Exhibit 10.83

 
 
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.  THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
 

 

EXECUTION COPY
 
SAAB 340B+
 
DELTA CONNECTION
 
AGREEMENT
 
This Saab 340B+ Delta Connection Agreement (this “Agreement”), dated and
effective the 1st day of July, 2010 (the “Agreement Date”), is among Delta Air
Lines, Inc., whose principal address is 1030 Delta Boulevard, Atlanta, Georgia
30320 (“Delta”), Pinnacle Airlines Corp., whose principal address is 1689
Nonconnah Boulevard, Suite 111, Memphis, Tennessee 38132 (“Parent”) and Mesaba
Aviation, Inc., whose principal address is 1000 Blue Gentian Road, Suite 200,
Eagan, MN 55121  (“Operator” and together with Delta and Parent, each a “Party”
and collectively, the “Parties”).
 
WHEREAS, Delta operates the Delta Connection program; and
 
WHEREAS, Parent and Delta have entered into that certain Stock Purchase
Agreement of even date herewith (the “Purchase Agreement”), pursuant to which
Delta will sell and transfer to Parent and Parent will purchase and acquire from
Delta all of the outstanding shares of capital stock of Mesaba on the terms and
conditions set forth in the Purchase Agreement;
 
WHEREAS, the Parties are entering into this Agreement contemporaneously with the
execution and delivery of the Purchase Agreement and consummation of the
transactions contemplated thereby
 
WHEREAS, the Parties are each willing to perform in the manner and upon the
conditions and terms hereinafter set forth; and
 
WHEREAS, Delta desires Operator to operate certain aircraft as a Delta
Connection carrier; and
 
WHEREAS, Operator desires for Delta to perform and provide various marketing,
schedule and fare related, and other services for Operator in connection with
the Delta Connection program; and
 
WHEREAS, Delta is willing to perform and provide various marketing, schedule and
fare related, and other services for Operator in connection with the Delta
Connection program; and
 
WHEREAS, this Agreement will enhance the ability of Operator and Delta to serve
the public and the communities that they serve or may choose to serve; and
 
WHEREAS, Parent will cause Operator to perform its obligations under this
Agreement pursuant to the terms and conditions of Article 27 below and the other
terms and conditions hereof;
 

 
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US 410080v.9

NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual undertakings set forth herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Delta and Parent
(on behalf of itself and Operator), intending to be legally bound, hereby agree
as follows:
 
ARTICLE 1
 
FARES AND RULES PUBLICATION
 
A. Delta Connection Program and Appointment of Delta as Agent.  Operator hereby
appoints Delta as its agent to publish its fares, schedules and related
information under Delta’s two letter flight designator code in city pairs
specified by Delta on the thirty-two (32) Saab 340B+ aircraft set forth on
Exhibit A attached hereto (the “Aircraft”), and Delta hereby accepts such
appointment.  Delta hereby grants Operator the authority to operate as a Delta
Connection carrier, and Operator hereby accepts such grant, to conduct air
transportation operating the Aircraft utilizing certain services together with
certain trademarks and service marks owned by Delta or which Delta has the right
to use, all as provided herein.
 
B. Sublease of Aircraft.  As of the Agreement Date, Delta and Operator have
entered into subleases (or leases) with respect to the Aircraft (each, as
amended from time to time, an “Aircraft Sublease”).
 
C. Aircraft Removal.  Except as otherwise set forth in this Agreement, Operator
will withdraw each Aircraft from the scope of this Agreement on  the termination
date as set forth next to such Aircraft’s tail number in Exhibit A-1 (the
“Retirement Date”)  On such Retirement Date, such Aircraft shall be returned to
Delta in accordance with the applicable Aircraft Sublease.
 
D. Early Aircraft Removal Right.  Notwithstanding the Retirement Dates set forth
on Exhibit A-1, Delta, at its option to be exercised at any time or from time to
time, may withdraw any Aircraft from this Agreement prior to the Retirement Date
for such Aircraft (the “Early Removal Right”); provided that Delta shall provide
Operator at least ninety (90) days advanced notice in writing of such
withdrawal.  Delta’s notice shall designate an effective date for such
withdrawal the (“Removal Date”).  On such Removal Date, the Aircraft Sublease
relating to such Aircraft shall be terminated and such Aircraft shall be
returned to Delta or delivered to its designee.  Notwithstanding the foregoing,
in no event shall more than three (3) Aircraft be removed from the terms of this
Agreement in a single calendar month, including those Aircraft removed pursuant
to Article 1(C) and this Article 1(D).
 
E. Fares, Rules and Seat Inventory.  Delta, in its sole discretion, shall
establish and publish all fares and related tariff rules for all seats, cargo
and freight on the Aircraft, including fares and rules for local traffic in the
city pairs served by such Aircraft.  In addition, Delta will control all seat
inventory and revenue management (including non-revenue passenger) decisions for
the Aircraft.
 

 
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F. Schedules Publication.  Delta, in its sole discretion, shall establish and
publish all schedules for the Aircraft, including city-pairs served,
frequencies, and timing of scheduled departures, subject to the reasonable
operating constraints of Operator, taking into consideration the Aircraft type,
maintenance requirements, crew scheduling and training requirements, aircraft
rotation requirements, applicable route, and slot or other regulatory
restrictions.  So that the information can be properly disseminated to Operator
for pilot and flight attendant staffing, and related operational requirements,
Delta will, from time to time, notify Operator of the preliminary schedule
times, frequencies and related information for the Aircraft no later than
seventy-five (75) days prior to the first day of the month in which such
schedule commences.  Operator shall provide to Delta the proposed block times
for the Aircraft, Aircraft performance analysis on operational items such as
passenger and baggage limitations (together with relevant assumptions) and
airfield appropriateness applicable to airports specified in Delta’s request for
each of the city pair proposed by Delta no later than fourteen (14) days of
Operator’s receipt of the preliminary schedule times provided by
Delta.  Notwithstanding the above, upon written notice to Operator, Delta may
assume responsibility for establishing the Aircraft block times.  Regardless of
whether Delta or Operator establishes the Aircraft block times, such block times
shall be based on a block time reliability rate of between *** and *** or the
block time reliability rate used for scheduling Delta mainline service,
whichever is greater.  No later than forty (40) days prior to the commencement
of such schedule, Delta will notify Operator of the final schedule times,
frequencies and related information for the Aircraft.  Where practical, Delta
will collaborate with Operator to determine mutually optimal schedules.  Delta
and Operator shall meet by October 1st of each year to discuss an annual
operating plan for the succeeding year with respect to the Aircraft, including
Delta’s forecasted level of operations, block hours and cycles and the
utilization of the Aircraft, and any other matters as Delta and Operator shall
determine.  Operator shall operate the Aircraft in the city pairs designated by
Delta, subject to the frequency and other scheduling requirements established by
Delta from time to time.  In addition, it is agreed and understood that Delta
may utilize and schedule any of the Aircraft to perform various charter
operations on behalf of Delta as can be reasonably accommodated by Operator,
including without limitation after taking into consideration Operator’s
maintenance requirements for the Aircraft.
 
G. Spare Aircraft.  Notwithstanding anything in this Article 1 or elsewhere in
this Agreement to the contrary, spare aircraft shall be allocated in each city
that has in excess of twenty (20) scheduled Delta Connection Flight departures,
but only so long as the Aircraft are scheduled to operate Delta Connection
Flights in such locations, respectively.  Such spare aircraft will not be
scheduled for Delta Connection Flights but may be used by Operator to replace
another Aircraft in the operation of a Delta Connection Flight that otherwise
would be cancelled and/or used to meet applicable maintenance requirements.
 

 
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ARTICLE 2
 
LIMITATION OF USE
 
A. Operator agrees that, except as otherwise directed or approved in writing by
Delta, in Delta’s sole discretion, (1) the Aircraft may be used only to provide
the air services contemplated by this Agreement (including charter flights
pursuant to Section 1F hereof, the “Delta Connection Flights”), (2) the Delta
Connection Flights shall only be operated under Delta’s “DL” flight designator
code except as otherwise directed by Delta, and (3) the Aircraft may not be used
by Operator for any other purpose including, without limitation, flying for any
other airline, providing charter services other than pursuant to Section 1F
hereof, or on Operator’s own behalf.
 
B. Without the prior written consent of Delta, neither Operator, nor any
affiliate of Operator, shall use outside the scope of this Agreement any of the
services, facilities or equipment provided, or caused to be provided, by Delta,
or an affiliate of Delta, to Operator in connection with the Aircraft or the
Delta Connection Flights.  With respect to any ancillary facilities or equipment
obtained by Operator pursuant to the terms hereof specifically for use by
Operator in connection with providing the services contemplated by this
Agreement, or otherwise provided by Delta to Operator for such use, such use for
the benefit of Delta shall have priority over any other use contemplated by
Operator.  With respect to facilities, equipment owned, leased or otherwise used
by Operator, Delta shall have the right to designate on a reasonable basis and
from time to time, in which case Operator shall use reasonable commercial
efforts to use such property to carry out Operator’s obligations under this
Agreement, provided that Operator shall have no obligation to use such
designated property if such use would increase Operator’s costs of providing
such service to Delta or otherwise adversely affect Operator’s performance
hereunder.  Nothing herein shall obligate Parent or Operator to use any ground
service equipment, aircraft or aircraft engines hereunder that are used
primarily for the benefit of other operations of Parent or Operator.
 
ARTICLE 3
 
COMPENSATION
 
A. Base Compensation.  Commencing after the operation of the initial Delta
Connection Flight, except as set forth elsewhere in this Agreement, in exchange
for the flying and operation of the Aircraft pursuant to the terms and
conditions of this Agreement, Delta shall pay Operator the “Base Rate Costs” and
the “Pass Through Costs” (each as such term is defined below, and collectively,
the “Direct Costs”) and the “Reimbursable Costs” (as such term is defined
below), in each case, as relates to the operation of the Delta Connection
Flights and as determined in accordance with this Agreement.  It is understood
that Direct Costs and other Reimbursable Costs shall be based on market based,
direct operating costs and generally accepted accounting principles,
consistently applied (“GAAP”), and specifically exclude any pre-paid expenses
except as expressly provided herein.  Any Delta Connection Flight operated with
no revenue passengers and not completed within two (2) hours of its scheduled
arrival time shall be deemed not completed for purposes of determining
Operator’s eligibility to any
 

 
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 “Monthly Incentive Compensation” (as defined below), unless operated at the
direction of Delta.  In addition, if Delta requests operator to cancel one or
more Delta Connection Flights (a “Delta Directed Cancellation”), then, each such
Delta Directed Cancellation, together with station over-flys due to no passenger
load (i.e Cancellation Codes 19G, 19H and 19K), shall be excluded from the
calculation of Operator’s completion rate for purposes of determining Operator’s
eligibility to any “Monthly Incentive Compensation.”  If Delta requests Operator
to cancel one or more Delta Connection Flights, Operator shall comply with any
such request within the time period reasonably requested by Delta.  In the event
Operator does not cancel any such Delta Connection Flights (each, an “Operator
Non-Cancelled Flight”), then each such Operator Non-Cancelled Flight, for
purposes of this Agreement, shall not be regarded as a completed flight, nor
included as a Delta Directed Cancellation, and Delta shall not be obligated to
pay Operator any Base Compensation, incentive compensation, or any other
reimbursements in connection with such Operator Non-Cancelled Flights.  For any
Delta Directed Cancellation, unless such cancellation becomes an Operator
Non-Cancelled Flight, Operator shall be compensated for its Direct Costs
incurred in connection with such Delta Directed Cancellation, other than
maintenance-related costs set forth on Exhibit B, for which Operator shall
receive no compensation.
 
(1) The “Base Rate Costs” shall include certain direct operating costs recorded
in accordance with GAAP incurred by Operator in its operation of the Delta
Connection Flights.  The Base Rate Costs are set forth on Exhibit B attached
hereto and incorporated herein; and shall be adjusted as provided in Section
3.B.  The Base Rate Costs shall be paid on a unit basis as set forth on
Exhibit B.
 
(2) The “Pass Through Costs” shall include the following variable costs incurred
by Operator in connection with its operation of the Delta Connection Flights for
which Delta shall bear the risk of price and volume fluctuations, provided that
such costs shall be reconciled on a monthly basis to reflect the actual costs
incurred by Operator:
 
(a) Landing Fees (but not if paid directly by Delta);
 
(b) Hull Insurance;
 
(c) Passenger Liability Insurance;
 
(d) War Risk Insurance;
 
(e) Fuel Expense – Operator’s actual fuel and into-plane expenses, plus
associated taxes (excluding any fuel purchases made, or caused to be made, by
Delta for the benefit of Operator);
 
(f) Glycol and de-icing services (but not if provided by Delta or an affiliate
or designee of Delta);
 
(g) Catering Costs (but not if provided by Delta or an affiliate or designee of
Delta);
 

 
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(h) Security (but not if provided by Delta or an affiliate or designee of
Delta);
 
(i) Property Taxes;
 
(j) All costs to change the Delta Connection livery of any Aircraft pursuant to
any request by Delta;
 
(k) All heavy maintenance expense relating to (1) engine maintenance under that
certain GE Engine Maintenance Agreement dated as of October 1, 1997; (2)avionics
maintenance under that certain Rockwell Collins Dispatch Plus Product Service
Agreement dated November 1, 2003; (3) propeller maintenance under that certain
Agreement with Smith Aerospace LLC d/b/a/ Dowty Propellers-Americas relating to
the repair and overhaul of propellers and propeller associated components dated
as of January 1, 2007   and (4) landing gear overhaul under that certain
Aircraft Landing Gear Maintenance Agreement dated as of May 1, 2007;
 
(l) From the Agreement Date through December 31, 2010, material expenses
incurred in connection with heavy airframe checks performed in-house by
Operator;
 
(m) Ground Handling Services (but not if provided free of charge to Operator by
Delta or an affiliate or designee of Delta);
 
(n) Terminal Facility Rent and Use Charges – Operator’s actual applicable
terminal facility rent and use charges (including common use, ramp rent and jet
bridge expenses), including without limitation facilities maintenance and
operation expenses, but excluding any such rent and use charges if premises are
provided by Delta or any affiliate or designee of Delta;
 
(o) The Rent, as defined in the Aircraft Sublease, due pursuant to the Aircraft
Subleases between Delta and Operator for the Aircraft (the “Aircraft Sublease
Expense”); and
 
(p) Any Federal Aviation Administration (“FAA”), Department of Transportation
(“DOT”) or any other governmental authority fines administered or levied against
Operator due to an action or omission principally caused by Delta or an
affiliate of Delta.
 
(q) All costs associated with meeting the Aircraft return conditions as set
forth in the Aircraft Subleases, but only if Operator is directed by Delta to
meet such return conditions upon the termination or expiration of any such
Aircraft Leases.
 

 
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With respect to heavy airframe maintenance, the parties shall each use
commercially reasonable efforts to mutually agree on the treatment of heavy
airframe maintenance expenses relating to the Aircraft as a Direct Cost
hereunder after December 31, 2010.  If the parties are unable to mutually agree
on such treatment by December 31, 2010, then, until the parties reach agreement
on such treatment, expenses incurred by Operator after December 31, 2010 with
respect to heavy airframe maintenance labor and materials (“Heavy Air Frame
Maintenance Expense”) shall be treated as a Pass Through Cost hereunder, subject
to the following conditions:
 
(i)           Pinnacle shall use its commercially reasonable efforts to minimize
such Heavy Air Frame Maintenance Expenses; and
 
(ii)           To the extent that the labor performing such heavy air frame
maintenance is also performing other services, then the Heavy Air Frame
Maintenance Expense shall properly account for the allocation of such labor
resources.
 
Notwithstanding the foregoing, Pass Through Costs shall not include any late
payment charges, penalties and/or fees which Operator incurs in connection with
the payment of the expenses listed above.  Estimates of certain of the initial
Pass Through Costs are set forth on Exhibit B.  Any costs or expense not
included either as a Pass Through Cost, Reimbursable Cost, Non-Reimbursable Cost
or Delta Cost shall be deemed a Base Rate Cost.
 
B. Adjustment to Base Rate Costs.  The Base Rate Costs set forth in Exhibit B
hereto shall remain in effect through December 31, 2010, and shall be adjusted
effective each January 1 thereafter, beginning on January 1, 2011 ***
 
C.  Reserved.
 
D.          Non-Reimbursable Costs.  The parties hereby acknowledge and agree
that Operator shall be solely responsible and Delta shall not be responsible,
nor reimburse Operator, for any and all FAA, DOT or any other government or
regulatory agency fines administered or levied against Operator due to any
action or omission not principally caused by Delta or an affiliate of Delta.
 
E.          Delta Costs.  The parties acknowledge and agree that the following
costs related to Operator’s services hereunder shall be paid directly by Delta
and shall not be included in the Base Compensation or any incentive compensation
calculation or payment:
 
(1) Travel agency commissions, if any;
 
(2) Credit card fees;
 
(3) Reservations handling charges;
 
(4) Booking fees;
 

 
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(5) Frequent flyer charges;
 
(6) Denied boarding costs;
 
(7) Advertising;
 
(8) Glycol and de-icing services (if provided by Delta or an affiliate or
designee of Delta);
 
(9) Terminal Facility Rent and use charges, including without limitation
facilities maintenance and operations costs (if premises are provided by Delta
or an affiliate or designee of Delta);
 
(10) Fuel and fuel management expenses (if provided or cause to be provided by
Delta or an affiliate or designee of Delta);
 
(11) The cost of any “Support Services” (as defined in Article 8 herein) and any
ticketing services, if provided, or cause to be provided, by Delta or an
affiliate or designee of Delta;
 
(12) Passenger amenities costs and other interrupted trip expenses, including
without limitation denied boarding compensation, food and lodging expenses and
other transportation costs incurred by Operator; and
 
(13) Landing fees (if paid directly by Delta).
 
           F.           Monthly Incentive Compensation or Penalties. 1.  In
addition to the Base Compensation, Operator shall have the opportunity to earn
additional compensation (the “Monthly Incentive Compensation”) based upon its
actual performance in the Monthly Performance Categories.  Based on Operator’s
performance with the performance criterion, then Delta shall pay Operator, or
Operator shall pay Delta, the applicable incentive or penalty amounts,
respectively, as set forth below.  All incentives (or penalties) are monthly and
stated in dollars per Aircraft.  In the case of Aircraft additions or removals
within a monthly period, such incentive and penalty amounts will be
prorated.  Any monthly incentive (or penalty) amount shall be added to (or
deducted from) the monthly settlement payment.  The applicable performance
levels and corresponding incentives and penalties are as follows:
 

 
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(i)           Completion Factor (calculated in accordance with Section 3.A.of
the Agreement):
 

 
Penalty
Neutral
Incentive
Performance Level
***
*** or greater, but less than or equal to ***
***
Penalty/Incentive per Aircraft
 
***
***
 
***

 
(ii)           On-Time Arrival within 14 Minutes (all-In A14):
 

 
Penalty
Neutral
Incentive
Performance Level
***
*** or greater, but less than or equal to ***
***
Penalty/Incentive per Aircraft
 
***
***
 
***

 
2.  Reconciliation of Performance Standards.  Following each month, (i) Operator
shall prepare a reconciliation of its actual performance to the targeted
performance with respect to the completion factor and on-time arrival factor
with respect to the Delta Connection Flights scheduled to be operated during
such month and (ii) Delta shall prepare a reconciliation of Operator’s actual
performance to targeted performance with respect to the ISM Score results of the
Delta Connection Flights operated during such month. Such reconciliations will
be completed and delivered to the other Party within twenty (20) days after the
end of each month.  Delta and Operator will have the right to audit the
reconciliations prepared by the other and shall report any discrepancies to the
other.  Any discrepancy not reported in writing within sixty (60) days of the
end of any month shall be deemed waived.
 
           G.           Cost Reductions.  At all times during the Term, Operator
shall use its reasonable commercial efforts to reduce its Direct Costs in the
following cost categories (the “Reducible Costs”):
 

 
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1.  Base Rate Costs:
 
(i)  
Line maintenance; and

(ii)  
Flight Operations and In Flight.

 
2.  Pass Through Costs:
 
(i)           Liability insurance;
 
(ii)           Hull insurance;
 
(iii)           War risk insurance
 
(iv)           Fuel (burn rate reductions); and
 
(v)           All heavy maintenance expense relating to engine maintenance,
avionics maintenance and landing gear overhaul.
 
Delta maintains the right to develop cost savings initiatives which will enable
Operator to reduce the costs reimbursable by Delta hereunder (each, a “Cost
Savings Initiative”).  Provided any such Cost Savings Initiative does not
materially interfere with or adversely affect other contractual or legal
obligations of Parent or Operator in existence at such time or materially
interfere with the Operator’s operational or maintenance standards or
performance requirements, each as necessary to perform the services contemplated
by this Agreement, Operator shall use its commercially reasonable efforts to
implement all such Cost Savings Initiatives identified by either Operator or
Delta.
 
In addition, Delta may assist Operator in obtaining goods and services in
connection with operating the Aircraft and/or the Delta Connection Flights in a
more economical manner, including, without limitation, via bulk purchasing and
inventory management systems and processes (each, a “Delta Sourcing
Initiative”).  If Delta initiates or identifies any such Delta Sourcing
Initiative, Operator is obligated to use its reasonable commercial efforts to
participate in such initiative, but only to the extent that such participation
would not materially interfere with or adversely affect other contractual or
legal obligations of Parent or Operator in existence at such time or materially
interfere with the Operator’s operational or maintenance standards or
performance requirements, each as necessary to perform the services contemplated
by this Agreement.

 
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H.           Accounting Provisions.  Delta shall retain all revenues (including,
without limitation, passenger, cargo, mail, food, beverage and duty-free
services or any other revenue including, without limitation, any guaranteed or
incentive payments from airport, local or municipal authorities in connection
with scheduling flights to such airport or locality, Essential Air Service
subsidies or any federal funds payments) in connection with the operation of the
Delta Connection Flights.  Operator shall promptly remit to Delta all monies
with respect to all airline ticket sales, on-board sales, baggage charges,
passenger charges, cargo sales and all other revenue collected by Operator or
any agent or employee of Operator in connection with the operation of the
Aircraft (including credit card transactions).
 
On each of the 7th, 14th, 21st and 28th day of each month (or if not a business
day, on the following business day) after operation of the initial Delta
Connection Flight, Delta will advance to Operator twenty-five percent (25%) of
the estimated monthly Direct Costs (excluding Aircraft Sublease Expense that is
deducted herefrom in payment of Rent pursuant to the terms of the Aircraft
Subleases) (the “Base Compensation”).  Such payment shall be made via wire
transfer or through the Airline Clearing House (the “Clearing House”), in
Delta’s discretion (but in any event on the dates set forth above) or, if any
such payment from Delta is not paid on such dates, then in Operator’s
discretion.  In computing the amount of the advance, Delta will use the
projected fuel costs, and the estimated number of weekly revenue block hours,
departures and passengers.  The reimbursement of Aircraft Sublease Expense in
respect of each Aircraft shall be due and payable each month on the date that
Rent in respect of such Aircraft under the respective Aircraft Sublease is due
and payable.
 
Within thirty (30) days following the end of each month, Delta and Operator will
reconcile the actual Direct Costs (excluding Aircraft Sublease Expense that is
deducted herefrom in payment of Rent pursuant to the terms of the Aircraft
Subleases) incurred by Operator for the Base Compensation, the final operating
results (including actual performance in the Performance Categories) of, and
actual revenue block hours flown by, Operator with the estimated payments made
pursuant to the previous paragraph.  Within five (5) business days of completing
such reconciliation, Delta or Operator, as the case may be, shall pay, via wire
transfer or the Clearing House in Delta’s discretion, to an account designated
by the other party, monies equal to the reconciled amount.  If certain actual
costs are not known by the end of such thirty-day period, Operator shall provide
Delta with a good faith estimate of such unknown costs and such estimated amount
shall be included in the initial thirty-day reconciliation.  As soon as
commercially reasonable, such estimated amounts shall be reconciled with the
actual costs for such expenses, and Delta or Operator, as the case may be, shall
pay, via wire transfer or the Clearing House in Delta’s discretion, to an
account designated by the other party, monies equal to the reconciled amount.
 
Notwithstanding anything herein to the contrary, in the event Operator is unable
to operate any of the Aircraft, or any of the Delta Connection Flights, for any
reason other than as a result of weather, fire, war, terrorism, other act of
hostilities, an industry-wide ATC action, an industry-wide directive by the FAA,
TSA or other governmental agency or act of God, Delta shall not be obligated to
pay Operator any portion of the Base Compensation, incentive
 

 
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compensation, or any other amounts, in connection with such non-operated
Aircraft and Delta Connection Flights.  If the non-operated Aircraft or Delta
Connection Flight is caused by weather, fire, war, terrorism, other act of
hostilities, an industry-wide ATC action, an industry-wide directive by the FAA,
TSA or other governmental agency or act of God, Delta shall nevertheless be
obligated to pay to Operator the Base Rate Costs for Flight Ops, In Flight, Line
Maintenance Salary and Line Maintenance Benefits (as set forth on Exhibit B)
associated with flights awarded to pilots of Operator in response to Operator’s
standard crew bid procedures and actual Pass Through Costs incurred by Operator
with respect to such Delta Connection Flights previously scheduled by Delta but
not operated by Operator during the period that Operator is unable to operate
such Aircraft or scheduled Delta Connection Flights.
 
           I.           Audit of Costs, Operations and Service Levels.  Operator
shall maintain complete and accurate books and records to support and document
all revenues, costs and expenses related to the Aircraft and its Delta
Connection operations hereunder, in accordance with generally accepted
accounting principles consistently applied and in accordance with the accounting
policies and procedures used by the parties to develop the Direct
Costs.  Delta’s in-house finance staff and any independent consultants selected
by Delta shall be entitled, following reasonable notice to Operator, to audit
and inspect Operator’s books and records relevant to the services provided
hereunder, the service levels achieved, and the determination of charges due
pursuant to this Agreement for the sole purposes of (1) prospectively adjusting
the Base Rate Amount in connection with any annual review pursuant to Section
3.B. hereof and/or (2) auditing Reimbursable Costs, Pass Through Costs, or
incentive compensation due or paid hereunder.  Any such audit will be conducted
during regular business hours and be paid for by Delta unless such audit
determines that Operator owes Delta in excess of $500,000, in which case
Operator shall pay Delta the costs and expenses incurred by Delta in connection
with such audit.
 
J.           Right of Set-off.  Any party may offset against any payment to be
made to any other party hereto (including the next scheduled payment by Delta to
be made pursuant to Section 3(H) above) the amount of any payment that such
other party or any of its affiliates owes to such first party or any of its
affiliates but has not made when due (taking into account any cure period),
unless such overdue payment is subject to a good faith dispute.
 
ARTICLE 4
 
TICKETING SERVICES; SIGNAGE; FACILITIES; SLOTS AND ROUTES
 
A. Ticketing Services.  Either Delta or Operator will provide primary airport
ticketing services in connection with the Delta Connection Flights, and, if
applicable, the other party will provide supplemental ticketing services for the
Delta Connection Flights at Delta’s airport ticketing locations and will use
Delta ticket stock for such purposes.
 
B. Signage.  Unless otherwise agreed by the parties, Delta will design, provide
and pay for appropriate airport and other signage installed after the Effective
Date to reflect the Delta Connection and the relationship between Operator and
Delta.  The nature and type of such signage will be in the sole discretion of
Delta, subject to any airport, governmental or quasigovernmental restrictions or
requirements, and to any contractual or other obligations of Parent or Operator,
and the location of such signage will be limited to passenger-related
 

 
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facilities from which Parent or Operator provides services to Delta
hereunder.  Delta will be responsible for installing and maintaining all such
signage, but the parties will mutually determine which party will obtain any
necessary formal or informal approvals from appropriate airport or other
authorities to install such signage.  The parties will fully cooperate with each
other in all endeavors relating to such signage and any necessary approvals.
 
C. Facilities.
 
(1) In connection with the Delta Connection Flights, and subject to clause (2)
below, Operator shall use the gates and facilities designated by Delta from time
to time at the locations in which Operator operates such Delta Connection
Flights.  No other use of such gates and other facilities by Operator or parties
other than Delta shall be allowed without Delta’s express written consent.
 
(2) Delta’s right to designate gates and other facilities to be used by Operator
in connection with providing Delta Connection Flights shall include the right at
each airport, in Delta’s discretion, to either:  (a) provide for use of some or
all of the needed facilities to Operator through mutually acceptable subleases,
ground handling agreements, licenses, permits or otherwise; or (b) require
Operator to directly obtain use of passenger-related and aircraft related
facilities used or to be used exclusively for Delta Connection Flights from the
airport operator or other lessors, and shall not include the right to designate
gates or other facilities then used by Operator for operations other than Delta
Connection Flights.  Delta and Operator agree that Delta may relocate Operator
to comparable facilities at the service locations, provided that Delta
reimburses Operator for its reasonable relocation expenses.
 
(3) Operator shall use its reasonable commercial efforts to ensure that all
leases, subleases, permits, licenses and other use agreements of airport
terminal facilities entered into by Operator for use exclusively in connection
with Delta Connection Flights (each, a “Facility Lease” and collectively,
“Facilities Leases”) shall be assignable to Delta or Delta’s designee, at
Delta’s election, without the consent of the other party to such Facility Lease
on termination of this Agreement, the withdrawal of Delta Connection Flights
from such airport or upon written notice from Delta to Operator, provided that
if the consent of the facility lessor is required by contract or governmental
regulations, Operator will use its reasonable commercial efforts to obtain such
consent at the time the Facility Lease is entered into and to incorporate such
consent in the terms of the Facility Lease or otherwise at such time as Delta
may direct.  Subject only to Operator obtaining any necessary consent of such
other party, Operator shall assign to Delta or Delta’s designee (a) all
Facilities Leases upon termination of this Agreement, (b) all Facilities Leases
at a particular airport upon the withdrawal of all Delta Connection Flights from
such airport, and (c) such Facilities Leases as Delta shall designate at any
time upon receipt of written notice from Delta.  If Delta elects and if the
other party to the Facilities Lease agrees, instead of an assignment, any such
transfer can be accomplished by either:  (i) a termination of the applicable
Operator Facilities Lease and a direct lease of such premises to Delta or
Delta’s designee; or (ii) a release of premises designated by Delta from the
applicable Operator Facility Lease and lease of such premises directly to Delta
or Delta’s designee.
 

 
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(4) Operator shall use its reasonable commercial efforts to ensure that all
Facilities Leases entered into by Operator shall expressly provide that Delta or
Delta’s designee, at Delta’s election, shall have the right to sublease any or
all of the premises covered by the applicable Facilities Lease without the
consent of the other party to such Facility Lease on termination of this
Agreement, the withdrawal or reduction of Delta Connection Flights from such
airport or upon written notice from Delta to Operator, provided that if the
consent of the facility lessor is required by contract or governmental
regulations, Operator will use its reasonable commercial efforts to obtain such
consent at the time the Facility Lease is entered into and to incorporate such
consent in the terms of the Facility Lease or otherwise at such time as Delta
may direct.  Subject only to Operator obtaining any necessary consent of such
other party, Operator shall, at Delta’s option, sublease the premises Delta
specifies under any applicable Facilities Lease to Delta or Delta’s designee on
termination of this Agreement, the withdrawal of Delta Connection Flights from
such airport or upon receipt of written notice from Delta.  If Delta or Delta’s
designee enters into such a sublease, at Delta’s option, Operator shall enter
into a sub-sublease of all or the portion of the subleased premises that Delta
designates.
 
(5) Operator shall not assign, transfer, sublease, alter, amend, modify or
terminate any Facilities Lease to which it is a party without the prior written
consent of Delta.
 
(6) Notwithstanding anything to the contrary in this Agreement, Delta may, at
its option, elect to enter the Facilities Lease in lieu of Operator for any
facilities to be used by Operator at any new or existing city to be served by
Operator pursuant to this Agreement, and in the event Delta exercises this
option (a) Delta shall enter into a Facilities Lease with the lessor of such
facilities, (b) Operator shall utilize such facilities pursuant to a sublease,
license agreement, permit, facilities use agreement or ground handling agreement
with Delta, (c) at Delta’s option, the sublease, facilities use agreement or
ground handling agreement shall terminate when Operator ceases to operate Delta
Connection Flights at the airport, and (d) Delta shall enter into agreements for
facilities which are reasonably suitable for Operator’s operational needs.  If
for any reason Delta fails to provide such facilities, such failure shall not be
a breach hereof and Operator shall be obligated to secure such facilities within
a reasonable period of time.
 
(7) At any location in which Operator is the signatory carrier of the applicable
Facility Lease, Operator shall vote as directed by Delta on any matters
submitted to the signatory carriers for a vote.
 
(8) Operator shall comply with all requirements of such Facilities Leases,
subleases and sub-subleases described in this Section 4C and an event of default
by Operator under any such agreements for a material Facilities Lease shall be a
breach of this Agreement.  If Operator receives any notice of default or breach
with respect to any Facilities Lease, Operator shall promptly provide a copy to
Delta, consult with Delta on handling and advise Delta on Operator’s plans for
resolving the matter.
 

 
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D. Slots and Route Authorities.  During the Term of this Agreement (including
any renewal terms) or upon the expiration or termination of this Agreement,
Delta may, in its sole discretion, require Operator to transfer to Delta or its
designee at no charge any airport takeoff or landing slots, route authorities or
other regulatory authorities as Delta shall designate which were obtained and
have been or are being used for Delta Connection Flights under this Agreement,
provided that Operator shall not be required to acquire any airport takeoff or
landing slot, route authority or other regulatory authority without the
acquisition cost paid by Operator, if any, being treated as a Pass Through Costs
under this Agreement.
 
ARTICLE 5
 
CUSTOMER SERVICES
 
A. Operator will handle all customer related services in connection with the
Delta Connection Flights in a professional, businesslike and courteous
manner.  In order to ensure a high level of customer satisfaction for the Delta
Connection Flights, Operator will (1) establish and maintain customer handling
procedures and policies for the Delta Connection Flights that are substantially
similar to those utilized by Delta (“Customer Service Policies”) and (2)
establish, maintain and enforce employee conduct, appearance and training
standards and policies for the Delta Connection Flights that are substantially
similar to those used by Delta.  All uniforms worn by Operator employees on the
Delta Connection Flights and by any Operator employees providing support
services in connection with such flights shall be subject to the prior approval
of Delta and shall at all times be consistent with Delta’s existing uniform
standards.
 
B. Operator and Delta will periodically meet to discuss and review Operator’s
customer handling procedures and policies for the Delta Connection Flights to
ensure compliance with this Article 5.  Each party will seek to set forth
concerns and complaints under this Article 5 in writing to the other party.  To
the extent Delta advises Operator of any deviation from Section 5A hereof, the
parties shall meet to mutually determine appropriate solutions and to agree to
the terms of a corrective action plan and the timing of its implementation.  In
the event Operator shall fail, in any material respect, to adopt or implement
any such agreed corrective action plan in the time period described therein, any
such failure may be deemed a material breach of this Agreement.
 
C. Operator shall adopt as its own, for the Delta Connection Flights, Delta’s
Terms and Conditions of Contract of Carriage (“Contract of Carriage”), baggage
liability policies and denied boarding compensation policies, each as amended
from time to time, and be bound by their respective terms with respect to its
operation of Delta Connection Flights.
 

 
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ARTICLE 6
 
[RESERVED]
 
ARTICLE 7
 
FREQUENT FLYER PARTICIPATION
 
During the Term of this Agreement, the parties agree that passengers on
Operator’s Delta Connection Flights will be eligible to participate in the Delta
SkyMiles frequent flyer program, as may be amended from time to time, or any
other similar program developed by Delta (the “Program”) and all Program award
tickets will be honored for travel on Delta Connection Flights on the following
terms and conditions:
 
A. Administration.  Administration of the Program shall be performed by and at
the cost of Delta.  Delta will promote and administer the Program.
 
B. Program Information.  Title and full and complete ownership rights to Program
membership data and information developed by Delta, wherever located, shall
remain with Delta or an affiliate of Delta.  Operator understands and agrees
that such data and information constitutes Delta’s (or its affiliates’)
proprietary information.  Any membership lists, labels, data, or other compiled
membership information supplied to Operator in any form and any and all copies
thereof are to be used by Operator exclusively in the performance of its
obligations under this Agreement and will not be otherwise used, sold, licensed,
leased, transferred, stored, duplicated or transmitted, in any form or by any
means, without Delta’s prior written consent.  All such information will either
be returned to Delta or destroyed at Delta’s request.
 
C. Accrual and Redemption.  Passengers on the Delta Connection Flights shall be
eligible to accrue and redeem Program mileage on such flights.  Passengers
traveling pursuant to award travel under the Program shall be considered
passengers for all purposes under this Agreement.
 
ARTICLE 8
 
SUPPORT SERVICES
 
Notwithstanding anything to the contrary in this Agreement, from time to time
during the Term, Delta may, at is sole discretion, require Operator to utilize
Delta, an affiliate of Delta or a another third party designated by Delta for
certain services or products including, without limitation, catering and
on-board provisioning; aircraft and engine maintenance and ground handling
(collectively, “Support Services”), provided such services and products are not
more costly to Operator than the alternative services or products they are
replacing or would replace and do not materially interfere with the operational
or maintenance standards or performance requirements of Operator, each as
necessary to perform the services contemplated by this Agreement, or adversely
affect other contractual or legal obligations of Parent or Operator in effect at
such time.
 

 
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ARTICLE 9
 
AUTOMATION SERVICES
 
Delta may provide Operator the following automation and related services for the
Delta Connection Flights, and if provided by Delta, Operator agrees to
participate in such services in the manner and subject to the conditions
described below.
 
A. Internal Reservations Equipment.  Delta shall provide or arrange for the
provision to Operator of an electronic reservations system (currently referred
to as “Deltamatic” but including any successor reservations system adopted by
Delta) and shall provide Operator with:  (1) the ability to access passenger
name records, (2) automated ticketing capabilities, (3) operational messaging
switching capabilities, (4) the ability to update Delta Connection Flight
information, (5) the ability to distribute flight releases and weather packages,
and (6) perform other reservations-related functions for the Delta Connection
Flights (Deltamatic and any successor system are hereinafter referred to as the
“Res System”).  Delta reserves the right to modify the functionality of the Res
System at any time.  Operator will use the Res System made available by Delta
for the Delta Connection Flights only.
 
B. Delta’s Rights and Obligations.
 
(1) Delta will install or cause to be installed the equipment requested by
Operator at the locations set forth on Exhibit C to this Agreement and shall
provide Operator connection to the Res System.  The equipment described on
Exhibit C and any software installed on the Equipment at the time of its
delivery to Operator is hereinafter referred to as the “Equipment.”  Operator
understands and agrees that:  (a) all Equipment shall remain the sole property
of Delta; (b) Operator shall not remove any identifying marks from the
Equipment; (c) Operator shall not subject the Equipment to any lien (other than
lessor’s liens or other liens generally applicable to equipment installed at
such locations); and (d) Delta may enter Operator’s premises to remove the
Equipment immediately upon termination of this Agreement.  Exhibit C may be
amended from time to time by mutual agreement of the parties to reflect the
installation, removal or relocation of Equipment.
 
(2) Delta will provide initial and recurrent training to Operator training staff
and other key designated personnel in the use of the Res System, at Delta’s
training centers unless otherwise agreed.  Delta may remove from a training
program any Operator employee who is not satisfactorily participating therein.
 
(3) Delta will promptly provide, or arrange to provide, all repairs and
maintenance services required for the Equipment and will use reasonable business
efforts to keep the Equipment and the Res System in good repair and
condition.  Operator will not perform or attempt to perform repairs or
maintenance of any kind on the Equipment without prior consultation with Delta
and will promptly contact Delta regarding the need for repairs or maintenance.
 

 
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C. Operator’s Rights and Obligations.
 
(1) Operator will not for any reason relocate or remove any of the Equipment
without Delta’s prior written consent.  Delta will pay all costs associated with
the installation, relocation, purchase, regular maintenance, repair (other than
for loss or damage for which is Operator is responsible) or removal of
Equipment.
 
(2) Operator will use the Equipment and the Res System in strict conformity with
the training and operating instructions provided by, or arranged to be provided
by, Delta.  Without limiting the generality of the foregoing, unless authorized
by Delta, Operator will not use the Res System to develop or publish any
reservation, ticketing, sales, cargo, tariff or other guide, to provide services
not authorized by this Agreement to third parties, to train persons other than
Operator’s employees in the use of the Equipment or the Res System, or for other
uses designated by Delta in writing as prohibited.  Operator may not publish,
disclose or otherwise make available to any third party the compilations of air
carrier service or fares obtained from the Res System; provided, however, that
Operator may use specific air carrier service and fare data for the benefit of
its customers.
 
(3) Operator will encourage and allow its employees using the Res System to
attend training sessions related to the Res System, and it is Operator’s
responsibility to ensure that each employee using the Res System receives full
and adequate training on the Res System.
 
(4) Operator will use its reasonable commercial efforts to protect the Equipment
from loss, damage or theft and to prevent its unauthorized use or improper
operation.  Operator will make no alterations to the Equipment and will return
the Equipment to Delta upon the termination of this Agreement in the same
condition as received, excepting only ordinary wear and tear in the normal
course of Operator’s operations.  Operator will obtain and maintain insurance
for the Equipment against all risks of damage and loss, including without
limitation loss by fire, theft and such other risks of loss as are customarily
insured in a standard all-risk policy.  Such insurance shall also provide the
following:
 
(a) Full replacement value coverage for the Equipment (subject to policy
deductibles);
 
(b) An endorsement naming Delta as the loss payee to the extent of its interest
in the Equipment; and
 
(c) An endorsement requiring the insurer to give Delta at least thirty (30) days
prior written notice of any intended cancellation, nonrenewal or material change
of coverage; provided that only ten (10) days prior written notice of
cancellation, nonrenewal or material change of coverage need be given in the
event that such cancellation, nonrenewal or material change in coverage is
caused solely by failure to make a premium payment.
 

 
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Upon request by Delta, Operator will promptly provide satisfactory evidence of
the insurance required pursuant to this Section 9C(4).  Notwithstanding the
foregoing, Operator shall be liable to Delta for any loss or damage to the
Equipment, regardless of cause, occurring while the Equipment is in the
possession, custody or control of Operator.
 
(5) Operator waives any proprietary rights that it may have with respect to
information entered into the Res System.
 
D. Entry and Inspection.  Persons designated or authorized by Delta may enter
Operator’s premises during normal business hours for the purposes of (1)
monitoring, inspecting, and reviewing Operator’s use of and operations with
respect to the Res System, (2) performing repairs or maintenance on the
Equipment, (3) installing, removing, replacing or relocating the Equipment
(unless otherwise permitted by this Agreement), or (4) training or retraining
Operator’s employees in the use of the Res System; provided that such activities
may not unreasonably interfere with Operator’s business.
 
E. Limitations on Liability.  In addition to any other limitations on liability
set forth herein:
 
(1) Neither Parent, Operator nor Delta is responsible for errors or inaccuracies
in the availability records, fare quotes, or other information contained in the
Res System at any time, for any planned or unplanned interruptions, delays or
malfunctions in the operation of the Res System or the Equipment or for the
merchantability or fitness for a particular purpose of any of the data or
Equipment made available to Operator.
 
(2) EXCEPT AS SET FORTH IN PARAGRAPH F BELOW, EACH OF PARENT, OPERATOR AND DELTA
HEREBY WAIVES AND RELEASES THE OTHER PARTIES AND THEIR AFFILIATES AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM ANY AND ALL
OBLIGATIONS AND LIABILITIES AND ALL OF THEIR RIGHTS, CLAIMS AND REMEDIES AGAINST
THE OTHER PARTIES OR THEIR AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES OR AGENTS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE,
DUE TO ANY DEFECTS OR INTERRUPTIONS OF SERVICE IN, OR ERRORS OR MALFUNCTIONS BY,
SOFTWARE, THE EQUIPMENT, THE RES SYSTEM OR ITS USERS, INCLUDING ALL LIABILITY,
OBLIGATION, RIGHT, CLAIM, OR REMEDY IN TORT, AND INCLUDING ALL LIABILITY,
OBLIGATION, RIGHT, CLAIM OR REMEDY FOR LOSS OF REVENUE OR PROFIT OR ANY OTHER
DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.  FURTHER, DELTA
DISCLAIMS AND EACH OF PARENT AND OPERATOR HEREBY WAIVES ANY WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR INTENDED USE RELATING TO THE RES SYSTEM, THE EQUIPMENT, DATA, OR
SERVICES FURNISHED HEREUNDER.
 

 
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F. Patent and Copyright Indemnity.  Delta will indemnify each of Parent and
Operator, its Affiliates and their respective directors, officers, employees or
agents, against, and will defend or settle, at its own expense, any action
brought against Parent, Operator or their Affiliates or any of their respective
directors, officers, employees or agents, to the extent that it is based on, a
claim that the Res System provided by Delta pursuant to this Agreement, in its
normal use, or any part thereof, infringes any U.S. copyright or patent; and
Delta will pay those costs, damages and attorney’s fees finally awarded against
Parent, Operator or their Affiliates or any of their respective directors,
officers, employees or agents in any such action attributable to any such claim,
but such defense, settlements and payments are conditioned on the
following:  (1) the provisions of Section 12C below, including those relating to
notice and control of defense, shall apply; (2) that Parent and Operator shall
cooperate with Delta in a reasonable way to facilitate the settlement or defense
of such claim, provided that Delta shall pay all of Parent’s and Operator’s
reasonable expenses in connection with any such cooperation requested by Delta;
and (3) should such Res System become, or in Delta’s opinion be likely to
become, the subject of such claim of infringement, then Operator shall permit
Delta, at Delta’s option and expense, either to (a) procure for Operator the
right to continue using the Res System, or (b) replace or modify the same so
that it becomes noninfringing and functionally equivalent, or (c) upon failure
of (a) and (b) above despite the reasonable efforts of Delta, accept immediate
termination of this Agreement as it relates to such system.  This paragraph (F)
states the entire liability of Delta with respect to the infringement of
copyrights and patents by the Res System provided hereunder or the operation
thereof.
 
ARTICLE 10
 
OPERATIONAL PERFORMANCE REQUIREMENTS
 
A. Operator agrees to provide the following information to Delta for each day
during the Term of this Agreement on the next business day after the applicable
day:
 
(1) The completion rate (actual) of the Delta Connection Flights during such
day.  Unless revised in accordance with Section 10C below, Operator shall
maintain a completion rate (determined in accordance with Section 3(A)) as set
forth on Schedule 10 attached hereto and made a part hereof.
 
(2) The number of scheduled Delta Connection Flights that do not arrive at their
scheduled destination prior to fifteen (15) minutes after their respective
scheduled arrival times during such day.  Unless revised in accordance with
Section 10C below, Operator shall maintain a percentage of on-time arrivals as
set forth on Schedule 10 attached hereto and made a part hereof.
 
B. Each of the requirements set forth on Schedule 10 shall be defined as the
“Operational Performance Standards.”  If Delta is concerned about Operator’s
performance in connection with any of the Operational Performance Standards set
forth on Schedule 10, Operator agrees to discuss with Delta such performance and
potential ways to improve such performance at Delta’s request.  The parties
shall have ten (10) days to determine appropriate solutions and/or a corrective
action plan, and Operator agrees to diligently comply with the
 

 
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 terms and conditions of any such solutions and corrective action plans that are
mutually agreed by the parties.
 
C. The parties recognize and agree that the Operational Performance Standards
set forth on Schedule 10 may be modified or adjusted by mutual agreement of the
parties hereto from time to time during the Term of this Agreement.
 
D. If at any time during the Term Operator is required to provide any of the
following information to the DOT, and Operator notifies Delta sufficiently in
advance of such requirement, Delta shall provide to Operator such information
Operator is required to provide to the DOT and other data in its possession
relating to the (1) number of mishandled bags, (2) denied boarding, (3)
disability complaints, (3) DOT complaints for the Delta Connection Flights
operated by Operator or any other information required by the regulations
promulgated by the DOT.
 
E. Operator shall actively participate in and comply with the Delta Connection
Safety Alliance and at all times during the Term and (i) comply with Delta’s
safety standards with respect to the services provided hereunder including,
without limitation, as set forth in the Delta Connection Carriers Non-Regulatory
Safety Program Standards document and the Delta Connection Ground Operations
Manual, (ii) within a reasonable timeframe of inception of this Agreement,
comply with and maintain all IATA Operational Safety Audit requirements and
certification, Cockpit Aviation Safety Action Program (subject to consent of
such Operator’s union representation and FAA), and all other safety initiatives
applicable to the regional service industry, and (iii) Operator shall be
required to successfully complete a DOD audit under a regular bi-annual
inspection program. (collectively, as amended from time to time, the “Delta
Connection Safety Standards”).  Operator’s failure to comply with the Delta
Connection Safety Standards shall be considered a material breach of this
Agreement. 
 

 
ARTICLE 11
 
TERM AND TERMINATION
 
A. This Agreement shall commence as of the Agreement Date and shall terminate
upon the last of the dates described in the following sentence, unless the
Agreement is terminated earlier in accordance with its terms (such period, and
any extension or renewal thereof, the “Term”).  As to any particular Aircraft,
unless this Agreement is terminated earlier in accordance with its terms, this
Agreement shall terminate with respect to each Aircraft, upon the earlier of the
Retirement Date or Removal Date for such Aircraft.
 
B. Notwithstanding the provisions of Section 11A, either party may terminate
this Agreement immediately if the other party files a voluntary petition in
bankruptcy, makes an assignment for the benefit of creditors, fails to secure
dismissal of any involuntary petition in bankruptcy within sixty (60) days after
the filing thereof, or petitions for reorganization, liquidation, or dissolution
under any federal or state bankruptcy or similar law.
 

 
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C. Notwithstanding the provisions of Section 11A, in the event of a material
breach of this Agreement by either party remaining uncured for more than thirty
(30) days after receipt of written notification of such breach by the
nonbreaching party, then the nonbreaching party may immediately terminate this
Agreement at its sole option.  Notwithstanding the foregoing or any other
provision of this Agreement, if between the Agreement Date and March 31, 2011
Delta notifies Operator of Delta’s intent to terminate this Agreement pursuant
to this Section 11.C., and the material breach by Operator giving rise to such
notice of termination is due to an act or omission of Operator occurring prior
to the Agreement Date, then Operator shall have ninety (90) days after receipt
of such notice to cure such material breach and if such material breach is not
cured within such 90-day period, Delta shall have the right to terminate this
Agreement immediately and at its sole option.
 
D. Notwithstanding the provisions of Section 11A, in the event a “Force Majeure
Event” (as defined in Article 19) substantially prevents one party’s performance
of its obligations pursuant to this Agreement, for a period of ten (10) or more
consecutive days, Delta may (1) temporarily suspend some or all of the Aircraft
from the scope of this Agreement upon written notice to the Operator, or (2)
terminate this Agreement in its entirety upon thirty (30) days prior written
notice to Operator.
 
E. Notwithstanding the provisions of Sections 11A, B, C and D, Delta shall have
the right to terminate this Agreement immediately and at its sole option upon
the occurrence of one or more of the following:
 
(1) Operator or Parent agrees to merge into or with any entity other than an
affiliate of Parent, agrees to be acquired by any entity other than an affiliate
of Parent, agrees to sell substantially all of its assets or enters into a
letter of intent, or similar document, to merge into or with any entity, to be
acquired by any entity other than an affiliate of Parent, or to sell
substantially all of its assets (each such event, a “Merger”);
 
(2) The acquisition, after the Agreement Date, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (as amended, the “Exchange Act”)) (a “Person”) other than
an affiliate of Parent of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than forty-nine percent (49%) of
either (a) the then outstanding shares of common stock of Operator or Parent, or
(b) the combined voting power of the then outstanding voting securities of
Operator or Parent entitled to vote generally in the election of such entity’s
directors or managers, as applicable (each such event, a “Change of Control”);
 
(3) Operator’s level of safety with respect to its operation of the Aircraft or
the Delta Connection Flights is not reasonably satisfactory to Delta;
 
(4) a breach by Operator of Section 17G hereof;
 
(5) Operator’s failure to pass, in Delta’s reasonable discretion, a safety and
code share audit to be conducted by Delta, at its sole discretion, at any time
during the Term of this Agreement;
 

 
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(6) Operator fails to achieve any of the Operational Performance Standards set
forth on Schedule 10 with respect to the Delta Connection Flights during any
three ***;
 
(7) a material breach by Operator or Parent of any representation or warranty in
Section 16A(5);
 
(8) Operator’s failure to comply with the insurance provisions of Articles 13
and 14 hereof;
 
(9) Operator’s FAA or DOT Certification is for any reason suspended or revoked
or otherwise not in full force and effect so as to permit Operator to operate
the Delta Connection Flights required under this Agreement;
 
(10) Operator shall commence operating an aircraft type which causes Delta to be
in violation of its collective bargaining agreement with its pilots in effect as
of the date hereof; and
 
(11) Parent or Operator shall default with respect to the material term of any
other agreement between Parent, Operator or any Affiliate of Parent or Operator,
on the one hand, and Delta or an Affiliate of Delta, on the other hand (any such
agreement, a “Related Party Agreement”), and such breach shall continue for more
than the period of grace, if any, specified therein and shall not have been
waived; provided, however, that each of (i) the 2010 Delta Connection Agreement
dated as of the Agreement Date by and among Parent, Operator, Pinnacle Airlines,
Inc. (“Pinnacle”) and Delta; (ii) the Delta Connection Agreement dated as of
April 27, 2007 by and among Delta, Parent and Pinnacle and (iii) the Second and
Amended Restated Air Services Agreement dated as of the Effective Date by and
among Parent, Pinnacle, Operator and Delta shall not be a related Party
Agreement hereunder until July 1, 2011.
 
Notwithstanding the above or any other provision of this Agreement, if between
the Agreement Date and March 31, 2011 Delta notifies Operator of Delta’s intent
to terminate this Agreement pursuant to Section 11(E)(4), 11(E)(5), 11(E)(6) or
11(E)(9) above, and the default by Operator giving rise to such notice of
termination is due to an act or omission of Operator occurring prior to the
Agreement Date, then Operator shall have ninety (90) days after receipt of such
notice to cure such default and if such default is not cured within such 90-day
period, Delta shall have the right to terminate this Agreement immediately and
at its sole option.
 
F. Termination of this Agreement for any reason shall not relieve either party
of rights and obligations incurred prior to the effective date of
termination.  A party’s right to terminate this Agreement shall be in addition
to any other rights or remedies, in law or equity, available to such party.
 

 
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ARTICLE 12
 
INDEPENDENT CONTRACTORS; LIABILITY PROVISIONS
 
A. Operator shall act as an independent contractor.  The employees, agents
and/or independent contractors of Operator engaged in performing any of the
services Operator is obligated to perform pursuant to this Agreement shall be
employees, agents and independent contractors of Operator for all purposes and
under no circumstances shall employees, agents or independent contractors of
Operator be deemed to be employees, agents or independent contractors of
Delta.  In its performance of obligations under this Agreement, Operator shall
act, for all purposes, as an independent contractor and not as an agent for
Delta.  Delta shall have no supervisory power or control over any employees,
agents or independent contractors engaged by Operator in connection with
Operator’s performance of its obligations hereunder, and all complaints or
requested changes in procedure shall, in all events, be transmitted by Delta to
a designated representative of Operator.  Nothing contained in this Agreement is
intended to limit or condition Operator’s control over its operation or the
conduct of its business as an air carrier, and Operator assumes all risks of
financial losses which may result from the operation of the air services to be
provided by Operator hereunder.
 
B. Delta shall act as an independent contractor.  The employees, agents and/or
independent contractors of Delta engaged in performing any of the services Delta
is to perform pursuant to this Agreement shall be employees, agents and
independent contractors of Delta for all purposes and under no circumstances
shall employees, agents and independent contractors of Delta be deemed to be
employees, agents or independent contractors of Operator.  In performing its
obligations under this Agreement, Delta shall act, for all purposes, as an
independent contractor and not as an agent for Operator.  Operator shall have no
supervisory power or control over any employees, agents or independent
contractors engaged by Delta in connection with the performance of its
obligations hereunder, and all complaints or requested changes in procedure
shall, in all events, be transmitted by Operator to a designated representative
of Delta.  Nothing contained in this Agreement is intended to limit or condition
Delta’s control over its operation or the conduct of its business as an air
carrier.
 
C. Parent and Operator, jointly and severally, shall be liable for and hereby
agrees fully to defend, release, discharge, indemnify, and hold harmless Delta
and its affiliates, and each of their respective directors, officers, employees
and agents (each, a “Delta Indemnitee”) from and against any and all claims,
demands, damages, liabilities, suits, judgments, actions, causes of action,
losses, costs and expenses of any kind, character or nature whatsoever (in each
case whether groundless or otherwise), including reasonable attorneys’ fees,
costs and expenses in connection therewith and expenses of investigation and
litigation thereof, which may be suffered by, accrued against, charged to, or
recoverable from any Delta Indemnitee in any manner arising out of, connected
with, or attributable to this Agreement, the performance, improper performance,
or nonperformance of any and all obligations to be undertaken by Operator
pursuant to this Agreement, or the operation, non-operation, or improper
operation of Operator’s aircraft, equipment or facilities at any location,
excluding only claims, demands, damages, liabilities, suits, judgments, actions,
causes of action, losses, costs and expenses resulting from the gross negligence
or willful misconduct of any Delta Indemnitee.
 

 
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Operator will do all things necessary to cause and assure, and will cause and
assure, that Operator will at all times be and remain in custody and control of
all aircraft, equipment, and facilities of Operator, and no Delta Indemnitee
shall, for any reason, be deemed to be in custody or control, or a bailee, of
Operator’s aircraft, equipment or facilities.
 
D. Delta shall be liable for and hereby agrees fully to defend, release,
discharge, indemnify, and hold harmless Operator, and each of its directors,
officers, employees, and agents (each, an “Operator Indemnitee”) from and
against any and all claims, demands, damages, liabilities, suits, judgments,
actions, causes of action, losses, costs and expenses of any kind, character or
nature whatsoever (in each case whether groundless or otherwise), including
reasonable attorneys’ fees, costs and expenses in connection therewith and
expenses of investigation and litigation thereof, which may be suffered by,
accrued against, charged to, or recoverable from any Operator Indemnitee in any
manner arising out of, connected with, or attributable to Delta’s performance,
improper performance or nonperformance of any and all obligations to be
undertaken by Delta pursuant to this Agreement, or the operation, non-operation
or improper operation of Delta’s aircraft, equipment or facilities at any
location, excluding only claims, demands, damages, liabilities, suits,
judgments, actions, causes of action, losses, costs and expenses resulting from
the gross negligence or willful misconduct of any Operator Indemnitee.  Delta
will do all things necessary to cause and assure, and will cause and assure,
that Delta will at all times be and remain in custody and control of any
aircraft, equipment and facilities of Delta used in connection with performance
of this Agreement, and no Operator Indemnitee shall, for any reason, be deemed
to be in the custody or control, or a bailee, of such Delta aircraft, equipment
or facilities.
 
E. Operator and Delta agree to comply with all lawful rules, regulations,
directives and similar instructions of appropriate governmental, judicial and
administrative entities including, but not limited to, airport authorities, the
Federal Aviation Administration and the Department of Transportation (and any
successor agencies) with respect to operations covered by this Agreement.
 
F. OTHER THAN ANY WARRANTIES SPECIFICALLY CONTAINED IN THIS AGREEMENT, EACH
PARTY DISCLAIMS AND THE OTHER PARTY HEREBY WAIVES ANY WARRANTIES, EXPRESS OR
IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS AGREEMENT OR ITS PERFORMANCE OF
ITS OBLIGATIONS HEREUNDER INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR INTENDED USE RELATING TO ANY EQUIPMENT, DATA,
INFORMATION OR SERVICES FURNISHED HEREUNDER.  EACH PARTY AGREES THAT THE OTHER
PARTY IS NOT LIABLE TO IT OR ANY OTHER PERSONS FOR CONSEQUENTIAL OR PUNITIVE
DAMAGES UNDER ANY CIRCUMSTANCES.
 

 
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G. Indemnification Claims.  A party (the “Indemnified Party”) entitled to
indemnification from the other party under the terms of this Agreement (the
“Indemnifying Party”) shall provide the Indemnifying Party with prompt written
notice (an “Indemnity Notice”) of any third party claim which the Indemnified
Party believes gives rise to a claim for indemnity against the Indemnifying
Party hereunder, and the Indemnifying Party shall be entitled, if it accepts
financial responsibility for the third party claim, to control the defense of or
to settle any such third party claim at its own expense and by its own counsel;
provided that the Indemnified Party’s prior written consent (which may not be
unreasonably withheld or delayed) must be obtained prior to settling any such
third party claim.  If the Indemnifying Party does not accept financial
responsibility for the third party claim or fails to defend against the third
party claim that is the subject of an Indemnity Notice within thirty (30) days
of receiving such notice (or sooner if the nature of the third party claim so
requires), or otherwise contests its obligation to indemnify the Indemnified
Party in connection therewith, the Indemnified Party may, upon providing written
notice to the Indemnifying Party, pay, compromise or defend such third party
claim.  The Indemnified Party shall provide the Indemnifying Party with such
information as the Indemnifying Party shall reasonably request to defend any
such third party claim and shall otherwise cooperate with the Indemnifying Party
in the defense of any such third party claim.  Except as set forth above in this
Section 12G, the Indemnified Party shall not enter into any settlement or other
compromise or consent to a judgment with respect to a third party claim as to
which the Indemnifying Party has an indemnity obligation hereunder without the
prior written consent of the Indemnifying Party (which may not be unreasonably
withheld or delayed), and the entering into any settlement or compromise or the
consent to any judgment in violation of the foregoing shall constitute a waiver
by the Indemnified Party of its right to indemnity hereunder to the extent the
Indemnifying Party was prejudiced thereby.  Any Indemnifying Party shall be
subrogated to the rights of the Indemnified Party to the extent that the
Indemnifying Party pays for any Loss suffered by the Indemnified Party
hereunder.  Notwithstanding anything contained in this Section 12G to the
contrary, Parent, Operator and Delta will cooperate in the defense of any claim
imposed jointly against them or as the result of the conduct of the other.
 
ARTICLE 13
 
WORKERS’ COMPENSATION AND EMPLOYERS’
 
LIABILITY INSURANCE PROVISIONS
 
A. For purposes of workers’ compensation insurance, Delta’s employees, agents
and independent contractors under no circumstances shall be deemed to be, or
shall be, employees, agents or independent contractors of Operator.
 
B. For purposes of workers’ compensation insurance, Operator’s employees, agents
and independent contractors under no circumstances shall be deemed to be, or
shall be, the employees, agents or independent contractors of Delta.
 

 
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C. Each party assumes full responsibility for, and liability to, its own
employees on account of injury, or death resulting therefrom, sustained in the
course of their employment.  Each party, with respect to its own employees,
accepts full and exclusive liability for the payment of applicable workers’
compensation and employers’ liability insurance premiums with respect to such
employees, and for the payment of all taxes, contributions or other payments for
unemployment compensation and old age benefits, and other similar benefits now
or hereafter imposed upon employers by any government or agency thereof having
jurisdiction in respect of such employee.  Each party also agrees to make such
payments and to make and file all reports and returns and to do all things
necessary to comply with all applicable laws at any time imposing such taxes,
contributions, or payments.
 
D. Each party will have their workers’ compensation insurance carrier endorse
its policy to provide a waiver of subrogation against the other party.
 
ARTICLE 14
 
INSURANCE PROVISIONS
 
A. Operator shall procure and maintain in full force and effect during the term
of this Agreement policies of insurance of the types and in the minimum amounts
set forth below:
 
(1) All risk hull insurance and hull war risk insurance on an agreed value
basis, not to exceed replacement value, except as required by financing
agreements.
 
(2) Comprehensive aviation liability (including premises, products and completed
operations) covering bodily injury, personal injury and property damage in an
amount not less than *** per occurrence; provided, however, that non-passenger
personal injury coverage may be limited to $*** per occurrence.
 
(3) Workers’ compensation for statutory limits.
 
(4) Employer’s liability in an amount not less than ***.
 
(5) Baggage liability.
 
(6) Cargo liability in an amount not less than *** per loss, casualty or
disaster.
 
(7) Automobile liability in an amount not less than *** combined single limit
per occurrence.
 
(8) War, Hijacking and Other Allied Perils insurance protecting against the
perils in AVN52D, as amended from time to time, or its U.S. equivalent in an
amount not less than *** per occurrence.  Such insurance may be maintained
through a combination of primary and excess layers.
 

 
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(9) Insurance required by any Facilities Lease.
 
B. Operator shall cause the policies of insurance described in Section 14A above
to be duly and properly endorsed by Operator’s insurance underwriters as
follows:
 
(1) As to the policies of insurance described in Sections 14A(1), A(2), A(3),
A(4), A(5), A(6), A(7) and A(8):  (a) to provide that any waiver of rights of
subrogation against other parties by Operator will not affect the policy
requirements provided in Section 14A above with respect to Delta, its
affiliates, and their directors, officers, employees and agents; and (b) to
provide that Operator’s underwriters shall waive all subrogation rights arising
out of this Agreement against Delta, its affiliates, and their directors,
officers, employees and agents without regard to any breach of warranty on the
part of Operator.
 
(2) As to the policies of insurance described in Sections 14A(2), A(5), A(6),
A(7) and A(8):  (a) to provide that Delta, its affiliates, and their directors,
officers, employees and agents shall be named as additional insured parties
thereunder; and (b) to provide that such insurance shall be primary insurance as
respects any insurance carried by Delta.
 
(3) As to the policies of insurance described in Sections 14A(2), A(7) and
A(8):  (a) to provide a cross-liability clause for Delta and Operator and their
respective affiliates, and their directors, officers, employees and agents; and
(b) to provide contractual liability insurance coverage for liability assumed by
Operator under this Agreement.
 
(4) As to any insurance obtained from foreign underwriters, to provide that
Delta may maintain against such underwriters a direct action in the United
States upon such insurance policies and, to this end, to include a standard
service of process clause designating a United States attorney in Washington,
D.C. or New York, New York.
 
C. Operator shall cause each of the insurance policies to be duly and properly
endorsed to provide that such policy or policies or any part or parts thereof
shall not be canceled, terminated or materially altered, changed or amended by
Operator’s insurance underwriters until after thirty (30) days’ written notice
to Delta, which thirty (30) days’ notice shall commence to run from the date
such notice is actually received by Delta.
 
D. Not later than the Effective Date, and upon renewal thereafter or upon
request by Delta, Operator shall furnish Delta evidence satisfactory to Delta of
the aforesaid insurance coverages and endorsements, including certificates
certifying that the aforesaid insurance policy or policies with the aforesaid
limits are duly and properly endorsed as aforesaid and are in full force and
effect.
 

 
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E. Operator shall not take any action, or fail to take any action, that will
cause the insurance and endorsements required to be maintained by Operator
pursuant to this Agreement to be invalidated.  In the event Operator fails to
maintain in full force and effect any of the insurance and endorsements required
to be maintained by Operator pursuant to Section 14A, Delta shall have the right
(but not the obligation) to procure and maintain such insurance or any part
thereof on behalf of Operator.  The cost of such insurance shall be payable by
Operator to Delta upon demand by Delta.  The procurement of such insurance or
any part thereof by Delta does not discharge or excuse Operator’s obligation to
comply with the provisions set out herein.  Operator agrees not to cancel,
terminate or materially alter, change or amend any of the policies until after
providing thirty (30) days’ advance written notice to Delta of Operator’s intent
to so cancel, terminate or materially alter, change or amend such policies of
insurance, which thirty-day notice period shall commence to run from the date
notice is actually received by Delta.
 
F. With respect to all claims against Operator (but not against Delta) with
respect to which Operator is not entitled to be indemnified by Delta pursuant to
Section 12B, whether or not covered by the insurance policies set forth in this
Article 14 or otherwise, Delta is responsible only for filing an initial report
and has no other obligations with respect to such claims, and Operator is fully
responsible for handling all adjustments, settlements, negotiations, litigation
and similar activities in any way related to or connected with such claims.
 
G. The parties hereby agree that from time to time during the term of this
Agreement Delta may require Operator to procure and maintain insurance coverages
in amounts in excess of the minimum amounts set forth in Section 14A should the
circumstances and conditions of Operator’s operations under this Agreement be
deemed, in Delta’s sole discretion, to require reasonable increases in any or
all of the foregoing minimum insurance coverages; provided that such insurance
coverages are reasonably obtainable in the insurance market and that the costs
thereof are all Pass Through Costs.
 
ARTICLE 15
 
OPERATIONS OF OPERATOR AS A DELTA CONNECTION CARRIER
 
A. Delta and Operator agree that, subject to the provisions of this Agreement,
Operator will operate the Delta Connection Flights exclusively as a Delta
Connection carrier.  Unless otherwise agreed by Delta, Operator will operate all
Delta Connection Flights and the Aircraft with the passenger seat capacity
permitted by law or regulation and otherwise as determined by Delta from time to
time.  Operator shall not change any of the Aircraft specifications without the
prior consent of Delta.
 
B. Operator acknowledges and agrees that participation in the Delta Connection
program obligates Operator to offer and maintain a professional, high quality
level of service in terms of schedules, customer service and the
like.  Accordingly, at the request of Delta, the parties will:  (1) meet to
mutually review and discuss the services, operations and plans of Operator and
Delta for the Delta Connection program; and (2) jointly develop a written
business plan for the Delta Connection operations and services of
Operator.  Operator will comply with the business plans so developed.
 

 
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C. Delta shall have the right, from time to time, to inspect Operator’s Delta
Connection Service, including without limitation Operator’s in-flight service,
flight, maintenance, technical operations, gate-check in service, ground
operations, Aircraft cleaning and any and all other services and operations
performed by Operator in connection with the Delta Connection Flights.  Such
inspections may be announced or unannounced, but under no circumstances shall
they interfere with the operation of Operator’s business.  Failure on the part
of Delta to conduct such inspections shall not relieve Operator of its
obligations to conform with the service and performance standards set forth in
this Agreement.
 
ARTICLE 16
 
REPRESENTATIONS AND WARRANTIES
 
A. Representations; Warranties and Covenants of Parent and Operator.  Each of
Parent and Operator represents and warrants to Delta as of the date hereof as
follows:
 
(1) Organization and Qualification.  Each of Parent and Operator is a duly
organized and validly existing corporation in good standing under the laws of
its state of incorporation and has the corporate power and authority to own,
operate and use its assets and operate the Delta Connection Flights.
 
(2) Authority Relative to this Agreement.  Each of Parent and Operator has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby in accordance with the terms
hereof.  The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of Parent and Operator.  This Agreement has
been duly and validly executed and delivered by each of Parent and Operator and
is, assuming due execution and delivery thereof by Delta and that Delta has full
legal power and right to enter into this Agreement, a valid and binding
obligation of each of Parent and Operator, enforceable against each of them in
accordance with its terms.
 
(3) Conflicts; Defaults.  Neither the execution or delivery of this Agreement
nor the performance by Parent and Operator of the transactions contemplated
hereby will (a) violate, conflict with, or constitute a default under any of the
terms of such entity’s articles of incorporation, by-laws, or any provision of,
or result in the acceleration of any obligation under, any contract, sales
commitment, license, purchase order, security agreement, mortgage, note, deed,
lien, lease, agreement or instrument, including without limitation, any order,
judgment or decree relating to the Delta Connection Flights, (b) result in the
creation or imposition of liens in favor of any third person or entity, (c)
violate any law, statute, judgment, decree, order, rule or regulation of any
governmental authority, or (d) constitute any event which, after notice or lapse
of time or both, would result in such violation, conflict, default, acceleration
or creation or imposition of liens.
 

 
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(4) Broker.  Neither Parent nor Operator has retained or agreed to pay any
broker or finder with respect to this Agreement and the transactions
contemplated hereby.
 
(5) Compliance.  All air transportation services performed pursuant to this
Agreement or otherwise by Operator shall be conducted in full compliance with
all applicable statutes, orders, rules, regulations and notifications, whether
now in effect or hereafter promulgated, of all governmental agencies having
jurisdiction over its operations, including, but not limited to, the FAA, DOD,
and DOT.  Operator’s compliance with such governmental statutes, orders, rules,
regulations and notifications will be the sole and exclusive obligation of
Operator, and Delta will have no obligation, responsibility, or liability,
whether direct or indirect, with respect to such matters.
 
B. Representations and Warranties of Delta.  Delta represents to each of Parent
and Operator as of the date hereof as follows:
 
(1) Organization and Qualification.  Delta is a duly incorporated and validly
existing corporation in good standing under the laws of the State of Delaware
and has the corporate power and authority to own, operate and use its assets and
to operate the Delta Connection program.
 
(2) Authority Relative to this Agreement.  Delta has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof.  The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Delta.  This Agreement has been duly and validly
executed and delivered by Delta and is, assuming due execution and delivery
thereof by Parent and Operator and that each of Parent and Operator has full
legal power and right to enter into this Agreement, a valid and binding
obligation of Delta, enforceable against Delta in accordance with its terms.
 
(3) Conflicts; Defaults.  Neither the execution or delivery of this Agreement
nor the performance by Delta of the transactions contemplated hereby will (a)
violate, conflict with, or constitute a default under any of the terms of
Delta’s articles of incorporation, by-laws, or any provision of, or result in
the acceleration of any obligation under, any contract, sales commitment,
license, purchase order, security agreement, mortgage, note, deed, lien, lease,
agreement or instrument, including without limitation, any order, judgment or
decree relating to the Delta Connection Flights, (b) result in the creation or
imposition of any liens in favor of any third person or entity, (c) violate any
law, statute, judgment, decree, order, rule or regulation of any governmental
authority, or (d) constitute any event which, after notice or lapse of time or
both, would result in such violation, conflict, default, acceleration or
creation or imposition of liens.
 

 
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(4) Broker.  Delta has not retained or agreed to pay any broker or finder with
respect to this Agreement and the transactions contemplated hereby.
 
(5) Compliance.  All air transportation-related actions performed pursuant to
this Agreement or otherwise by Delta shall be conducted in full compliance with
all applicable statutes, orders, rules, regulations and notifications, whether
now in effect or hereafter promulgated, of all governmental agencies having
jurisdiction over its operations, including, but not limited to, the FAA, DOD,
and DOT.  Delta’s compliance with such governmental statutes, orders, rules,
regulations and notifications will be the sole and exclusive obligation of
Delta, and neither Parent nor Operator will have any obligation, responsibility,
or liability, whether direct or indirect, with respect to such matters.
 
ARTICLE 17
 
COVENANTS OF OPERATOR
 
Operator hereby covenants and agrees that:
 
A. If requested by Delta at any time during the Term of this Agreement, Operator
shall place its flight designator code on certain flights operated by Delta or
an affiliate of Delta.
 
B. During the Term of this Agreement, Operator shall not, on the same operating
certificate as the Aircraft, own, lease or operate for any purpose any aircraft,
whether for itself, Delta or another carrier, that will cause Delta to be in
violation of its collective bargaining agreement with its pilots in effect as of
the date hereof, or, with respect to Operator’s commencing the ownership, lease
or operation of a new type or size aircraft in the future, as such agreement may
have been amended at such time.  In furtherance of the above, if during the term
of this Agreement, Operator operates a jet aircraft certificated in the United
States with a Maximum Gross Take Off Weight greater than *** and certificated
for *** or fewer passenger seats but configured with *** or fewer passenger
seats for itself or a carrier other than Delta or an affiliate of Delta, then
Operator shall not operate any jet aircraft configured with between *** and ***
passenger seats for itself or a carrier other than Delta or an affiliate of
Delta in any city pair that is served, on a non-stop basis by Delta or an
affiliate of Delta.
 
C. Operator shall not enter into any binding agreement or arrangement (or series
of agreements or arrangements) with any third party (excluding any employee
collective bargaining units) for the procurement of any goods or services
relating to Operator, the Aircraft or operation of any of the Delta Connection
Flights that will result in a material increase in Operator’s Pass Through Costs
to perform its services hereunder without the prior written consent of Delta,
which consent shall not be unreasonably withheld and shall be provided in a
timely manner in order to permit Operator to satisfy its obligations hereunder
(it being understood that Delta’s consent shall not be required if Operator does
not pass any such increased costs to Delta as Pass Through Costs).
 

 
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D. At the request of Delta, Operator agrees to enter into such agreement(s) with
another air carrier as may be necessary to implement share code-sharing on the
Delta Connection Flights with such other air carrier.
 
E. Operator agrees that any pilot furloughed by Delta will be given preferential
new hire opportunities at Operator if such pilot completes all new hire paper
work, meets all new hire airman and medical qualifications, satisfies background
checks and successfully completes an interview and employment process, subject
to any other preferences arising from existing contractual arrangements to which
Parent or Operator is currently a party as of the Agreement Date.  Operator and
Delta shall determine and implement mutually acceptable procedures and processes
to effectuate the new hire opportunity commitment set forth above.  Delta agrees
to offer preferential interviews for employment to airmen employed by Operator,
subject to Delta’s objectives for diversity and experience among newly hired
pilots.
 
F. Operator shall file all reports and plans relating to its operations with the
DOD, DOT, FAA, NTSB or any state or airport authority, and Operator shall
promptly furnish Delta with copies of all such reports and such other available
traffic and operating reports as Delta may request from time to
time.  Additionally, Operator will promptly furnish Delta with a copy of every
report and plan that Operator prepares, whether or not such report is filed with
the FAA, NTSB or any other governmental agency, relating to any accident or
incident involving an Aircraft when such accident or incident is claimed to have
resulted in the death or injury to any person or the loss of, damage to or
destruction of any property.
 
G. All flight operations, dispatch operations and flights and all other
operations undertaken by Operator pursuant to this Agreement shall be conducted
and operated by Operator in strict compliance with all Governmental Regulations,
including, without limitation, those relating to airport security, the use and
transportation of hazardous materials, flight crew and mechanic qualifications
and licensing requirements, crew training and hours.  All Aircraft shall be
operated and maintained by Operator in strict compliance with all Minimum
Maintenance Standards, all Governmental Regulations, Operator’s own operations
manuals and maintenance manuals and procedures, and all applicable equipment
manufacturer’s instructions.  No later than one (1) year after the Effective
Date, Operator shall apply and close out its inspection to establish its
registration as an IOSA Operator and maintain such registration at all times
thereafter during the Term.  At all times, Operator shall operate with the
highest standards of care.
 

 
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H. In the event Parent is no longer a public reporting company, Operator shall
furnish to Delta (1) within forty-five (45) days after the end of each of the
three interim calendar quarters, unaudited financial statements including
Operator’s then current corporate balance sheet and profit and loss statement
and (2) within ninety-one (91) days after the end of Operator’s fiscal year,
Operator’s then current, audited financial statements including, either
separately or on a consolidated basis, the balance sheet and the profit and loss
statement, together with associated footnotes, and a copy of the independent
auditor’s report.  Notwithstanding the reporting status of Parent, Operator
shall furnish to Delta within ninety-one (91) days after the end of Operator’s
fiscal year, a profit and loss statement with respect to Operator’s Delta
Connection operations prepared by the rules and regulations promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and certified by Operator’s chief financial officer.
 
ARTICLE 18
 
CONTRACT INTERPRETATION
 
A. This Agreement is subject to, and will be governed by and interpreted in
accordance with, the laws of the State of New York, excluding conflicts of laws
principles, and of the United States of America.  Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may only be brought in the courts of the State of New York in New York
County, or, if it has or can acquire jurisdiction, in the United States District
Court for the Southern District of New York, and each of the parties hereto
irrevocably consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives, to
the fullest extent permitted by law, any objection to venue laid
therein.  Process in any action or proceeding referred to in the proceeding
sentence may be served on any party anywhere in the world.  Each party further
agrees to waive any right to a trial by jury.
 
B. The descriptive headings of the several articles and sections of this
Agreement are inserted for convenience only, confer no rights or obligations on
either party, and do not constitute a part of this Agreement.
 
C. Time is of the essence in interpreting and performing this Agreement.
 
D. This Agreement (including the Exhibits and Schedules hereto) constitutes the
entire understanding between the parties with respect to the subject matter
hereof, and any other prior or contemporaneous agreements, whether written or
oral, are expressly superseded hereby.
 
E. If any part of any provision of this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity or unenforceability only, without in any way affecting the
remaining parts of such provision or the remaining provisions.
 
F. This Agreement may be executed in any number of counterparts, including via
facsimile, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.
 

 
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G. Because a breach of the provisions of this Agreement could not adequately be
compensated by money damages, any party shall be entitled to an injunction
restraining such breach or threatened breach and to specific performance of any
provision of this Agreement and, in either case, no bond or other security shall
be required in connection therewith, and the parties hereby consent to the
issuance of such injunction and to the ordering of specific performance.
 
H. NO PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES, INCLUDING LOST REVENUES, LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC
ADVANTAGE, ARISING FROM THIS AGREEMENT OR ANY BREACH HEREOF.
 
ARTICLE 19
 
CIRCUMSTANCES BEYOND THE PARTIES’ CONTROL
 
With the exception of outstanding rights and obligations, and subject to
Section 0 hereof, each party will be relieved of its obligations under this
Agreement in the event, to the extent and for the period of time that
performance is delayed or prevented caused by any acts of God, acts of terrorism
or hostilities, war, strike, labor disputes, work stoppage, fire, act of
government, court order, or any other act reasonably beyond the control of that
party, including but not limited to, non-delivery or delay in delivery of the
Aircraft or delay in the completion of required training of the Operator’s
employees by the Aircraft manufacturer (each, a “Force Majeure Event”).
 
ARTICLE 20
 
NO LICENSE GRANTED
 
A. This Agreement is not, and shall not be construed to be, a license for either
party to use the trade names, trademarks, service marks, or logos of the other
party, or its affiliates, without such party’s prior written consent.
 
B. Operator will conduct all operations described herein under the service mark
“Delta Connection.”  Delta hereby grants to Operator a nonexclusive,
nontransferable, non-sublicensable license to use certain trademarks, service
marks, logos and trade names that Delta owns or has the right to use, including,
“Delta,” “Delta Connection,” “SkyMiles,” and the Delta widget design
(collectively, the “Delta Marks”) in connection with the services to be rendered
by Operator pursuant to this Agreement; provided, however, that at any time
during the Term of this Agreement, Delta may alter, amend or revoke the license
hereby granted and require Operator’s use of a new or different Delta Mark in
connection with the services provided hereunder as Delta may determine in its
sole discretion.
 

 
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C. Operator hereby acknowledges Delta’s right to use the Delta Marks, further
acknowledges the validity of the Delta Marks, and agrees that it will not do
anything in any way to infringe or abridge Delta’s, or any of its affiliates’,
rights in the Delta Marks or directly or indirectly to challenge the validity of
the Delta Marks.
 
D. Except as set forth in Section 20B above, Operator shall not use any of the
Delta Marks without Delta’s prior written consent.
 
E. Nothing in this Agreement shall be construed to give Operator the exclusive
right to use any of the Delta Marks, or to abridge Delta’s right to use or
license any of its trademarks, service marks, trade names or logos
(collectively, “Identification”) and to license such other uses of such
Identification as Delta or its affiliates may desire.
 
F. Should this Agreement be canceled or otherwise terminated for any reason as
set forth in Article 11 hereof, all right to use the Delta Marks shall revert to
Delta and shall not thereafter be used by Operator in any form or fashion.
 
G. Branding.
 
(1) Livery.  Each of the Aircraft shall be in the color scheme, including
exterior paint and interior upholstery and appointments (“Livery”) of the Delta
Connection Livery, as provided by Delta to Operator from time to time.  Any
changes to the initial Livery of any of the Aircraft shall be done on a schedule
as mutually agreed by the parties, and at Delta’s cost.
 
(2) On Board Branding.  Delta shall control all on board branding and in-flight
materials including, without limitation, in-flight publications, food and
beverage products, paper goods and service ware.  In the event of any change to
the on-board branding or in-flight materials, Delta shall be responsible for
reimbursing Operator for any reasonable costs and expenses incurred by Operator
in connection therewith.  Operator shall be solely responsible for maintaining
all licenses necessary for the serving of in-flight food and beverages on the
Delta Connection Flights.
 

 
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ARTICLE 21
 
MODIFICATION AND WAIVER
 
No amendment, modification, supplement, termination or waiver of any provision
of this Agreement, and no consent to any departure by either party therefrom,
shall in any event be effective unless in writing signed by authorized
representatives of both parties, and then only in the specific instance and for
the specific purpose given.
 
ARTICLE 22
 
NOTICES
 
Unless otherwise provided herein, all notices, requests and other communications
required or provided for hereunder shall be in writing (including telecopy or
similar teletransmission or writing) and shall be given at the following
addresses:
 
(1) If to Delta:
 
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia  30354
Dept. 915
Attn: Vice President – Delta Connection
Telecopy: 404.677.6247

with copies to:

Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia  30354
Dept. 981
Attn: Executive V.P. and General Counsel
Telecopy: 404.715.2233

(2) If to Parent or Operator:
 
Pinnacle Airlines Corp.
1689 Nonconnah Boulevard
Suite 111
Memphis, Tennessee  38132
Attention:  Chief Financial Officer and General Counsel
Telecopy:  901.348.4262

 
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with copies to:

Kevin P. Lewis
Vinson & Elkins LLP
1001 Fannin Street
2500 First City Tower
Houston, Texas  77002
Telecopy:  713.615.5967

Any such notice, request or other communication shall be effective (a) if given
by mail, upon the earlier of receipt or the third business day after such
communication is deposited in the United States mails, registered or certified,
with first class postage prepaid, addressed as aforesaid or (b) if given by any
other means including, without limitation, by air courier, when delivered at the
address specified herein.  Delta or Operator may change its address for notice
purposes by notice to the other party in the manner provided herein.
 
ARTICLE 23
 
ASSIGNMENT
 
This Agreement shall bind and inure to the benefit of Delta, Parent and, subject
to Article 27 below, Operator, and their respective successors and assigns;
provided, however, neither party may assign or transfer this Agreement or any
portion hereof to any person or entity except as provided in Article 27 or
otherwise without the express written consent of the other party.  Any
assignment or transfer, by operation of law or otherwise, without such consent
shall be null and void and of no force or effect.
 
ARTICLE 24
 
GOOD FAITH
 
Each party shall exercise good faith in its dealings with the other party hereto
and in performance of its obligations under this Agreement.
 

 
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ARTICLE 25
 
CONFIDENTIALITY
 
A. Except as otherwise provided below, each party shall, and shall ensure that
its directors, officers, employees, affiliates and professional advisors
(collectively, the “Representatives”), at all times, maintain strict confidence
and secrecy in respect of all Confidential Information (as defined below) of the
other party (including its affiliates) received directly or indirectly as a
result of this Agreement.  If a party (the “Disclosing Party”) in good faith
determines that it is required to disclose any Confidential Information of other
party (the “Affected Party”) in order to comply with any applicable law or
government regulation, or under the terms of a subpoena or order issued by a
court or governmental body, it shall (1) notify the Affected Party immediately
of the existence, terms and circumstances surrounding such request, (2) consult
with the Affected Party on the advisability of taking legally available steps to
resist or narrow such request and (3) if any disclosure of Confidential
Information is required to prevent the Disclosing Party from being held in
contempt or subject to other legal penalty, furnish only such portion of the
Confidential Information as it is legally compelled to disclose and use
commercially reasonable efforts (at the cost of the party whose Confidential
Information is being protected) to obtain an order or other reliable assurance
that confidential treatment shall be accorded to the disclosed Confidential
Information.  Each party agrees to transmit Confidential Information only to
such of its Representatives as required for the purpose of implementing and
administering this Agreement, and shall inform such Representatives of the
confidential nature of the Confidential Information and instruct such
Representatives to treat such Confidential Information in a manner consistent
with this Article 25.
 
For purposes of this Agreement, “Confidential Information” shall mean (a) all
confidential or proprietary information of a party, including, without
limitation, trade secrets, information concerning past, present and future
research, development, business activities and affairs, finances, properties,
methods of operation, processes and systems, customer lists, customer
information (such as passenger name record or “PNR” data) and computer
procedures and access codes; and (b) the terms and conditions of this Agreement
and any reports, invoices or other communications between the parties given in
connection with the negotiation or performance of this Agreement; and (c)
excludes:  (i) information already in a party’s possession prior to its
disclosure by other party; (ii) information obtained from a third person or
entity that is not prohibited from transmitting such information to the
receiving party as a result of a contractual, legal or fiduciary obligation to
the party whose information is being disclosed; (iii) information that is or
becomes generally available to the public, other than as a result of disclosure
by a party in violation of this Agreement; or (iv) information that has been or
is independently acquired or developed by a party, or its affiliate, without
violating any of its obligations under this Agreement.
 

 
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Notwithstanding the provisions of this Section 25A to the contrary, the parties
acknowledge that this Agreement may constitute a material contract for purposes
of Parent’s disclosure obligations arising under the Securities Act of 1933, as
amended, and/or the Securities Exchange Act of 1934, as amended, and that Parent
may make any such required disclosure, subject to the prior review by, and
meaningful consultation with, Delta.
 
B. Each party acknowledges and agrees that in the event of any breach of this
Article 25, the Affected Party shall be irreparably and immediately harmed and
could not be made whole by monetary damages.  Accordingly, it is agreed that, in
addition to any other remedy at law or in equity, the Affected Party shall be
entitled to an injunction or injunctions (without the posting of any bond and
without proof of actual damages) to prevent breaches or threatened breaches of
this Article 25 and/or to compel specific performance of this Article 25.
 
C. The confidential obligations of the parties under this Article 25 shall
survive the termination or expiration of this Agreement.
 
ARTICLE 26
 
ANCILARY ARRANGEMENTS
 
A. During the Term, Operator shall each be entitled to make available for its
eligible employees the travel privileges set forth on Schedule 26 attached
hereto in accordance with the terms and conditions set forth therein (the
“Employee Pass Travel Privileges”).  Delta shall have the right, in its sole
discretion, to change, alter, modify, reduce or discontinue the Employee Pass
Travel Privileges at any time upon no less than sixty (60) days prior written
notice to Operator.
 
B.           Delta and Operator shall enter into a separate written agreement
with respect to emergency response and family assistance services to be provided
to Operator by Delta at no charge in connection with the Delta Connection
Flights operated under this Agreement.
 
ARTICLE 27
 
PARENT GUARANTEE AND CHANGE OF OPERATOR
 
A. Parent hereby unconditionally and irrevocably guarantees to Delta the due and
punctual performance by Operator of each of Operator’s obligations, agreements
and covenants arising under this Agreement and under each term and condition
hereof (collectively, the “Obligations”).  If Operator shall fail or be unable
to perform any such Obligation as and when the same shall be required to be
performed, then Parent, at its sole cost and expense, shall be obligated to
promptly perform or cause to be promptly performed each such Obligation in
accordance with the terms hereof and thereof.  This guaranty is a guaranty of
payment, performance and compliance and not of collectibility and is in no way
conditioned or contingent upon any attempt to collect from or enforce
performance or compliance by Operator or upon any other event or condition
whatsoever.  If for any reason any payment Obligation amount shall not be paid
by Operator when due, Parent shall immediately pay such amount to the person
entitled thereto pursuant to this Agreement, as if such amount constituted the
direct and primary obligation of Parent and regardless of whether any person has
taken any steps to enforce any rights against Operator to collect such amount.
 

 
40

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B. To the fullest extent permitted under applicable law, the obligations of
Parent hereunder shall be absolute and unconditional, shall be continuing and
remain in full force and effect until final and irrevocable payment or
performance, and shall not be released, discharged, affected or impaired in any
respect by:  (1) any amendment, modification, or cancellation of, or addition or
supplement to this Agreement; (2) any exercise, acceleration, extension,
compromise, settlement, non-exercise, waiver, release, or cancellation by Delta
of any right, remedy, power or privilege under or related to this Agreement or
any other guaranty of any obligations of Operator; (3) the invalidity or
unenforceability, in whole or in part, of this Agreement; (4) any change in the
corporate existence, structure or ownership of Operator or Parent or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
either of them or their assets; or (5) any other occurrence, circumstance,
happening or event whatsoever, whether similar or dissimilar to the foregoing,
whether foreseen or unforeseen, and any other circumstance which might otherwise
constitute a legal or equitable defense, release or discharge of the liabilities
of a guarantor or surety, or which might otherwise limit recourse against
Parent.  If acceleration of the time for the performance or payment of any
Obligation is stayed upon the insolvency, bankruptcy or reorganization of
Operator, all Obligations that are subject to acceleration under the terms of
this Agreement shall nonetheless be performed or payable hereunder by Parent.
 
C. Parent hereby specifically agrees that it shall not be necessary or required
as a condition to enforcement of the obligations hereunder against it, that
there be (and Parent, to the fullest extent permitted by applicable law,
specifically waives) diligence, presentment, or protest of any kind whatsoever
with respect to this guaranty by Parent or the Obligations; such waiver
includes, without limitation:  (1) presentment for payment upon Operator or
Parent or the making of any protest; (2) any requirement to exhaust any remedies
exercisable upon a default under this Agreement or to give any notice of
non-performance or non-payment; (3) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge, release or defense of a
guarantor or surety; or (4) so long as any Obligation remains outstanding, any
right of subrogation by virtue of any performance or payment made
hereunder.  Parent agrees that any payment or performance of the Obligations
guaranteed hereunder or other act that tolls any statute of limitations
applicable to enforcement of the Obligations shall similarly operate to toll any
statute of limitations applicable to any liability of Parent pursuant to this
Article 27.  In addition, to the fullest extent permitted by applicable law,
Parent waives the benefit and advantage of any and all valuation, stay,
appraisement, extension or redemption laws which, but for this provision,
agreement and waiver, might be applicable to any sale made under any judgment,
order or decree of any court or otherwise based on the guaranty of Parent
pursuant to this Article 27.  All waivers made by Parent in this Section 27C and
elsewhere throughout this Article 27 are intentional and made by Parent after
due consideration of all the consequences thereof.
 
D. All of the terms and conditions of this Article 27 shall be binding upon and
shall inure to the benefit of the respective successors and assigns of the
parties; provided that Parent may not assign, delegate or otherwise transfer any
of its rights or obligations hereunder without the consent of Delta.
 
 

 
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IN WITNESS WHEREOF, the parties have executed this Agreement by their
undersigned duly authorized representatives:
 
MESABA AVIATION, INC.

By: ***
Name: ***
Title:  Vice President

PINNACLE AIRLINES CORP.

By: ***
Name: ***
Title:  Vice President and General Counsel

DELTA AIR LINES, INC.

By: ***
Name: ***
Title: Senior Vice President – Delta Connection

--
 

 
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EXHIBIT A
 

 
AIRCRAFT
 
N422XJ
N423XJ
N424XJ
N417XJ
N426XJ
N427XJ
N428XJ
N429XJ
N430XJ
N433XJ
N434XJ
N435XJ
N436XJ
N437XJ
N438XJ
N439XJ
N441XJ
N442XJ
N443XJ
N444XJ
N445XJ
N446XJ
N447XJ
N448XJ
N449XJ
N450XJ
N451XJ
N452XJ
N453XJ
N454XJ
N456XJ
N457XJ

 

 

 

 

--
 
 
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EXHIBIT A-1
 

 
Retirement Dates
 

 
Aircraft
Retirement Date
N422XJ
***
N423XJ
***
N424XJ
***
N417XJ
***
N426XJ
***
N427XJ
***
N428XJ
***
N429XJ
***
N430XJ
***
N433XJ
***
N434XJ
***
N435XJ
***
N436XJ
***
N437XJ
***
N438XJ
***
N439XJ
***
N441XJ
***
N442XJ
***
N443XJ
***
N444XJ
***
N445XJ
***
N446XJ
***
N447XJ
***
N448XJ
***
N449XJ
***
N450XJ
***
N451XJ
***
N452XJ
***
N453XJ
***
N454XJ
***
N456XJ
***
N457XJ
***

 

 

--
 
 
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Exhibit B
 

 
***
 

 

 

 

--
 
 
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Exhibit C
 

 
RES SYSTEM EQUIPMENT
 

 
Equipment, as defined in Section 9(B)(1) of the Agreement, may be provided to
Operator by Delta for installation at one or more of the following locations of
Operator:
 

 
1.  
Headquarters

 
2.  
Dispatch

 
3.  
Training

 
4.  
Maintenance base for the Aircraft

 
5.  
Stations handled by Operator, if any.

 
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 Schedule 10
 
MIMIMUM PERFORMANCE REQUIREMENTS
 
The minimum performance requirements will not apply during a performance period
when there are ten (10) Aircraft or less under this Agreement.
 

 
1.  Completion Rate (actual):  ***or greater.
 

 

 
2.  On-time Arrivals:  *** of all flights flown or greater.
 

 

 

 
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Schedule 26
 
Pass Travel Privileges
 
DELTA CONNECTION EMPLOYEE NON-REVENUE SPACE AVAILABLE PASS TRAVEL POLICIES
 
Effective Date:  June 1, 2009
 
***
 

 
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