or are being contested in compliance with Section 5.05; (c) (i) Liens (other than any Lien imposed under ERISA) incurred or (ii) deposits made (including, without limitation, surety bonds and appeal bonds), in each case, in connection with workers’ compensation, unemployment insurance and other types of social security benefits (or benefits arising under other public liability laws or similar legislation) or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (d) leases, subleases, licenses, use agreements, usufructs, easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, reservations, encroachments, land use restrictions or encumbrances, which, in the case of Real Property Assets, (i) do not interfere materially with the ordinary conduct of the business of the Borrower or any Guarantor, as the case may be, (ii) do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Borrower or any Guarantor, as the case may be and (iii) do not materially adversely affect the marketability of the applicable property; (e) letters of credit or deposits in the ordinary course to secure leases; (f) Liens imposed by applicable law on the assets of the Borrower or any Guarantor located at an airport for the benefit of any nation or government or national or governmental authority of any nation, state, province or other political subdivision thereof, and any agency, department, regulator, airport authority, air navigation authority or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government in respect of the regulation of commercial aviation or the registration, airworthiness or operation of civil aircraft and having jurisdiction over the Borrower or such Guarantor including, without limitation, the FAA or DOT, (g) Liens in favor of depositary banks arising as a matter of law encumbering deposits (including the right of setoff) and that are within the general parameters customary in the banking industry, (h) in the case of Real Property Assets, those Liens specified in the applicable Second Lien Real Estate Mortgage; (i) in the case of any Mortgaged Collateral, those Liens specified in the applicable Second Lien Aircraft Mortgage; and (j) extensions, renewals or replacements of any Lien referred to in paragraphs (a) through (g) above, provided, that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby.

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

“Petty Cash Accounts” shall mean domestic or foreign deposit or securities accounts of the Borrower and Guarantors holding aggregate balances in an amount not to exceed $50,000,000 with respect to domestic accounts and $150,000,000 with respect to foreign accounts at any one time.

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

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

“Pledged Spare Parts” shall mean Spare Parts which are maintained by or on behalf of the Borrower or any Guarantor at a Spare Parts Location.

“Post-Petition Aircraft Agreement” shall have the meaning set forth in the Plan of Reorganization.

“Primary Foreign Slots” shall mean the Foreign Slots set forth on Schedule 4(f) to the Second Lien SGR Security Agreement, as such Schedule may be amended from time to time pursuant to the Second Lien SGR Security Agreement.

“Primary Routes” shall mean the Routes set forth on Schedule 4(h) to the Second Lien SGR Security Agreement, as such Schedule may be amended from time to time pursuant to the Second Lien SGR Security Agreement.

“Primary Supporting Route Facilities” shall mean the Supporting Route Facilities of the Borrower and, if applicable, a Guarantor, at the airports listed on Schedule 4(i) to the Second Lien SGR Security Agreement.

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

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“Prospective Assignment” shall have the meaning given in the Cape Town Convention.

“Prospective International Interest” shall have the meaning given in the Cape Town Convention.

“Prospective Sale” shall have the meaning given in the Cape Town Convention.

“Protocol” shall mean the Protocol referred to in the defined term “Cape Town Convention.”

“Qualified Judgment” shall mean any judgment arising from the resolution of disputed pre-petition claims, so long as, and to the extent that, a reserve has been established therefor (including a reserve of Equity Interests of the Borrower to satisfy certain pre-petition claims pursuant to the Plan of Reorganization).

“Qualified Permitted Investments” shall mean Permitted Investments of the type described in clause (e) of the definition thereof issued, guaranteed or placed with the Administrative Agent and other Permitted Investments of the type from time to time generally permitted in money market deposit accounts at JPMCB or GSCP.

“Qualified Restructuring Indebtedness” shall mean any Indebtedness of the Borrower or any of its Subsidiaries with respect to any Restructuring Aircraft other than any such Indebtedness (i) created by any Post-Petition Aircraft Agreement that has been entered into relating to such Restructuring Aircraft or (ii) arising out of the assumption without modification of pre-petition agreements related to such Restructuring Aircraft.

“Real Estate Appraiser” shall mean, in the case of the Real Property Assets, (a) American Appraisal Associates with respect to those certain parcels of real property described in Schedule 3.15(a) or (b) such other appraisal firms as may be retained by the Administrative Agent, in consultation with the Borrower, from time to time.

“Real Property Assets” shall mean those certain parcels of real property owned in fee by the Borrower and described in Schedule 3.15(a) and together with, in each case, all buildings, improvements, facilities, appurtenant fixtures and equipment, easements and other property and rights incidental or appurtenant to the ownership of such parcel of real property (as each such real property is more particularly described in the applicable Second Lien Real Estate Mortgage) (including, without limitation, all Collateral described in the applicable Second Lien Real Estate Mortgage), and, from time to time, all Collateral identified in a Second Lien Real Estate Mortgage granted pursuant to Section 5.14, Section 5.16 or any other provision of this Agreement (including in connection with the designation of such real property or related asset as Cure Collateral).

“Recovery Event” shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any Collateral or any Event of Loss.

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

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

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

“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, or disposing into the indoor or outdoor environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any hazardous substance or pollutant or contaminant).

“Replacement Airframe” shall have the meaning given to such term in the Second Lien Aircraft Mortgage.

“Replacement Engine” shall have the meaning given to such term in the Second Lien Aircraft Mortgage.

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of (a) until the Closing Date, the Second Lien Term Loan Commitments then in effect and (b) thereafter, the aggregate unpaid principal amount of the Second Lien Term Loans then outstanding.

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

“Restricted Accounts” shall mean the accounts identified as Restricted Accounts on Schedule 1.01(c);

“Restricted Captive Insurance Company Subsidiary” shall mean a Subsidiary that is a captive insurance company and is prohibited from becoming a Guarantor hereunder pursuant to applicable rules and regulations.

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

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“Restructuring Aircraft” shall mean each of the aircraft listed on Schedule 1.01(d).

“Rolling Twelve Months” shall mean, with respect to any date of determination, the month most recently ended and the eleven (11) immediately preceding months for which, in each case, financial statements are available considered as a single period.

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

“Sale” shall have the meaning given in the Cape Town Convention.

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

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

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

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

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

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

“Second Lien Real Estate Mortgages” shall mean, collectively, (a) that certain Real Estate Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement, dated the date hereof, by the Borrower to the Collateral Agent, in substantially the form of Exhibit A and (b) each other mortgage granted pursuant to the terms hereof, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

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

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

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“Second Lien Term Loan” shall have the meaning set forth in Section 2.01(a).

“Second Lien Term Loan Commitment” shall mean the commitment of each Lender to make a Second Lien Term Loan hereunder in a principal amount not to exceed the amount set forth under the heading “Second Lien Term Loan Commitment” opposite its name in Annex A hereto. The original aggregate amount of the Second Lien Term Loan Commitments is $900,000,000.

“Second Lien Term Loan Commitment Percentage” shall mean, at any time, with respect to each Lender at any time, the percentage which such Lender’s Second Lien Term Loan Commitment then constitutes of the aggregate Second Lien Term Loan Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lender’s Second Lien Term Loans then outstanding constitutes of the aggregate principal amount of the Second Lien Term Loans of all Lenders then outstanding).

“Second Lien Trademark Security Agreement” shall mean that certain Second Lien Trademark Security Agreement as defined in Section 5.19(a), as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.

“Second Priority Obligations” shall have the meaning set forth in the Intercreditor Agreement.

“Second Priority Obligations Payment Date” shall have the meaning set forth in the Intercreditor Agreement.

“Second Priority Secured Parties” shall have the meaning set forth in the Intercreditor Agreement.

“Shifting Control Agreement” shall mean any Shifting Control Deposit Account Agreement or any Shifting Control Securities Account Agreement.

“Shifting Control Deposit Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the First Lien Collateral Agent or the Collateral Agent, and the relevant bank at which the relevant deposit account of the Borrower or any Guarantor, as the case may be, is at any time maintained.

“Shifting Control Securities Account Agreement” shall mean an agreement in writing in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrower or any Guarantor, as the case may be, the First Lien Collateral Agent or the Collateral Agent and any securities intermediary in respect of the relevant securities account.

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

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“SkyTeam Partner” shall mean any airline that is a member of the SkyTeam international airline alliance.

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

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

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

“Specified Jet Fuel Action” shall mean, if the transactions effected pursuant to the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower, any action by the Jet Fuel Counterparty, as secured party, to the extent such action seeks to foreclose (or obtain a lien) on the Jet Fuel Assets.

“Specified Permitted Collateral Liens” shall mean Permitted Collateral Liens (other than Liens permitted under clauses (c)(i) (other than any such Liens that are non-consensual or imposed by law), (c)(ii) and (e) of the definition of Permitted Liens and clause (j) of the definition of Permitted Liens (to the extent related to such other specified clauses of such definition) and clauses (m), (n) and (u) of Section 6.01 and clause (s) of Section 6.01 (to the extent related to such other specified clauses of Section 6.01)).

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

“Subordinations” shall have the meaning given in the Cape Town Convention.

“Subsidiary” shall mean, with respect to any Person (in this definition referred to as the “parent”), any corporation, association or other business entity (whether now existing or hereafter organized) of which at least a majority of the securities or other ownership or membership interests having ordinary voting power for the election of directors is, at the time as of which any determination is being made, owned or controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

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

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

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

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

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

“Termination Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. 4043), (b) an event described in Section 4068 of ERISA, (c) the withdrawal of the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a “substantial employer,” as such term is defined in Section 4001(a)(2) of ERISA, (d) the incurrence of liability by the Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, (e) the imposition of Withdrawal Liability or receipt of notice from a Multiemployer Plan that such liability may be imposed, (f) a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA, (g) providing notice of intent to terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, if such amendment requires the provision of security, (h) the institution of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, (i) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) and, on and after the effectiveness of the Pension Act, any failure by any Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (j) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, or (k) any other event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the imposition of any liability under Title IV of ERISA (other than for the payment of premiums to the PBGC in the ordinary course). Notwithstanding the above, for purposes of this definition, the sale by the Borrower of its interest in Comair shall not be considered a “reportable event” under clause (a) above.

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

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

“Tooling” shall mean tooling inventory, including but not limited to dies, molds, tooling, casting patterns, gauges, jigs, racks and stands for engines, cowls, radome and wheels, aircraft jacks, test benches, test equipment, lathes, welders, grinders, presses, punches and hoists and other similar items (whether or not completed or fixed or handheld).

“Total Collateral Coverage Ratio” shall have the meaning set forth in Section 6.06(a).

“Total Obligations” shall have the meaning set forth in Section 6.06(a).

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

“Travel Agency Cash Transaction” shall mean any purchase in cash or check of a ticket through a travel agency that is a member of Bank Settlement Plan or Airline Reporting Corporation, as applicable, it being understood and agreed that the account receivable in respect of such purchase that is included in the calculation of Eligible Account shall be net of any set-off for commissions or refunds and shall be included only to the extent such travel agency is unconditionally required to pay such net amount to the applicable clearinghouse or for the account of the Borrower.

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

“UBS” shall mean UBS Securities LLC.

“UBS Finance” shall mean UBS Loan Finance LLC.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time.

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

“Unrestricted Cash” shall mean all cash and Permitted Investments of the Borrower and the Guarantors held in accounts (other than the Escrow Accounts, Payroll Accounts and Restricted Accounts) which are the subject of Control Agreements that have been executed and delivered to the Collateral Agent.

“Unused Total Revolving Commitment” shall have the meaning set forth in the First Lien Credit Agreement.

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

“Visa/MasterCard Dollar Trigger Event” shall mean any amendment to the existing processing agreement or the Borrower entering into any replacement processing agreement with respect to Visa and MasterCard receivables denominated in Dollars that changes the percentage or calculation of reserves held by the credit card processing bank in respect of such receivables (solely, in the case of any such change in calculation, to the extent resulting in a calculation that is no longer based upon Unearned Value (as such term is defined in the definition of “Estimated Credit Card Receivables Component” contained herein)).

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

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

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SECTION 1.03.Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Upon any such request for an amendment, the Borrower, the Required Lenders and the Administrative Agent agree to consider in good faith any such amendment in order to amend the provisions of this Agreement so as to reflect equitably such accounting changes so that the criteria for evaluating the Borrower’s financial condition shall be the same after such accounting changes as if such accounting changes had not occurred.

SECTION 2.

AMOUNT AND TERMS OF CREDIT

SECTION 2.01.Commitments of the Lenders.

(a)Second Lien Term Loan Commitment.(i) Each Lender agrees, upon the terms and subject to the conditions herein set forth, to make available to the Borrower on the Closing Date a term loan (a “Second Lien Term Loan”) in a principal amount equal to such Lender’s Second Lien Term Loan Commitment. Once repaid or prepaid, the Second Lien Term Loans may not be reborrowed.

(ii)The Second Lien Term Loans shall be made by the Lenders prorata in accordance with their respective Second Lien Term Loan Commitments; provided, however, that the failure of any Lender to make its Second Lien Term Loan shall not in itself relieve the other Lenders of their obligations to lend.

(b)Type of Borrowing. Except as otherwise provided in Section 2.02, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c)Amount of Borrowing. At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is in an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000. Borrowings of more than one Type may be outstanding at the same time.

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

SECTION 2.02.Requests for Borrowings. To request the initial Borrowing of Second Lien Term Loans, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, two (2) Business Days before the date of the proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01:

(a)the aggregate amount of the requested Borrowing (which shall comply with Section 2.01(c));

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

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

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

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the requested Borrowing that is to be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.02, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.03.Funding of Borrowings.  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., New York City time, or such earlier time as may be reasonably practicable, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request.

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

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SECTION 2.04.Interest Elections.  (a) The Borrower may elect from time to time to (i) convert ABR Loans to Eurodollar Loans, (ii) convert Eurodollar Loans to ABR Loans, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto or (iii) continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto

(b)To make an Interest Election Request pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.02 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

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

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

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

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

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

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

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

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

SECTION 2.05.Limitation on Eurodollar Tranches.  Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than twenty Eurodollar Tranches shall be outstanding at any one time.

SECTION 2.06.Interest on Loans. 

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

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

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

SECTION 2.07.Default Interest.  If the Borrower or any Guarantor, as the case may be, shall default in the payment of the principal of or interest on any Loan or in the payment of any other amount becoming due hereunder, whether at stated maturity, by acceleration or otherwise, the Borrower or such Guarantor, as the case may be, shall on written demand of the Administrative Agent from time to time pay interest, to the extent permitted by law, on all overdue amounts up to (but not including) the date of actual payment (after as well as before judgment) at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days or when the Alternate Base Rate is applicable and is based on the Prime Rate, a year with 365 days or 366 days in a leap year) equal to (a) with respect to any Loan, the rate then applicable for such Borrowings plus 2.0% and (b) in the case of all other amounts, the rate applicable for ABR Loans plus 2.0%.

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

SECTION 2.09.Amortization of Second Lien Term Loan; Repayment of Loans; Evidence of Debt.

(a)Subject to adjustment pursuant to Section 2.10(d), the Borrower shall repay to the Lenders the aggregate principal amount of all Second Lien Term Loans outstanding on the following dates in the respective amounts set forth opposite such dates:

Date	Amount
September 30, 2007	$2,250,000
December 31, 2007	$2,250,000
March 31, 2008	$2,250,000
June 30, 2008	$2,250,000
September 30, 2008	$2,250,000
December 31, 2008	$2,250,000
March 31, 2009	$2,250,000
June 30, 2009	$2,250,000
September 30, 2009	$2,250,000
December 31, 2009	$2,250,000
March 31, 2010	$2,250,000
June 30, 2010	$2,250,000
September 30, 2010	$2,250,000
December 31, 2010	$2,250,000
March 31, 2011	$2,250,000
June 30, 2011	$2,250,000
September 30, 2011	$2,250,000
December 31, 2011	$2,250,000
March 31, 2012	$2,250,000
June 30, 2012	$2,250,000
September 30, 2012	$2,250,000
December 31, 2012	$2,250,000
March 31, 2013	$2,250,000
June 30, 2013	$2,250,000
September 30, 2013	$2,250,000
December 31, 2013	$2,250,000
March 31, 2014	$2,250,000
Maturity Date	$839,250,000

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provided, however, that the final principal repayment installment of the Second Lien Term Loans shall be repaid on the Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of all Second Lien Term Loans outstanding on such date. Once repaid, no portion of the Second Lien Term Loans may be reborrowed.

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

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

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

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

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

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SECTION 2.10.Mandatory Prepayment; Commitment Termination.

(a) Within three (3) Business Days of the Borrower or any Guarantor receiving any Net Cash Proceeds as a result of an Asset Sale or Recovery Event (including, without limitation, an Event of Loss concerning an Airframe, Engine, Spare Engine or Spare Parts), the Borrower or such Guarantor shall, if the Borrower shall not be in compliance with Section 6.06(a) on the date such Net Cash Proceeds are received, deposit such received Net Cash Proceeds(solely to the extent necessary to maintain compliance with Section 6.06) into an account that is maintained with the Administrative Agent or First Lien Administrative Agent for such purpose and subject to a Full Control Agreement; provided that (i) in the case of the Net Cash Proceeds of any Event of Loss so deposited and involving an Airframe, Engine or Spare Engine, the Borrower shall be permitted to use such Net Cash Proceeds to replace such Airframe, Engine or Spare Engine, as the case may be, with a Replacement Airframe or Replacement Engine, as the case may be, in accordance with the requirements of the First Lien Aircraft Mortgage, with such Replacement Airframe or Replacement Engine to be subject to the Lien of the Collateral Agent for the benefit of the First Priority Secured Parties pursuant to the First Lien Aircraft Mortgage and otherwise satisfying the requirements of the First Lien Aircraft Mortgage at the time of (or substantially simultaneously with) the release of such Net Cash Proceeds, (ii) in the case of Net Cash Proceeds of any  Recovery Event (other than Net Cash Proceeds covered by clause (i) above) so deposited, the Borrower may use such Net Cash Proceeds to repair or replace the assets which are the subject of such Recovery Event with comparable assets, (iii) in the case of any Net Cash Proceeds of any Asset Sale so deposited, the Borrower may use such Net Cash Proceeds to  replace the assets which are the subject of such Asset Sale with comparable assets within 365 days after such deposit is made, (iv) all such Net Cash Proceeds shall be subject to release as provided in Section 6.06(c) or, at the option of the Borrower at any time, may be applied in accordance with the requirements of Section 2.10(b), and (v) upon the occurrence of an Event of Default, the amount of any such deposit may be applied, subject to the Intercreditor Agreement, by the Administrative Agent in accordance with Section 2.10(b)), provided that any release of Net Cash Proceeds pursuant to clause (iii) of this Section shall be conditioned on the Borrower being in compliance with Section 6.06(a), after giving effect thereto (it being understood that the failure to be in compliance with Section 6.06(a) shall not prevent the release of any Net Cash Proceeds in connection with any repair or replacement of assets permitted hereunder so long as no decrease in the Total Collateral Coverage Ratio will result therefrom).  

(b) Amounts to be applied in connection with prepayments made pursuant to this Section 2.10 shall, subject to the Intercreditor Agreement, be applied to the prepayment of the Second Lien Term Loans on a prorata basis. The application of any prepayment pursuant to this Section 2.10 shall be made, first, to ABR Loans and, second, to Eurodollar Loans.

(c) The Second Lien Term Loan Commitments shall terminate at 5:00 p.m., New York City time, on the Closing Date. Upon the Termination Date, the Borrower shall repay the Loans in full.

(d) All prepayments under this Section 2.10 shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any Fees and any losses, costs and expenses, as more fully described in Section 2.13 and 2.17 hereof. Any prepayments of the Second Lien Term Loans under this Section 2.10 shall be applied prorata to the remaining scheduled amortization payments set forth in Section 2.09(a).

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SECTION 2.11.Optional Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to prepay any Second Lien Term Loans, in whole or in part, (i) with respect to Eurodollar Loans, upon (A) telephonic notice followed promptly by written or facsimile notice or (B) written or facsimile notice received by 1:00 p.m.,New York City time, three Business Days prior to the proposed date of prepayment and (ii) with respect to ABR Loans, upon written or facsimile notice received by 1:00 p.m.,New York City time, one Business Day prior to the proposed date of prepayment; provided that ABR Loans may be prepaid on the same day notice is given if such notice is received by the Administrative Agent by 12:00 noon, New York City time; providedfurther, however, that (A) each such partial prepayment shall be in an amount not less than $5,000,000 and in integral multiples of $1,000,000, (B) no prepayment of Eurodollar Loans shall be permitted pursuant to this Section 2.11(a) other than on the last day of an Interest Period applicable thereto unless such prepayment is accompanied by the payment of the amounts described in Section 2.13, and (C) no partial prepayment of a Borrowing of Eurodollar Loans shall result in the aggregate principal amount of the Eurodollar Loans remaining outstanding pursuant to such Borrowing being less than $10,000,000.

(b) All prepayments under Section 2.11(a) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but not including) the date of prepayment, plus any Fees and any losses, costs and expenses, as more fully described in Sections 2.13 and 2.17 hereof. Any partial prepayments of the Second Lien Term Loans pursuant to this Section 2.11 shall be applied at the direction of the Borrower.

(c) Each notice of prepayment shall specify the prepayment date, the principal amount of the Loans to be prepaid and, in the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable and shall commit the Borrower to prepay such Loan by the amount and on the date stated therein; provided, that the Borrower may revoke any notice of prepayment under this Section 2.11 if such prepayment would have resulted from a refinancing of the Obligations hereunder, which refinancing shall not be consummated or shall otherwise be delayed. The Administrative Agent shall, promptly after receiving notice from the Borrower hereunder, notify each Lender of the principal amount of the Loans held by such Lender which are to be prepaid, the prepayment date and the manner of application of the prepayment.

SECTION 2.12.Increased Costs.  (a)  If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement subject to Section 2.12(c)); or

(ii)impose on any Lender or the London interbank market any other condition (other than Taxes) affecting this Agreement or Eurodollar Loans made by such Lender;

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

(b) If any Lender reasonably determines in good faith that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts, in each case as documented by such Lender to the Borrower as will compensate such Lender or such Lender’s holding company for any such reduction suffered; it being understood that to the extent duplicative of the provisions in Section 2.14, this Section 2.12(b) shall not apply to Taxes.

(c) The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurodollar funds or deposits, additional interest on the unpaid principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Second Lien Term Loan Commitments or the funding of the Eurodollar Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Second Lien Term Loan Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least fifteen (15) days’ prior notice (with a copy to the Administrative Agent, and which notice shall specify the Statutory Reserve Rate, if any, applicable to such Lender) of such additional interest or cost from such Lender. If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

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

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

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SECTION 2.13.Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of the occurrence and continuance an Event of Default), (b) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto or (c) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.16 or Section 10.08(b), then, in any such event, at the request of such Lender the Borrower shall compensate such Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount reasonably determined in good faith by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the applicable rate of interest for such Loan (excluding, however the Applicable Margin included therein, if any), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.

SECTION 2.14.Taxes.  (a)  Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

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

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

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

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

(f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

SECTION 2.15.Payments Generally; Pro Rata Treatment.

(a) The Borrower shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest or fees, or of amounts payable under Section 2.12 or 2.13, or otherwise) prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the reasonable discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 30 Hudson Street, 17^th Floor, Jersey City, NJ 07302, pursuant to wire instructions to be provided by the Administrative Agent, except that payments pursuant to Sections 2.12, 2.13 and 10.04 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

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(b) If at any time insufficient funds are received by and available to the Administrative Agent or to the Collateral Agent to pay fully all Second Priority Obligations then due hereunder, such funds shall be applied (i) first, towards payment of fees and expenses then due under Section 10.04 payable to the Administrative Agent and the Collateral Agent, in their respective capacities as such, ratably among the parties entitled thereto in accordance with the amounts of fees and expenses then due to such parties, (ii) second, towards payment of fees and expenses then due under Section 10.04 payable to the Agents and the Lenders and towards payment of interest then due on account of the Second Lien Term Loans, ratably among the parties entitled thereto in accordance with the amounts of such fees and expenses and interest then due to such parties, and (iii) third, towards payment of principal of the Second Lien Term Loans then due hereunder (prorata among the holders of such Indebtedness), ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

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

(d) If any Lender shall fail to make any payment required to be made by it pursuant to Sections 2.03(a) or (b) or 10.04(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.16.Mitigation Obligations; Replacement of Lenders.  (a)  If the Borrower is required to pay any additional amount to any Lender under Section 2.12 or to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder, to assign its rights and obligations hereunder to another of its offices, branches or affiliates or to file any certificate or document reasonably requested by the Borrower, if, in the judgment of such Lender, such designation, assignment or filing (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

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(b)If, after the date hereof, any Lender requests compensation under Section 2.12 or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.02), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, that (i) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts due, owing and payable to it hereunder at such time, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (ii) in the case of payments required to be made pursuant to Section 2.14, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.17.Certain Fees.  The Borrower shall pay to the Administrative Agent, for the respective accounts of the Administrative Agent and the Lenders, the fees set forth in that certain Arrangers Fee Letter dated as of January 29, 2007 among the Administrative Agent, JPMSI, Goldman Sachs, LBI, LCPI, Merrill Lynch, UBS, UBS Finance, Barclays, Barclays Capital and the Borrower at the times set forth therein, and as otherwise heretofore agreed.

SECTION 2.18.Nature of Fees.  All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent, as provided herein and in the fee letters described in Section 2.17. Once paid, none of the Fees shall be refundable under any circumstances.

SECTION 2.19.Right of Set-Off.  Upon the occurrence and during the continuance of any Event of Default pursuant to Section 7.01(b), the Administrative Agent and each Lender (and their respective banking Affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final but excluding deposits in the Escrow Accounts, Payroll Accounts and other accounts, in each case, held in trust for an identified beneficiary) at any time held and other indebtedness at any time owing by the Administrative Agent and each such Lender (or any of such banking Affiliates) to or for the credit or the account of the Borrower or any Guarantor against any and all of any such overdue amounts owing under the Loan Documents, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand under any Loan Document. Each Lender and the Administrative Agent agree promptly to notify the Borrower and Guarantors after any such set-off and application made by such Lender or the Administrative Agent (or any of such banking Affiliates), as the case may be, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and the Administrative Agent under this Section are in addition to other rights and remedies which such Lender and the Administrative Agent may have upon the occurrence and during the continuance of any Event of Default.

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SECTION 2.20.Payment of Obligations

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

SECTION 2.21.Defaulting Lenders.  (a)  If at any time any Lender becomes a Defaulting Lender, then the Borrower may, on ten (10) Business Days’ prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.02(b) (with the assignment fee to be paid by the Borrower in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person.

(b) Any Lender being replaced pursuant to Section 2.21(a) above shall (i) execute and deliver an Assignment and Acceptance with respect to such Lender’s outstanding Second Lien Term Loan Commitments and Loans and (ii) deliver any documentation evidencing such Loans to the Borrower or the Administrative Agent. Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s outstanding Second Lien Term Loan Commitments and Loans, (B) all obligations of the Borrower owing to the assigning Lender relating to the Second Lien Term Loan Commitments and Loans so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such assignment and acceptance and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate documentation executed by the Borrower in connection with previous Borrowings, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Loans, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to make Loans hereunder, the Borrower and each of the Guarantors jointly and severally represent and warrant as follows:

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

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

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

SECTION 3.03.Due Execution.  The execution, delivery and performance by each of the Borrower and the Guarantors of each of the Loan Documents to which it is a party (a) are within the respective corporate or limited liability company powers of each of the Borrower and the Guarantors, have been duly authorized by all necessary corporate or limited liability company action, including the consent of shareholders or members where required, and do not (i) contravene the charter, by-laws or limited liability company agreement (or equivalent documentation) of any of the Borrower or the Guarantors, (ii) violate any applicable law (including, without limitation, the Securities Exchange Act of 1934) or regulation (including, without limitation, Regulations T, U or X of the Board), or any order or decree of any court or Governmental Authority, other than violations by the Borrower or the Guarantors which would not reasonably be expected to have a Material Adverse Effect, (iii) conflict with or result in a breach of, constitute a default under, or create an adverse liability or rights under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on the Borrower or the Guarantors or any of their properties, which, in the aggregate, would reasonably be expected to have a Material Adverse Effect, or (iv) result in or require the creation or imposition of any Lien upon any of the property of any of the Borrower or the Guarantors other than the Liens granted pursuant to this Agreement or the other Loan Documents; and (b) do not require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority other than (i) the filing of financing statements under the New York Uniform Commercial Code, (ii) the filings and consents contemplated by the Collateral Documents, (iii) approvals, consents and exemptions that have been obtained on or prior to the Closing Date and (iv) consents, approvals and exemptions that the failure to obtain in the aggregate would not be reasonably expected to result in a Material Adverse Effect. This Agreement has been duly executed and delivered by each of the Borrower and the Guarantors. This Agreement is, and each of the other Loan Documents to which the Borrower and each of the Guarantors is or will be a party, when delivered hereunder or thereunder, will be, a legal, valid and binding obligation of the Borrower and each Guarantor, as the case may be, enforceable against the Borrower and the Guarantors, as the case may be, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

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

SECTION 3.05.Financial Statements; Material Adverse Change.

(a)The Borrower has furnished the Administrative Agent on behalf of the Lenders with copies of the audited consolidated financial statement and schedules of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2006, certified by its chief financial officer. Such financial statements present fairly, in all material respects, in accordance with GAAP, the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis as of such date and for such period; such balance sheets and the notes thereto disclose all liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof required to be disclosed by GAAP and such financial statements were prepared in a manner consistent with GAAP in all material respects.

(b)Since January 29, 2007, there has been no Material Adverse Change.

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

SECTION 3.07.Liens.  Except for the Liens existing on the Closing Date as reflected on Schedule 3.07, there are no Liens of any nature whatsoever on any assets of the Borrower or any of the Guarantors other than Liens permitted pursuant to Section 6.01 (including any waiver or amendment thereto subsequent to the Closing Date).

SECTION 3.08.Use of Proceeds.  The proceeds of the Loans shall be used to repay amounts outstanding under the Existing DIP Facilities, to pay certain accrued administrative expenses, and for the payment of fees and transaction costs as contemplated hereby and as referred to in Section 2.17.

SECTION 3.09.Litigation and Environmental Matters.  Other than as set forth on Schedule 3.09:

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

(b)Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, (i) the Borrower and each Guarantor is currently in compliance with all, and has not violated any, Environmental Laws and/or requirements of any Airport Authority with respect to environmental matters and maintains and complies with all, and has not violated any, Environmental Permits and (ii) none of the Borrower or the Guarantors has (x) become subject to any Environmental Liability, or (y) received written or, to the knowledge of the Borrower or the Guarantors, verbal notice of any pending or, to the knowledge of the Borrower or the Guarantors, threatened claim with respect to any Environmental Liability, and there is no reasonable basis for any Environmental Liability.

SECTION 3.10.FAA Slot Utilization.  Except for matters which could not reasonably be expected to have a Material Adverse Effect, the Borrower and the Guarantors, as applicable, are utilizing, or causing to be utilized, their respective FAA Slots in a manner consistent with applicable rules, regulations, laws and contracts in order to preserve both their respective right to hold and operate the FAA Slots, taking into account any waivers or other relief granted to the Borrower and any Guarantor by the FAA, other applicable U.S. Governmental Authority or U.S. Airport Authority. Except as otherwise disclosed in the Borrower’s most recent Form 10-K, neither the Borrower nor any Guarantor has received any written notice from the FAA, other applicable U.S. Governmental Authority or U.S. Airport Authority, or are aware of any other event or circumstance, that would be reasonably likely to impair in any material respect their respective right to hold and operate any FAA Slot, except that which would not reasonably be expected to have a Material Adverse Effect.

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SECTION 3.11.Primary Foreign Slot Utilization.  The Borrower and the Guarantors, as applicable, are utilizing, or causing to be utilized, their respective Primary Foreign Slots in a manner consistent with applicable regulations, foreign laws and contracts in order to preserve their respective right to hold and operate the Primary Foreign Slots. Except as otherwise disclosed in the Borrower’s most recent Form 10-K, neither the Borrower nor any Guarantor, as applicable, has received any written notice from any applicable Foreign Aviation Authorities, or is aware of any other event or circumstance that would be reasonably likely to impair in any material respect their respective right to hold and operate any such Primary Foreign Slot, except that which would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.12.Primary Route Utilization.  The Borrower and the Guarantors, as applicable, hold the requisite authority to operate each of their respective Primary Routes pursuant to Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any applicable Foreign Aviation Authorities, and have, at all times after being awarded each such Primary Route, complied in all material respects with all of the terms, conditions and limitations of each such certificate or order issued by the DOT and the applicable Foreign Aviation Authorities regarding such Primary Route and with all applicable provisions of Title 49, applicable foreign law, and the applicable rules and regulations of the FAA, DOT and any Foreign Aviation Authorities regarding such Primary Route. There exists no failure of the Borrower and any applicable Guarantor to comply with such terms, conditions or limitations that gives the FAA, DOT or any applicable Foreign Aviation Authorities the right to terminate, cancel, suspend, withdraw or modify in any materially adverse respect the rights of the Borrower and the Guarantors, as applicable, in any such Primary Route, except to the extent that such failure could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13.Margin Regulations; Investment Company Act.

(a)Neither the Borrower nor any Guarantor is engaged, nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board, “Margin Stock”), or extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Loans will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulation U.

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

SECTION 3.14.ERISA.  Except as set forth on Schedule 3.14 and other than in connection with the bankruptcy proceedings of the Borrower and certain of the direct and indirect subsidiaries of the Borrower in the Bankruptcy Court, no Termination Event has occurred or is reasonably expected to occur. Except to the extent the same could not reasonably be expected to have a Material Adverse Effect and except as otherwise disclosed in the Borrower’s most recent Form 10-K (including the Notes to the financial statements contained therein), the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans. As of the date hereof, neither the Borrower nor any of its ERISA Affiliates contributes to or is obligated to contribute to any Multiemployer Plan subject to Title IV of ERISA.

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SECTION 3.15.Properties.

(a)The Borrower and the Guarantors have good title to (and with respect to Real Property Assets, good and marketable title to) each of the properties and assets reflected on the financial statements referred to in Section 3.05 hereof, including, without limitation, the Real Property Assets (other than such properties or assets disposed of in the ordinary course of business since the date of such financial statements or as permitted hereunder). As of the Closing Date, Schedule 3.15(a) is a true and complete description of (i) each parcel of real property owned by the Borrower or any Guarantor and (ii) the entity who owns such real property.

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

(c)As of the Closing Date, neither the Borrower nor any Guarantor has received any written notice of a pending or contemplated condemnation proceeding affecting any Real Property Asset having a fair market value in excess of $5,000,000.

SECTION 3.16.Perfected Security Interests.  The Collateral Documents, taken as a whole, are effective to create in favor of the Collateral Agent, for the benefit of the Second Priority Secured Parties, a legal, valid and enforceable security interest in all of the Collateral subject as to enforceability to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. At such time as (a) financing statements in appropriate form are filed in the appropriate offices (and the appropriate fees are paid), (b) the Second Lien Aircraft Mortgage (including, without limitation, any Mortgage Supplement) is filed for recordation with the FAA (and the appropriate fees are paid) and registrations with respect to the International Interests in the Mortgaged Collateral constituted by the Second Lien Aircraft Mortgage are duly made in the International Registry, (c) with respect to identified intellectual property registered in the United States, the Second Lien Trademark Security Agreement and the Second Lien Patent Security Agreement are filed in the appropriate divisions of the United States Patent and Trademark Office (and the appropriate fees are paid) and the Second Lien Copyright Security Agreement is filed in the United States Copyright Office (and the appropriate fees are paid), (d) the Second Lien Real Estate Mortgages are filed in the appropriate recording office (and the appropriate fees are paid), (e) execution of the Control Agreements and (f) delivery of pledged securities under the Second Lien Pledge Agreement (together with appropriate stock powers) to the Administrative Agent or the First Lien Administrative Agent, the Collateral Agent, for the benefit of the Second Priority Secured Parties, shall have a second priority perfected security interest and/or mortgage (or comparable Lien) in all of the Collateral to the extent that the Liens on such Collateral may be perfected upon the filings or upon the taking of the actions described in clauses (a) through (f) above, subject in each case only to Liens permitted by Section 6.01 (or, in the case of the Real Property Assets, subject only to the Permitted Liens and other Liens specified in the applicable Second Lien Real Estate Mortgage).

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SECTION 3.17.Payment of Taxes.  Except as set forth on Schedule 3.17 (and except as otherwise specifically permitted by the Plan of Reorganization and the Bankruptcy Court), each of the Borrower and the Guarantors has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid when due all Taxes required to have been paid by it, except and solely to the extent that, in each case (a) such Taxes are being contested in good faith by appropriate proceedings and the Borrower or such Guarantor, as applicable, has set aside on its books adequate reserves therefor or (b)  the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.18.Section 1110.  The Aircraft, Engines and Spare Engines listed on Schedule 3.18 represent each of the Aircraft, Engine and Spare Engine constituting Mortgaged Collateral as of the Closing Date that were first placed in service prior to October 22, 1994.

SECTION 4.

CONDITIONS OF LENDING

SECTION 4.01.Conditions Precedent to Initial Loans.  The obligation of the Lenders to make the initial Loans is subject to the satisfaction (or waiver in accordance with Section 10.08) of the following conditions precedent:

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

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

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

(iii)a certificate of the Secretary or an Assistant Secretary of such entity dated the date of the initial Loans hereunder and certifying (A) that attached thereto is a true and complete copy of the by-laws or limited liability company agreement of that entity as in effect on the date of such certification, (B) that attached thereto is a true and complete copy of resolutions adopted by the board of directors, board of managers or members of that entity authorizing the Borrowings hereunder, the execution, delivery and performance in accordance with their respective terms of this Agreement, the Loan Documents and any other documents required or contemplated hereunder or thereunder and the granting of the Liens contemplated hereby or the other Loan Documents, (C) that the certificate of incorporation or formation of that entity has not been amended since the date of the last amendment thereto indicated on the certificate of the Secretary of State furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer of that entity executing this Agreement and the Loan Documents or any other document delivered by it in connection herewith or therewith (such certificate to contain a certification by another officer of that entity as to the incumbency and signature of the officer signing the certificate referred to in this clause (iii)); and

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

(b)Credit Agreement.  Each party hereto shall have duly executed and delivered to the Administrative Agent this Agreement.

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

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(d)SGR Security Agreement. Each of the Borrower and Comair shall have duly executed and delivered to the Collateral Agent or First Lien Collateral Agent, as applicable, a slot, gate and route security and pledge agreement, in substantially the form of Exhibit D (the “Second Lien SGR Security Agreement”), together with (i) in respect of each of the FAA Slots, undated slot transfer documents, executed in blank to be held in escrow by the Collateral Agent or First Lien Collateral Agent, as applicable, and (ii) all financing statements in form and substance reasonably acceptable to the Collateral Agent, as may be required to grant, continue and maintain an enforceable security interest in the applicable Collateral (subject to the terms hereof and of the other Loan Documents) in accordance with the Uniform Commercial Code as enacted in all relevant jurisdictions

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

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

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

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(h)Appraisals and Field Audits. The Administrative Agent shall have received, in form and substance reasonably satisfactory to it, (i) appraisals from (1) the Appraisers in respect of the Appraised Collateral (other than the Real Property Assets) and (2) the Real Estate Appraiser in respect of the Real Property Assets and (ii) a Field Audit in respect of the Eligible Accounts Receivable.

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

(i)a written opinion of Leslie P. Klemperer, Vice President and Deputy General Counsel for the Borrower;

(ii)a written opinion of Davis Polk & Wardwell, counsel to the Borrower and the Guarantors, dated the date of the initial Loans, substantially in the form of Exhibit G-1;

(iii) a written opinion of each of (A) Kilpatrick Stockton LLP, (B) Keating Muething & Klekamp PLL, (C) Akerman Senterfitt and (D) Morris, Nichols, Arsht & Tunnell LLP, each a special local counsel to the Borrower and the Guarantors, each dated the date of the initial Loans, substantially in the form of Exhibits G-2, G-3, G-4 and G-5, respectively;

(iv)a written opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special FAA counsel, substantially in the form of Exhibit G-6; and

(v)a written opinion with respect to each Second Lien Real Estate Mortgage reasonably satisfactory to the Administrative Agent of such other local real estate counsel as the Administrative Agent may reasonably request.

(j)Payment of Fees and Expenses. The Borrower shall have paid to the Administrative Agent the then unpaid balance of all accrued and unpaid Fees due, owing and payable under and pursuant to this Agreement, as referred to in Section 2.17 and as heretofore agreed upon by the Borrower and the Administrative Agent, and all reasonable fees and reasonable out-of-pocket expenses of the Administrative Agent, the Lead Arrangers, the Joint Bookrunners and the Collateral Agent (including the reasonable fees and reasonable out-of-pocket expenses of counsel to the Administrative Agent) as to which invoices have been issued and presented.

(k)Lien Searches; International Registry Searches. The Administrative Agent shall have received UCC searches conducted in the jurisdictions in which the Borrower and the Guarantors are incorporated or such other jurisdictions as the Administrative Agent may reasonably require and Lien searches conducted in the recording office of the Federal Aviation Administration and, with respect to the applicable Mortgaged Collateral, “priority search certificates” (as defined in the Regulations and Procedures for the International Registry), all as may be reasonably satisfactory to the Administrative Agent (dated as of a date reasonably satisfactory to the Administrative Agent), reflecting the absence of Liens and encumbrances on the assets of the Borrower and the Guarantors other than Liens permitted hereunder and as may be reasonably satisfactory to the Administrative Agent and the absence of registrations on the International Registry with respect to the applicable Mortgaged Collateral other than the registrations contemplated herein, and (in the case of the searches conducted at the recording office of the FAA) indicating that the Borrower (or a Guarantor) is the registered owner of each of the aircraft which is intended to be covered by the Second Lien Aircraft Mortgage.

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

(ii)The Collateral Agent shall have been named as loss payees and/or additional insured, as applicable, with respect to the Collateral on such policies of insurance of the Borrower and the Guarantors as the Collateral Agent may have reasonably requested (or as otherwise specified in the Collateral Documents).

(m)Title/Survey. The Collateral Agent shall have received title insurance policies with respect to each Real Property Asset from Lawyers Title Insurance Company or another title company reasonably acceptable to the Collateral Agent and real property surveys with respect to the Real Property Assets, all in form and substance reasonably satisfactory to the Collateral Agent.

(n)Order; Plan of Reorganization. (i) The Confirmation Order shall have been entered in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, any applicable orders of the Bankruptcy Court and any applicable local rules and the provisions relating to the Facilities contained therein shall be reasonably satisfactory to the Administrative Agent, (ii) the Confirmation Order shall be in full force and effect, shall not, without the consent of the Agents (such consent not to be unreasonably withheld, conditioned or delayed), have been reversed or modified or be subject to stay or a motion to stay, (iii) all conditions to the effectiveness of the Plan of Reorganization shall have been satisfied or waived (the waiver thereof (other than the waiver of the condition that the Confirmation Order shall have become a Final Order), if materially adverse to the Lenders, having been approved by the Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed)) and the Consummation of the Plan of Reorganization shall occur on the Closing Date contemporaneously with the making of the initial Loans hereunder, and (iv) the pro forma capital and ownership structure shall be substantially as described in the Joint Plan of Reorganization of the Borrower and its domestic Subsidiaries filed with the Bankruptcy Court on April 25, 2007 and such plan shall not have been amended in any manner materially adverse to the Lenders without the consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned or delayed).

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(o) Repayment of Existing DIP Facility. Upon Consummation of the Plan of Reorganization and the making of the initial Loans, the Existing DIP Facilities shall have been repaid in full (or, in the case of any Existing DIP Facility Letter of Credit, cash-collateralized or guaranteed by a back-to-back letter of credit) and all action necessary to release all collateral pledged to secure the Loans shall have been taken, in form and substance reasonably satisfactory to the Administrative Agent. Substantially all other existing Indebtedness of the Borrower and its Subsidiaries, other than any Indebtedness otherwise permitted hereunder, shall have been repaid, restructured or reinstated as expressly contemplated by the Plan of Reorganization.

(p) Consents. All material governmental and third party consents and approvals necessary in connection with the financing contemplated hereby shall have been obtained, in form and substance reasonably satisfactory to the Administrative Agent, and be in full force and effect.

(q) Financial Statements. The Lenders shall have received (i) audited consolidated financial statements of the Borrower for the three most recent fiscal years ended prior to the Closing Date, (ii) unaudited interim consolidated financial statements of the Borrower for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this Section 4.01(q) and 60 days or more prior to the Closing Date, (iii) a proforma consolidated balance sheet of the Borrower as of the date of the most recent consolidated balance sheet delivered pursuant to the preceding clauses (i) or (ii), giving effect to the consummation of the Plan of Reorganization and the financings contemplated hereby and thereby, and (iv) a business plan of the Borrower including quarterly projections through December 31, 2007 and annual projections through December 31, 2010. Documents required to be delivered pursuant to clauses (i) and (ii) hereof which are made available via EDGAR, or any successor system of the SEC, in the Borrower’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, shall be deemed delivered to the Lenders on the date such documents are made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent.

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

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

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

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(u) Intercreditor Agreement. The Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, and the First Lien Collateral Agent shall have executed the Intercreditor Agreement.

(v) Eligible Collateral. At the time the Lenders make the initial Loans, and after giving effect thereto, the Appraised Value of the Eligible Collateral shall not be less than 125% of the Total Obligations outstanding on the Closing Date.

(w) Restructuring Aircraft Certificate. The Borrower shall have delivered an Officer’s Certificate certifying that there have been no material adverse developments or changes in the status of the Qualified Restructuring Indebtedness from the information previously disclosed to the Administrative Agent.

(x) Eligible Accounts Receivable Certificate. The Borrower shall have delivered an Officer’s Certificate, substantially in the form of Exhibit K, setting forth the amount of the Eligible Accounts Receivable as of the Closing Date, together with all supporting documents with respect to such Eligible Accounts Receivable as the Administrative Agent may reasonably request.

(y) Corporate Ratings. The Borrower shall have obtained a corporate credit rating from S&P and a corporate family rating from Moody’s.

(z) No Material Adverse Effect. Since January 29, 2007, no Material Adverse Effect shall have occurred.

(aa) First Lien Credit Agreement. The First Lien Credit Agreement shall have become effective in accordance with its terms and the Borrower shall have received $600,000,000 in gross proceeds from the borrowing of First Lien Loans thereunder.

(bb) Other Documentation and Information. The Administrative Agent shall have received (i) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower and each Guarantor and the authorization of the Transactions and (ii) a fully executed copy of the First Lien Credit Agreement.

(cc) Notice. The Administrative Agent shall have received a Borrowing Request pursuant to Section 2.02 with respect to the borrowing of the Loans.

SECTION 5.

AFFIRMATIVE COVENANTS

From the date hereof and for so long as the Second Lien Term Loan Commitments remain in effect or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than contingent indemnification obligations not due and payable), the Borrower and each of the Guarantors agree to:

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

(a)Within 90 days after the end of each fiscal year, the Borrower’s consolidated balance sheet and related statement of income and cash flows, showing the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of the close of such fiscal year and the results of their respective operations during such year, the consolidated statement of the Borrower to be audited for the Borrower by Ernst & Young LLP or other independent public accountants of recognized national standing and accompanied by an opinion of such accountants (without a “going concern” or like qualification or exception and without any qualification or exception (other than with respect to the 2005 audit and the 2006 audit) as to the scope of such audit) and to be certified by a Responsible Officer of the Borrower to the effect that such consolidated financial statements fairly present in all material respects the financial condition and results of operations of the Borrowerand its Subsidiaries on a consolidated basis in accordance with GAAP. Documents required to be delivered pursuant to this clause (a) which are made available via EDGAR, or any successor system of the SEC, in the Borrower’s Annual Report on Form 10-K, shall be deemed delivered to the Lenders on the date such documents are made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent;

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

(c)(i) concurrently with any delivery of financial statements under (a) and (b) above, a certificate of a Responsible Officer of the Borrower (A) certifying that no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default has occurred, or, if such an Event of Default or event has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, (B) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the provisions of Sections 6.04, 6.05 and 6.06 and (C) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.05 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; and (ii) concurrently with any delivery of financial statements under (a) above, a certificate (which certificate may be limited to accounting matters and disclaim responsibility for legal interpretations) of the accountants auditing the consolidated financial statements delivered under (a) above certifying that, in the course of the regular audit of the business of the Borrower and its Subsidiaries, such accountants have obtained no knowledge that an Event of Default pursuant to Section 7.01(c) due to any failure to comply with Section 6.04 or 6.05 has occurred and is continuing or if, in the opinion of such accountants, such an Event of Default has occurred and is continuing, specifying the nature thereof and all relevant facts with respect thereto;

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(d)promptly after the same become publicly available, copies of all registration statements and all periodic and other reports, proxy statements and other materials filed by it with the SEC, or any governmental authority succeeding to any of or all the functions of said commission, or with any national securities exchange, as the case may be. Documents required to be delivered pursuant to this clause (d) which are made available via EDGAR, or any successor system of the SEC, shall be deemed delivered when made so available; provided that, upon request, the Borrower shall deliver paper copies of such documents to the Administrative Agent;

(e)Within ninety (90) days from the last Business Day of the immediately preceding fiscal year, a detailed consolidated budget for the following 12-month period (including projected statements of operations and cash flow for such period);

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

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

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

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

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

(k)promptly after a Responsible Officer obtains knowledge of (i) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary that could reasonably be expected to result in a Material Adverse Effect; or (ii) the receipt of any environmental audits and reports, whether prepared by personnel of the Borrower or any Guarantor or by independent consultants, which relate to an Environmental Liability which could be expected to have a Material Adverse Effect, notification thereof (together with, in the case of clause (ii) above, copies of such audits and reports), each such notice to be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto;

(l)promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Guarantor as the Administrative Agent, at the request of any Lender, may reasonably request;

(m)within (i) twenty (20) Business Days following the end of each calendar month, a certificate of a Responsible Officer of the Borrower or, if applicable, a Guarantor, (x) stating that at all times since the last certificate delivered under this Section 5.01(m) (or, in the case of the first certificate to be delivered after the Closing Date, at all times since the Closing Date) the Borrower or Guarantor, as the case may be, has utilized the Primary Routes and the Primary Foreign Slots in a manner consistent in all material respects with applicable regulations, rules, law, foreign law and contracts in order to preserve their respective rights in and to use each of the Primary Routes and Primary Foreign Slots and (y) setting forth (A) any permanent disposition or transfer by the Borrower or such Guarantor of any Appraised FAA Slot, Primary Foreign Slot or Primary Route and (B) airports associated with additional Primary Routes allocated to or acquired by the Borrower or such Guarantor which airports are not already listed on Schedule 4(g) to the Second Lien SGR Security Agreement or Schedule 4(i) to the Second Lien SGR Security Agreement and (ii) five (5) Business Days following the end of each calendar month, copies of any report filed by the Borrower or any Guarantor in such calendar month with the FAA, DOT or any other applicable Governmental Authority or Airport Authority or any Foreign Aviation Authorities regarding utilization of Primary Routes or Primary Foreign Slots or access to the Primary Supporting Route Facilities, as well as a summary thereof, in a format reasonably acceptable to the Administrative Agent;

(n)at any time that Eligible Accounts Receivable shall be included as Eligible Collateral, promptly and in any event within 30 days after the end of each month while Eligible Accounts Receivable are part of Eligible Collateral, an Officer’s Certificate from the Borrower, substantially in the form of Exhibit K, setting forth the amount of Eligible Accounts Receivable as of such date, together with all supporting documents with respect to Eligible Accounts Receivable as the Administrative Agent may reasonably request;

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(o)promptly after a Responsible Officer obtains knowledge thereof, notice of any Collateral Event;

(p)promptly after a Responsible Officer obtains knowledge thereof, notice of any Event of Loss;

(q)promptly after a Responsible Officer obtains knowledge of any Visa/MasterCard Dollar Trigger Event, notification thereof (accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of such Visa/MasterCard Dollar Trigger Event).

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

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

SECTION 5.02.Existence.  Preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business except (a)(i) if in the reasonable business judgment of the Borrower it is no longer necessary for the Borrower and the Guarantors to preserve and maintain such rights, privileges, qualifications, permits, licenses and franchises, and (ii) such failure to preserve the same could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, and (b) as otherwise permitted in connection with (i) sales of assets permitted by Section 6.10 or (ii) mergers, liquidations and dissolutions permitted by Section 6.02.

SECTION 5.03.Insurance.

(a)In addition to the requirements of Section 5.03(b) or as set forth in each Real Property Mortgage, (i) keep its properties (other than the Mortgaged Collateral, as to which only the insurance provisions of the Second Lien Aircraft Mortgage shall be applicable) insured at all times, against such risks, including fire and other risks insured against by extended coverage, and on such term and conditions, as is prudent and customary with U.S. based companies of the same or similar size in the same or similar businesses; (ii) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by the Borrower or any Guarantor, as the case may be, in such amounts and with such deductibles as are customary with companies of the same or similar size in the same or similar businesses and in the same geographic area; and (iii) maintain such other insurance or self insurance as may be required by law.

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

(c)All such insurance referred to in Section 5.03(a) with respect to the Collateral (other than the Mortgaged Collateral as to which only the provisions of the Aircraft Mortgage shall be applicable) shall (i) contain a Lender’s Loss Payable Endorsement in favor of the Collateral Agent, on behalf of the Second Priority Secured Parties, in all loss or damage insurance policies, (ii) provide that no cancellation thereof shall be effective until at least thirty (30) days after written notice thereof to the Collateral Agent, on behalf of the Second Priority Secured Parties, permitting the Collateral Agent to cure any default with respect to applicable outstanding premiums, (iii) name the Collateral Agent, for the benefit of the Second Priority Secured Parties, as loss payees for physical damage insurance with respect to property which constitutes Collateral (other than the Mortgaged Collateral as to which only the provisions of the Aircraft Mortgage shall be applicable) or a Real Property Asset as to which a Lien has been granted to the Collateral Agent, and as additional insureds for liability insurance,(iv) provide that once the Collateral Agent has given notice of the occurrence of an Event of Default, no loss in excess of $5,000,000 shall be adjusted or otherwise settled without the prior written consent of the Collateral Agent, and (v) state that none of the Collateral Agent, any of the Lenders, nor any other Second Priority Secured Party shall be responsible for premiums, commissions, club calls, assessments or advances.

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

(e)No less frequently than annually, but in any event prior to expiration of any insurance policy maintained in connection herewith or in connection with any Collateral Document, furnish to the Collateral Agent certificates of insurance with respect to insurance maintained by the Borrower or any Guarantor, as the case may be, which certificates evidence compliance by the Borrower and the Guarantors with the insurance requirements set forth herein and in any of the Collateral Documents and contain signatures of duly authorized representatives of AON Risk Services or such other insurance broker as may be reasonably acceptable to the Collateral Agent, at all times prior to policy termination, cessation or cancellation.

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(f)Make available at the Borrower’s headquarters, upon the reasonable request of the Collateral Agent and upon reasonable prior notice, all insurance policies maintained by the Borrower and the Guarantors for the review of the Collateral Agent and any agents or representatives thereof.

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

SECTION 5.05.Obligations and Taxes.  Pay all its material obligations (other than any obligations with respect to any Restructuring Aircraft, except obligations under any Post-Petition Aircraft Agreement applicable to such Restructuring Aircraft) promptly and in accordance with their terms and pay and discharge promptly all taxes, assessments and governmental charges, levies or claims (other than such taxes, assessments and governmental charges, levies and claims to the extent addressed in the Plan of Reorganization, which shall be paid in accordance with the Plan of Reorganization) imposed upon it or upon its income or profits or in respect of its property, before the same shall become more than ninety (90) days delinquent, except in each case where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; provided, however, that the Borrower and each Guarantor shall not be required to pay and discharge or to cause to be paid and discharged any such obligation, tax, assessment, charge, levy or claim so long as (i) the validity or amount thereof shall be contested in good faith by appropriate proceedings and (ii) the Borrower and the Guarantors shall have set aside on their books adequate reserves therefor in accordance with GAAP.

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

SECTION 5.07.Access to Books and Records.  (a)  Maintain or cause to be maintained at all times true and complete books and records in all material respects in a manner consistent with GAAP in all material respects of the financial operations of the Borrower and the Guarantors and provide the Administrative Agent, the Collateral Agent and their respective representatives and advisors reasonable access to all such books and records (subject to requirements under any confidentiality agreements, if applicable), as well as any appraisals of the Collateral, during regular business hours, in order that the Administrative Agent and the Collateral Agent may upon reasonable prior notice and with reasonable frequency, but in any event, so long as no Event of Default has occurred and is continuing, no more than one time per year, examine and make abstracts from such books, accounts, records, appraisals and other papers, and permit the Administrative Agent, the Collateral Agent and their respective representatives and advisors to confer with the officers of the Borrower and the Guarantors and representatives (provided that the Borrower shall be given the right to participate in such discussions with such representatives) of the Borrower and the Guarantors, all for the purpose of verifying the accuracy of the various reports delivered by the Borrower or the Guarantors to the Administrative Agent or the Lenders pursuant to this Agreement or for otherwise ascertaining compliance with this Agreement; and at any reasonable time and from time to time during regular business hours, upon reasonable notice to the Borrower, permit the Administrative Agent, the Collateral Agent, and any agents or representatives (including, without limitation, appraisers) thereof to visit the properties of the Borrower and the Guarantors and to conduct examinations of and to monitor the Collateral held by the Collateral Agent, in each case at the expense of the Borrower (provided, that the Borrower shall not be required to pay the expenses of more than one such visit a year unless an Event of Default has occurred and is continuing).

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

SECTION 5.08.Compliance with Laws.

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

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

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

SECTION 5.09.Appraisal Reports and Field Audits.  Cooperate with the Appraiser, Real Estate Appraiser or Field Auditor, as the case may be, such that the Administrative Agent shall receive one or more Appraisal Reports or Field Audits, as the case may be, establishing the value of the Appraised Collateral or Eligible Accounts Receivable, as the case may be, (a) in the case of Appraisal Reports, by no later than thirty (30) days prior to each anniversary of the Closing Date, (b) on the date upon which any additional property or assets that constitutes Appraised Collateral (including, without limitation, applicable Cure Collateral) is pledged as Collateral to the Collateral Agent to secure the Second Priority Obligations, but only with respect to such additional Collateral, (c) promptly at the request of the Administrative Agent upon the occurrence and during the continuation of an Event of Default, (d) in the case of Field Audits, promptly at the request of the Administrative Agent (which are not contemplated to occur more than once per year, but in any event, so long as no Event of Default has occurred and is continuing, no more than once per year) and (e) upon a Change in Law with respect to any assets which constitute Collateral, which change could reasonably be expected to result in the Borrower’s failure to maintain the required coverage ratios pursuant to Section 6.06. In addition to the requirements set forth in this Section 5.09, if at any time the Collateral Agent in its reasonable good faith business judgment believes that a Collateral Event has occurred, it may request the delivery of an updated Appraisal Report with respect to the affected Collateral, and the Borrower and the Guarantors shall cooperate with the Appraiser to ensure that the Collateral Agent receives the same. The Borrower may from time to time cause to be delivered subsequent Appraisal Reports if it believes that the affected item of Collateral has a higher Appraised Value than that reflected in the most recent Appraisal Report delivered.

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

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SECTION 5.11.FAA Slot Utilization.Subject to transfers, exchanges and other dispositions permitted by this Agreement and the Second Lien SGR Security Agreement, utilize (or arrange for utilization by exchanging FAA Slots with other air carriers) the FAA Slots (except FAA Slots which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, laws and contracts in order to preserve its right to hold and operate the FAA Slots, taking into account any waivers or other relief granted to the Borrower by the FAA, any other applicable Governmental Authority or any Airport Authority.

SECTION 5.12.Primary Foreign Slot Utilization.  Subject to transfers, exchanges and other dispositions permitted by this Agreement and the Second Lien SGR Security Agreement, utilize (or arrange for utilization by exchanging Primary Foreign Slots with other air carriers) the Primary Foreign Slots (except Primary Foreign Slots which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, foreign law and contracts in order to preserve its right to hold and operate the Primary Foreign Slots, taking into account any waivers or other relief granted to the Borrower by any applicable Foreign Aviation Authorities.

SECTION 5.13.Primary Route Utilization.Subject to transfers, exchanges and other dispositions permitted by this Agreement and the Second Lien SGR Security Agreement, utilize the Primary Routes (except Primary Routes which are reasonably determined by the Appraisers to be of de minimis value) in a manner consistent in all material respects with applicable regulations, rules, treaties, foreign law and contracts in order to preserve its right to hold and operate the Primary Routes and maintain access to the Primary Supporting Route Facilities sufficient to ensure its ability to retain its rights in and to the Primary Routes, taking into account any waivers or other relief granted to the Borrower by the FAA, any other applicable Governmental Authority, any Airport Authority or any applicable Foreign Aviation Authorities.

SECTION 5.14.Additional Subsidiaries.  If any additional Subsidiary of the Borrower is formed or acquired after the Closing Date, the Borrower will promptly, and in any event within twenty (20) Business Days after such Subsidiary is formed or acquired, (a) to the extent such Subsidiary is an entity incorporated or organized in the United States and is not an Immaterial Subsidiary, an Excluded Subsidiary or a Restricted Captive Insurance Company Subsidiary, cause such Subsidiary to become a party to the Guarantee contained in Section 9 hereof, each applicable Collateral Document and all other agreements, instruments or documents that create or purport to create and perfect a Lien in favor of the Collateral Agent for the benefit of the Second Priority Secured Parties, by executing an Instrument of Assumption and Joinder substantially in the form attached hereto as Exhibit H and, subject to preexisting Liens on such Subsidiary’s assets and the terms thereof (to the extent the same are permitted under this Agreement), promptly take such actions to create and perfect Liens on such Subsidiary’s assets to secure the Second Priority Obligations to the extent required under the applicable Collateral Documents and (c) cause any Equity Interests or promissory notes evidencing Indebtedness of such Subsidiary that, in each case, are owned by or on behalf of the Borrower or any Guarantor to be pledged to the extent required by the Collateral Documents, provided that, if such Subsidiary is directly owned by the Borrower or any Guarantor and is organized under the laws of a jurisdiction other than the United States of America or any state thereof or the District of Columbia, Equity Interests of such Subsidiary to be pledged shall be limited to 65% of the outstanding voting Equity Interests of such Subsidiary.

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SECTION 5.15.[Reserved]

SECTION 5.16.Additional Collateral; Additional Grantors.

(a)If any aircraft, engines, spare parts or owned real property (including, in the case of owned real property, only owned real property valued individually in excess of $5,000,000 or $20,000,000 in the aggregate from the Closing Date, but excluding any leasehold interests) are acquired by the Borrower or any Guarantor after the Closing Date (other than any spare parts that become subject to a Lien pursuant to the Aircraft Mortgage upon acquisition thereof), the Borrower will promptly notify the Administrative Agent thereof and at the Administrative Agent’s request within forty-five (45) days of such notice, will cause such assets to be subjected to a Lien securing the Second Priority Obligations to the extent not excluded from the definition of “Collateral” under the Loan Documents, subject to preexisting Liens on such assets permitted hereunder and any other Liens permitted hereunder, and will take, and cause the Guarantors to take, such actions as shall be necessary to grant and perfect such Liens, including actions described in this paragraph (a), all at the expense of the Borrower and Guarantors; provided, however, that this clause (a) shall not apply (i) if and to the extent that, on the date of and after giving effect to such acquisition, the Borrower shall be in compliance with Section 6.06(a) and shall have delivered to the Administrative Agent an Officer’s Certificate certifying to such compliance or (ii) to any aircraft, engines, spare parts or owned real property to the extent that the Administrative Agent has received, on or before the date of such acquisition, a copy of an executed commitment letter, letter of intent, memorandum or understanding or other similar document that evidences a commitment to consummate a financing of such aircraft, engines, spare parts or owned real property within forty-five (45) days of the date of such acquisition and such financing actually occurs within forty-five (45) days (it being understood that the Lenders hereby authorize the Collateral Agent to withhold or delay such filing if the Collateral Agent shall be satisfied in its sole discretion that the applicable financing shall be consummated within a reasonable timeframe thereafter);providedfurther that the Administrative Agent shall not require the execution or delivery of any Mortgage Supplement, or require the Borrower or any Guarantor to take any actions with respect to the FAA, relating to any of the 737-800 aircraft to be sold pursuant to agreements described on Schedule 5.17 hereof.

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

SECTION 5.17.Pledged Spare Parts.  Segregate all of its Pledged Spare Parts from any Spare Parts which are subject to any consignment arrangement, and shall keep all Spare Parts not so subject to a consignment arrangement in Spare Parts Locations, except to the extent permitted in the Second Lien Aircraft Mortgage. The Pledged Spare Parts will be maintained by or on behalf of the Borrower and Comair, as required by the Second Lien Aircraft Mortgage.

SECTION 5.18.Further Assurances.  Execute any and all further documents and instruments, and take all further actions, that may be required or advisable under applicable law, the Cape Town Convention or by the FAA, or that the Collateral Agent may reasonably request, in order to create, grant, establish, preserve, protect and perfect the validity, perfection and priority of the Liens and security interests created or intended to be created by the Collateral Documents, to the extent required under this Agreement or the Collateral Documents, including, without limitation, amending, amending and restating, supplementing, assigning or otherwise modifying, renewing or replacing the Second Lien Aircraft Mortgage or other agreements, instruments or documents relating thereto, in each case as may be reasonably requested by the Collateral Agent, in order to (i) create interests (including, but not limited to, International Interests, Assignments, Prospective International Interests, Prospective Assignments, Sales, Prospective Sales, Assignments of Associated Rights and Subordinations) that may be registered and/or assigned under the Cape Town Convention, (ii) create, grant, establish, preserve, protect and perfect the Liens in favor of the Collateral Agent for the benefit of the Second Priority Secured Parties to the fullest extent possible under the Cape Town Convention, including, where necessary, the subordination of other rights or interests and (iii) realize the benefit of the remedial provisions that are contemplated by the Cape Town Convention, subject to the provisions of Section 4.07 of the Second Lien Aircraft Mortgage.

Without limiting the generality of the foregoing or any other provisions of the Loan Documents, the Borrower hereby (a) agrees to exclude the application of Article XVI(1)(a) of the Protocol and (b) consents, pursuant to Article XV of the Protocol, to any Assignment of Associated Rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the applicable Loan Documents and further agrees that the provisions of the preceding paragraph shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such Assignment of Associated Rights.

SECTION 5.19.Post Closing Items.

(a)Within thirty (30) days of the Closing Date, the Borrower and each applicable Guarantor shall have duly executed and delivered to the Collateral Agent a Trademark Security Agreement in substantially the form of Exhibit F-1 (the “Second Lien Trademark Security Agreement”), together with all documents, certificates, forms and filing fees that the Collateral Agent may deem reasonably necessary to perfect and protect the Liens and security interests created in the identified intellectual property in the Second Lien Trademark Security Agreement.

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(b)Within thirty (30) days of the Closing Date (or such later date as the Administrative Agent may, in its reasonable discretion, consent to in writing), the Borrower and each applicable Guarantor shall have delivered to the Collateral Agent or First Lien Collateral Agent a Shifting Control Agreement or any other Control Agreement, properly executed by the Borrower or any Guarantor, as the case may be, and each bank or other financial institution (as may be specified by the Borrower) at which the Borrower or any Guarantor, as the case may be, maintains a deposit account or securities account (it being understood that no Control Agreement shall be required to be delivered with respect to any Excluded Account).

(c)Within thirty (30) days of the later of (i) the Closing Date and (ii) the date the Collateral Agent becomes registered with the International Registry (or such later date as the Administrative Agent may, in its reasonable discretion, consent to in writing), the Borrower and each applicable Guarantor shall have delivered evidence of the registrations in the International Registry of International Interests in the Airframes, Engines and Spare Engines constituted by the Second Lien Aircraft Mortgage.

SECTION 6.

NEGATIVE COVENANTS

From the date hereof and for so long as the Second Lien Term Loan Commitments remain in effect or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than contingent indemnification obligations not due and payable), the Borrower and each of the Guarantors will not:

SECTION 6.01.Liens.  Incur, create, assume or suffer to exist any Lien on any asset of the Borrower or the Guarantors, now owned or hereafter acquired by the Borrower or any of such Guarantors, other than:

(a) Liens which were existing on the Closing Date as reflected on Schedule 3.07;

(b) Permitted Liens;

(c) Liens in favor of the Collateral Agent and the Lenders pursuant to the Loan Documents;

(d) Liens securing Indebtedness or Capitalized Leases permitted by Section 6.03(l) or any permitted refinancing thereof, provided that such Lien attach only to the assets of the Borrower or Guarantor (including related leases thereof and, in the case of personal property, other assets integral to the use thereof including security deposits from any sublessee collaterally assigned for the benefit of lessors) subject to such acquisition or financing;

(e) Liens on the Collateral that are pari passu with the Liens in favor of the First Lien Collateral Agent securing the Designated Cash Management Obligations;

(f) Liens on the Collateral that are pari passu with the Liens in favor of the First Lien Collateral Agent securing Indebtedness permitted by Section 6.03(f) or (g) and relating to Designated Hedging Agreements; provided that the maximum amount of such Indebtedness that constitutes First Priority Obligations shall not exceed $200,000,000 at any time;

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(g) licenses, leases and subleases of (A) Mortgaged Collateral and Collateral (as defined in the Second Lien SGR Security Agreement) granted to others but only to the extent permitted by the Second Lien Aircraft Mortgage with respect to Mortgaged Collateral and to the extent permitted by the Second Lien SGR Security Agreement with respect to Collateral as defined therein and (B) all other assets to the extent such license, sublicense, lease or sublease does not interfere in any material respect with the business of the Borrower and the Guarantors, taken as a whole;

(h) Liens arising from precautionary UCC financing statements regarding operating leases permitted by this Agreement;

(i) any interest or title of a licensor, sublicensor, lessor, sublessor or airport operator under any lease, license or use agreement;

(j) Liens on real and personal property acquired in connection with acquisitions permitted by this Agreement to the extent such Liens exist on such acquired property at the time of acquisition or Liens existing on any property or asset of any Person that becomes a Guarantor after the date hereof prior to the time such Person becomes a Guarantor, provided, (1) such Liens are not created in contemplation of or in connection with such acquisition or such Person becoming a Guarantor, as the case may be, (2) such Liens shall not apply to any other property or assets of the Borrower or any Guarantor and (3) such Liens shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Guarantor, as the case may be;

(k) Liens in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business and consistent with past practices;

(l) Liens on (1) the Borrower’s right to receive a refund of unearned insurance premiums and (2) insurance policies and the proceeds thereof, to secure the Borrower’s payment of such insurance premiums financed by Indebtedness permitted pursuant to Section 6.03(e);

(m) Liens on the Collateral in favor of the First Lien Collateral Agent securing the First Priority Obligations;

(n) junior Liens on the Collateral securing the Indebtedness permitted pursuant to Section 6.03(m), provided, that such Liens shall be subject in all respects to an intercreditor agreement substantially in the form of the Intercreditor Agreement;

(o) Liens consisting of setoff or netting rights in connection with Hedging Agreements;

(p) Liens securing reimbursement obligations in respect of standby or documentary letters of credit or bankers acceptances, provided that in the case of (1) documentary letters of credit or bankers acceptances, such Liens attach only to the documents, goods covered thereby and proceeds thereof and (2) in the case of standby letters of credit, such Liens may only be on cash in an amount not to exceed $172,500,000;

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(q) Liens on the underlying commodity trading accounts or other brokerage accounts incurred in the ordinary course of business;

(r) Liens which arise under Article 2 of the UCC;

(s) replacement, extension and renewal of any Lien permitted hereby, provided that any such replacement, extension, or renewal of any Lien shall not extend to any property or assets of the Borrower or any Guarantor which was not subject to the Lien being replaced, extended or renewed;

(t) Liens in favor of any of the Borrower or a Guarantor that do not encumber any Collateral;

(u) Liens arising by operation of law in connection with judgments, attachment or awards which do not constitute an Event of Default hereunder;

(v)  other Liens incurred by the Borrower and the Guarantors (except with respect to Real Property Assets) so long as the Indebtedness and other obligations secured thereby does not exceed Indebtedness permitted by Section 6.03(ee);

(w) Liens on cash collateral and fuel inventory (and the proceeds thereof) or letters of credit in each case securing Indebtedness permitted pursuant to Section 6.03(f), and Indebtedness permitted by Section 6.03(g) in an aggregate amount at any one time for all such cash and letters of credit in excess of the amount thereof that is secured as permitted by Section 6.01(f), not in excess (other than with respect to Liens on fuel inventory and the proceeds thereof) of $575,000,000;

(x) Liens on Margin Stock, if and to the extent the value of all Margin Stock of the Borrower and its Subsidiaries exceeds 25% of the total assets subject to this Section 6.01;

(y) Liens on any Restructuring Aircraft created by or pursuant to any Post-Petition Aircraft Agreement;

(z) Liens on the Excluded Accounts and amounts on deposit therein in favor of the beneficiaries of the amounts on deposit therein to the extent such Liens secure obligations owed to such beneficiaries;

(aa) the Lien of the Jet Fuel Counterparty on the Jet Fuel Assets, in the event that the transactions underlying the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower;

(bb) Liens attaching solely to cash earnest money deposits in connection with Investments permitted pursuant to Section 6.09;

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(cc) Liens securing Indebtedness permitted by (i) Section 6.03(h) and (ii) Section 6.03(y);

(dd) Liens on cash collateral securing surety and appeal bonds in an aggregate amount for all such cash collateral not exceeding $172,500,000; and

(ee) other Liens so long as the obligations secured thereby do not exceed $28,750,000 at any time.

SECTION 6.02.Merger, etc.  Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except (a) that any Subsidiary (so long as such Subsidiary is not the Borrower) may merge into the Borrower or any other Guarantor in a transaction in which the Borrower or any Guarantor is the surviving corporation, provided that (i) immediately after giving effect thereto no Event of Default or event with which upon notice or the passage of time or both would constitute an Event of Default shall have occurred and be continuing and (ii) any such merger involving a Person whose Equity Interests are not 100% owned by the Borrower directly or indirectly immediately prior to such merger shall not be permitted unless also permitted by Section 6.10; (b) that any Subsidiary (so long as such Subsidiary is not the Borrower) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders, provided that an Event of Default does not result from such liquidation or dissolution; (c) any Person (other than the Borrower) may merge into the Borrower or any Guarantor pursuant to a Permitted Acquisition in which the Borrower or such Guarantor is the surviving corporation; (d) asset sales permitted hereunder; and (e) any Permitted Change of Control Transaction.

SECTION 6.03.Indebtedness.  Contract, create, incur, assume or suffer to exist any Indebtedness, except for:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness incurred pursuant to the First Lien Credit Agreement or any refinancing thereof in accordance with the Intercreditor Agreement; provided that the principal amount of Indebtedness incurred in connection with any such refinancing shall not exceed the amount permitted by the Intercreditor Agreement;

(c) Indebtedness incurred prior to the Closing Date or with respect to which an option exists (including existing Capitalized Leases) as set forth on Schedule 6.03;

(d) intercompany Indebtedness between the Borrower and the Guarantors, which Indebtedness shall be pledged to the Collateral Agent pursuant to the Second Lien Pledge Agreement, to the extent required pursuant to the terms thereof;

(e) Indebtedness of the Borrower or any Guarantor owed to one or more Persons in connection with the financing of certain insurance premiums;

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(f) Indebtedness owed to any First Lien Lender (or any of its banking Affiliates) or any other Person in respect of fuel hedges and other derivatives contracts, in each case to the extent that such agreement or contract is entered into for bona fide hedging purposes and, in the case of such other derivatives contracts, in the ordinary course of business;

(g) Indebtedness owed to any First Lien Lender or any of its banking Affiliates or any other Person in respect of (i) foreign exchange contracts, currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign exchange rates and currency values and (ii) interest rate swap, cap or collar agreements, interest rate future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates, in each case to the extent that such agreement or contract is entered into in the ordinary course of business for bona fide hedging purposes;

(h) Indebtedness owed to any First Lien Lender or any of its banking Affiliates or any other Person in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;

(i) Indebtedness of any of the Borrower and the Guarantors consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business and consistent with past practices of the Borrower and the Guarantors;

(j) Indebtedness of any of the Borrower and the Guarantors arising in the ordinary course of business of the relevant party and owing to Citibank, N.A., its banking Affiliates and other financial institutions providing netting services permitted to be incurred and outstanding pursuant to this Agreement so long as such Indebtedness does not remain outstanding for more than three (3) Business Days from the date of its incurrence;

(k) Indebtedness of any of the Borrower and the Guarantors to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Borrower and the Guarantors;

(l) (i) Indebtedness incurred to finance the acquisition of aircraft, engines, spare parts or other operating assets; provided that no such Indebtedness may be incurred more than twelve (12) months after such acquisition if, after giving effect to such Indebtedness, an Event of Default shall have occurred and be continuing under Section 6.06; and (ii) other Indebtedness secured by aircraft, engines, spare parts or other operating assets that are not subject to Liens described in Section 6.01(c) (including without limitation as a result of any release of such Liens pursuant to Section 6.06(c));

(m) Indebtedness of the Borrower and the Guarantor in an aggregate amount not to exceed $1,150,000,000, provided that such Indebtedness shall have a final maturity six months after the Maturity Date and shall be on terms reasonably satisfactory to the Administrative Agent;

(n) Indebtedness consisting of promissory notes issued to current or former directors, consultants, managers, officers and employees or their spouses or estates to purchase or redeem capital stock of the Borrower issued to such director, consultant, manager, officer or employee in an aggregate amount not to exceed $1,150,000 annually;

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(o) Indebtedness to the extent permitted by an Investment permitted by Section 6.09(j);

(p) Indebtedness of a person or acquired assets that is the subject of a Permitted Acquisition which Indebtedness was in existence at the time of such Permitted Acquisition and not incurred in contemplation thereof;

(q) intercompany Indebtedness owed by the Borrower and any Guarantor to another Subsidiary, which is not a Guarantor, in an amount not to exceed $57,500,000 in the aggregate at any one time outstanding;

(r) any Indebtedness extending, renewing, replacing or refinancing (collectively, “Refinancing”) all or any portion of any Indebtedness permitted under paragraph (c), (l), (m), (p), (x), (y) or (z), provided that (1) any such Refinancing of Indebtedness permitted under clause (m) which is subordinated to the Obligations shall remain subordinated on substantially the same basis, and (2) the weighted average life to maturity of such Indebtedness, in the case of clause (m), shall not be shortened, providedfurther that any such Refinancing of Indebtedness permitted under clause (c) or (l)(i) may exceed the amount being Refinanced so long as the Lien securing such Refinancing does not extend to any property or asset of the Borrower or any Guarantor which was not subject to the Lien securing the Indebtedness being Refinanced;

(s) other unsecured Indebtedness incurred subsequent to the Closing Date;

(t) Indebtedness in respect of Redeemable Stock;

(u) Indebtedness in respect of deferred rent;

(v) Indebtedness in respect of deferred taxes;

(w) Indebtedness permitted to be secured pursuant to Section 6.01(p);

(x) Indebtedness under the ALPA Notes and the CVG Notes;

(y) Indebtedness secured by purchase money security interests and Capitalized Leases (including in the form of sale-leaseback, synthetic lease or similar transactions) to the extent such Indebtedness was incurred in connection with ARB Indebtedness; provided, that the amount of such Indebtedness does not exceed 100% of the purchase price or construction cost (including any capitalized interest and issuance fees and expenses) of the subject asset;

(z) Indebtedness relating to any Restructuring Aircraft created by or pursuant to any Post-Petition Aircraft Agreement;

(aa) Indebtedness consisting of indemnification obligations owed by Comair to Bombardier Inc., a Canadian national corporation, relating to certain CRJ leases, in an amount not to exceed $9,000,000 in the aggregate;

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(bb) in the event that the transactions underlying the Jet Fuel Inventory Supply Agreement are re-characterized as Indebtedness owed by the Borrower, such Indebtedness;

(cc) reimbursement obligations in respect of standby or documentary letters of credit or bankers acceptances that are secured by Liens permitted pursuant to Section 6.01(p);

(dd) surety and appeal bonds secured by Liens permitted pursuant to Section 6.01(dd); and

(ee) Indebtedness not to exceed $28,750,000 at any one time outstanding for Indebtedness of the Borrower or any Guarantor incurred subsequent to the Closing Date that will be secured Indebtedness.

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

Fiscal quarter ending	Ratio
June 2007	0.85:1.00
September 2007	0.85:1.00
December 2007	0.85:1.00
March 2008 and thereafter for each fiscal quarter ending through the Maturity Date	1.02:1.00

SECTION 6.05.Unrestricted Cash Reserve.  Permit the aggregate amount of Unrestricted Cash to be less than $650,000,000 at any time after the 30^th day following the Closing Date.

SECTION 6.06.Coverage Ratio.  (a) Permit at any time the ratio (the “Total Collateral Coverage Ratio”) of (i) the Appraised Value of the Eligible Collateral to (ii) the sum of the aggregate outstanding principal amount of the First Lien Obligations plus the outstanding principal amount of the Second Lien Term Loans (such sum the “Total Obligations”) to be less than 125%, provided, that if, (A) upon (i) delivery of an Appraisal Report or a Field Audit (as applicable) pursuant to Section 5.09 hereof or (2) the establishment of reserves pursuant to clause (B) of the definition of “Appraised Value” contained herein and (B) solely with respect to determining compliance with this Section as a result thereof, it is determined that the Borrower shall not be in compliance with this Section 6.06(a), the Borrower shall, within forty-five (45) days of the date of such Appraisal Report, Field Audit or establishment of reserves (as applicable), (I) designate Cure Collateral as additional Eligible Collateral in accordance with clause (d) of the definition of Eligible Collateral in Section 1.01 or (II) prepay the Loans, in each case in an amount sufficient to enable the Borrower to comply with this Section 6.06(a).

(b)Notwithstanding anything to the contrary contained herein, if the Borrower shall fail at any time to be in compliance with Section 6.06(a)solely as a result of an Event of Loss (as defined in the Second Lien Aircraft Mortgage) or other Recovery Event, in each case, covered by insurance (pursuant to which the Collateral Agent is named as loss payee and with respect to which payments are to be delivered directly to the Collateral Agent or First Lien Collateral Agent) for which the insurer thereof has been notified of the relevant claim and has not challenged such coverage, any calculation made pursuant to Section 6.06(a) shall deem the Borrower to have received Net Cash Proceeds (and to have taken all steps necessary to designate, and to have designated, such Net Cash Proceeds as Cure Collateral) in an amount equal to the expected coverage amount (as determined by the Borrower in good faith and updated from time to time to reflect any agreements reached with the applicable insurer and net of any amounts required to be paid out of such proceeds and secured by a Lien permitted pursuant to Section 6.01(l)) until the earlier of (i) the date any such Net Cash Proceeds are actually received by the Collateral Agent or First Lien Collateral Agent, as applicable, (ii) the date that is 270 days after such Event of Loss or Recovery Event and (iii) the date on which any such insurer denies such claim; provided that, prior to giving effect to this clause (c), the Appraised Value of the Eligible Collateral shall be no less than 100% of the Total Obligations. It is understood and agreed that if the Collateral Agent should receive any Net Cash Proceeds directly from the insurer in respect of an Event of Loss or a Recovery Event and at the time of such receipt, (A) no Event of Default shall have occurred and be continuing and the Borrower is in compliance with Section 6.06(a) (without giving effect to the receipt of such Net Cash Proceeds), the Collateral Agent shall promptly cause such proceeds to be paid to the Borrower or the applicable Guarantor and (B) an Event of Default shall have occurred and be continuing or the Borrower fails to be in compliance with Section 6.06(a) (without giving effect to the receipt of such Net Cash Proceeds), the Collateral Agent shall promptly cause such proceeds to be deposited into the account of the Borrower or the applicable Guarantor maintained for such purpose with the Administrative Agent that is subject to a Full Control Agreement and such proceeds shall be applied or released from such account in accordance with Section 2.10(a).

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(c)At the Borrower’s request, (i) the Lien on an operating asset constituting Collateral in connection with any financing permitted pursuant to (x) Section 6.03(l) secured by such operating asset or (y) Section 6.03(y) or (ii) the Lien on an asset constituting Eligible Collateral will be promptly released, provided, in each case, that the following conditions are satisfied or waived: (A) no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default shall have occurred and be continuing, (B) either (x) after giving effect to such release, the remaining Eligible Collateral shall continue to satisfy this Section 6.06, (y) the Borrower shall prepay the Loans in an amount required to comply with this Section 6.06, or (z) the Borrower shall deliver to the Collateral Agent Cure Collateral in an amount required to comply with this Section 6.06, and (C) the Borrower shall deliver an Officer’s Certificate demonstrating compliance with this Section 6.06 following such release. In connection herewith, the Collateral Agent agrees to promptly provide any documents or releases reasonably requested by the Borrower to evidence such release.

SECTION 6.07.Dividends; Capital Stock.  Declare or pay, directly or indirectly, or otherwise make any Restricted Payment or set apart any sum for the aforesaid purposes, except (a) dividends or other distributions or transfers to the Borrower or another Guarantor; (b) dividends by any Guarantor to any other holder of its equity on a pro rata basis; (c) dividends in the form of capital stock or increases in the aggregate liquidation value of any preferred stock; (d) repurchases of Equity Interests deemed to occur upon (i) the exercise of stock options if the Equity Interests represent a portion of the exercise price thereof or (ii) the withholding of a portion of Equity Interests issued to (A) employees under the Plan of Reorganization and (B) employees and other participants under an equity compensation program of the Borrower or its Subsidiaries, in each case to cover withholding tax obligations of such persons in respect of such issuance; (e) dividends or repurchases of Equity Interests with the proceeds from the issuance of additional Equity Interests or subordinated Indebtedness permitted hereunder, provided that no Event of Default shall have occurred and be continuing at the time of payment of such dividend; (f) to the extent not otherwise permitted under clauses (c) or (e) of this Section, dividends or other distributions or transfers pursuant to stock option plans, other benefit plans or other arrangements for management or employees of the Borrower and its Subsidiaries in a maximum aggregate amount not to exceed $2,300,000; and (g) other Restricted Payments in an aggregate amount not to exceed $1,150,000 annually.

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SECTION 6.08.Transactions with Affiliates.  Sell or transfer any property or assets to, or otherwise engage in any other material transactions with, any of its Affiliates (other than the Borrower and its Subsidiaries), other than (a) on overall terms and conditions not less favorable to the Borrower or such Guarantor than could be obtained on an arm’s-length basis from unrelated third parties; (b) transactions contemplated by the Plan of Reorganization; (c) fees and compensation paid to, and indemnities provided on behalf of, officers, directors or employees of the Borrower or any Guarantor as reasonably determined by the board of directors or senior management, as the case may be, of the Borrower or any Guarantor; (d) any dividends, other distributions or payments permitted by Section 6.07; (e) the existence of, and the performance by a Guarantor or the Borrower of its obligations under the terms of, any limited liability company, limited partnership or other organization document or securityholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party on the Closing Date and set forth on Schedule 6.08, and similar agreements that it may enter into thereafter; (f) the provision of any legal, accounting or administrative services to the Borrower or any of its Subsidiaries in the ordinary course of business in accordance with past practices; and (g) transactions with Affiliates set forth on Schedule 6.08.

SECTION 6.09.Investments, Loans and Advances.  Purchase, hold or acquire any Investments, except for:

(a) ownership by the Borrower and the Guarantors of the capital stock of each of the Subsidiaries subject in each case to Section 6.02;

(b) Permitted Investments;

(c) advances and loans among the Borrower and the Guarantors;

(d) Investments in the Escrow Accounts and other trust accounts;

(e) Investments existing on the date hereof and described on Schedule 6.09 hereto;

(f) Investments in connection with (i) foreign exchange contracts, currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign interest rates and currency values, (ii) interest rate swap, cap or collar agreements and interest rate future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates, and (iii) fuel hedges and other derivatives contracts, in each case to the extent that such agreement or contract is entered into for bona fide hedging purposes and (other than in the case of fuel hedges) in the ordinary course of business;

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(g) Investments received (x) in settlement of amounts due to any of the Borrower and the Guarantors effected in the ordinary course of business (including as a result of dispositions permitted by this Agreement) or (y) in connection with the bankruptcy or the reorganization of any customers or suppliers;

(h) Investments in an amount not to exceed $172,500,000 in the aggregate at any one time outstanding in connection with (1) Investments in travel or airline related businesses made in connection with marketing and promotion agreements, alliance agreements, distribution agreements, agreements with respect to fuel consortiums, agreements relating to flight training, agreements relating to insurance arrangements, agreements relating to parts management systems and other similar agreements, (2) additional Investments in joint ventures listed on Schedule 6.09 or Investments in new joint ventures made after the Closing Date, and (3) Investments by the Borrower and the Guarantors not otherwise permitted under this Agreement;

(i) advances to officers, directors and employees of the Borrower and the Guarantors in an aggregate not to exceed (i) $287,500 at any time outstanding to any individual officer, director or employee or (ii) $5,750,000 in the aggregate at any time outstanding for all such advances;

(j) Investments held or invested in by any of the Borrower and the Guarantors in the form of foreign cash equivalents in the ordinary course of business;

(k) advances to officers, directors and employees of the Borrower and the Guarantors in connection with relocation expenses or signing bonuses for newly hired officers, directors or employees of the Borrower and the Guarantors;

(l) Investments in the form of lease, utility and other similar deposits or any other deposits permitted hereunder in the ordinary course of business;

(m) pledges and deposits by the Borrower and the Guarantors permitted under Sections 6.01 or 6.03;

(n) (i) Investments and guarantees by the Borrower and the Guarantors permitted under Sections 6.01 or 6.03, (ii) Guarantees in the ordinary course of business of obligations that do not constitute Indebtedness of (A) the Borrower or any of its Subsidiaries or (B) any regional air carrier that is a member of the Delta Connection program owed to airport operators in connection with its activities under the Delta Connection program and (iii) advances to airport operators of landing fees and other customary airport charges on behalf of carriers for which the Borrower or any of its Subsidiaries provides ground handling services;

(o) loans or Investments by the Borrower or any Guarantor that could otherwise be made as a distribution permitted under Section 6.07; provided that for purposes of Section 6.07 such loan or Investment shall be treated as a distribution thereunder;

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(p) Investments held by the Borrower or any Guarantor to the extent such Investments reflect an increase in the value of Investments;

(q) Investments by the Borrower and the Guarantors creating new Subsidiaries so long as they comply with Section 5.14 hereof;

(r) Investments in Subsidiaries which are not Guarantors in an aggregate amount not to exceed $28,750,000 in the aggregate at any one time outstanding;

(s) Investments in Aero Assurance, Ltd. or New Sky, Ltd., to the extent reasonably necessary to support the working capital insurance obligations of the Borrower and the Guarantors;

(t) any Permitted Acquisition by the Borrower or any Guarantor so long as (1) on a pro forma basis after giving effect to such Permitted Acquisition, the Borrower and the Guarantors shall be in compliance with Sections 6.04, 6.05 and 6.06 and (2) in the event the purchase price for such Permitted Acquisition exceeds $750,000,000, the sum of (A) the unrestricted cash of the Borrower and its Subsidiaries and (B) the Unused Total Revolving Commitment, in each case, as determined immediately prior to such acquisition, shall be no less than $1,500,000,000;

(u) any Investments acquired in connection with Permitted Acquisitions;

(v) capitalization or forgiveness of any Indebtedness owed to the Borrower by any Guarantor or owed to any Guarantor by the Borrower or any other Guarantor;

(w) cancellation, forgiveness, set-off, or acceptance of prepayments by the Borrower or any Guarantor with respect to debt, other obligations and/or equity securities in the ordinary course of business and to the extent not otherwise prohibited by the terms of this Agreement;

(x) Investments consisting of the acquisition of equity interests pursuant to Sections 6.07(d) and 6.07(e);

(y) the Borrower and the Guarantors may hold Investments comprised of notes payable, or stock or other securities issued by Account Debtors to the Borrower or such Guarantor, as the case may be, pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(z) the Borrower and the Guarantors may make Investments with the funds held in the Excluded Accounts;

(aa) the Borrower may make any Investment in any Guarantor, any Guarantor may make any Investment in the Borrower and any Guarantor may make any Investment in any other Guarantor;

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(bb) the Borrower may make Investments in the form of advances under a revolving loan facility in an aggregate principal amount not to exceed $28,750,000 outstanding at any time, to the Borrower’s Plans or any similar benefit plans of the Borrower (together, the “Benefits Plans”) for the payment of ordinary operating expenses of the Benefits Plans (including the payment of benefits in accordance with the terms of the Benefits Plans and periodic premiums under insurance or annuity contracts) or for the purposes incidental to the ordinary operation of the Benefits Plans;

(cc) Investments resulting from any sale or other Disposition of assets otherwise permitted by Section 6.10; and

(dd) the Borrower and the Guarantors may make other Investments in an aggregate amount outstanding at any one time not to exceed $28,750,000 for all Investments made pursuant to this clause(dd).

The amount of any investment or loan shall be the initial amount of such investment less all returns of principal, capital, dividends and other cash returns thereof and less all liabilities expressly assumed by another person in connection with the sale of such investment.

SECTION 6.10.Disposition of Assets.  Sell or otherwise Dispose of any Collateral (including, without limitation, the capital stock of any Subsidiary, but excluding any Permitted Disposition), except that such sale or other Disposition of Collateral shall be permitted provided that upon consummation of any such sale or other Disposition (i) no Event of Default shall have occurred and be continuing and (ii) the Borrower is in compliance, after giving effect to the grace periods referred to in Section 6.06 and after giving effect to such sale or other Disposition (including any deposit of any Net Cash Proceeds received upon consummation thereof in an account subject to a Full Control Agreement), with Section 6.06 hereof; provided that nothing contained in this Section 6.10 is intended to excuse performance by the Borrower or any Guarantor of any requirement of any Collateral Document that would be applicable to a Disposition permitted hereunder.

SECTION 6.11.Nature of Business.  Enter into any business that is materially different from those conducted by the Borrower and the Guarantors on the Closing Date, except for any business ancillary to the businesses conducted by the Borrower and the Guarantors on the Closing Date.

SECTION 6.12.Fiscal Year.  Change the last day of its fiscal year from December 31.

SECTION 7.

EVENTS OF DEFAULT

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

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

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

(c)default shall be made by the Borrower or any Guarantor in the due observance or performance of any covenant, condition or agreement contained in Section 6 hereof (subject to the Borrower’s right to cure non-compliance with the covenants contained in Section 6.06(a) as described therein); or

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

(e)other than with respect to (x) any Qualified Restructuring Indebtedness and (y) any Specified Jet Fuel Action, the Borrower or any Guarantor or any of their respective Subsidiaries shall fail to make any payment of principal, interest or premium in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace periods or waivers or amendments); or

(f)other than with respect to (x) any Qualified Restructuring Indebtedness, (y) any Specified Jet Fuel Action and (z) the Regional Airports Improvement Corporation Facilities Sublease Refunding Revenue Bonds, Issue of 1996, Delta Air Lines, Inc. (Los Angeles International Airport), any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or (in the case of any Material Indebtedness other than Indebtedness under the First Lien Credit Agreement) that enables or permits (after giving effect to any grace periods) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that the foregoing shall not apply to Indebtedness that becomes due as a result of (i) the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of any property or assets pursuant to the terms of such Indebtedness to the extent that (A) such sale, transfer or other disposition does not give rise to a default thereunder and (B) the payment of such Indebtedness is made in accordance with the terms of such Indebtedness with the proceeds of such sale, transfer or other disposition or (ii) in the case of any ARB Indebtedness, a change in law causing a determination of taxability-related call in respect of such ARB Indebtedness; or

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

(h)the Borrower or any Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; or

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

(j)a Change of Control shall occur; or

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

(l)any final judgment in excess of $57,500,000 (exclusive of any Qualified Judgment, any Specified Jet Fuel Action and any judgment or order the amounts of which are fully covered by insurance less any applicable deductible and as to which the insurer has been notified of such judgment and has not denied coverage) shall be rendered against the Borrower or any of the Guarantors and the enforcement thereof shall not have been stayed, vacated, satisfied, discharged or bonded pending appeal within sixty (60) consecutive days; or

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

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

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

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

(q)all or substantially all of the Borrower’s flights and operations are suspended for more than two (2) consecutive days (other than as a result of an FAA suspension due to force majeure or any other extraordinary event similarly affecting major United States air carriers having both substantial domestic and international operations);

then, and in every such event and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders, the Administrative Agent shall, by written notice to the Borrower, take one or more of the following actions, at the same or different times: (i) declare the Loans or any portion thereof then outstanding to be forthwith due and payable, whereupon the principal of the Loans together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding; (ii) set-off amounts in any accounts (other than Escrow Accounts, Payroll Accounts or other accounts held in trust for an identified beneficiary) maintained with the Administrative Agent or the Collateral Agent (or any of their respective affiliates) and apply such amounts to the obligations of the Borrower and the Guarantors hereunder and in the other Loan Documents; and (iii) exercise any and all remedies under the Loan Documents and under applicable law available to the Administrative Agent, the Collateral Agent and the Lenders. In case of any event with respect to the Borrower described in clause (g) or (h) of this Section, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Any payment received as a result of the exercise of remedies hereunder shall be applied in accordance with Section 2.15(b).

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SECTION 8.

THE AGENTS

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

(b)Each of the Lenders hereby authorizes the Administrative Agent and the Collateral Agent, as applicable, and in their sole discretion:

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

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

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

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

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

SECTION 8.03.Liability of Agents.

(a)The Administrative Agent and the Collateral Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Administrative Agent and the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent and the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that each such agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08), and (iii) except as expressly set forth herein, the Administrative Agent and the Collateral Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the institution serving as an Administrative Agent or Collateral Agent or any of its Affiliates in any capacity. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.08) or in the absence of its own gross negligence, bad faith or willful misconduct. The Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent and the Collateral Agent by the Borrower or a Lender, and the Administrative Agent and the Collateral Agent shall not be responsible for, or have any duty to ascertain or inquire into, (A) any statement, warranty or representation made in or in connection with this Agreement, (B) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (D) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (E) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent and the Collateral Agent.

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

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

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

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SECTION 8.05.Successor Agents.  Subject to the appointment and acceptance of a successor agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation by the Administrative Agent, the Required Lenders shall have the right, with the consent (provided no Event of Default or event which upon notice or lapse of time or both would constitute an Event of Default has occurred or is continuing) of the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, in consultation with the Borrower, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank institution with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as an Administrative Agent.

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

SECTION 8.07.Advances and Payments.

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

(b)Any amounts received by the Administrative Agent in connection with this Agreement (other than amounts to which the Administrative Agent is entitled pursuant to Sections 2.16, 8.04 and 10.04), the application of which is not otherwise provided for in this Agreement, shall be applied in accordance with Section 2.15(b). All amounts to be paid to a Lender by the Administrative Agent shall be credited to that Lender, after collection by the Administrative Agent, in immediately available funds either by wire transfer or deposit in that Lender’s correspondent account with the Administrative Agent, as such Lender and the Administrative Agent shall from time to time agree.

SECTION 8.08.Sharing of Setoffs.  Each Lender agrees that if it shall, through the exercise either by it or any of its banking Affiliates of a right of banker’s lien, setoff or counterclaim against the Borrower or a Guarantor, including, but not limited to, a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim and received by such Lender (or any of its banking Affiliates) under any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain payment in respect of its Loans as a result of which the unpaid portion of its Loans is proportionately less than the unpaid portion of the Loans of any other Lender (a) it shall promptly purchase at par (and shall be deemed to have thereupon purchased) from such other Lender a participation in the Loans of such other Lender, so that the aggregate unpaid principal amount of each Lender’s Loans and its participation in Loans of the other Lenders shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its Loans prior to the obtaining of such payment was to the principal amount of all Loans outstanding prior to the obtaining of such payment and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payment pro-rata, provided, that if any such non-pro-rata payment is thereafter recovered or otherwise set aside, such purchase of participations shall be rescinded (without interest). The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding (or deemed to be holding) a participation in a Loan acquired pursuant to this Section or any of its banking Affiliates may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to such Lender as fully as if such Lender was the original obligee thereon, in the amount of such participation.

SECTION 8.09.Other Agents.  No Agent (other than the Administrative Agent and the Collateral Agent) shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, no such Agent shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any such Agent in deciding to enter into this Agreement or in taking or not taking action hereunder. Each such Agent shall be entitled to the benefit of the exculpation and indemnification provided in this Section 8 to the same extent as the Administrative Agent and the Collateral Agent.

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SECTION 9.

GUARANTY

SECTION 9.01.Guaranty.

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

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

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

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

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

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

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

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

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

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SECTION 10.

MISCELLANEOUS

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

(i)if to the Borrower or any Guarantor, to it at Delta Air Lines, Inc., 1030 Delta Boulevard, Atlanta, GA 30354, Attention of: (x) Treasurer, Dept. 856, Telecopier No.: (404) 715-4862, Telephone No.: (404) 714-1724 and (y) General Counsel, Dept. 971, Telecopier No.: (404) 715-2233, Telephone No.: (404) 715-2611;

(ii)if to GSCP as Administrative Agent, to it at c/o Goldman, Sachs & Co., 30 Hudson Street, 17th Floor, Jersey City, NJ 07302, Attention: SBD Operations, Attention: Pedro Ramirez (Telecopier:  (212) 357-4597, email and for delivery of final financial statements for posting: ), with a copy to Goldman Sachs Credit Partners L.P., 1 New York Plaza, New York, New York  10004, Attention: Rob Schatzman (Telecopier:  (212) 902-3000); and

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

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

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

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

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

(A)the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Second Lien Term Loan to an assignee that is (I) immediately prior to giving effect to such assignment a Lender, (II) an Affiliate of a Lender, or (III) an Approved Fund;

(B)the Borrower; provided that no consent of the Borrower shall be required for an assignment (I) if an Event of Default has occurred and is continuing or (II) if the assignee is a Lender, an Affiliate of a Lender or an Approved Fund.

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

(A)any assignment of any portion of the Loans shall be made to an Eligible Assignee;

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

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(C)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

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

(E)the assignee, if it was not a Lender immediately prior to such assignment, shall deliver to the Administrative Agent an administrative questionnaire in a form as the Administrative Agent may require.

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

(iii)Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.12, 2.14 and 10.04). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.02 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

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

(c)Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed administrative questionnaire in a form as the Administrative Agent may require (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register; provided, that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.03(b) or 10.04(c), the Administrative Agent shall have no obligation to accept such Assignment and Acceptance and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

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(d) (i)  Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Second Lien Term Loan Commitment and the Loans owing to it); provided, that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.08(a)that affects such Participant. Subject to paragraph (d)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.12 and 2.14to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.08 as though it were a Lender, provided such Participant agrees to be subject to the requirements of Section 8.08 as though it were a Lender.

(ii)  A Participant shall not be entitled to receive any greater payment under Section 2.14 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.14(e) as though it were a Lender.

(e)Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 10.02 shall not apply to any such pledge or assignment of a security interest; provided, that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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(f)Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.02, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower or any of the Guarantors furnished to such Lender by or on behalf of the Borrower or any of the Guarantors; provided, that prior to any such disclosure, each such assignee or participant or proposed assignee or participant are advised of and agree to be bound by either the provisions of Section 10.03 or other provisions at least as restrictive as Section 10.03.

SECTION 10.03.Confidentiality.  Each Lender agrees to keep any information delivered or made available by the Borrower or any of the Guarantors to it confidential from anyone other than persons employed or retained by such Lender who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans, and who are advised by such Lender of the confidential nature of such information; provided, that nothing herein shall prevent any Lender from disclosing such information (a) to any of its Affiliates (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential) or to any other Lender, (b) upon the order of any court or administrative agency, (c) upon the request or demand of any regulatory agency or authority, (d) which has been publicly disclosed other than as a result of a disclosure by the Administrative Agent or any Lender which is not permitted by this Agreement, (e) in connection with any litigation to which the Administrative Agent, any Lender, or their respective Affiliates may be a party to the extent reasonably required, (f) to the extent reasonably required in connection with the exercise of any remedy hereunder, (g) to such Lender’s legal counsel and independent auditors, and (h) to any actual or proposed participant or assignee of all or part of its rights hereunder or to any direct or indirect contractual counterparty (or the professional advisors thereto) to any swap or derivative transaction relating to the Borrower and its obligations, in each case, subject to the proviso in Section 10.02(f). If any Lender is in any manner requested or required to disclose any of the information delivered or made available to it by the Borrower or any of the Guarantors under clauses (b) or (e) of this Section, such Lender will, to the extent permitted by law, provide the Borrower with prompt notice, to the extent reasonable, so that the Borrower may seek, at its sole expense, a protective order or other appropriate remedy or may waive compliance with this Section.

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

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

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

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

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

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

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

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

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

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

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

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

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SECTION 10.08.Amendments, etc.

(a)No modification, amendment or waiver of any provision of this Agreement or any Collateral Document (other than any Control Agreement), and no consent to any departure by the Borrower or any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given; provided, however, that no such modification or amendment shall without the written consent of (i) each Lender directly affected thereby (A) increase the Second Lien Term Loan Commitment of any Lender or extend the expiry of the Second Lien Term Loan Commitment of any Lender (it being understood that a waiver of an Event of Default shall not constitute an increase in or extension of the expiry of the Second Lien Term Loan Commitment of a Lender), (B) reduce the principal amount of any Loan or the rate of interest payable thereon (provided that only the consent of the Required Lenders shall be necessary for a waiver of default interest referred to in Section 2.07), extend the scheduled date or reduce the amount of any required amortization payment of the Second Lien Term Loan pursuant to Section 2.09, or extend any date for the payment of interest hereunder or extend the final maturity of the Borrower’s obligations hereunder or (C) amend, modify or waive any provision of Section 2.15(b) or (ii) all of the Lenders (A) amend or modify any provision of this Agreement which provides for the unanimous consent or approval of the Lenders, (B) amend this Section 10.08 or modify the percentage of the Lenders required in the definition of Required Lenders or (C) release all or substantially all of the Liens granted to the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document, or release all or substantially all of the Guarantors. No such amendment or modification shall adversely affect the rights and obligations of the Administrative Agent or the Collateral Agent hereunder without its prior written consent. No notice to or demand on the Borrower or any Guarantor shall entitle the Borrower or any Guarantor to any other or further notice or demand in the same, similar or other circumstances. Each assignee under Section 10.02(b) shall be bound by any amendment, modification, waiver, or consent authorized as provided herein, and any consent by a Lender shall bind any Person subsequently acquiring an interest on the Loans held by such Lender. No amendment to this Agreement shall be effective against the Borrower or any Guarantor unless signed by the Borrower or such Guarantor, as the case may be.

(b)Notwithstanding anything to the contrary contained in Section 10.08(a), (i) in the event that the Borrower requests that this Agreement be modified or amended in a manner which would require the unanimous consent of all of the Lenders and such modification or amendment is agreed to by the Required Lenders, then the Borrower may replace any such non-consenting Lender in accordance with Section 10.02; provided that such amendment or modification can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this clause (i)); (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Second Lien Term Loan Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Loans held or deemed held by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder requiring any consent of the Lenders) and (iii) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days notice thereof.

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

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

SECTION 10.11.Survival.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Second Lien Term Loan Commitments have not expired or terminated. The provisions of Sections 2.12, 2.13, 2.14 and 10.04 and Section 8 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Second Lien Term Loan Commitments or the termination of this Agreement or any provision hereof.

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

SECTION 10.13.USA Patriot Act.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrower and each Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and each Guarantor and other information that will allow such Lender to identify the Borrower and each Guarantor in accordance with the Patriot Act.

SECTION 10.14.Registrations with International Registry.  Each of the parties hereto consents to the registrations with the International Registry of the International Interest constituted by the Second Lien Aircraft Mortgage, and each party hereto covenants and agrees that it will take all such action reasonably requested by Borrower or Collateral Agent in order to make any registrations with the International Registry, including becoming a registry user entity with the International Registry and providing consents to any registration as may be contemplated by the Loan Documents.

SECTION 10.15.WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.16.Intercreditor Arrangements.  Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement or any other Loan Document and the exercise of any right or remedy by the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement, this Agreement and any other Loan Document, the terms of the Intercreditor Agreement shall govern and control with respect to any right or remedy. Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Administrative Agent or the Collateral Agent (and the Lenders) shall be subject to the terms of the Intercreditor Agreement, and until the First Priority Obligations Payment Date (as defined in the Intercreditor Agreement), any obligation of the Borrower and any Guarantor hereunder or under any other Loan Document with respect to the delivery or control of any Collateral, the novation of any lien on any certificate of title, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person shall be deemed to be satisfied if the Borrower or such Guarantor, as applicable, complies with the requirements of the similar provision of the applicable First Lien Loan Document. Until the First Priority Obligations Payment Date (as defined in the Intercreditor Agreement), the delivery of any Collateral to the First Lien Collateral Agent pursuant to the First Lien Loan Documents shall satisfy any delivery requirement hereunder or under any other Loan Document.

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

DELTA AIR LINES, INC.
By:	/s/ Paul A. Jacobson
	Name: Paul A. Jacobson
	Title: Vice President and Treasurer

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

COMAIR HOLDINGS, LLC
By:	/s/ Dan Dixon
	Name: Dan Dixon
	Title: Vice President, Chief Financial Officer and Treasurer

COMAIR, INC.
By:	/s/ Dan Dixon
	Name: Dan Dixon
	Title: Vice President and CFO

COMAIR SERVICES, INC.
By:	/s/ Dan Dixon
	Name: Dan Dixon
	Title: Vice President

CROWN ROOMS, INC.
By:	/s/ Mona Warwar
	Name: Mona Warwar
	Title: Assistant Treasurer

DAL GLOBAL SERVICES, LLC
By:	/s/ Mona Warwar
	Name: Mona Warwar
	Title: Assistant Treasurer

DAL MOSCOW, INC.
By:	/s/ Mona Warwar
	Name: Mona Warwar
	Title: Assistant Treasurer

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

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

DELTA CONNECTION ACADEMY, INC.
By:	/s/ Jason Dauderman
	Name: Jason Dauderman
	Title: VP of Finance and CFO

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

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

EPSILON TRADING, LLC
By:	/s/ Edward M. Smith
	Name: Edward M. Smith
	Title: Treasurer and Comptroller

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

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

C.I.T. LEASING CORPORATION, as Co-Documentation Agent
By:	/s/ Nicholas Pastushan
	Name: Nicholas Pastushan
	Title: Senior Vice President

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

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

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

EX-10.2

EXHIBIT 10.2

Description of Certain Benefits of Executive Officers

Delta provides the following programs to its executive officers as part of their overall compensation package. Delta reserves the right to change, amend or terminate these benefits, consistent with the terms of the program, at any time for any reason for both active and retired employees.

Executive Life Insurance: Delta provides life insurance coverage of two times base salary to executive officers through an endorsement split dollar program under which Delta owns the policy. Delta reimburses active participants for taxes associated with the program while the endorsement is in effect. After retirement, death benefit coverage continues for an executive officer who retires at or after age 62 with at least ten years of service. If an executive officer retires prior to age 62 or with less than ten years of service, the participant’s death benefit is reduced by 3% for each year of age less than 62 and by 10% for each year of service less than ten years. Insurance coverage ceases for executive officers who terminate employment other than as a result of retirement, approved long-term disability or death.

Financial Planning Services: Executive officers are eligible for reimbursement of up to $15,000 per year for tax preparation, legal and financial planning services under Delta's Financial Planning Program if they so choose.

Flight Benefits: As is common in the airline industry, Delta provides complimentary travel and certain Delta Crown Room privileges for executive officers, the officer’s spouse, domestic partner or designated companion, and the officer's children, parentsand, to a limited extent, other persons designated by the officer. Complimentary travel for such other persons is limited to an aggregate imputed value of $10,000 per year.Delta reimburses the officer for associated taxes on complimentary travel with an imputed tax value of up to $20,000 per year. Unused portions of the annual allowances described in the previous two sentences accumulate and may be carried into succeeding years. Executive officers who retire at or after age 52 with at least 10 years of service, or at or after age 62 with five years of service, continue to receive these travel privileges, except that they do not receive any additional annual allowances following retirement.

Company Car: Delta provides a company car only for its Chief Executive Officer. No other executive is provided a company car. The value of any non-business use of the car is included in the officer’s taxable income.

Home Security Services: Delta reimburses executive officers for installation and monthly monitoring of home security systems if they so choose.

Vacation: Delta’s standard policy regarding personal time off and paid holidays applies to Delta’s executive officers except that they will begin to accrue vacation at the service level currently corresponding to four weeks of vacation.

EX-15

Exhibit 15

August 2, 2007

To the Board of Directors and Shareowners of

Delta Air Lines, Inc.

We are aware of the incorporation by reference in the Registration Statement (Form S-8 No. 333-142424) of Delta Air Lines, Inc. for the registration of shares of its common stock of our reports dated April 26, 2007 and July 31, 2007 relating to the unaudited condensed consolidated interim financial statements of Delta Air Lines, Inc. that are included in its Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007.

/s/ Ernst & Young LLP

EX-31.1

Exhibit 31.1

I, Gerald Grinstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2007;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;

4. Delta’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of Delta’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in Delta’s internal control over financial reporting that occurred during Delta’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta’s internal control over financial reporting; and

5. Delta’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta’s auditors and the Audit Committee of Delta’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta’s internal control over financial reporting.

Date: August 2, 2007	/s/ Gerald Grinstein
	Gerald Grinstein
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Edward H. Bastian, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2007;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;

4. Delta’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of Delta’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in Delta’s internal control over financial reporting that occurred during Delta’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta’s internal control over financial reporting; and

5. Delta’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta’s auditors and the Audit Committee of Delta’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta’s internal control over financial reporting.

Date: August 2, 2007	/s/Edward H. Bastian
	Edward H. Bastian
	Executive Vice President and
	Chief Financial Officer

EX-32

Exhibit 32

August 2, 2007

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Ladies and Gentlemen:

The certifications set forth below are hereby submitted to the Securities and Exchange Commission pursuant to, and solely for the purpose of complying with, Section 1350 of Chapter 63 of Title 18 of the United States Code in connection with the filing on the date hereof with the Securities and Exchange Commission of the Quarterly Report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2007 (the “Report”).

Each of the undersigned, the Chief Executive Officer and the Executive Vice President and Chief Financial Officer, respectively, of Delta, hereby certifies that, as of the end of the period covered by the Report:

1. such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta.

/s/ Gerald Grinstein                                   

Name: Gerald Grinstein

Chief Executive Officer

/s/ Edward H. Bastian                               

Name: Edward H. Bastian

Executive Vice President and

Chief Financial Officer