Exhibit 10.82

 
 
EXECUTION COPY

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.

2010 DELTA CONNECTION AGREEMENT
 
by and among
 
PINNACLE AIRLINES CORP.
 
PINNACLE AIRLINES, INC.,
 
MESABA AVIATION, INC.
 
and
 
DELTA AIR LINES, INC.
 
 
Dated as of July 1, 2010
 

 
 
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2010 DELTA CONNECTION AGREEMENT
 
THIS 2010 DELTA CONNECTION AGREEMENT (the “Agreement”), dated and effective the
1st day of July, 2010, 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,
TN  38132 (“Parent”), Pinnacle Airlines, Inc., whose principal address is 1689
Nonconnah Boulevard, Suite 111, Memphis, TN  38132 (“Pinnacle”) and Mesaba
Aviation, Inc., whose principal address is 1000 Blue Gentian Road, Suite 200,
Eagan, MN 55121 (Mesaba”).
 
WITNESSETH:
 
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;
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Parties, intending to
be legally bound, do hereby agree as follows:
 
                 ARTICLE I                      
 
DEFINITIONS
 
Section 1.01 Definitions.  For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
 
1.  
the terms as defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;

 
2.  
all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles; and

 
3.  
the words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular Article or other
subdivision; and

 
4.  
Exhibit A includes defined terms that have meanings assigned to them in such
Exhibit.

 

 
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“2007 CRJ-900 Delta Connection Agreement” means that certain Delta Connection
Agreement, as amended from time to time, dated as of April 27, 2007 by and among
Delta, Parent and Pinnacle.
 
“Accident” means an ***.
 
“ACARS” means the Aircraft Communications Addressing and Reporting System, or
any replacement system, which provides datalink communications between the
Aircraft and the applicable Operator with respect to operational matters.
 
“Affiliate” means, as applied to a Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.  For purposes of this definition “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities, by contract or
otherwise.
 
“Aggregated CRJ900 Delta Connection Flights” means the Scheduled Flights and the
“Delta Connection Flights” (as defined in the 2007 CRJ-900 Delta Connection
Agreement) scheduled pursuant to the 2007 CRJ-900 Delta Connection Agreement.
 
“Air Navigation Fees” means fees or charges assessed on air operators by a
governmental authority to recover the costs for the provisions or availability
of air navigation services provided by such governmental authority.
 
“Aircraft” means the (i) forty-one (41) CRJ900 aircraft (including airframe and
on-wing engines) in Mesaba’s Delta Connection fleet as of the Effective Date as
set forth on Schedule 1-A attached hereto and made a part hereof and (ii) any
additional aircraft to be mutually agreed between the Parties, including
airframe and on-wing engines, when and as such aircraft are added to an
Operator’s Delta Connection fleet pursuant to Section 3.02.  Any Aircraft
removed from an Operator’s fleet shall cease to be an “Aircraft” hereunder upon
the date of removal of such Aircraft from scheduled operations (other than for
maintenance).
 
“Aircraft Rental Expense” means the Basic Rent charged in the Leases between
Delta and the applicable Operator with respect to each of the Aircraft.
 
 “Airport Landing Fees” means all landing fees, aircraft rescue and fire
fighting (ARFF) fees, airport user fees and other airfield assessments to the
extent such fees and assessments are attributable to or a result of Regional
Airline Services.
 
“Basic Rent” shall have the meaning ascribed to such term in the Leases.
 
 “Block Hour” means the period of time (in minutes) beginning when an Aircraft
first moves from the ramp blocks in connection with an operated Scheduled
Flight, a Non-Scheduled Flight or a Charter Flight and ending when the Aircraft
next comes to a stop at the ramp blocks at any station or other point of
termination as recorded by ACARS or another mutually agreed system, divided by
sixty (60).
 

 
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  “Charter Flights” means revenue passenger flights using the Aircraft (other
than Scheduled Flights).
 
“Colgan” means means Colgan Air, Inc., a Virginia corporation and wholly-owned
subsidiary of Parent.
 
“COMAT” means company material, including but not limited to priority aircraft
maintenance parts.
 
 “CRJ900 Spare Engine Rental Expense” means the Basic Rent set forth in the
Leases between Delta and the applicable Operator for each of the CRJ900 Spare
Engines.
 
“CRJ900 Spare Engines” means (i) the one (1) General Electric CF34-8C5 spare
engine in Mesaba’s Delta Connection fleet as of the Effective Date as set forth
on Schedule 1-B attached hereto and made a part hereof and (ii) any additional
spare engines to be mutually agreed between the Parties when and as such spare
engines are added to the fleet of Aircraft covered by this Agreement pursuant to
Section 3.02(a)(ii).  Any CRJ900 Spare Engine removed from the fleet of Aircraft
covered by this Agreement shall cease to be an “CRJ900 Spare Engine” hereunder
upon the date of removal of such engine from scheduled operations (other than
for maintenance).
 
 “Cycle” means an actual takeoff at an origin city and landing at a destination
city of an Aircraft in connection with a Scheduled Flight, a Non-Scheduled
Flight or a Charter Flight.
 
 “Dangerous Goods” shall have the meaning ascribed to such term in Section 1.0
of the Dangerous Goods Regulations of the International Air Transport
Association (“IATA”), as such term may be amended from time to time by IATA.
 
“Data Communication Equipment” shall have the meaning ascribed to such term in
Section 4.04.
 
“Default” means the occurrence of an event set forth in Section 10.02 or Section
10.03, and the expiration of any cure period provided therein without cure or
other remedial action having occurred, permitting termination of this Agreement.
 
“Delta Connection Carrier” means an airline operating regional jet and/or
turboprop air transportation services as a Delta Connection carrier pursuant to
a Delta Connection agreement or other similar airline services agreement between
such airline and Delta.
 
“Delta Connection Safety Standards” shall have the meaning ascribed to such term
in Section 2.09.
 
“Delta Identification” means any Identification designated by Delta from time to
time in its sole discretion for use by an Operator in connection with the
Regional Airline Services (including without limitation “Delta Connection” or
any similar or successor name).
 
“Designator” means “DL” or such other designator code designated by Delta from
time to time in its sole discretion to identify Delta’s flights.
 

 
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“Direct Costs” means Delta’s, an Operator’s or Parent’s, as applicable, actual
paid or accrued cost incurred for goods and services without any, with respect
to Direct Costs of an Operator, added surcharge for administrative or general
overhead expenses of such Operator.
 
“Direct Expenses” shall have the meaning ascribed to such term in Exhibit A.
 
 “DOT” means the United States Department of Transportation or any successor
agency to its functions with respect to the regulation of air transportation.
 
“DOT Certification” means any and all certifications and approvals by the DOT,
the FAA and other regulatory agencies required for an Operator to operate the
Aircraft and to perform pursuant to the terms of this Agreement and all
Governmental Regulations.
 
 “Effective Date” means the date specified in Section 10.01 of this Agreement.
 
“Equipment” means the Aircraft, the CRJ900 Spare Engines and QECs.
 
 “FAA” means the Federal Aviation Administration or any successor organization
or agency.
 
 “GAAP” means generally accepted accounting principles at the time prevailing in
the United States for companies engaged in businesses similar to that of the
applicable Operator, consistently applied.
 
“Governmental Authority” means any foreign or United States federal or state (or
any subdivision thereof), agency, authority, bureau, commission, department or
similar body or instrumentality thereof, or any governmental court or tribunal.
 
“Governmental Regulations” means the rules and regulations prescribed by an
airport authority at a Service City or by any local, state or federal unit of
government having authority and jurisdiction to regulate the business and
affairs of an air carrier having DOT Certification, including without
limitation, the DOT, DOD and the FAA.
 
“Ground Handling Functions” means the ground handling functions performed in
connection with the Regional Airline Services, including, but not limited to,
the following:  (i) gate check-in activities, (ii) passenger enplaning/deplaning
activities, (iii) sky cap and wheelchair services, (iv) aircraft
loading/unloading services, included but not limited to airside busing, (v)
passenger ticketing, (vi) jetbridge maintenance, (vii) janitorial services,
(viii) deicing services, (ix) pushback, tow or taxi, (x) airstarts, and (xi)
aircraft overnight cleaning, including lavatory service and water service, but
excluding turn cleaning unless otherwise directed by Delta.
 

 
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“Hub Locations” means each of Atlanta (ATL), Cincinnati (CVG), Detroit (DTW),
Los Angeles (LAX), New York-John F. Kennedy (JFK), New York-LaGuardia (LGA),
Memphis (MEM), Minneapolis (MSP) and Salt Lake City (SLC) and any other airport
which has an average fifty (50) or more departures per day that are operated by
Delta or one or more Delta Connection Carrier under the Designator.  If any Hub
Location has an average of fewer than fifty (50) departures per day that are
operated by Delta or one or more Delta Connection Carrier under the Designator,
such Hub Location shall not be considered a Hub Location for purposes of this
Agreement until such Hub Location returns to having an average fifty (50) or
more departures per day that are operated by Delta or one or more Delta
Connection Carrier under the Designator.
 
“Identification” means a trade name, trademark, service mark, graphic, logo,
distinctive color scheme or other trade dress, domain name, aircraft livery
and/or other identification or indication of source or origin.
 
“Lease” means (i) the leases, subleases and/or sub-subleases (including any and
all amendments thereto) in effect as of the Effective Date by and between Delta
(or an Affiliate of Delta) and Mesaba in respect of the Aircraft, (ii) the
leases, subleases and/or sub-subleases (including any and all amendments
thereto) in effect as of the Effective Date by and between Delta (or an
Affiliate of Delta) and Mesaba in respect of CRJ900 Spare Engines and QECs.
 
“Maintenance Facilities” shall have the meaning ascribed to such term in Section
4.03(i).
 
“Maintenance Program” shall have the meaning ascribed to such term in the
Leases.
 
“Non-Scheduled Flights” means all flights using the Aircraft which are not
Scheduled Flights or Charter Flights.
 
“Operator” means, respectively, each of Mesaba and Pinnacle, but only while such
Party is operating one or more of the Aircraft and providing all or part of the
Regional Airline Services hereunder.
 
“Operator Identification” means any Identification selected by Mesaba or
Pinnacle, respectively, from time to time for use in connection with the
business of Mesaba or Pinnacle, respectively, including without limitation (i)
with respect to Mesaba, “Mesaba,” “Mesaba Airlines,” “Mesaba Aviation, Inc.,” or
any similar name and (ii) with respect to Pinnacle, “Pinnacle,” “Pinnacle
Airlines” or any similar name.
 
“Operator Non-Cancelled Flight” shall have the meaning ascribed to such term
in  Section 2.11(a).
 
“Party” means, respectively, each of Delta, Parent, Mesaba and Pinnacle.
 
 “Performance Period” means each calendar month or portion thereof occurring
during the Term of this Agreement.
 
“Person” means an individual, partnership, corporation, business trust, joint
stock company, limited liability company, unincorporated association, joint
venture or other entity of whatever nature.
 

 
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“Pinnacle Party” means, respectively, each of Parent, Mesaba and Pinnacle.
 
 “QECs” means quick engine change kits.
 
“Regional Airline Services” means the provisioning by the Operators to Delta of
Scheduled Flights and Charter Flights using the Aircraft, and all related
activities, in accordance with this Agreement.
 
“Revenue Passenger” means a revenue passenger flown on a Scheduled Flight or a
Charter Flight.
 
“SAAB Agreement” means that certain SAAB 340B+ Delta Connection Agreement of
even date hereof by and among Delta, parent and Mesaba.
 
 “Scheduled Flights” means revenue passenger flights (other than Charter
Flights) using an Aircraft which, regardless of frequency, and published in the
customary and applicable schedule distribution systems, such as the Official
Airline Guide (“OAG”), or published by Delta in its own system timetables.
 
“Second Amended and Restated Airline Services Agreement” means that certain
Second Amended and Restated Airline Services Agreement of even date hereof by
and among the Parties.
 
“Service Cities” means those cities identified from time to time by Delta to
which the Operators shall provide Regional Airline Services.
 
“Support Agreements” shall have the meaning ascribed to such term in Section
3.10.
 
“Term” shall have the meaning ascribed to such term in Section 10.1.
 
“Termination Date” means the date on which this Agreement terminates pursuant to
Article X.
 
“Ticket Taxes and Fees” means any taxes pursuant to Sections 4261 or 4271 of the
U.S. Internal Revenue Code of 1986, as amended or succeeded, on any amounts paid
by customers for transportation of persons or packages by air, and any passenger
facility charges, airport improvement fees, security fees or charges, stamp
taxes, excise taxes, value-added taxes (in the nature of a sales or use tax),
gross receipts taxes (in the nature of a sales or use tax), U.S. APHIS user and
aircraft inspection fees, U.S. Customs user fees, U.S. Immigration user fees,
and any other taxes and/or user fees imposed by any domestic or foreign
governmental entity, airport or taxing authority on a per-passenger basis on any
travel or on any amounts paid by customers for transportation of persons or
packages by air.
 
 “TSA” means the United States Transportation Security Administration or any
successor governmental organization or agency.
 

 
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ARTICLE II                                
 
PROVISION OF REGIONAL AIRLINE SERVICES
 
Section 2.01 Operation of Scheduled Flights.
 
(a) Subject to the terms and conditions of this Agreement, the Operators shall
use the Aircraft to operate Scheduled Flights and Charter Flights as shall be
designated by Delta from time to time in Delta’s sole discretion.  Delta, in its
sole discretion, shall establish and publish all schedules for the Aircraft,
including city-pairs served, frequencies, and timing of scheduled departures,
taking into consideration the Aircraft type, maintenance requirements,
crew  training and scheduling requirements, aircraft rotation requirements,
applicable route and slot or other regulatory restrictions.  So that the
information can be properly disseminated to the Operators for pilot and flight
attendant staffing, and related operational requirements, Delta will, from time
to time, notify each Operator of the preliminary schedule times, frequencies and
related information for the Aircraft no later than seventy-five (75) days prior
to the commencement of such schedule.  Each 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 in the preliminary
schedule from 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 an Operator, Delta may assume responsibility for
establishing the Aircraft block times for such Operator.  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 Operators of the final schedule times, frequencies
and related information for the Aircraft.  Where practical, Delta will
collaborate with the Operators to determine mutually optimal schedules.  Each
Operator shall operate its respective Aircraft in the city pairs designated by
Delta, subject to the frequency and other scheduling requirements established by
Delta from time to time in accordance with this Section 2.01.  Delta and the
Operators shall meet by October 1 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 the Operators shall
determine.  Minimum turn times shall be set by Delta in conformity with standard
industry practices and Aircraft type.
 
(b) Subject to the prior written consent of Delta, which shall not be
unreasonably withheld or delayed, from time to time, Mesaba may assign all of
its rights and obligations under this Agreement with respect to the operation of
one (1) or more of the Aircraft and Equipment related to such Aircraft to
Pinnacle, provided that (i) any such assignment does not (w) negatively impact
Pinnacle’s ability to perform its remaining obligations under the Second Amended
and Restated Airline Services Agreement or the 2007 CRJ-900 Delta Connection
Agreement, (x) negatively impact Mesaba’s ability to perform its obligations
under the Second Amended and Restated Airline Services Agreement or the SAAB
Agreement, (y) create an undue burden on Delta or (z) interfere with Delta's
performance requirements or schedule
 

 
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of Scheduled Flights and Charter Flights;  (ii) Pinnacle is an Affiliate of
Mesaba and Parent at the time of any such assignment; (iii) Pinnacle assumes all
of the rights and obligations of Mesaba hereunder with respect to the operation
of such Aircraft and related Equipment; (iv) such assignment does not cause
Mesaba to operate fewer than five (5) Aircraft and (v) Pinnacle shall reimburse
Delta for all reasonable out-of-pocket costs and expenses incurred by Delta in
connection with any such assignment, including without limitation, reasonable
attorneys’ fees to prepare any and all documents required in connection with the
movement of the aircraft to Pinnacle’s operating certificate and the costs for
filing all required documents with the FAA.  Upon the assignment by Mesaba to
Pinnacle of all of its rights and obligations under this Agreement with respect
to the operation of all Aircraft and Equipment related to such Aircraft in
Mesaba’s fleet as of the Effective Date in accordance with this Section 2.01(b)
(the “Final Aircraft Assignment Date”) without any further action by any Party,
Mesaba shall automatically be terminated as a Party to this Agreement and shall
have no further rights or obligations under this Agreement, provided that any
such termination shall not relieve Mesaba from liability for any breach of this
Agreement arising prior to the Final Aircraft Assignment Date.  References to
Mesaba herein shall thereafter be deemed to be references to
Pinnacle.  Notwithstanding the automatic release of Mesaba as provided above, if
Pinnacle so requests, Delta shall promptly execute one or more documents
evidencing such termination, in form and substance reasonably satisfactory to
Delta.
 
Section 2.02 Use of Designator, DL Identification and Related Matters.  Subject
to Section 2.03 below and the applicable provisions of Article VII below, the
Operators shall operate the Scheduled Flights and Charter Flights provided under
this Agreement exclusively using the Designator and the designator code of any
codeshare partner of Delta approved by Delta in its sole discretion.  The
Scheduled Flights and Charter Flights shall be identified by the applicable
Operator solely with flight numbers assigned by Delta.  Subject to Section 2.03
below and the applicable provisions of Article VII below, each Operator shall
use only the Delta Identification for the Aircraft (except as otherwise required
by Governmental Regulations), and for all airport terminal facilities (such as
gates, passenger waiting areas and jetways), signage, equipment, uniforms and
advertising, promotional and business materials in any form or media that are
used in connection with the Regional Airline Services; provided, however, all
employee uniforms  of an Operator be determined by such Operator, provided that
such uniforms shall at all times be consistent with Delta’s uniform standards in
effect at the applicable time and subject to the approval of Delta (including
approval of any use of the Delta Identification thereon) which shall not be
unreasonably withheld.  Each Operator shall not use their respective Operator
Identification for the Aircraft (except as required by Governmental Regulation),
airport terminal facilities (such as gates, passenger waiting areas and
jetways), signage or advertising, promotional or business materials in any form
or media that are used in connection with the Regional Airline Services;
provided, however, nothing in the foregoing prohibition shall preclude an
Operator from using its Operator Identification for general corporate purposes,
responding to customer inquiries, on crew wings and employee service pins, and
for purposes that are not covered by the foregoing prohibition and do not
involve interaction with customers or passengers.
 

 
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Section 2.03 Use of Other Designators.  No Operator shall use on the Aircraft or
in connection with the Regional Airline Services hereunder the airline
designator, Identification, or any other identifying feature of a foreign or
United States airline other than Delta (except as otherwise required by
Governmental Regulations), without the express prior written consent of Delta,
or unless Delta directs an Operator to use such other designator,
Identification, or identifying feature.  At the request of Delta, each Operator
shall enter into such agreement(s) with another air carrier as may be necessary
to implement code-sharing on the Scheduled Flights with such other air carrier.
 
Section 2.04 Personnel and Dispatch Control.  Each Operator shall be responsible
for providing all crews (flight and cabin) to operate the Scheduled Flights and
any Charter Flights to be operated by it and for all aspects (personnel and
other) of dispatch control, including but not limited to load control.
 
Section 2.05 Inventory Management.  Delta shall have complete control and
discretion over all inventory management functions for all Scheduled Flights and
Charter Flights operated pursuant to this Agreement, including, without
limitation, overbooking levels, discount seat levels, and allocation of seats
among the various fare buckets.   In performing such inventory management, Delta
shall conform in all material respects to its own procedures and standards,
taking into account the Aircraft type.
 
Section 2.06 Passenger Fares.  Delta shall be the sole authority for filing
tariffs for Scheduled Flights operated pursuant to this Agreement, and Delta
shall establish all passenger fares for Scheduled Flights and Charter Flights
operated pursuant to this Agreement.  All charges for filing of fares or tariffs
for Scheduled Flights operated pursuant to this Agreement shall be paid by
Delta.
 
Section 2.07 DOT Certification.  Each Operator has and shall maintain DOT
Certification and all other permits, licenses, certificates and insurance
required by any Governmental Authority and Article IX hereof to enable such
Operator to perform the services required by this Agreement.
 
Section 2.08 Compliance with Governmental Regulations.  All flight operations,
dispatch operations and all other operations undertaken by an Operator pursuant
to this Agreement shall be conducted and operated by such Operator in strict
compliance with all Governmental Regulations, including, without limitation,
those relating to security, the use and transportation of hazardous materials,
flight crew and mechanic qualifications and licensing requirements, crew
training and hours, and customs and immigration requirements.  All Equipment
shall be operated and maintained by each Operator in strict compliance with all
Governmental Regulations, such Operator’s own operations manuals and maintenance
manuals and procedures, and all applicable equipment manufacturer’s
instructions.  At all times, each Operator shall operate with the highest
standards of care.
 
 
 
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Section 2.09 Safety Standards.  Each Operator shall actively participate in and
comply with the Delta Connection Safety Alliance and at all times during the
Term (i) comply with Delta’s safety standards for Regional Airline Services
including, without limitation, as set forth in the Delta Connection Carriers
Non-Regulatory Safety Program Standards document and the Delta Connection Ground
Operations Manual, provided, with respect to any changes Delta may make to such
safety standards after the Effective Date, Delta shall, at its discretion, do
one of the following: (x) pay directly for the incremental Direct Costs incurred
by an Operator attributable to such change; (y) treat the incremental Direct
Costs incurred by an Operator attributable to such change as a Direct Expense or
(z) adjust the Aircraft Months Rate to reflect the incremental increase or
decrease to the Direct Costs incurred by an Operator attributable to such change
(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), Flight Operations Quality Assurance (subject to
consent of such Operator’s union representation and FAA) and all other safety
initiatives applicable to the regional jet service industry, and (iii) each
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”).
 
Section 2.10 Quality of Service.  Delta policies, procedures, performance
standards (including but not limited to Delta’s Sky Priority initiative) and
means of measurement thereof concerning the provision of air passenger and air
cargo services shall be applicable to all services provided by each Operator
under this Agreement.  Each Operator shall achieve, with respect to the
provision of Regional Airline Services, at least the same quality of airline
service as that provided by Delta, subject to limitations imposed by the type of
Aircraft, its route network, the availability of equipment and facilities at the
Service Cities and the performance by Delta of its obligations under this
Agreement.  Each Operator shall maintain adequate staffing levels to ensure at
least the same level of customer service and operational efficiency that Delta
achieves.  Each Operator shall cooperate with Delta in any way necessary or
desirable to provide such comparable level of customer service in connection
with the operation of Regional Airline Services; and each Operator shall
maintain new hire and recurrent training programs for all job descriptions, and
such programs, as they pertain to customer service, shall be reasonably
acceptable to Delta.
 
Section 2.11 Service Standards.  Without limiting Sections 2.09 and 2.10, the
Operators shall achieve the following specific performance standards with
respect to any Performance Period during the Term:
 
(a) Performance Standards.
 
(i) Minimum Completion Factor.  Operators shall maintain an aggregated
completion rate with respect to the scheduled Aggregated CRJ900 Delta Connection
Flights as set forth on Schedule 2.11 attached hereto and made a part
hereof.  For purposes of this Agreement, the determination of completion rate of
the scheduled Aggregated CRJ900 Delta Connection Flights shall be calculated on
an all-in basis, such that all cancellations or uncompleted flights --
regardless of the reason -- shall be counted as cancelled flights which either
Operator has not completed with the following exceptions:
 

 
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(A) Any Aggregated CRJ900 Delta Connection Flight that is cancelled by an
Operator, but through coordination with Delta’s Operation Control Center (“OCC”)
is successfully operated by either Delta or another operator within the Delta
Connection program other than such Operator (i.e. Cancellation Codes 19A-F set
forth on Exhibit C attached hereto and made a part hereof) (a “Substitute
Flight”), shall be treated as a completed Aggregated CRJ900 Delta Connection
Flight.  Each Operator shall use its best efforts to coordinate Substitute
Flights with Delta’s OCC when known cancellations are imminent;
 
(B) Any Aggregated CRJ900 Delta Connection Flight that is cancelled at Delta’s
request, as determined by Delta’s OCC (i.e. Cancellation Code 19H set forth on
Exhibit C);
 
(C) Any Aggregated CRJ900 Delta Connection Flight operated by an Operator with
no revenue passengers and not completed within two (2) hours of its scheduled
arrival time shall be considered a non-completed flight, unless at the direction
of Delta’s OCC; and
 
(D) Any Aggregated CRJ900 Delta Connection Flight requested by Delta’s OCC to be
cancelled for purposes of substitution (i.e. Cancellation Code 19G set forth on
Exhibit C) shall be treated as a completed flight.
 
If Delta requests an Operator to cancel one or more scheduled Delta Connection
Flights, such Operator shall comply with any such request within the time period
reasonably requested by Delta.  In the event such Operator does not cancel any
such flight, or does not cancel any such flight within the time period
reasonably requested by Delta (each, an "Operator Non-Cancelled Flight"), each
such Operator Non-Cancelled Flight, for all purposes of this Agreement, shall
not be regarded as a completed flight, and Delta shall not be obligated to pay
Operator any compensation or any other reimbursements in connection with such
Operator Non-Cancelled Flights.
 
(ii) Minimum On-Time Arrival Reliability.  Operators shall maintain an aggregate
percentage of on-time arrivals for all  Aggregated CRJ900 Delta Connection
Flights as set forth on Schedule 2.11 attached hereto and made a part hereof.
 
(iii) Minimum ISM Score.  Operators shall maintain an ISM score as set forth on
Schedule 2.11 attached hereto and made a part hereof. The ISM score will be
calculated by Delta taking a simple average of the Delta Customer Satisfaction
Survey results for the Aggregated CRJ900 Delta Connection Flights during the
applicable Performance Period in each of the following categories:
 
On-Board Timely & Accurate Information
 
Flight Attendant Helpful & Courteous
 

 
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Flight Attendant Availability
 
Flight Attendant Professional Appearance
 
Clean Lavatory
 
Clean Cabin
 
Condition of Aircraft Interior & Cabin Appearance
 
For purposes of measuring Operators’ ISM Score, the Performance Period shall be
each calendar quarter during the Term.  Delta shall deliver Operator’s ISM Score
to Operator not more than sixty (60) days following the end of the applicable
calendar quarter.
 
(iv) Minimum On-Time Departure Reliability.  Operators shall maintain an
aggregate percentage of on-time departures for all  Aggregated CRJ900 Delta
Connection Flights as set forth on Schedule 2.11 attached hereto and made a part
hereof.
 
(b) Each of the requirements set forth in Section 2.11(a) above shall be defined
as the “Operational Performance Standards.”  If Delta is concerned about one or
both Operators’ performance in connection with any of the Operational
Performance Standards, such Operator(s) 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 each Operator agrees to
diligently comply with the terms and conditions of any such solutions and
corrective action plans that are mutually agreed by the Parties.
 
(c) Adjustments to Performance Standards.  The Parties recognize and agree that
the performance standards set forth on Schedule 2.11 may be modified or adjusted
by mutual agreement of the Parties hereto from time to time during the Term of
this Agreement.
 
Section 2.12 Service Recovery.  If requested by Delta, an Operator shall provide
Revenue Passengers with service recovery and passenger amenities in accordance
with Delta’s standard policies and procedures.  Delta shall reimburse such
Operator for all Direct Costs incurred as a result of providing such service
recovery and, upon request, such Operator shall submit to Delta supporting
documentation with sufficient detail to allow Delta to verify the invoiced
amount.
 
Section 2.13 In-flight Food, Beverages and Supplies.  For all Scheduled Flights
and Charter Flights, Delta shall provide, or cause to be provided, catering
services, food and beverages for passengers and crews, all at Delta’s sole
cost.  Each Operator shall collect the appropriate amounts from passengers for
all sales of in-flight food products and/or beverages in accordance with Delta’s
policies and procedures, and any revenue associated with on-board sales of the
food product and/or beverages shall be remitted to and the sole property of
Delta.
 

 
13

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

 

 
Each Operator shall institute and maintain adequate controls to efficiently
manage the usage of in-flight food, beverages and supplies.  Each Operator will
also institute and maintain adequate controls to minimize the breakage or
otherwise loss of product or revenue ("shrinkage") associated with in-flight
food and beverage sales.  Each Operator may be required to provide reports
detailing the ratio of usage and shrinkage on an ad-hoc basis as requested by
Delta from time to time.
 
Each Operator shall be responsible for obtaining and maintaining, at its own
expense (which expense shall not be a Direct Expense), all licenses necessary
for the serving of in-flight food and beverages on Scheduled Flights and Charter
Flights.
 
Delta shall furnish Each Operator, at Delta’s sole cost, adequate supplies of
its customary in-flight supplies including, but not limited to, the Delta
in-flight magazine, flatware, dishes, cups, napkins, pillows, blankets, trash
bags, sick sacks, lavatory supplies, creamers, swizzle sticks and sugar in a
form similar or identical to that used by Delta.  Each Operator will purchase
any and all liquor to be provided to passengers on its Scheduled Flights or
Charter Flights, and Delta shall reimburse such Operator for such liquor
expenses and associated liquor taxes as a Direct Expense pursuant to Exhibit
A.  All in-flight product and customer service specifications will be at the
sole discretion of Delta.
 
Section 2.14 Exclusivity Arrangements.  (a) During the Term, except as otherwise
directed or approved in writing by Delta, in Delta’s sole discretion, the
Operators, in aggregate, shall not operate more than *** departures per day
under either of their own flight designator codes into or out of any Hub
Location.
 
(b) If, during the Term, an Operator operates a jet aircraft certificated in the
United States with a Maximum Gross Take Off Weight greater than ***pounds 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 such 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) Nothing in this Agreement shall preclude Delta from entering into code
share, alliance or other commercial cooperation arrangements with any other
airline or entering into similar or other arrangements with other carriers for
the provisioning of regional airline services using CRJ900 aircraft or any other
aircraft to or from the Hub Locations, the Service Cities or elsewhere.
 
(d) Except as set forth in Section 2.14(a) and (b) above, nothing in this
Agreement shall preclude an Operator from operating an aircraft for another
carrier other than Delta or an Affiliate of Delta, under the flight designator
code of such other carrier, into any Hub Location or preclude an Affiliate of
Parent other than Operator from operating any aircraft for itself or a carrier
other than Delta or an Affiliate of Delta to or from the Hub Locations, the
Service Cities or elsewhere.
 

 
14

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

 

 
Section 2.15 Contract of Carriage.  Each Operator shall adopt as its own, for
the Regional Airline Services, Delta’s Terms and Conditions of Contract of
Carriage (“Contract of Carriage”), cargo tariffs, bills of lading, 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 the Regional Airline Services.
 
                            ARTICLE III                                
 
EQUIPMENT
 
Section 3.01 Use of the Equipment.  Each Operator agrees (a) that the Equipment
shall be used only to provide and/or support the Regional Airline Services
contemplated by this Agreement and (b) that the Equipment shall not be used by
it for any other purpose without the prior written consent of Delta.
 
Section 3.02 Fleet Size and Related Matters.  As of the Effective Date, Mesaba’s
Delta Connection fleet consists of the Aircraft.
 
(i) Unscheduled Aircraft.  Subject to the Operators’ approval, which shall not
be unreasonably withheld, Delta shall determine the appropriate level of
unscheduled Aircraft to be included in each Operator’s fleet of Aircraft from
time to time.
 
(ii) Spare Engine Requirements.
 
(A)           Delta shall make available to the Operators for use on the
Aircraft CRJ900 Spare Engines in the quantities during the corresponding years
as set forth in the following “Table 1”.  Table 1 represents the full and
complete obligation of Delta for spare engine support with respect to the
Aircraft based upon known and projected LLP and service performance at the time
of this Agreement.  The quantities specified in Tables 1 and 2, excluding
operational Spare Engines, may change based upon operations, maintenance
schedules and production planning by mutual agreement of the Parties.  The
CRJ900 Spare Engines may be substituted at any time, at Delta’s sole discretion,
by any engine maintenance agreement that contains a minimum serviceable spares
support provision.
 

 
15

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

 

 
Table 1:
 
***
***
***
***
***
***
***
***
***
***
***
***
***
***       
***
***
***
***
***
***
***
***
***
***
***
***
 
 
 
 
***
 
 
 
 
***

 
(B)           Pinnacle shall make available for use on the CRJ900 DCA Aircraft
spare engines in the quantities during the corresponding years as set forth in
the following “Table 2”.  Such spare engines may be substituted at any time, at
Pinnacle’s sole discretion, by any engine maintenance agreement that contains a
minimum serviceable spares support provision:
 
Table 2:
 
 
***
***
***
***
***
***
***
***
***
***
***
***
***
***       
***
***
***
***
***
***
***
***
***
***
***
***
 
 
 
 
***
 
 
 
 
***

 
(C)           Cross Utilization of CRJ900 Spare Engines.  The CRJ900 Spare
Engines, together with the engines on the Aircraft as of the Effective Date, may
be cross utilized between the Aircraft and the CRJ900 aircraft operated by
Pinnacle pursuant to the 2007 CRJ900 Delta Connection Agreement (the “CRJ900 DCA
Aircraft”), but no other aircraft, provided each of the following conditions
are, and remain, satisfied:
 

 
16

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

 

 

 
1.  
The spare engines for the CRJ900 DCA Aircraft, together with the engines on the
CRJ900 DCA Aircraft as of the Effective Date (as set forth on Schedules 1-A and
1-B attached to this Agreement and made a part hereof), are cross utilized for
the Aircraft at substantially the same rates as the CRJ900 Spare Engines and the
engines on the Aircraft as of the Effective Date are cross-utilized on the
CRJ900 DCA Aircraft.

 
2.  
The CRJ900 Spare Engines and the engines on the Aircraft as of the Effective
Date shall not be negatively discriminated against in any way, in Delta’s
commercially reasonable judgment, including with respect to, but not limited to,
utilization, configuration, handling and storage.

 
3.  
Spare engines are assets specifically designed for replacement of non-scheduled
removals induced by exceeding the operating or mechanical allowable limits for
revenue flight.  Spare engines may also be used to support a planned removal of
an engine that is operating with sustained restrictions that preclude normal
routing of an Aircraft.  The minimum number of Spare engines for the purposes of
this Agreement is ***.

 
4.  
Upon the termination or expiration of the Agreement, at Pinnacle’s sole cost,
Pinnacle shall return each of the (i) engines on an Aircraft as of the Effective
Date and (ii) the CRJ900 Spare Engines to a position on the Aircraft and the
remaining engines to a spare stand and correct any configuration discrepancies,
including but not limited to Pinnacle owned LRUs installed on the Aircraft and
such engines.

 
If it is determined, in Delta’s commercially reasonable judgment, that any of
the above conditions is not satisfied, then Delta may, at it’s sole discretion,
upon 30 days advance notice to Pinnacle require that neither the CRJ900 Spare
Engines, nor the engines on the Aircraft as of the Effective Date, may be
utilized on any of the CRJ900 DCA Aircraft, and within 90 calendar days of the
date of such notice, Pinnacle must comply with Condition 4 above.
 
(D)           Delta will provide additional spare engines as reasonably required
by Operators in addition to the engines set forth in Tables 1 and 2 above;
provided, however, Delta shall have no obligation to provide any such additional
spare engines if Operator’s requirement for additional spare engines is due to
or as a result of any of the following:
 
(i)           engine removals due to any maintenance performed unreasonably in
advance of the time such maintenance is required in accordance with the
Maintenance Program and not mutually agreed to by Delta;
 

 
17

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

 

 
(ii)            any engine maintenance that is required due to the negligence of
an Operator or any of its maintenance service providers;
 
(iii)            inadequate engine maintenance by an Operator or Operator’s
failure to  follow procedures approved by the OEM or Delta. 
 
(E)           If Delta and Operator mutually agree that additional spare engines
are required due to an operational necessity for an extended period of time,
Operator will fully share engine maintenance and scheduling practices and will
work with Delta to change or adjust these practices to minimize spare engine
support.
 

 
(iii) Spare APUs.
 
(A) Delta shall make available to the Operators for use on the Aircraft spare
auxiliary power units (“APUs”) in the quantities during the corresponding years
as set forth in the following “Table 3” (the “Spare APUs”).  Table 3 represents
the full and complete obligation of Delta for spare APU support with respect to
the Aircraft based upon known and projected LLP and service performance at the
time of this Agreement.  The quantities specified, in Tables 3 and 4 excluding
operational Spare APUs, may change based upon operations, maintenance schedules
and production planning by mutual agreement of the Parties.  The Spare APUs may
be substituted at any time, at Delta’s sole discretion, by any APU maintenance
agreement that contains a minimum serviceable spares support provision.
 
Table 3:
 
 
***
***
***
***
***
***
***
***
***
***
***
***
***
***       
***
***
***
***
***
***
***
***
***
***
***
***
 
 
 
 
***
 
 
 
 
***

 
(B)           Pinnacle shall make available for use on the CRJ900 DCA Aircraft
spare APUs in the quantities during the corresponding years as set forth in the
following “Table 4”.  Such spare APUs may be substituted at any time, at
Pinnacle’s sole discretion, by any
 

 
18

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

 

APU maintenance agreement that contains a minimum serviceable spares support
provision:
 
Table 4:
 
***
***
***
***
***
***
***
***
***
***
***
***
***
***       
***
***
***
***
***
***
***
***
***
***
***
***
 
 
 
 
***
 
 
 
 
***

***

 
(C)           Cross Utilization of Spare APUs.  The Spare APUs, together with
the APUs on the Aircraft as of the Effective Date (as set forth on Schedule 1-C
attached to this Agreement and made a part hereof), may be cross utilized
between the Aircraft and the CRJ900 DCA Aircraft, but no other aircraft,
provided each of the following conditions are, and remain, satisfied:
 

 
1.  
The spare APUs for the CRJ900 DCA Aircraft, together with the APUs on the CRJ
DCA Aircraft as of the Effective Date, are cross utilized for the Aircraft at
substantially the same rates as the Spare APUs and the APUs on the Aircraft as
of the Effective Date are cross-utilized on the CRJ900 DCA Aircraft.

 
2.  
Pinnacle is able to be added to and will become a party to the APU maintenance
agreement that covers Mesaba’s APUs as of the Effective Date, and such agreement
has provisions to allow for cross utilization of the APUs between the CRJ900 DCA
Aircraft and the Aircraft.

 
3.  
The Spare APUs and the APUs on the Aircraft as of the Effective Date shall not
be negatively discriminated against in any way, in Delta’s commercially
reasonable judgment, including with respect to, but not limited to, utilization,
configuration, handling and storage.

 
4.  
Spare APUs are assets specifically designed for replacement of non-scheduled
removals induced by exceeding the operating or mechanical allowable limits for
revenue flight.  Spare APUs may also be used to support a planned removal of an
APU that is operating with sustained restrictions that preclude normal routing
of

 

 
19

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

 

an Aircraft and scheduling of such removals will be coordinated between Delta
and Pinnacle.  The minimum number of Spare APUs for the purposes of this
Agreement is ***.
 
5.  
Upon the termination or expiration of the Agreement, at Pinnacle’s sole cost,
Pinnacle shall return each of the (i) APUs on an Aircraft as of the Effective
Date and (ii) the Spare APUs to a position on the Aircraft and the remaining
APUs to a spare stand and correct any configuration discrepancies, including but
not limited to Pinnacle owned LRUs installed on the Aircraft and such APUs.

 
If it is determined, in Delta’s commercially reasonable judgment, that any of
the above conditions is not satisfied, then Delta may, at it’s sole discretion,
upon 30 days advance notice to Pinnacle require that neither the Spare APUs, nor
the APUs on an Aircraft as of the Effective Date may be utilized on any of the
CRJ900 DCA Aircraft, and within 90 calendar days of the date of such notice,
Pinnacle must comply with Condition 5 above, and at such point, Delta’s sole
responsibility will be to provide Spare APUs for the Aircraft.
 

 
(D)           Delta will provide additional spare APUs as reasonably required by
Operators in addition to the APUs set forth in Tables 3 and 4 above; provided,
however, Delta shall have no obligation to provide any such additional spare
APUs if Operator’s requirement for additional spare APUs is due to or as a
result of any of the following:
 
(i)           APU removals due to any maintenance performed unreasonably in
advance of the time such maintenance is required in accordance with the
Maintenance Program and not mutually agreed to by Delta;
 
(ii)            any APU maintenance that is required due to the negligence of an
Operator or any of its maintenance service providers;
 
(iii)            inadequate APU maintenance by an Operator or Operator’s failure
to  follow procedures approved by the OEM or Delta. 
 
(E)           If Delta and Operator mutually agree that additional spare APUs
are required due to an operational necessity for an extended period of time,
Operator will fully share APU maintenance and scheduling practices and will work
with Delta to change or adjust these practices to minimize spare APU support.
 

        (iv) QECs.  Subject to the Operators’ approval, which shall not be
unreasonably withheld, Delta shall determine the appropriate quantity of QECs to
be included in each Operator’s fleet of Aircraft from time to time.
 

 
20

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

 

 
Section 3.03 Lease of the Equipment.  As of the Effective Date, Mesaba and Delta
(and/or an Affiliate of Delta) have entered into Leases with respect to each of
the Aircraft, each of the CRJ900 Spare Engines and each of the QECs.
 
Section 3.04 Manufacturer Benefits Agreement.  Pursuant to a letter dated June
27, 2005 and a letter dated February 13, 2007 (the “Letter Agreements”) from
Delta (as successor by merger to Northwest Airlines, Inc.) to Bombardier
Aerospace (“Bombardier”), Delta has made available to Mesaba certain benefits
under the Purchase Agreements between Delta and Bombardier, which benefits
relate to, among other things, manufacturer credits, inventory service
representatives, field service representatives and technical manuals.  All such
benefits under the Purchase Agreements shall be utilized by the Operators and
applied to reduce the Direct Expenses of the Operators.  In addition, Delta
shall have the sole right to enter into future manufacturer benefit agreements
that may have the effect of further reducing the Operators’ Direct Expenses.
 
Section 3.05 Equipment Maintenance, Servicing and Cleaning.  Each Operator shall
be responsible for all aspects of maintenance of the Equipment used by it in
accordance with the Maintenance Program (including any maintenance or
modifications required by FAA airworthiness directives and all routine and
non-routine maintenance), and for servicing and cleaning (except turn cleaning
performed as part of customary ground handling services to be performed by the
ground handler selected by Delta pursuant to Section 4.02(a)) the Equipment
(including repainting of worn aircraft exteriors and replacement of interior
items in accordance with this Section 3.05 below).
 
With respect to maintenance of the Aircraft and the CRJ900 Spare Engines, the
baseline maintenance program will be the most current version of the CRJ900 MSG3
Maintenance Review Board Report.  An Operator may deviate from the baseline
maintenance program in accordance with such Operator’s Maintenance Program,
provided that such Operator shall notify Delta at least thirty (30) days in
advance regarding any such deviations from the baseline maintenance
program.  Each Operator’s responsibility with respect to the Maintenance Program
includes, but is not limited to, incorporating the latest revision of the
Original Equipment Manufacturer (OEM) Maintenance Program, collecting log page,
non-routine, equipment check findings and Service Difficulty Reports (SDR).  Any
Maintenance Program changes or Service Bulletins on the Aircraft and CRJ900
Spare Engines that involve expenses pursuant to Exhibit A, Section 1.03 (Direct
Expenses) shall be reviewed by Delta prior to implementation and shall require
Delta’s approval to be considered Direct Expenses for payment purposes.  An
Operator may, however, on its own authority and cost (with no reimbursement from
Delta) make Maintenance Program changes on the Aircraft and CRJ900 Spare
Engines.
 
On a quarterly basis during the Term, each Operator will provide to Delta a list
of Maintenance Program changes on the Aircraft and CRJ900 Spare Engines,
including required labor, estimated costs to implement, any expenses that are
deemed Direct Expenses and implementation status.  The list shall include:
 

 
21

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

 

 
(a) Deletion or escalation of a routine task (this does not include a complete
“check” such as “A” check),
 
(b) Deletion of steps to a routine task or procedure that may result in a change
to the task intent or task scope,
 
(c) De-escalation of a task,
 
(d) Escalation or de-escalation of a “check” such as an “A” check,
 
(e) Addition of a routine task (adding a function not currently being
performed), and
 
(f) Addition of steps to a routine task or procedure that may result in change
to the intent or work scope (a change of access or area for inspection, and/or
change of method for inspection).
 
With respect to painting the Aircraft, Operator shall re-paint each Aircraft at
least once every six (6) years (a “Paint Cycle”) or as otherwise directed or
waived by Delta on a case-by-case basis.  The Aircraft shall be painted in
livery as determined by Delta in its sole discretion, and any changes or
deviations are subject to Delta’s prior approval.  Painting of any Aircraft,
including the vendor to be used, must be approved in advance by Delta and will
be paid by Operator and considered a Direct Expense for payment purposes.
 
With respect to modifications to the Aircraft interiors, all such modifications
must be coordinated with Delta and approved in advance by Delta, and the costs
thereof will be paid by the Operator, provided Delta shall reimburse such
Operator for a prorated portion of such costs, such prorated portion to equal
the total Direct Cost of such modification multiplied by a fraction, the
numerator of which shall be equal to the number of days remaining until the next
regularly scheduled replacement of the interior to be modified and the
denominator of which shall be equal to the total number of days between the most
recent replacement thereof and the next regularly scheduled replacement thereof.
 
The Parties shall coordinate with respect to Aircraft painting and interior
modifications as required to facilitate the applicable Operator’s operational
planning and budget requirements.
 
With respect to interior cabin maintenance and exterior cleaning of the
Aircraft, each Operator shall comply with the following standards and
replacement schedule, provided such standards and schedules may be amended from
time to time by Delta upon no less than thirty (30) days prior notice to the
Operators:
 
Interior:
·  
Extensive Interior Clean (EIC) – at intervals not to exceed 30 days and using
the vendors designated by Delta from time to time

·  
Carpet – Deep-cleaned with each EIC, runner replaced every 120 days, and
under-seat replaced every 12 months

·  
Seat Covering – conditioned every 90 days, refurbished every 2 years and
replaced every 6 years

 
22

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

 

·  
Seat cushions – seats replaced every 3-4 years, back cushions every 6-7 years

·  
Galley/Lav Floor laminate – replaced every heavy maintenance event

Exterior:
·  
Wash at intervals not to exceed 60 days

·  
APU exhaust wipe-down no greater than 10 days

·  
Polish leading edge and engine inlet every 18 months

With respect to any changes Delta may make to the standards and schedules set
forth above, Delta shall, at its discretion, do one of the following: (i) pay
directly for the incremental Direct Cost of such change; (ii) treat the
incremental Direct Cost of such change as a Direct Expense or (iii) adjust the
Aircraft Months Rate to reflect the incremental increase or decrease to the
Direct Cost attributable to such change.
 
Section 3.06 Maintenance Agreements.
 
For each of the engines on the Aircraft and the CRJ900 Spare Engines, the
Operators shall utilize the Delta selected vendor(s) for all major shop-level
engine maintenance (e.g. maintenance in accordance with the engine original
equipment manufacturer shop manual) in accordance with terms and conditions
negotiated by Delta after review and concurrence by the Operators that such
agreements contain reasonably satisfactory arrangements in respect of the
Operators’ operational requirements, such review and concurrence not to be
unreasonably withheld or delayed.
 
In the event Delta enters into agreements for APU and associated component
maintenance, avionics maintenance and/or landing gear overhauls with respect to
the Aircraft, Operators shall utilize the vendors in such agreements for such
services; provided, however, Operators’ utilization of such vendors shall be
subject to (i) termination of an Operator’s existing vendor contracts, if any,
and Delta’s payment of any early termination penalties imposed pursuant to such
Operator’s terminated contracts, (ii) reasonably satisfactory arrangements in
respect of the Operators’ operational requirements and (iii) adjustment (if any)
to the rates set forth in Exhibit A, Attachment D.
 
In the event spare parts pooling agreements are established for Delta Connection
Carriers, each Operator will participate in such agreements so long as such
agreements adequately address the Operators’ respective inventory needs,
logistics requirements and configuration concerns and are not contrary to any
FAA regulation and such agreements do no 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 comply
with its obligations under this Agreement.
 
In the event spare engine pooling agreements are established for Delta
Connection Carriers, each Operator will participate in such agreements so long
as such agreements adequately address the Operators’ respective inventory needs,
logistics requirements and
 

 
23

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

 

configuration concerns and are not contrary to any FAA regulation and such
agreements do not materially interfere the Operator’s operational or maintenance
standards or performance requirements, each as necessary to comply with its
obligations under this Agreement.
 
In the event an Operator is or becomes a party to such agreements as outlined in
this Section 3.06, such Operator shall not execute any amendment or side letter
to  extend or terminate any of those agreements without Delta’s prior written
consent.
 
        The use of such vendors and related agreements by an Operator as
provided for in this Section 3.06 shall be subject to such Operator formally
approving such vendors as part of its FAA approved Maintenance Program, with
such approvals not unreasonably withheld or delayed.  Pursuant to the Operators’
respective FAA approved Maintenance Program, an Operator may cease the use of
such vendors, with the prior consent of Delta, with such consent not being
unreasonably withheld or delayed, as a remedy for quality control related issues
associated with non-compliance with such Operator’s FAA approved Maintenance
Program or FAA regulatory requirements.
 
The Parties acknowledge and agree that (i) as of the Effective Date, the
avionics associated with the Aircraft are maintained under that certain Rockwell
Collins Dispatch Plus Maintenance and Inventory Support Agreement dated June 12,
2009 (the “Rockwell Avionics Agreement”); (ii) the Rockwell Avionics Agreement
and all services and inventory provided thereunder shall be used by the Pinnacle
Parties solely to support the Aircraft and the seventeen (17) CRJ-200 aircraft
in the Mesaba fleet as of the Effective Date; and (iii) no Pinnacle Party shall
use the services and inventory provided pursuant to the Rockwell Avionics
Agreement to support any aircraft other than the Aircraft and the seventeen (17)
CRJ-200 aircraft in the Mesaba fleet as of the Effective Date without the prior
written consent of Delta.  The Parties agree to use their respective
commercially reasonable efforts to mutually seek a replacement agreement, or
amendment, to the Rockwell Avionics Agreement that would provide avionics
maintenance to the Aircraft, the seventeen (17) CRJ-200 aircraft in the Mesaba
fleet as of the Effective Date and the CRJ-200 and CRJ-900 aircraft in the
Pinnacle fleet as of the Effective Date.
 
Section 3.07 Aircraft and Engine/APU Configuration; Aircraft Records.
 
Each Operator shall be responsible for review, justification and implementation
of OEM safety and reliability service bulletins with respect to the Aircraft,
the CRJ900 Spare Engines and the CRJ900 APUs.
 
In order to maintain consistency in engine and APU configuration, Delta will
work with the respective Delta Connection Carriers to create and maintain one
Engine Configuration Specification Manual (“CSM”) and one APU CSM.  Each
Operator agrees to participate in the CSM process, and Delta shall obtain the
concurrence of the Operators prior to any changes being made to the CSMs,
including incorporation of any service bulletins, and no Operator shall
unreasonably withhold or delay such concurrence.  If concurrence between such
Parties cannot be achieved, then an Operator may, on its own authority and cost
(with no reimbursement by Delta) incorporate revisions to the CSM.  Upon
expiration or termination of this Agreement, if requested by Delta, each
Operator shall restore any engine or APU to CSM configuration at such
 

 
24

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

 

Operator’s sole cost.
 
The baseline Aircraft configuration will be maintained to
Original-Equipment-Manufacturer (OEM) approved configurations, provided that an
Operator may deviate from the OEM-approved configurations in accordance with the
Maintenance Program.  Each Operator shall notify Delta in advance regarding any
deviations from OEM-approved configurations unless otherwise agreed to by the
Parties, and such Operator shall be responsible for all costs (with no
reimbursement from Delta) associated with such deviations.  Each Operator shall
return the Aircraft in an OEM approved configuration unless otherwise mutually
agreed upon by Delta and such Operator.  Any cost associated with reconfiguring
the Aircraft will be the applicable Operator’s responsibility.
 
Delta shall have responsibility for oversight of aircraft modifications and/or
projects for incorporation on the Aircraft fleet subject to the following
criteria:
 
(a) All such aircraft modifications/projects that involve expenses deemed Direct
Expenses, shall, prior to implementation, be reviewed by Delta and shall require
Delta’s approval to be considered Direct Expenses for payment purposes.  Should
Delta not approve such modifications or projects, the applicable Operator may
elect to perform such activity solely at its expense and shall perform such
actions in accordance with terms of its Aircraft Lease;
 
(b) All Engine/APU costs (i) involving work outside the scope of a third-party
contract  or (ii) charged on a “time and materials” basis as a Direct Cost shall
require Delta’s workscope approval prior to shop induction; and
 
(c) A listing of all in-production and pending ADs, Notice of Proposed Rule
Making (NPRM), safety-related, reliability, operator-designed and Supplemental
Type Certificate (STC) Aircraft projects shall be provided by the Operators to
Delta on a quarterly basis.  The listing shall include Aircraft/Engine/APU
affectivity and implementation status.
 
Each Operator is responsible for managing its respective Aircraft records and
shall meet the requirements of 14 C.F.R. 121.380 (including but not limited to
the items detailed below), or any successor thereto, and verify that Part 145
Repair Stations contracted to work on its Aircraft maintain the necessary
maintenance records.  Each Operator will ensure that the following records are
retrievable by Aircraft and/or by component serial number, as applicable:
 
1.  
Supplemental Type Certificates (STC’s)

 
2.  
Airworthiness Directive (AD) compliance

 
3.  
Service Bulletin (SB) compliance

 
4.  
Alternative Method of Compliance (AMOC’s) (transferable and non-transferable)

 
5.  
Component overhaul records

 
6.  
Aircraft discrepancy log books

 
7.  
Non-routines

 
8.  
Major repairs and alterations

 
9.  
Routine scheduled checks (A, C, D, etc.)

 
10.  
Aircraft delivery documents

 
11.  
Back to birth trace for all life limited parts (LLP’s).

 

 
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Section 3.08 Third Party Guarantees and Warranties.  Each Operator shall
administer, track and pursue warranty and guaranty claims under the purchase,
support and service agreements for the Equipment, so as to minimize operating
costs for the Equipment.  Such efforts shall include establishment of all
systems and procedures necessary to track and submit warranty and guaranty
claims, including providing reports and information required to be provided
under the purchase, support or services agreement.  No Operator shall operate or
maintain the Equipment in a manner that could result in any warranty or guaranty
being terminated or voided, without the prior written consent of Delta.
 
Section 3.09 Related Transfer Arrangements.  All leases and subleases of
simulators, tooling and spare parts inventory agreements and vendor and/or
maintenance agreements with respect to the Equipment (collectively “Support
Agreements”) entered into by one or more Operator after the Effective Date shall
be assignable to Delta without the consent of the other party to such Support
Agreement on termination of this Agreement.  On termination or expiration of
this Agreement, if mutually agreed to by Pinnacle and Delta, each Operator shall
assign to Delta such Support Agreements as Delta shall designate.  Each Operator
shall use reasonable efforts to obtain the consent of the other party to any
such Support Agreements in effect as of the Effective Date and, subject to
obtaining such consents, if necessary, if mutually agreed to by Pinnacle and
Delta, each Operator shall assign such Support Agreements to Delta on
termination or expiration of this Agreement.  On the expiration or termination
of this Agreement, if mutually agreed to by Pinnacle and Delta, Delta may
purchase from each Operator or its Affiliate all simulators, tooling and spare
parts inventory then owned by such Operator or its Affiliate which are used with
or related to the Equipment, for an amount to be determined by Pinancle and
Delta.  Upon termination or expiration of this Agreement, each Operator shall
make available to Delta at no cost all aircraft records and manuals required in
order to operate and maintain the Equipment in advance of transfer.
 
Section 3.10 Equipment Financing Coordination.  Each Operator shall coordinate
and cooperate with Delta with respect to Equipment sale, purchase and lease
transactions.  Such coordination and cooperation shall include, but is not
limited to, cooperating with Delta in structuring the closing of Equipment sale,
purchase or lease transactions in a manner that will minimize the imposition of
any local, city, county, state, provincial, federal or foreign taxes or other
governmental transfer charges related to such transactions, providing Delta with
financial information (audited and unaudited) that Delta may then provide to
third parties, assisting Delta in raising capital through the sale of either
debt and/or equity in connection with the financing or leasing of the Equipment
where and as requested by Delta (including but not limited to participating in
meeting with the manufacturer, potential investors and sources of financing or
lease equity to discuss Operator’s financial and operational performance and
outlook), and full cooperation in meeting appropriate return conditions of the
Equipment upon expiration of the Equipment’s Lease.  All of an Operator’s
reasonable out-of-pocket costs and expenses arising from cooperation under the
foregoing shall be reimbursed by Delta.
 
Section 3.11 Spare Parts Inventory; Application of Credits.  If Delta possesses
any manufacturer, supplier or servicer credits and Operator intends to acquire
spare parts or inventory from Bombardier or General Electric, such Operator
shall purchase from Delta such
 

 
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credits at the face value of such credits in an amount up to to the amount to be
purchased from Bombardier or General Electric, as applicable (but only to the
extent Bombardier or General Electric, as applicable, will accept such
credits).  Delta shall provide Pinnacle notice from time to time upon Delta
obtaining eligible credits that are available pursuant to this Section
3.11.  Following notification by an Operator to Delta of such Operator’s intent
to utilize credits, Delta shall deduct the amount of such credits from the next
payment due to such Operator hereunder, and on such date, Delta shall deliver to
such Operator a credit memorandum equal to the amount of such credits purchased
by such Operator.
 
ARTICLE IV                                
 
ANCILLARY ARRANGEMENTS
 
Section 4.01 Coordination with Operators.
 
(a) Schedules and Timetables.  Delta shall file and maintain schedules with all
applicable schedule distribution systems for all Scheduled Flights, and such
schedules shall be filed and maintained by Delta together with the schedules for
its flights.  Delta shall include and list all Scheduled Flights providing
Regional Airline Services in the schedule publication program of Delta.  Delta
shall include Scheduled Flights operated by each Operator in all appropriate
flight information systems on which Delta flights are listed.
 
(b) Travel Privileges.  As of the Effective Date, each of Pinnacle and Mesaba
(for so long as such Party continues to be an Operator under this Agreement)
shall each be entitled to make available for their respective employees, the
travel privileges set forth on Exhibit B attached hereto in accordance with the
terms and conditions set forth therein (the “Employee Pass Travel
Privileges”).  Notwithstanding the foregoing, ***, such travel privileges shall
be substantially similar to those travel privileges provided by Delta to
employees of other Delta Connection Carriers.    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 Parent.
 
Section 4.02 Ground Handling and Weather-event Recovery.
 
(a) Ground Handling.  With respect to the Scheduled Flights and Charter Flights,
Delta shall be responsible for all Ground Handling Functions at all Service
Cities.  Delta at its option may: (i) perform all Ground Handling Functions
directly, (ii) contract with Pinnacle pursuant to the Airport Services Master
Agreement between Pinnacle as Handling Company and Delta dated as of December 2,
2008, as amended from time to time or (iii) sub-contract performance of the
Ground Handling Functions to an Affiliate of Delta or a third party vendor, or a
combination of any of the foregoing.
 
(b) Weather-event Recovery.  With respect to recovery from weather events that
disrupt the Regional Airline Services operated by an Operator, such Operator’s
System Operations Control shall coordinate with Delta’s System Operations
Control for returning to normal operations.
 

 
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Section 4.03 Facilities.
 
(a) Airport Facilities.  During the Term and subject to the terms and conditions
of this Section 4.03, Delta shall provide the applicable Operator with access on
a non-exclusive, shared use basis to a portion of the airport premises and
facilities leased by Delta pursuant to a use and lease agreement or other
agreement with the applicable airport authority or other third party (each, a
“Delta Lease” and collectively, the “Delta Leases”) at each of the Service
Cities served by such Operator hereunder and at other airport locations
designated in writing by Delta from time to time, the types, location and square
footage of which shall be designated in writing by Delta from time to time
(together with any other premises and facilities of Delta to which such Operator
may have access for purposes of this Agreement, the “Premises”). Delta may, at
its expense, relocate any of the Premises used by an Operator at anytime during
the Term.  The Premises shall be used by the applicable Operator solely for the
performance of Regional Airline Services hereunder and for no other purpose
except as otherwise approved in writing by Delta.  In the event
Delta  determines that an operator requires additional facilities at any Service
City for the performance of Regional Airline Services hereunder, Delta may elect
(i) to lease or acquire the right to use such facilities and, in such
event,  Delta shall provide such Operator with access to such facilities on the
terms and conditions set forth in this Section 4.03 and such facilities shall be
deemed to be “Premises” hereunder, or (ii) to require such Operator to lease or
acquire the right to use such facilities and, in such event such Operator shall
ensure that any use and lease agreement or other agreement entered into with the
applicable airport authority or other third party with respect to such
facilities contains a provision that allows such agreement to be assigned by
such Operator to Delta without the consent of such airport authority or other
third party upon expiration or termination of this Agreement, the withdrawal of
Scheduled Flights from such airport, or upon written notice from Delta to such
Operator, provided that if the consent of such airport authority or other third
party is required by contract or Governmental Regulations, such Operator will
use its best efforts to obtain such consent at the time of any such termination,
withdrawal or written notice.  Upon the expiration or earlier termination of
this Agreement, the withdrawal of Scheduled Flights from any such airport or
upon receipt of written notice from Delta, promptly upon Delta’s request, each
Operator shall assign all of its right, title and interest in and to such
agreement to Delta, provided that such assignment does not give rise to an event
of default under such agreement, that the applicable Operator is released from
obligations arising under such agreement from and after the date of assignment,
and, to the extent consent of the airport authority or other third party is
required, such Operator is able to obtain such consent after using its best
efforts to obtain the consent of the airport authority or other third party to
any such assignment do so.
 
(b) Facilities Rent.  Except as otherwise provided herein, with respect to each
Service City served by an Operator hereunder, the applicable Operator shall not
be obligated to pay any portion of the rent or facility charges payable by Delta
pursuant to the applicable Delta Lease, provided that Delta may elect, with
respect to one or more such Service Cities, to cause an operator to pay the rent
directly to the lessor of such Premises and Delta shall reimburse such Operator
for the Direct Costs incurred by such Operator as a result of such
election.  Each Operator shall submit to Delta supporting documentation
reasonably requested by Delta with sufficient detail to allow Delta to verify
the accuracy of the invoiced amount.
 

 
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(c) Airport Landing Fees.  With respect to Airport Landing Fees payable with
respect to any flight operated by either Operator pursuant to this Agreement to
or from any Service City or other location to which a such flight to or from any
Service City is diverted, Delta may elect to pay such fees directly to the
applicable airport authority based on the reports submitted by such Operator to
Delta or such airport authority pursuant to Section 4.03(g) hereof or, at
Delta’s election (or Delta’s failure to pay such fees), to cause such Operator
to pay directly to the applicable airport authority such landing fees in the
amounts required pursuant to the applicable Delta Lease or any operating permit
or other agreement between such Operator and such airport authority with respect
to such flight and, in such event, such fees shall constitute Direct Expenses of
such Operator hereunder for which such Operator shall be reimbursed by Delta
pursuant to Exhibit A, Section 1.03 hereof.
 
(d) Passenger Facility Charges.  Delta shall be responsible for the collection
and remittance in accordance with the applicable Delta Lease of all passenger
facility charges, if any, with respect to flights operated by Operators in
accordance with this Agreement.
 
(e) Other Airport Charges.  Except as otherwise provided in this Section 4.03,
each Operator shall be responsible for the payment of all fees and expenses, if
any, incurred by Delta or such Operator pursuant to the applicable Delta Lease
or any operating permit or similar agreement between such Operator and the
applicable airport authority with respect to any flight operated by such
Operator in accordance with this Agreement, including without limitation,
employee badging fees, employee parking fees, license fees, fees or penalties on
payments made after the due date as a result of an action or inaction of such
Operator, and repair and maintenance costs and expenses.  Such fees and expenses
shall not constitute Direct Expenses of such Operator and Delta shall not be
obligated to reimburse such Operator for such fees and expenses.
 
(f) Signatory Status.  Upon the request of any airport authority at any Service
City served by an Operator hereunder and subject to Delta’s prior written
consent, such Operator shall enter into an operating permit or similar agreement
with such airport authority to permit such Operator to serve such Service
City.  In all such events, subject to Delta’s prior written consent, each
Operator shall take all actions required to obtain signatory status at any
Service City served by it hereunder and shall perform all conditions required by
the applicable airport authority to obtain such status, including without
limitation the posting of a bond or letter of credit and furnishing evidence of
insurance coverage as may be required by such airport authority, provided that
any expenses incurred in obtaining such signatory status shall constitute Direct
Expenses of such Operator hereunder for which such Operator shall be reimbursed
by Delta pursuant to Exhibit A, Section 1.03 hereof.  In the event an Operator
qualifies as a signatory carrier at any Service City served by it hereunder,
such Operator agrees to vote on any matter submitted to the signatory carriers
at such Service City for a vote as directed by Delta. All costs and continuing
liabilities, including fiscal year shortfall adjustments, associated with such
Operator’s obligations under such operating permit or similar agreement to pay
landing fees, common use charges or other rates, charges and fees to the airport
operator the Signatory obligations of such Operator shall be included in Direct
Expense during the Term, and any such obligations payable after the term of the
Agreement shall be paid upon invoice from such Operator to Delta. If an Operator
is
 

 
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unable to terminate the operating permit or similar agreement conferring
signatory status without cause and without penalty effective upon termination of
the Agreement, if requested by such Operator, Delta will cooperate with such
Operator to transfer such Operator’s signatory obligations to Delta, when
permitted by the airport authority.
 
(g) Reporting Obligations.  During the Term, each Operator shall prepare and
timely deliver to Delta or to the applicable airport authority at each Service
City, as directed by Delta, all reports and other information required to be
provided pursuant to each of the Delta Leases with respect to any flight
operated by such Operator hereunder, including without limitation all landing
and passenger data.  In the event Delta incurs any fees, fines, penalties or
expenses as a result of any failure to deliver or delay by an Operator in the
delivery of such information, Delta shall have the right to deduct any such fee,
fine, penalty or expense from amounts owed by Delta  hereunder.
 
(h) Invoice Processing; Accounting Entries.  With respect to those Service
Cities designated by Delta from time to time during the Term, each Operator
shall be responsible for reviewing all invoices received by it or Delta for fees
and charges submitted by the applicable airport authority, reconciling all
amounts set forth on such invoices, certifying to Delta that such amounts are
payable in accordance with the applicable Delta Lease, and obtaining payment
authorization with respect to such fees and charges.
 
(i) Maintenance Facilities.  During the Term, each Operator shall be responsible
for obtaining and maintaining adequate maintenance facilities required for the
maintenance of all Equipment operated or utilized in connection with the
performance of services pursuant to this Agreement (the “Maintenance
Facilities”).  With respect to any agreement to purchase, lease, sublease or
otherwise obtain the use of any Maintenance Facilities or any amendment to any
such existing agreement entered into by an Operator after the Effective Date,
such Operator shall obtain Delta’s written consent prior to entering into any
such agreement or amendment and Delta shall be entitled to elect to enter into
any such agreement or amendment in its own name in place of such Operator and,
in any such case, Delta shall grant to such Operator the right to use such
facilities on the terms and conditions set forth in this Agreement.
 
(j) Signage.  Subject to Governmental Regulations and the provisions of the
applicable Delta Lease, the applicable Operator shall display at all locations
within the Premises such signage or other forms of advertising as Delta may
specify.  All signage utilizing a Delta trademark shall be provided by Delta at
its sole cost and expense, shall remain the property of Delta and any use
thereof shall be subject to the provisions of Article VII hereof.  No Operator
shall, without the prior written consent of Delta, use any other trademarks on
any signage or other forms of advertising displayed on any Equipment or at any
facility used by such Operator to provide Regional Airline Services hereunder or
used to identify or promote the Regional Airline Services, except as may be
required by Governmental Regulations.
 
(k) Subject to Delta Lease.  Any right granted to an Operator hereby to use any
Delta facilities is in all respects subject and subordinate to the terms and
conditions of the applicable Delta Lease and each applicable Operator shall
comply with such Delta Lease in all respects to the extent applicable to such
Operator’s use of the Premises.  No Operator shall commit or permit to be
committed any act or omission that shall violate any term or condition of any of
the
 

 
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Delta Leases or any applicable law, rule or regulation, and shall make no
alterations, additions or improvements to such facilities.  Each Operator shall
obtain and maintain in good standing any licenses, permits, approvals or
consents required in connection with its use of such facilities.  Each Operator
shall maintain the Premises used by it in a neat, clean, and sanitary condition
and shall not permit trash, rubbish, or waste to accumulate at such
Premises.  The applicable Operator shall dispose of all such materials,
including without limitation hazardous waste materials, in accordance with all
applicable laws, rules, regulations, ordinances and Delta’s Environmental
Programs Manual.  Should an Operator cease to provide Regional Airline Services
at any Service City where the Premises are located, such Operator shall return
the Premises to Delta in their original condition, subject only to ordinary wear
and tear, and such Operator shall properly remove and dispose of all trash,
rubbish and waste.
 
(l) No Warranties.  Any equipment and facilities provided to an Operator by
Delta hereunder are provided AS-IS, WHERE-IS, AND WITH ALL FAULTS.  Delta makes
no warranties, express or implied with respect to merchantability, fitness for
intended use or condition of any equipment or facilities provided hereunder.  IN
NO EVENT SHALL DELTA’S LIABILITY OF ANY KIND WITH RESPECT TO SERVICES, EQUIPMENT
OR FACILITIES PROVIDED TO COMPANY UNDER THIS AGREEMENT INCLUDE ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
 
(m) Separate Facilities Use Agreement.  Should the airport operator or other
third party lessor under the Delta Lease at any Service City require a separate
facilities use agreement between Delta and an Operator with respect to the
Premises, such Operator shall sign such agreement prepared by Delta containing
terms and conditions generally consistent with the terms and conditions of this
Agreement.
 
Section 4.04 Data Communications. If necessary for an Operator’s operation of
the Regional Airline Services hereunder, Delta shall provide to such Operator at
all Service Cities served by such Operator, at Delta’s sole expense, data
circuit lines, any required data networking equipment, the use of computer
reservation terminals, printers and modems, including hardware, software and
maintenance support for such equipment (the “Data Communication
Equipment”).  Such Data Communication Equipment shall be of the same type and
quality as that used by Delta in its airline operations.  In connection with the
commencement of Regional Airline Services at a new Service City,  if necessary
for an Operator’s operation of the Regional Airline Services hereunder, Delta
will provide such Operator with Delta’s standard Data Communications Equipment
at Delta’s sole expense.
 
Section 4.05 Security.  Delta shall be responsible for the systems which are
programmed to perform all the Department of Homeland Security and foreign
government requirements relating to watchlist vetting, CAPPS, and passenger APIS
submission.  Delta and the Operators’ personnel are each responsible to ensure
all required government and airline security and customs/immigration procedures
are followed and each Party will ensure that its staff has received the
appropriate training as required by applicable law and by the carrier.
 

 
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In regard to security investigations, each Operator will cooperate with Delta
during the investigation of alleged or actual security compliance violations,
security issues, fraud, theft, vandalism, and other possible criminal acts
involving any employee, passenger or agent of such Operator or relating to the
Regional Airlines Services provided by such Operator hereunder.
 
Airport security and passenger screening is conducted by the TSA as of the
Effective Date.  To the extent airlines have responsibility for airport security
and/or passenger screening Delta shall be responsible for an Operator’s
allocated share with respect to the Regional Airline Services only of all
maintenance expenses associated with all security equipment and such Operator’s
allocated share of all personnel expenses (including overtime) associated with
the operation of such equipment and all airport security-related functions,
including, without limitation, passenger screening and activities related to
security directives imposed by Governmental Regulations.  Notwithstanding the
foregoing, the parties acknowledge and agree that should the U.S. government
augment or change the directives, requirements, processes, procedures or the
activities related to passenger screening as may be imposed by future
Governmental Regulations, then the parties will negotiate in good faith
regarding any changes to this Agreement that may be necessary as a result.
 
Section 4.06 Reservation Services.  During the Term, Delta shall handle, at its
sole expense, reservations for all passenger air transportation on Scheduled
Flights operated pursuant to this Agreement.  Reservations shall be handled in
the same manner and subject to the same standards utilized by Delta for its own
reservations.  All reservations shall be made in the name of Delta unless
otherwise required by Governmental Regulations.  Delta shall be sole owner of
any customer or passenger data relating to the Scheduled Flights and related
reservation services.  However, upon the reasonable request of an Operator,
Delta will share with such Operator such customer or passenger data relating to
the Scheduled Flights and related reservation services when reasonably necessary
solely for the purpose of resolving Customer/Passenger complaints or claims, or
if such Operator is required to produce such customer or passenger data relating
to the Scheduled Flights and related reservation services in response to a valid
subpoena, order of a court or other governmental body of the United States or
any political subdivision thereof (provided, however, that such Operator shall
have given notice to Delta and shall allow Delta to make a reasonable effort to
obtain a protective order requiring that such information so disclosed shall be
used only for the purposes for which the order was issued) or if otherwise
required by law, or if necessary to establish rights or enforce obligations
under this Agreement.  No Operator shall have any right to disclose or use such
information other than as expressly provided herein or otherwise permitted by
Delta in writing.
 
Section 4.07 Baggage Claims and Baggage Delivery.  With respect to baggage
claims and delivery costs in connection with the provision of the Regional
Airline Services, Delta shall be responsible for such claims and any Direct
Costs incurred by an Operator.
 

 
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Section 4.08 Ticketing Services and Ticketing Procedures.
 
(a) Frequent Flyer Program.  Each Operator agrees to accept Delta frequent flyer
tickets and to provide transportation services pursuant to such tickets at no
charge to Delta.  All travel under the frequent flyer program solely on an
Operator shall entitle a passenger to such credit as shall be equivalent to the
credit offered on Delta for comparable mileage segments.  Delta will provide
such credit to members of its frequent flyer program who travel on an Operator
at no charge to such Operator.
 
(b) Ticketing Costs.  All travel agency commissions attributable to Scheduled
Flights shall be Delta’s expense.  Delta shall pay all computer reservation
system fees attributable to passengers on Scheduled Flights.
 
Section 4.09 Air Cargo Handling Services.  With respect to the Scheduled
Flights, Delta shall be responsible for all air cargo handling services at all
Service Cities.  Delta at its option may: (i) perform all air cargo handling
functions directly; (ii) contract with Pinnacle pursuant to the Airport Services
Master Agreement between Pinnacle as Handling Company and Delta dated as of
December 2, 2008, as amended from time to time or (iii) sub-contract performance
of the air cargo handling functions to an Affiliate of Delta or a third party
vendor, or a combination of any options above.
 
Section 4.10 Air Cargo Acceptance & Claims.
 
(a) At each location at which Delta operates ticketing services, Delta shall at
no charge to the applicable Operator accept air cargo for shipment on flights to
be operated by and over the routes of such Operator or Delta. Delta shall issue
appropriate documentation in accordance with current operations procedures for
all shipments.
 
(b) For purposes of air cargo claims, Delta will be responsible for all air
cargo claims arising from the Regional Airline Services performed hereunder,
provided that all loss/damage/delay claims involving routing on both Delta and
one or both Operators will be determined and managed by Delta’s cargo claims
department.  If Delta determines an Operator is liable for the loss, Delta will
invoice such Operator and provide sufficient documentation as to Delta’s
investigation and conclusion for the claim loss, and the claim will be forwarded
to such Operator for review and reimbursement to Delta.  If such Operator
disputes the invoice, such Operator shall provide written notice to Delta within
thirty (30) days from the date of invoice and such Operator’s obligation to pay
the invoice shall be suspended until the dispute is resolved.
 
Section 4.11 Use of COMAT.  Delta and each Operator shall each provide to the
other, at no cost to the other and on a non-discriminatory basis, access to its
respective COMAT system for the movement and acquisition of priority aircraft
maintenance parts and other company material.  Delta’s failure to deliver timely
a maintenance component via COMAT, whether timely or at all, shall not cause an
affected Scheduled Flight to be excluded in calculating an Operator’s on-time
performance and completion factors.  Wherever possible, bookings should be
 

 
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made in advance, and all access shall be consistent with Delta’s and each
Operator’s respective published COMAT procedures and policies, as amended from
time to time.
 
Section 4.12 Slots and Route Authorities.  If Delta schedules an Operator to
operate a Delta Connection Flight to a location for which such Operator requires
an airport takeoff or landing slot or route authority, Delta will either (i)
provide such airport takeoff or landing slot or route authority to such Operator
or instruct such Operator to obtain such airport takeoff or landing slot or
route authority and Delta shall reimburse such Operator for any reasonable
out-of-pocket costs and expenses incurred by such Operator in obtaining such
airport takeoff or landing slot or route authority.  During the Term or upon the
expiration or termination of this Agreement, Delta may, in its sole discretion,
require the applicable 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 have been or are being
used for Regional Airlines Services under this Agreement, provided that Operator
does not require such airport takeoff or landing slot, route authority or other
regulatory authority for the provision of Regional Airline Services pursuant to
this Agreement.  If an Operator is operating Regional Airline Services at a
Service City pursuant to the DOT’s Essential Air Service (“EAS”) program on
behalf of Delta, upon the expiration or termination of this Agreement, Delta
will obtain another operator to provide air service to such city and the parties
will cooperate in good faith to transfer the EAS designation and air service
responsibility to the new operator.
 
Section 4.13 Emergency Response and Family Assistance Agreement.  Delta shall
enter into a separate written agreement with each Operator with respect to
emergency response and family assistance services to be provided to each
Operator by Delta at no charge in connection with the Regional Airlines Services
operated under this Agreement.
 
ARTICLE V                                
 
REVENUES, PAYMENTS AND SETOFF
 
Section 5.01 Revenues.  Each Operator acknowledges and agrees that all revenues
resulting from the sale and issuance of passenger tickets and cargo air waybills
associated with the operation of the Aircraft and all other sources of revenue
associated with the operation of the Aircraft are the sole property of Delta,
including without limitation ticket change fees and other fees or charges which
are applicable pursuant to Delta’s tariffs, fuel surcharges, governmental
subsidies, EAS subsidies, revenue guarantees, unaccompanied minor fees, liquor
charges, snack/beverage services, SkyMall products and services and other
in-flight products, luggage fees, advertising revenue, excess baggage fees and
nonrevenue pass travel charges.
 
Section 5.02 Payments to Pinnacle.  Delta will pay Pinnacle for the Regional
Airline Services in accordance with Exhibit A hereto.
 
Section 5.03 Billing.  Delta and Pinnacle shall bill each other on a monthly
basis (or as otherwise agreed) in respect of amounts owed to each other under
this Agreement not contemplated under Exhibit A.  If such billed items are not
paid by the applicable Party within sixty (60) days of the invoice date, the
aggregate amount of any undisputed unpaid items may be offset against or
included, as applicable, in the next scheduled payment pursuant to Exhibit
A.  Disputed amounts must be paid when the dispute is resolved to the
satisfaction of the Parties, provided that such amount may be set off against or
included, as applicable, in the
 

 
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next scheduled payment pursuant to Exhibit A if the formerly disputed amount is
not paid within seven (7) days of resolution.  Delta may also offset against the
next scheduled payment pursuant to Exhibit A the amount of any payment owed to
Delta or an Affiliate of Delta (including, without limitation, those under any
Lease, the 2007 CRJ-900 Delta Connection Agreement, the SAAB Agreement and the
Second Amended and Restated Airline Services Agreement) with respect to which an
Operator or any Affiliate of an Operator or Parent shall have defaulted and
shall have failed to cure before the expiration of any applicable cure period.
 
ARTICLE VI                                
 
REPORTING OBLIGATIONS, AUDITING, INSPECTIONS AND CONFIDENTIALITY/PUBLICITY
 
Section 6.01 Reporting Obligations.
 
(a) Certain Notices to Delta.  In addition to the other reporting requirements
set forth in this Agreement, Parent shall give written notice (within ten (10)
business days) to Delta of (i) any litigation involving an uninsured claim of
more than $1,000,000 against any Pinnacle Party, (ii) any proceeding before any
Governmental Authority which, if adversely determined, would materially and
adversely affect the financial condition, affairs, operations or prospects of
any Pinnacle Party, including but not limited to a copy of any significant FAA
enforcement or civil penalty action, (iii) any in-flight injuries resulting in
severe bodily harm and (iv) any other matter which would materially and
adversely affect the financial condition, affairs, operations or prospects of
any Pinnacle Party or its ability to perform its obligations under this
Agreement.  Pinnacle shall also provide to Delta not later than the last day of
each month the completion factor and on-time factor for the prior month with
respect to the Scheduled Flights operated pursuant to this Agreement.
 
(b) Financial and Reporting Covenants.  Parent shall promptly provide to Delta
notice of and adequate information regarding any material weaknesses noted in
any management letters received by any Pinnacle Party from its independent
auditors and such company’s responses thereto.
 
Section 6.02 Audits.
 
(a) Audit of Costs, Operations and Service Levels.  The Pinnacle Parties shall
maintain complete and accurate books and records to support and document all
revenues, costs and expenses related to the Aircraft and the Regional Airline
Services provided hereunder, in accordance with GAAP and in accordance with the
accounting policies and procedures used by the Parties to develop the payment
rates set forth in Exhibit A, Attachment D (as amended or reset from time to
time) and the Direct Expenses.  Delta’s in-house finance staff and any
independent consultants selected by Delta shall be entitled, following
reasonable notice to Pinnacle, to audit and inspect the respective books and
records of the Pinnacle parties 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 (i) prospectively adjusting the Aircraft
Month Rates, Block Hour Rates,  and Cycle Rates in connection with any rate
reset pursuant to Exhibit A hereof and/or (ii) auditing any Direct Expenses or
incentive compensation due or paid hereunder.  Any such audit will be conducted
during regular business hours and be paid for by
 

 
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Delta unless such audit determines that one or more Pinnacle Party owes Delta in
excess of $500,000, in which case Pinnacle shall pay Delta the costs and
expenses incurred by Delta in connection with such audit.
 
(b) Inventory Audits.  At Delta’s request, during the Term each Operator and
Delta (or its designee) shall conduct periodic inventory audit of all spare
parts, tooling and equipment owned by Delta and leased to such Operator or owned
by Delta and supplied to such Operator.  In conducting such audit, the
applicable Parties shall tabulate the quantity and type of all spare parts and
equipment including recognition of spare parts and equipment which were scrapped
in the preceding year(s).
 
Section 6.03 Inspections.  Delta or its designee shall be entitled to conduct a
codeshare safety audit, on-site observations, inspections and audits of each
Operator’s in-flight service, flight, maintenance, technical operations,
Aircraft cleaning and any and all other services and operations performed under
this Agreement to monitor the Operators’ respective operations, safety,
performance and overall customer experience in the same manner as similar
functions are evaluated at Delta.  Each Operator’s operation will be evaluated
according to the same standard as Delta taking into account the differences in
size and operational capabilities between Delta and the applicable
Operator.  Such observations, inspections and audits may be announced or
unannounced, but under no circumstances shall they materially interfere with the
operation of the applicable Operator’s business.  Delta shall report the
findings of any such inspection to the applicable Operator in writing.  Such
Operator shall provide a prompt written response detailing a plan of corrective
action to remedy any deficiencies noted in any inspection. If any deficiency
with respect to operational safety, flight service, maintenance, or technical
operations comes to the attention of an Operator through internal audits or any
other means, such Operator shall take immediate corrective action with respect
thereto. In addition, Operator shall promptly notify Delta of any of the
following deficiencies that come to the attention of Operator:
 
 
1.
Any notice of civil penalty from a Governmental Authority;  

 
2.  Findings from a third party source (IATA, DOD, etc.) regarding safety
deficiencies not immediately resolved during the audit; and

3.  Self disclosures involving systemic issues. 

 
Section 6.04 Confidentiality/Publicity.  Each of the Parties agrees that, except
as otherwise required by Governmental Regulations or any other applicable law or
legal process, or as may be required to comply with or enforce the terms hereof,
it shall not disclose to others and shall keep confidential the terms of this
Agreement and any confidential, non-public information concerning the other or
any of its Affiliates that it obtains as a result of or pursuant to this
Agreement.  The Parties agree, however, that each Party may share this
Agreement, and the terms and details herein, with its respective outside
financial auditors or attorneys without the consent of the other Parties, and
without breach or violation of this Section 6.04 or this Agreement.  No Pinnacle
Party shall issue any press release or public announcement relating to new
Scheduled Flights, the cessation of Scheduled Flights in any Service City,
schedule changes,
 

 
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customer initiatives, marketing programs or promotions, without Delta’s prior
written approval of the press release or public announcement.  In any such press
release or public announcement, the applicable Operator shall identify itself as
a Delta Connection Carrier.
 
ARTICLE VII                                
 
DELTA IDENTIFICATION
 
Section 7.01 Identification License.  Delta hereby grants to each Operator a
limited, non-exclusive, non-transferable, non-sublicensable license to use the
DL Identification in connection with its operation of the Regional Airline
Services as authorized hereunder.
 
Section 7.02 Designator License.  Delta hereby grants to each Operator a
limited, non-exclusive, non-transferable, non-sublicensable license to use the
Designator in connection with its operation of the Scheduled Flights as
authorized hereunder.
 
Section 7.03 New Identifications.  From time to time in its sole discretion,
Delta may change any DL Identifications and/or Designators upon notice to the
Operators.  After receipt of such notice, each Operator shall, as soon as
practicable, but no later than sixty (60) days thereafter, commence use of the
new DL Identifications and/or Designators and cease all use of any superseded
ones.  Delta shall reimburse each Operator for the reasonable out-of-pocket
expenses incurred by it in making such changes.
 
Section 7.04 Use of Identification.  Delta shall have exclusive control over the
use and display of all DL Identifications and Designators, and each Operator
shall comply with all policies and guidelines of Delta in this regard.   Each
Operator shall use the DL Identifications and Designators in good faith, in a
dignified manner and in compliance with good trademark practice.  Each Operator
shall use the DL Identifications and Designators exactly as prescribed by Delta,
and shall not use (i) any stylization, abbreviation or variation thereof or (ii)
the DL Identifications and Designators in connection or combination with any
other Identification, in each case, without Delta’s prior written consent, which
may be withheld in its sole discretion.
 
Section 7.05 Quality Control.  Each Operator shall use the DL Identifications
and Designators only in connection with products and services that comply with
the high standards of quality associated with Delta. At Delta’s request, each
Operator shall submit representative samples to Delta of all uses by it of the
DL Identifications and Designators pursuant to this Agreement, including
Sections 2.02 and 4.03.  each Operator shall receive the prior written approval
of Delta for any new uses of the DL Identifications and Designators, including
on any advertising and promotional materials.  Once such approval is received,
the applicable Operator need not resubmit such materials for approval unless
they contain non-trivial modifications.
 
Section 7.06 Reservation of Rights.  All rights not expressly granted to the
Operators hereunder are expressly reserved by Delta, including without
limitation the right to use or license others to use any DL Identifications or
Designators.  No Operator shall use the DL Identification or Designator except
as expressly authorized herein, nor has any right to use any other
Identification of Delta other than the specific DL Identification in the exact
form prescribed by Delta from time to time.
 

 
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Section 7.07 Ownership.  Each Pinnacle Party hereby acknowledges that, as
between the Parties, Delta is the sole owner of the names “Delta” and “Delta
Connection,” the Delta “widget” logo, the initials “DL,” and any Designators or
DL Identifications related thereto or otherwise licensed to the Operators
hereunder.  Each Pinnacle Party agrees not to directly or indirectly question,
attack, contest or impugn the validity and/or Delta’s rights in the Designators
and DL Identifications, including without limitation by attempting to register
title to or any intellectual property rights in same or by participating in any
action or proceeding adverse to Delta in this regard.  Each Pinnacle Party
agrees to cooperate fully with Delta in all actions to enforce, police and
defend Delta’s rights in the Designators and DL Identifications, subject to
reimbursement for its reasonable out-of-pocket expenses.
 
Section 7.08 Termination.  Should this Agreement expire or terminate for any
reason and not be replaced with another airline services agreement among the
Parties, the licenses in Sections 7.01 and 7.02 shall immediately terminate
(although Sections 7.07 and 7.08 shall survive), and each Operator shall
promptly, but in any event within ninety (90) days (one hundred twenty (120)
days with respect to any distinctive color scheme), take all such actions as may
be necessary to change its facilities, equipment, uniforms, supplies and other
materials to cease all use of any Designators and DL Identifications and to
avoid any customer confusion or the suggestion or appearance that such Operator
continues to have an operating relationship with Delta.
 
Section 7.09 Bankruptcy.  The Parties intend that the identity of each Operator
as the licensee hereunder is a material condition to Delta’s granting of the
licenses in 7.01 and 7.02, and that this Agreement should be construed overall
as a contract for the personal services of each Operator.  Therefore, in the
event either Operator becomes subject to a bankruptcy proceeding, the Parties
intend that this Agreement shall not be assumed and/or assigned by any such
Operator or its representative without Delta’s prior consent.
 
ARTICLE VIII                                
 
TAXES AND FEES
 
Section 8.01 Taxes and Fees.  Each Operator shall be liable for and pay the
amount of any taxes (other than Ticket Taxes and Fees), duties, license fees,
assessments, and other charges, together with any interest and penalties
thereon, levied, assessed, or imposed by any federal, foreign, state or local
taxing or airport authority related or attributable to (i) the property owned or
used by such Operator, and (ii) the performance of Regional Airline Services
pursuant to this Agreement, excluding any taxes based on the net income of
Delta.  Delta shall reimburse Operators for taxes as set forth on Exhibit A.
 
Section 8.02 Property Tax, Fuel Tax, and Sales and Use Tax Compliance.
 
(a) With respect to any property taxes, fuel taxes, sales and use taxes, excise
taxes, liquor taxes, and similar transaction taxes (“Transaction Taxes”), Delta
and the Pinnacle Parties shall cooperate to ensure that each Operator is timely
filing appropriate tax returns and refund claims to minimize its respective
Transaction Taxes.  Delta shall determine which entity, Delta
 

 
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or the applicable Operator, shall be responsible for preparing and filing
appropriate such tax returns and refund claims.  Unless Delta determines
otherwise and notifies an Operator in writing, such Operator shall be
responsible for all such Transaction Tax filings and payments. Upon the request
of Delta, (i) Delta shall be entitled to review any actual or proposed tax
filings of an Operator related to Transaction Taxes and (ii) each Operator shall
execute and deliver a power of attorney and/or an assignment of refund claim in
favor of Delta, in each case with respect to any Transaction Taxes.  Each
Operator shall notify Delta of the commencement of any tax audit. Prior to
resolving any tax audit, the applicable Operator shall receive approval from
Delta to resolve any such audit.
 
(b) Each Operator shall use its reasonable best efforts to, and cooperate with
Delta to, minimize its respective Transaction Taxes.  Each Operator shall in
good faith and using reasonable best efforts supply Delta with such information
and documents reasonably requested by Delta to minimize its respective
Transaction Taxes.  Unless Delta determines otherwise, the applicable Operator
shall use its reasonable best efforts to seek any and all applicable refunds or
credits of Transaction Taxes paid by such Operator.  Any such refunds for
Transactional Taxes will be to the sole benefit of Delta.
 
Section 8.03                      New International Service Cities.  With
respect to taxes associated with any Regional Airline Services to new
international Service Cities, which are commenced after the Effective Date,
Delta and the applicable Operator shall use reasonable best efforts to agree to
the administration of all responsibilities for such taxes and how such taxes
shall be reimbursed in accordance with Exhibit A hereto.
 

 
ARTICLE IX                                
 
LIABILITY, INDEMNIFICATION AND INSURANCE
 
Section 9.01 Independent Contractor.
 
(a) Each of the Pinnacle Parties shall act hereunder as an independent
contractor.  The employees, agents and/or independent contractors of the
applicable Pinnacle Party engaged in performing any of the services such
Pinnacle Party is obligated to perform pursuant to this Agreement shall be
employees, agents and independent contractors of such Pinnacle Party for all
purposes and under no circumstances shall employees, agents or independent
contractors of any Pinnacle Party be deemed to be employees, agents or
independent contractors of Delta.  In its performance of obligations under this
Agreement, each of the Pinnacle Parties 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 any Pinnacle Party in connection with their performance
of their respective obligations hereunder, and all complaints or requested
changes in procedure shall, in all events, be transmitted by Delta to a
designated representative of Parent.  Nothing contained in this Agreement is
intended to limit or condition either Operators control over their respective
operation or the conduct of their respective business as an air carrier
 

 
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(b) Delta shall act hereunder 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 any Pinnacle
Party.  In performing its obligations under this Agreement, Delta shall act, for
all purposes, as an independent contractor and not as an agent for any Pinnacle
Party.  No Pinnacle Party shall have any 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 any Pinnacle Party
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.
 
Section 9.02 Indemnification.
 
(a) At all times while Regional Airline Services are being furnished hereunder,
including without limitation, while Ground Handling Functions are being
performed with respect to any Aircraft, an employee or agent of the applicable
Operator shall be in charge, custody and control of any Aircraft operated by
such Operator by Delta or its contractors and Delta shall at no time be
considered a bailee of or as having care, custody or control of such Aircraft.
 
(b) Each Pinnacle Party, 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 a Pinnacle
Party pursuant to this Agreement, or the operation, non-operation, or improper
operation by a Pinnacle Party of the Equipment or the Premises, 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.
 
(c) Except as limited by Section 9.02(d) below, Delta shall be liable for and
hereby agrees fully to defend, release, discharge, indemnify, and hold harmless
each Operator, and each of their respective 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
 

 
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 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.
 
(d) Delta shall be liable for and hereby agrees fully to defend, release,
discharge, indemnify, and hold harmless each Operator Indemnity against any
physical loss of or damage to the Aircraft caused solely by Delta's negligent
operation of ground support equipment while providing Ground Handling Functions
PROVIDED ALWAYS THAT Delta's liability shall be limited to any such loss of or
damage to an Operator’s Aircraft not exceeding the lesser of (i) $500,000 or
(ii) the deductible on such Operator’s hull insurance policy covering the
damaged Aircraft, except that loss or damage in respect of any incident below
*** shall not be indemnified.
 
(e) The Pinnacle Parties 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 the Regional Airline
Services.
 
(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 NO OTHER
PARTY IS LIABLE TO IT OR ANY OTHER PERSONS FOR CONSEQUENTIAL OR PUNITIVE DAMAGES
UNDER ANY CIRCUMSTANCES.
 
(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
 

 
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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
9.02(g), 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 9.02(g) to the
contrary, any Pinnacle Party and Delta will cooperate in the defense of any
claim imposed jointly against them or as the result of the conduct of the other.
 
(h) The respective obligations of the Parties under the indemnity and insurance
provisions contained in this Agreement shall remain in effect and shall survive
without limitation the termination of this Agreement with respect to any
occurrence or claims arising during the term of or in connection with this
Agreement.
 
Section 9.03 Insurance.
 
(a) Each Operator agrees, at its sole expense, to maintain in full force and
effect the following insurance coverage with respect to Regional Airline
Services:
 
(1) All risk hull (including spares) insurance and hull war risk insurance on an
agreed value basis.
 
(2) Comprehensive airline liability insurance (including premises,
hangarkeepers, mobile equipment, contractual, cargo and products and completed
operations liability) covering bodily injury, personal injury and property
damage in an amount not less than *** per occurrence and in the aggregate where
applicable.
 
(3) Workers' compensation for statutory limits.
 
(4) Employer's liability in an amount not less than ***.
 
(5) Baggage liability limit of ***
 
(6) Automobile liability for public road use in an amount not less than
***combined single limit per occurrence.
 

 
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(7) 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.
 
(8) In lieu of commercial War Risk coverages required in Sections 9.03(a)(1) and
(7) above, evidence of indemnification by the United States Government shall be
acceptable.
 
(b) Prior to the commencement of Regional Airline Services under this Agreement
and upon renewal of the required coverages, each Operator shall issue a
Certificate of Insurance to Delta evidencing the above coverage
requirements.  Except for Workers Compensation, the Certificates of Insurance
must include the following special insurance provisions:
 
(1) Delta, its Affiliates and each of their respective it directors, officers,
employees and agents are included as Additional Insureds to the extent
Operator’s liability to Delta and such entities herein.
 
(2) Each Operator’s insurance coverages are primary without right of
contribution from Delta’s insurance.
 
(3) Each Operator’s insurers will waive their rights of subrogation against
Delta, its Affiliates and their respective directors, officers, employees and
agents, but only to the extent such Operator has waived its rights against such
parties pursuant to the terms of this Agreement.
 
(4) With respect to the insurance afforded Delta, its Affiliates and their
respective directors, officers, employees and agents, Each Operator’s insurance
shall not be invalidated by and breach or warranty by any Pinnacle Party.
 
(5) Provide cross liability and severability of interest provisions.
 
(6) In the event the required coverages are cancelled or materially changed, the
applicable Operator’s insurers will provide thirty (30) days prior notice (7
days as respect War Coverages and 10 days as respects non payment of premium) to
Delta.
 
(c) Each Operator shall comply with all insurance provisions in any Lease for
any Aircraft that such Operator leases or subleases from Delta.
 

 
***
 

 
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ARTICLE X                                
 
TERM AND TERMINATION
 
Section 10.01 Term.  This Agreement shall commence on and shall be effective as
of July 1, 2010 (the “Effective Date”) and, unless earlier terminated as
provided herein, shall continue in effect until the twelfth (12th) anniversary
of the Effective Date (the “Term”).
 
Section 10.02 Termination by Either Party.
 
(a) Notwithstanding the provisions of Section 10.01, Delta may terminate this
Agreement immediately if any Pinnacle 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.
 
(b) Notwithstanding the provisions of Section 10.01, the Pinnacle Parties may
terminate this Agreement immediately if Delta 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.
 
(c) Notwithstanding the provisions of Section 10.01, in the event of a material
breach of this Agreement by either any Pinnacle Party or Delta 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 Effective Date and March
31, 2011 Delta notifies Pinnacle of Delta’s intent to terminate this Agreement
pursuant to this Section 10.02(c), and the default by Operator giving rise to
such notice of termination is due to an act or omission of Mesaba occurring
prior to the Effective Date, then Operators 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.
 
Section 10.03 Termination by Delta.  Notwithstanding, and in addition to, the
provisions of Section 10.02, 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:
 
(i) Any Pinnacle Party agrees to merge into or with any entity other than an
Affiliate of Parent, agrees to be acquired by any entity other than 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 other than an
Affiliate of Parent, 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”);
 

 
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(ii) The acquisition 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 any Pinnacle Party, or (b) the combined
Voting Power of the then outstanding voting securities of any Pinnacle Party
entitled to vote generally in the election of such entity’s directors or
managers, as applicable (each such event, a “Change of Control”);
 
(iii) An Operator’s level of safety with respect to its operation of the
Aircraft or the Regional Airline Services is not reasonably satisfactory to
Delta;
 
(iv) a breach by any Operator of Section 2.08 hereof;
 
(v) an Operator’s failure to pass, in Delta’s reasonable discretion, a safety
and codeshare audit to be conducted by Delta, at its sole discretion, at any
time during the Term of this Agreement;
 
(vi) Operators fail to achieve any of the Operational Performance Standards set
forth on Schedule 2.11 with respect to the Aggregate CRJ900 Delta Connection
Flights during ***;
 
(vii) a material breach by any Pinnacle Party of any representation or warranty
in Section 11.01(e);
 
(viii) an Operator’s failure to comply with the insurance provisions of Section
9.03 hereof;
 
(ix) an 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 such Operator
to provide the Regional Airline Services required under this Agreement;
 
(x) an Operator shall commence operating an aircraft type which causes Delta to
be in violation of its collective bargaining agreement with its pilots, as may
be amended from time to time;
 
(xi) any Pinnacle Party shall default with respect to the material terms of any
other agreement between any Pinnacle Party or any Affiliate of any Pinnacle
Party, 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 2007 CRJ-900 Delta
Connection Agreement; (ii) the SAAB Agreement and (iii) the Second and Amended
Restated Air Services Agreement shall not be a Related Party Agreement hereunder
until July 1, 2011; or
 

 
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(xii) an Operator’s failure to pass, any audit conducted by the DOT, FAA, DOD or
IOSA, at any time during the Term of this Agreement.
 
Notwithstanding the foregoing or any other provision of this Agreement, if
between the Effective Date and March 31, 2011 Delta notifies Pinnacle of Delta’s
intent to terminate this Agreement pursuant to Section 10.03(iv), 10.03(v),
10.03(vi) or 10.03(ix) above, and the default by Operator giving rise to such
notice of termination is due to an act or omission of Mesaba occurring prior to
the Effective Date, then Operators 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.
 
Section 10.04 Force Majeure.  Notwithstanding the provisions of Sections 10.01,
10.02 and 10.03, in the event 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 an Operator’s employees by the
Aircraft manufacturer (each, a “Force Majeure Event”) substantially prevents one
Party’s performance of its obligations pursuant to this Agreement, for a period
of fifteen (15) or more consecutive days, Delta may (y) temporarily suspend some
or all of the Aircraft from the scope of this Agreement upon written notice to
Parent, or (z) terminate this Agreement in its entirety upon thirty (30) days
prior written notice to Parent.
 
Section 10.05 Effect of Termination.  Termination of this Agreement for any
reason shall not relieve any 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.
 
ARTICLE XI                                
 
REPRESENTATIONS AND WARRANTIES
 
Section 11.01 Representations; Warranties and Covenants of Pinnacle
Parties.  Each of the Pinnacle Parties represents and warrants to Delta as of
the Effective Date as follows:
 
(a) Organization and Qualification.  Each Pinnacle Party 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 provide the Regional Airline Services.
 
(b) Authority Relative to this Agreement.  Each Pinnacle Party 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 Pinnacle Party.  This Agreement has been
duly and validly executed and delivered by each Pinnacle Party and is, assuming
due
 

 
46

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

 

 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
Pinnacle Party, enforceable against each of them in accordance with its terms.
 
(c) Conflicts; Defaults.  Neither the execution or delivery of this Agreement
nor the performance by any Pinnacle Party of the transactions contemplated
hereby will (i) 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 Regional Airline Services, (ii) result in the
creation or imposition of liens in favor of any third person or entity, (iii)
violate any law, statute, judgment, decree, order, rule or regulation of any
governmental authority, or (iv) 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.
 
(d) Broker.  No Pinnacle Party has retained or agreed to pay any broker or
finder with respect to this Agreement and the transactions contemplated hereby.
 
(e) Compliance.  All Regional Airline Services performed pursuant to this
Agreement or otherwise by an 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.  Each Operator’s compliance with such governmental statutes, orders,
rules, regulations and notifications will be the sole and exclusive obligation
of each such Operator, and Delta will have no obligation, responsibility, or
liability, whether direct or indirect, with respect to such matters.
 
Section 11.02 Representations and Warranties of Delta.  Delta represents to each
Pinnacle Party as of the Effective Date as follows:
 
(a) 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.
 
(b) 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 each Pinnacle Party and that each Pinnacle Party 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.
 

 
47

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(c) Conflicts; Defaults.  Neither the execution or delivery of this Agreement
nor the performance by Delta of the transactions contemplated hereby will (i)
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 Regional Airline Services, (ii) result in the creation or
imposition of any liens in favor of any third person or entity, (iii) violate
any law, statute, judgment, decree, order, rule or regulation of any
governmental authority, or (iv) 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.
 
(d) Broker.  Delta has not retained or agreed to pay any broker or finder with
respect to this Agreement and the transactions contemplated hereby.
 
(e) 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 no Pinnacle Party will have any obligation, responsibility, or
liability, whether direct or indirect, with respect to such matters.
 
ARTICLE XII                                
 
COVENANTS OF OPERATORS
 
Each Operator hereby covenants and agrees that:
 
(a) Such 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 Scheduled
Flights or Charter Flights that will result in a material increase in such
Operator’s Direct Expenses 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
conditions hereunder (it being understood that Delta’s consent shall not be
required if such Operator does not pass any such increased costs to Delta as a
Direct Expense or otherwise).
 
(b) ***

 
48

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(c) Such Operator shall file all reports and plans relating to its operations
with the DOD, DOT, FAA, NTSB or any state or airport authority, and such
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, such Operator will promptly furnish Delta with a copy of
every report and plan that such 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.
 
(d) In the event Parent is no longer a public reporting company, such Operator
shall furnish to Delta (1) within 45 days after the end of each of the three
interim calendar quarters, unaudited financial statements including such
Operator's then current corporate balance sheet and profit and loss statement
and  (2) within 91 days after the end of such Operator's fiscal year, such
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, such Operator
shall furnish to Delta within 91 days after the end of such Operator's fiscal
year, a profit and loss statement with respect to such Operator’s Delta
Connection operations prepared by SEC line-item and certified by such Operator’s
chief financial officer.
 
ARTICLE XIII
 
CONTRACT INTERPRETATION
 
Section 13.01 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.
 
Section 13.02 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.
 
Section 13.03 Time is of the essence in interpreting and performing this
Agreement.
 

 
49

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Section 13.04 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.
 
Section 13.05 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.
 
Section 13.06 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.
 
Section 13.07 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. 
 
Section 13.08 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 XIV
 
CIRCUMSTANCES BEYOND THE PARTIES' CONTROL
 
With the exception of outstanding rights and obligations, and Delta’s right to
terminate this Agreement pursuant to Section 10.04 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
Force Majeure Event.
 
ARTICLE XV
 
MODIFICATION AND WAIVER
 
No amendment, modification, supplement, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Party therefrom, shall
in any event be effective unless in writing signed by authorized representatives
of each Party hereto, and then only in the specific instance and for the
specific purpose given.
 
ARTICLE XVI
 
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:
 

 
50

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(1)  If to Delta:

Delta Air Lines, Inc.
7500 Airline Drive, C009
Minneapolis, MN 55450-1101
Dept. 915
Attn: Senior Vice President- Delta Connection
Telecopy:  (612) 727-4104

with copies to:

Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA  30354
Dept. 981
Attn: Senior V.P. and General Counsel
Telecopy:  (404) 715-2233

(2)  If to any Pinnacle Party:

Pinnacle Airlines Corp.
1689 Nonconnah Boulevard
Suite 111
Memphis, Tennessee 38132
Attention:  Chief Financial Officer and General Counsel
Telecopy:  (901) 348-4262

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 (i) 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 (ii) if given by any
other means including, without limitation, by air courier, when delivered at the
address specified herein.  A Party may change its address for notice purposes by
notice to the other Parties in the manner provided herein.
 

 
51

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ARTICLE XVII
 
ASSIGNMENT
 
This Agreement shall bind and inure to the benefit of Delta, Parent, Pinnacle
and Mesaba, 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 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 XVIII
 
GOOD FAITH
 
Each Party shall exercise good faith in its dealings with the other Parties
hereto and in performance of its obligations under this Agreement.
 
ARTICLE XIX
 
CONFIDENTIALITY
 
Section 19.01 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 Parties (including their respective 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 another 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 (a) notify
the Affected Party immediately of the existence, terms and circumstances
surrounding such request, (b) consult with the Affected Party on the
advisability of taking legally available steps to resist or narrow such request
and (c) 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 XIX.
 
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
 

 
52

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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.
 
Notwithstanding the provisions of this Section XIX(A) 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.
 

 
53

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Section 19.02 Each Party acknowledges and agrees that in the event of any breach
of this Article XIX, 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 XIX and/or to compel specific performance of this
Article XIX.
 
Section 19.03 The confidential obligations of the Parties under this Article XIX
shall survive the termination or expiration of this Agreement.
 
ARTICLE XX
 
PARENT GUARANTEE
 
Section 20.01 (a) Parent hereby unconditionally and irrevocably guarantees to
Delta the due and punctual performance by each Operator of each of the Operators
respective obligations, agreements and covenants arising under this Agreement
and under each term and condition hereof (collectively, the “Obligations”).  If
an 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 an Operator or
upon any other event or condition whatsoever.  If for any reason any payment
Obligation amount shall not be paid by an 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 such Operator to collect such amount.
 
(b)         Pinnacle hereby unconditionally and irrevocably guarantees to Delta
the due and punctual performance by Mesaba of each of Mesaba’s Obligations.  If
Mesaba shall fail or be unable to perform any such Obligation as and when the
same shall be required to be performed, then Mesaba, 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 Mesaba or upon
any other event or condition whatsoever.  If for any reason any payment
Obligation amount shall not be paid by Mesaba when due, Pinnacle 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
Pinnacle and regardless of whether any person has taken any steps to enforce any
rights against Mesaba or Parent to collect such amount.

Section 20.02 To the fullest extent permitted under applicable law, the
obligations of Parent and Pinnacle 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: (a) any amendment,
 

 
54

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modification, or cancellation of, or addition or supplement to this Agreement;
(b) 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 either Operator; (c) the invalidity or unenforceability, in whole
or in part, of this Agreement; (d) any change in the corporate existence,
structure or ownership of either Operator or Parent or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting either of them
or their assets; or (e) 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 or Pinnacle.  If
acceleration of the time for the performance or payment of any Obligation is
stayed upon the insolvency, bankruptcy or reorganization of an Operator, all
Obligations that are subject to acceleration under the terms of this Agreement
shall nonetheless be performed or payable hereunder by Parent or Pinnacle, as
applicable.
 
Section 20.03 Each of Parent and Pinnacle 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 each of Parent and
Pinnacle, to the fullest extent permitted by applicable law, specifically
waives) diligence, presentment, or protest of any kind whatsoever with respect
to the respective guaranty by Parent and Pinnacle or the Obligations; such
waiver includes, without limitation: (i) presentment for payment upon any
Operator or Parent or the making of any protest; (ii) any requirement to exhaust
any remedies exercisable upon a default under this Agreement or to give any
notice of non-performance or non-payment; (iii) any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge,
release or defense of a guarantor or surety; or (iv) so long as any Obligation
remains outstanding, any right of subrogation by virtue of any performance or
payment made hereunder.  Each of Parent and Pinnacle agrees that any payment or
performance of the Obligations guaranteed by it 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 or Pinnacle pursuant to this Article XX.  In addition, to
the fullest extent permitted by applicable law, each of Parent and Pinnacle
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 respective guaranty of Parent and
Pinnacle pursuant to this Article XX.  All waivers made by Parent or Pinnacle in
this Section 20.03 and elsewhere throughout this Article XX are intentional and
made by Parent or Pinnacle, as applicable, after due consideration of all the
consequences thereof.
 
Section 20.04 All of the terms and conditions of this Article XX shall be
binding upon and shall inure to the benefit of the respective successors and
assigns of the Parties; provided that neither Parent nor Pinnacle may assign,
delegate or otherwise transfer any of its rights or obligations hereunder
without the prior consent of Delta.
 
ARTICLE XXI
 
TERMINATION OF PRIOR AGREEMENT
 
The Parties agree that that certain Second Amended and Restated Airline Services
Agreement, dated effective as of October 1, 2008 by and between Delta and Mesaba
is terminated as of the Effective Date and notwithstanding any provision therein
to the contrary, including survival of any provisions thereof, such agreement is
of no further force and effect with no obligation thereunder owing from either
party thereto to the other, or from Mesaba to any other party.
 

 
55

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IN WITNESS WHEREOF, Delta, Parent, Pinnacle and Mesaba have each executed this
Agreement as of the Effective Date.
 
PINNACLE AIRLINES, INC.
 
 
 
By:                                                                
Name:  ***
Title:  Vice President and General Counsel
 
DELTA AIR LINES, INC.
 
 
 
By:                                                                
Name:           ***
Title:  Senior Vice President – Delta Connection
 
 
 
PINNACLE AIRLINES CORP.
 
 
 
By:                                                                
Name:  ***
Title:  Vice President and General Counsel
 
 
 
MESABA AVIATION, INC.
 
 
 
By:                                                                
Name:  ***
Title:  Vice President
 

 
56

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Schedule 1-A
 
Aircraft
 

 
ShipNo
RegNo
MSN
Eng1
Eng2
4950
N600LR
15142
194618
194621
4951
N601LR
15145
194626
194629
4952
N602LR
15151
194638
194639
4953
N604LR
15152
194643
194644
4954
N605LR
15160
194663
194660
4901
N901XJ
15130
194586
194587
4902
N902XJ
15131
194589
194590
4903
N903XJ
15134
194601
194598
4904
N904XJ
15135
194605
194600
4905
N905XJ
15137
194607
194606
4906
N906XJ
15138
194609
194608
4907
N907XJ
15139
194611
194610
4908
N908XJ
15140
194617
194612
4909
N909XJ
15141
194619
194616
4910
N910XJ
15143
194623
194620
4912
N912XJ
15144
194627
194624
4913
N913XJ
15148
194565
194632
4914
N914XJ
15149
194637
194634
4915
N915XJ
15150
194653
194652
4916
N916XJ
15154
194647
194642
4917
N917XJ
15155
194649
194646
4918
N918XJ
15156
194651
194648
4919
N919XJ
15163
194665
194668
4920
N920XJ
15167
194677
194678
4921
N921XJ
15172
194689
194687
4922
N922XJ
15174
194669
194686
4923
N923XJ
15177
194697
194698
4924
N924XJ
15179
194700
194701
4925
N925XJ
15183
194711
194708
4926
N926XJ
15184
194713
194710
4927
N927XJ
15188
194719
194716
4928
N928XJ
15190
194723
194724
4929
N929XJ
15191
194725
194726
4930
N930XJ
15192
194727
194728
4931
N931XJ
15193
194731
194732
4932
N932XJ
15194
194735
194734
4933
N933XJ
15196
194739
194740
4934
N934XJ
15198
194749
194746
4935
N935XJ
15199
194743
194748
4936
N936XJ
15201
194753
194758
4937
N937XJ
15210
194779
194784

 

 
57

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Schedule 1-B
 
CRJ900 Spare Engines
 

 
1.  S/N 194571
 

 
58

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Schedule 1-C
 
APUs
 
SN
P-535
P-536
P-540
P-590
P-545
P-539
P-546
P-548
P-550
P-552
P-554
P-559
P-560
P-566
P-567
P-569
P-572
P-584
P-588
P-544
P-592
P-595
P-600
P-601
P-607
P-608
P-581
P-543
P-610
P-614
P-612
P-623
P-622
P-628
P-648
P-551
P-556
P-562
P-563
P-565
P-615
P-312

 

 

 
59

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Schedule 2.11
 
MINIMUM PERFORMANCE REQUIREMENTS
 
1.  
Completion Rate:  No less than the threshold calculated in accordance with the
Minimum Completion Factor Standard in Exhibit D.

 
2.  
On-time Reliability:  No less than the threshold calculated in accordance with
the Minimum A0 Performance Standards in Exhibit D of all Aggregated CRJ900 Delta
Connection Flights flown and arriving at scheduled destination within less than
1 minute of scheduled arrival time.

 
3.  
On-Time Departures:  No less than the threshold calculated in accordance with
the Minimum D0 Performance Standards in Exhibit D of all Aggregated CRJ900 Delta
Connection Flights flown and departing from scheduled origin less than 1 minute
of scheduled departure time.

 
4.  
Customer Experience:  ***

 

 
60

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EXHIBIT A
 
PAYMENT TERMS
 
Unless otherwise indicated, all section references in this Exhibit A refer to
the corresponding section of this Exhibit A.
 
Section 1.01.   Payment Terms.
 
(a) Payments
 
For purposes of this Section 1.01, payments to Pinnacle shall be calculated as
follows for any applicable period:
 
the Aircraft Months Payment, which will be equal to the then applicable Aircraft
Months Rate multiplied by Aircraft Months for such period for Scheduled Flights,
Non-Scheduled Flights and Charter Flights, plus
 
the Block Hour Payment, which will be equal to the then applicable Block Hour
Rate multiplied by Block Hours for such period for Scheduled Flights,
Non-Scheduled Flights and Charter Flights, plus
 
the Cycle Payment, which will be equal to the then applicable Cycle Rate
multiplied by Cycles for such period for Scheduled Flights, Non-Scheduled
Flights and Charter Flights, plus
 
the Direct Expense Payment, which will be determined in accordance with Section
1.03 below, plus
 
the Margin, which shall equal *** multiplied by (1 + CPPIB) multiplied by
Aircraft Months for such period for Scheduled Flights, Non-Scheduled Flights and
Charter Flights.
 
(b) Provisional Billing and Payment Schedule
 
On a monthly basis and in a format agreeable to Delta, the Pinnacle Parties
shall provide estimates of the upcoming monthly Aircraft Months Payment, Block
Hour Payment, Cycle Payment Direct Expense Payment (excluding Equipment Rental
Expense that is deducted herefrom in payment of Rent pursuant to the terms of
the Leases) and Margin.  Such estimates shall be based upon the schedule
(including Scheduled Flights, Non-Scheduled Flights and Charter Flights) to be
operated by the Operators during the upcoming month (assuming a *** completion
rate) and shall be provided no later than 10 days prior to the start of the
upcoming month in which the wire transfers shall be made.  Delta shall review
such estimates for each Aircraft Months Payment, Block Hour Payment, Cycle
Payment, Direct Expense Payment and Margin for accuracy and reasonableness.  To
the extent any such estimates are determined to be inaccurate or unreasonable,
the Pinnacle Parties, upon request from Delta, shall provide supporting
documentation and/or explanations for such estimates or correct such estimates
as provided by Delta.
 

 
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Except as set forth below, on the 7th, 14th, 21st and 28th day of the applicable
month (or if not a business day, on the following business day), Delta will
advance to Pinnacle twenty-five percent (25%) of the aggregate cost estimates of
such month’s Aircraft Months Payment, Block Hour Payment, Cycle Payment, Direct
Expense Payment (excluding Equipment Rental Expense that is deducted herefrom in
payment of Rent pursuant to the terms of the Leases) and Margin (each such
advance, a “Provisional Payment”).  Each Provisional 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
Provisional Payment is not paid by Delta on any such date, then in Pinnacle’s
discretion.  Notwithstanding the foregoing, Delta shall be entitled, without
notice, to deduct from any payment owed to Pinnacle hereunder any amounts that
are, at the time of such payment, due and owing under that certain Promissory
Note dated July 1, 2010 issued by Pinnacle, Parent and Mesaba to Delta (the
“Promissory Note”).
 
(c) Monthly Reconciliation
 
Reconciliation of each month’s Provisional Payments to reflect actual operating
statistics and Direct Expenses (excluding rents payable under the Leases) paid
or accrued under Section 1.03 shall be completed on a monthly basis as follows:
 
a.           On or before the fifth (5th) Business Day after the last day of
each calendar month, in a format mutually agreeable to Delta and Parent, each
Operator shall submit to Delta a report detailing actual operational statistics
pertaining to the Aircraft Months Payment, the Block Hour Payment and the Cycle
Payment and its actual Direct Expenses for such month.  Delta and the Pinnacle
Parties agree to make a good faith effort to expeditiously reconcile any
differences in operational statistics data used to calculate reconciliation
payments.  In addition, if requested by Delta, the Pinnacle Parties shall submit
to Delta documentation sufficient to support its actual Direct Expense items,
including copies of all invoices.
 
b.           Within five (5) business days of completing such reconciliation,
Delta or Pinnacle, 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 completion of the reconciliation, the Pinnacle Parties shall
provide Delta with a good faith estimate of such unknown costs and such
estimated amount shall be included in the initial reconciliation.  As soon as
commercially reasonable, such estimated amounts shall be reconciled with the
actual costs for such expenses, and Delta or Pinnacle, as the case may be, shall
pay, via wire transfer or the Clearing House in Delta’s discretion or, if not
paid by Delta on any such date, then in Pinnacle’s discretion, to an account
designated by the other Party, monies equal to the reconciled amount.
 
c.           Notwithstanding anything in this Agreement to the contrary, in the
event an Operator is unable to operate any of the Aircraft, or any of the
Scheduled Flights, Non-Scheduled Flights or Charter 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,
 

 
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Delta shall not be obligated to pay Pinnacle any portion of the Aircraft Months
Payment, the Block Hour Payment, the Cycle Payment, the Direct Expenses, any
incentive compensation, or any other amounts, in connection with such
non-operated Aircraft, Scheduled Flights, Non-Scheduled Flights or Charter
Flights.  If the non-operated Aircraft, Scheduled Flight, Non-Scheduled Flight
or Charter 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 only be obligated to
pay the following fixed costs associated with such non-operated Aircraft,
Scheduled Flight, Non-Scheduled Flight or Charter Flight:  Equipment Rental
Expense, Hull Insurance and Property Taxes, but not any variable costs,
incentive compensation, or any other amounts with respect to such non-operated
Aircraft, Scheduled Flights, Non-Scheduled Flights or Charter Flights during the
period that an Operator is unable to operate such Aircraft, Scheduled Flight,
Non-Scheduled Flight or Charter Flight.
 
Section 1.02                      Payment Rates
 
(a) Aircraft Month Rate.  The Aircraft Month Rate for the time period between
the Effective Date through December 31, 2012 shall equal the aggregate sum of
the sub-categories denoted with an “AC Months” Driver, excluding “Margin”, set
forth in Attachment D for the appropriate year as set forth in Attachment D.
 
(b) Block Hour Rate.  The Block Hour Rate for the time period between the
Effective Date through December 31, 2012 shall equal the aggregate sum of the
sub-categories denoted with a “Block Hours” Driver set forth in Attachment D for
the appropriate year as set forth in Attachment D.
 
(c) Cycle Rate.  The Cycle Rate for the time period between the Effective Date
through December 31, 2012 shall equal the aggregate sum of the sub-categories
denoted with a “Cycles” Driver set forth in Attachment D for the appropriate
year as set forth in Attachment D.
 
(d) Rate Adjustments.
 
(i) Rate Reset.  (A)  Prior to October 1, 2012, the Parties agree to meet and
confer regarding the reset, if any, of the Aircraft Month Rates, Block Hour
Rates *** and Cycle Rates to be effective for calendar year 2013 (the “2013 Rate
Reset”).  Such reset rates shall reflect the estimated cost structure of the
Operators’ operations during 2013 and incorporate synergies achieved or expected
to be achieved by Parent and the Operators as mutually agreed upon by the
Parties.  For purposes of the 2013 Rate Reset, the Parties shall use the
following methodology:  Operators’ and/or Parent’s Direct Costs for the prior
year (excluding one-time or unusual items) shall be adjusted for known changes
or PPI, pooled by the cost category at the cost aggregation level  and at the
appropriate corporate level of the Pinancle Parties (for example, corporate
overhead would be pooled at the Parent and allocated to all Affiliates of
Parent) and divided by the Statistical Driver to arrive at the respective
Aircraft Month Rate, Block Hour Rate *** and Cycle Rate.  The Aircraft Month
Rates, Block Hour Rates (with Flight Operations
 

 
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Rate included) and Cycle Rates for calendar years 2014, 2015, 2016 and 2017 will
be determined by multiplying the prior year’s Aircraft Month Rates, Block Hour
Rates (with Flight Operations Rate included) and Cycle Rates by (1+CPPI).
 
(ii) Prior to October 1, 2017, the Parties agree to meet and confer regarding
the reset, if any, of the Aircraft Month Rates, Block Hour Rates and Cycle Rates
to be effective for calendar year 2018 using the same methodology as specified
above for the 2013 Rate Reset, provided that the Flight Operations Rate shall be
reset as part of the Block Hour Rate reset (the “2018 Rate Reset”).  The
Aircraft Month Rates, Block Hour Rates, and Cycle Rates for calendar years 2019,
2020, 2021 and 2022 will be determined by multiplying the prior year’s Aircraft
Month Rates, Block Hour Rates, and Cycle Rates by (1+CPPI).
 
(iii) Until the Parties determine the respective Aircraft Month Rates, Block
Hour Rates and Cycle Rates to be effective for calendar years 2013 and 2018 in
accordance with the methodology set forth above, the Aircraft Month Rates, Block
Hour Rates and Cycle Rates in effect for 2012 and the Aircraft Month Rates,
Block Hour Rates, and Cycle Rates in effect for 2017 as adjusted pursuant to
this Agreement, respectively, will be used as an estimate for the provisioning
payments and the payments will be reconciled on a retroactive basis to January
1, 2013 and January 1, 2018, respectively, once any reset or Aircraft Month
Rates, Block Hour Rates and Cycle Rates to be effective for calendar year 2013
and Aircraft Month Rates, Block Hour Rates, and Cycle Rates to be effective for
calendar year 2018, respectively, are finally determined.
 
(iv) In connection with the 2013 Rate Reset and the 2018 Rate Reset, Delta shall
be entitled, following reasonable notice to Pinnacle, to review and inspect the
books, records, statistics and expenses of each Pinnacle Party and any
applicable Affiliate of a Pinnacle Party incurred with respect to services
provided in applicable prior periods.  For the avoidance of doubt, the prior
period for the 2013 Rate Reset Period shall be the period beginning on the
Effective Date.
 
(v) In the event that the Parties are unable to agree on any revised Aircraft
Month Rates, Block Hour Rates or Cycle Rates as contemplated in sub-paragraph
(i) above, such rates will be set utilizing the following procedure:  (i) the
Parties shall attempt to agree upon an impartial industry expert to act as sole
arbitrator, provided that if the Parties are unable to agree upon an expert to
so act, each of Delta, on the one hand, and the Pinnacle Parties, on the other
hand, shall appoint an expert, and the two experts so appointed shall appoint a
third expert; (ii) Delta, on the one hand, and the Pinnacle Parties, on the
other hand, shall submit a set of proposed rates to the arbitrator(s); and (iii)
the arbitrator(s) shall choose a set of rates from those submitted without
modifying either.
 
            ***
 
(vii)           Margin Reset.   In the event the Second Amended and Restated
Airline Services Agreement expires on December 31, 2017, the Margin for each
calendar year during the Term commencing with calendar year 2018 shall be
revised to equal *** multiplied (1+CPPIB) multiplied by Aircraft Months for such
period for Scheduled Flights, Non-Scheduled Flights and Charter Flights.
 

 
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Section 1.03                      Direct Expenses.  With respect to Regional
Airline Services operated with the Aircraft, Delta will reimburse Operators for
the following accrued or paid expenses incurred by the Operators in connection
with the provision of the Regional Airline Services at the Direct Cost to
Operators (“Direct Expenses”).  Accruals shall be made in accordance with GAAP;
provided, however, the following Direct Expenses shall not be accrued more than
one month in advance of the applicable Operator’s cash expense:  (b) Engine
Maintenance, (c) Heavy Airframe Maintenance, (d) APU Maintenance, (e) Avionics
Maintenance, (f) Landing Gear Maintenance, (k) Aircraft Painting and Interior
Refurbishment, (n) Airworthiness Directives and (o) Aircraft Return Conditions:
 
(a) Equipment Rental Expense.  Equipment Rental Expense less any performance
guarantee payments or credits that an Operator receives from the manufacturers.
 
(b) Engine Maintenance.  (1)  The Aircraft engine maintenance performed pursuant
to Section 3.06 of the Agreement less any warranty payments or credits that the
Operator receives, including but not limited to those from Delta-selected
vendors.  (2)  The cost of materials and components used in connection with
unscheduled off-wing maintenance performed by the Operator (not including labor
for removal and replacement of line replaceable units or QEC items).  (3)  Shop
level maintenance of engine LRUs per the LRU OEM Component Maintenance Manual
will be reimbursed to the Operator as a Direct Expense.  Each Operator shall
provide to Delta, upon reasonable request, documentation detailing the
unscheduled event and cost of each of the components.
 
(c) Heavy Airframe Maintenance.   Maintenance Program required heavy maintenance
checks performed pursuant to Section 3.05 of this Agreement which require an
Aircraft to be out of service for an extended period of time to perform, such as
accomplishment of the 1C, 2C, 3C and 4C checks and associated tasks and is
performed per the Comair Maintenance Services Agreement dated January 1, 2009 or
any replacement agreement thereof.
 
(d) APU Maintenance.   Shop level APU and LRU maintenance performed in
accordance with the APU OEM Shop Manual and LRU OEM Component Maintenance
Manuals, but excluding maintenance of QEC or BFE items.
 
(e) Avionics Maintenance.   Shop level maintenance performed in accordance with
the OEM Component Maintenance Manual and is performed per the Rockwell Collins
Dispatch Plus Maintenance and Inventory Support Agreement dated June 12, 2009.
 
(f) Landing Gear Maintenance.   Shop level maintenance on the Aircraft landing
gear primary assemblies in accordance with the OEM Shop Manual.
 
(g) Liquor.  Liquor and liquor tax provisioned by the Operator for the purposes
of in-flight distribution.
 
(h) Aviation Insurance.  Aircraft hull insurance and aviation liability
insurance, including war risk liability and hull war risk insurance per Section
9.03 of the Agreement, plus any related fees and taxes and self insured
retention.
 

 
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(i) Property Taxes.  Property taxes, subject to the provisions of Section 8.02
of the Agreement, less the amounts of any refunds.  Delta agrees to pay Property
Taxes assessed in the final year of the Agreement, notwithstanding the actual
invoice date to the applicable Operator.
 
(j) Landing Fees.  Airport landing fees, if paid by the Operator pursuant to
Section 4.03(c) of the Agreement.
 
(k) Aircraft Painting and Interior Refurbishment.  Aircraft painting and
Aircraft interior refurbishment expenses, in accordance with Section 3.05 of the
Agreement.
 
(l) APHIS Fees.  APHIS Fees if such fees are paid directly by the Operator
notwithstanding Section 8.01 of the Agreement.
 
(m) Air Navigation Fees.
 
(n) Airworthiness Directives.  Direct Costs incurred under items (b), (c), (d),
(e) or (f) of this Section 1.03 as a result of an Airworthiness Directive and
any Direct Costs for materials in excess of *** per Aircraft per Airworthiness
Directive resulting from an Airworthiness Directive for which such maintenance
is not reimbursed under items (b), (c), (d), (e) or (f) of this Section 1.03.
 
(o) Aircraft Return Conditions.  Any incremental Direct Costs incurred with
meeting the Aircraft return conditions as set forth in the Leases of the
Aircraft, if directed by Delta to meet such return conditions upon the
termination or expiration of any such Lease.
 
(p) 2010 Aircraft Interior Remodeling Plan.  Direct Costs incurred with
remodeling the interiors of the Aircraft pursuant to the 2010 Aircraft Interior
Remodeling Plan provided by Delta.
 

 
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The Parties agree that for purposes of this Section 1.03, for each relevant
period, the following Direct Expenses shall be determined, and such amount
billed under this Agreement for such period, in accordance with the following
allocations of the aggregated amount of Operators’ actual aggregate Direct Cost
incurred, if any, with respect to each such Direct Expense under this Agreement
and the corresponding Pass Through Cost under the 2007 CRJ-900 Delta Connection
Agreement:

 
(i)  Landing Fees:
Cycles operated by the Aircraft/ (Cycles operated by the Aircraft +
Cycles operated by the CRJ900 DCA Aircraft)

                (ii)  Passenger Liability Insurance:
Block Hours flown by the Aircraft/ (Block Hours
flown by the Aircraft + Block Hours operated by
the CRJ900 DCA Aircraft)

(iii)  War Risk Insurance:                      Block Hours flown by the
Aircraft/ (Block Hoursflown by the Aircraft + Block Hours operated by theCRJ900
DCA Aircraft)

Notwithstanding the foregoing, Delta will not reimburse any Operator for (i) any
charges, penalties and/or fees related to late payment which an Operator incurs
in connection with payment of the Direct Expenses listed above; (ii) any
maintenance performed unreasonably in advance of the time such maintenance is
required in accordance with the Maintenance Program; and (iii) any maintenance
that is required due to the negligence of such Operator or any of its
maintenance service providers, inadequate maintenance by such Operator or such
Operator not following procedures approved by the OEM or Delta.  In addition, no
Operator shall enter into any agreement pursuant to which such Operator’s Direct
Costs pursuant to such agreement would be a Direct Expense hereunder in excess
of One Million Dollars per year without the prior written consent of Delta,
which consent shall not be unreasonably withheld, conditioned or delayed.  In
addition, Delta shall have the right to assist an Operator in obtaining goods
and services in connection with operating the Regional Airline Services in a
more economical manner, including, without limitation, via bulk purchasing and
inventory management systems and processes (each, a “Delta Sourcing
Initiative”).  Provided that any such Delta Sourcing 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 comply with its obligations under
this Agreement, Operator shall implement all such Delta Sourcing Initiatives.
 
The reimbursement of Equipment Rental 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 Lease is due and payable
 

 
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Section 1.04                      Fuel
 
(a) Fuel Administration.  Each Operator will join the fuel consortium at a
Service City upon Delta’s request.  In connection with the Regional Airline
Services, Delta will provide to the Operators the following fuel-related
services:  (i) fuel supply and into-plane fuel services, including negotiation
of fuel supply, fuel storage and into-plane service contracts for the Aircraft
and (ii) payment of all into-plane and fuel invoices in respect of the
Aircraft.  Delta will reimburse an Operator for any fees associated with joining
or being a member of a consortium.
 
(b) Fuel Burn Review Procedures.  Commencing as of January 1, 2011, Delta and
Operators agree to review the fuel burn performance (defined as gallons per
block hour) of the Aircraft for compliance with annual performance measures
including, but not limited to:
 
(i) Planned Fuel On Arrival (FOA)
 
(ii) Auxiliary Power Unit (APU) Usage
 
Operators will be responsible for the development and setting of the annual
performance measure targets for the Aircraft, each as defined in Attachment B,
and an annual budgeted fuel burn rate expressed in gallons per block hour
(“All-in Rate”), in a timeframe consistent with the development of the annual
operating expense budget of each party.  The All-in Rate shall encompass all
scheduled and non-scheduled burned gallons and include the measures defined in
(b)(i-ii) above and those measures the Parties may agree to subsequently
add.  The annual targets for the performance measures and All-in Rate will be
subject to Delta’s approval.  The Parties agree to work in good faith to resolve
any differences that may exist with respect to setting annual targets.  Each
Operator shall implement industry best practices to efficiently manage FOA to
ensure target achievement (i.e. Alternate Exemptions 3585C, etc.)  For the APU
target, in the event agreement can not be reached, the target will be based on
the then-applicable APU target of each Operator with appropriate operational
adjustments.  Additional performance measures may be identified and added at a
future date by mutual agreement of the parties for purposes of reviewing the
Aircraft’s annual fuel burn.  In the event data is not yet available for a given
measure, no annual target will be set.  The Parties agree to use reasonable best
efforts in researching and collecting data for purposes of adding performance
measures and cooperation may not be unreasonably withheld by either Party.
 
Although fuel tankering does not reduce Aircraft fuel burn it does reduce
overall fuel expense.  If Operator does not already have a tankering program in
place, the Parties agree to use reasonable best efforts in researching and
collecting data for purposes of adding tankering measures.  The Parties agree
that tankering shall be reviewed and assessed at a future date to determine
procedures for implementation and agree to implement a mutually agreed fuel
tankering program.
 

 
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Not later than sixty (60) days following the end of the year for which the
targets applied, Operators shall each (i) deliver to Delta the analysis and
conclusion of its performance for the year then ended with respect to each of
the performance measures and the All-in Rate, and (ii) provide Delta with the
data used by it to determine variances to each of the performance measure
targets and the All-in Rate in a format specified by Delta.  Delta shall have
thirty (30) days from the receipt of Operators’ analysis to complete its
review.  If it is determined that an Operator exceeded one or more of the
targets for the annual performance measures, and the cause of exceeding the
targets was not attributed to operational exceptions out of such Operator’s
control (e.g. runway closure for construction requiring more holding fuel during
periods of peak arrival demand), a fuel penalty shall be assessed per the
formulas set forth in Attachment B (a “Fuel Burn Penalty Payment”).  If it is
mutually determined by an Operator and Delta that such Operator exceeded the
budget for the All-in Rate, after adjusting for variances to target for the
performance measures, and the cause of exceeding the budget was within the
control of such Operator, a fuel penalty shall be assessed per the formula set
forth in Attachment B (a “Fuel Burn Penalty Payment”).  Such Fuel Burn Penalty
Payment(s) shall be made in accordance with Section 5.03 of the Agreement.
 
Operators and Delta agree to negotiate in good faith to develop a revised goal
structure for FOA, APU and All-in Rate to be implemented by January 1, 2011.
Such revised goal structure will provide for incentives as well as penalties.
 
Section 1.05                      Performance Levels and Related Incentives and
Penalties.
 
(a) Operators shall be subject to certain monthly performance levels together
with incentive payments and/or penalties as described in this Section 1.05(a)
(“Performance Criteria”).  If Operators achieve the performance criterion, then
Delta shall pay Operators the applicable incentive amount set forth below and if
Operators do not achieve the performance criterion, then Delta shall charge
Pinnacle the applicable penalty amount set forth below.  All incentives and
penalties are monthly, unless otherwise specified as quarterly, and stated in
dollars per Aircraft.  In the case of Aircraft additions or removals within a
monthly or quarterly period, such incentive amounts will be prorated.  Any
monthly incentive amount shall be added to, and any monthly penalty charge shall
be deducted from, the monthly settlement payment.  Any quarterly incentive
amount shall be added to, and any quarterly penalty charge shall be deducted
from, the next monthly settlement payment following the tenth day after the
delivery by Delta of Operator’s ISM Score pursuant to Section 2.11(a)(iii).  The
applicable performance levels and corresponding incentives and penalties are as
follows:
 
(i) Completion Factor (calculated in accordance with Section 2.11(a)(i) of the
Agreement):
 

 
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Penalty 2
Penalty 1
Neutral
Incentive 1
Incentive 2
Performance Level
*
*
*
*
*
Penalty/Incentive per Aircraft
 
***
 
***
***
 
***
 
***

 
* The Performance Levels shall be established in accordance with Exhibit D.
 

 
(ii) On-Time Arrival within 0 Minutes (calculated in accordance with Section
2.11(a)(ii) of the Agreement):
 

 
Penalty 2
Penalty 1
Neutral
Incentive 1
Incentive 2
Performance Level
*
*
*
*
*
Penalty/Incentive per Aircraft
 
***
 
***
***
 
***
 
***

 
* The Performance Levels shall be established in accordance with Exhibit D.
 

 
In conjunction with Operators’ on-time arrival performance, Pinnacle’s and
Mesaba’s target block time performance (within zero minutes) shall not exceed
*** with respect to the Aggregated CRJ900 Delta Connection Flights.  If
Pinnacle’s and Mesaba’s actual block time performance (within zero minutes)
exceeds *** with respect to the Aggregated CRJ900 Delta Connection Flights,
Pinnacle’s and Mesaba’s actual arrival performance (within zero minutes) will be
adjusted downward by 0.7 percentage point per 1.0 percentage point in excess of
***.
 

 
(iii) Customer Satisfaction (measured in accordance with Section 2.11(a)(iii) of
the Agreement) (The Performance Period for Customer Satisfaction will be
assessed on a calendar quarter basis):
 

 
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Penalty 2
 
Penalty 1
Neutral
 
Incentive 1
 
Incentive 2
Performance Level
≤ ****
≤ ***** but > *****
> ***** but < *****
≥ ***** but  < *****
≥ *****
Penalty/Incentive per Aircraft
 
*** per quarter
 
*** per quarter
***per quarter
 
***per quarter
 
***per quarter

 

 
 
(iv)           On-Time Departure within 0 Minutes (calculated in accordance with
Section 2.11(a)(iv) of the Agreement):
 

 
Penalty 2
Penalty 1
Neutral
Incentive 1
Incentive 2
Performance Level
*
*
*
*
*
Penalty/Incentive per Aircraft
 
***
 
***
***
 
***
 
***

 
* The Performance Levels shall be established in accordance with Exhibit D.
 

 
(b) Reconciliation of Performance Standards.  Following each month, (i)
Operators 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 Aggregated CRJ900 Delta Connection Flights and (ii)
Delta shall prepare a reconciliation of Operators’ actual performance to
targeted performance with respect to the Customer Satisfaction results of the
Aggregated CRJ900 Delta Connection Flights. Such reconciliations will be
completed and delivered to the other Party within twenty (20) days after the end
of each month.  Delta and Pinnacle 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.
 

 
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Attachment A
 
Definitions
 
For purposes of this Exhibit A, the following terms are defined as set forth
below.  (Other defined terms are set forth in Article I of the Agreement).
 
“Aircraft Months” means an Aircraft each month after such Aircraft has been
placed in service by an Operator and remains in service for Delta (including
non-scheduled Aircraft).  An Aircraft placed in service by an Operator by the
15th of a month is assumed to have been in service for the entirety of such
month.
 
“Aircraft Months Payment” means the payment for Aircraft Months to be made
pursuant to Section 1.01(a) of Exhibit A.
 
“Aircraft Months Rate” shall have the meaning ascribed to such term in Section
1.02 of this Exhibit A.
 
“Block Hour Payment” means the payment for Block Hours to be made pursuant to
Section 1.01(a) of this Exhibit A.
 
“Block Hour Rate” shall have the meaning ascribed to such term in Section 1.02
of this Exhibit A.
 
“CPPI” means the percent increase, if any, in the PPI for finished goods
published by the United States Department of Labor, Bureau of Labor Statistics,
which increase occurred during the immediately preceding calendar year, defined
as (PPI for the prior calendar year/PPI for the two years prior)-1, but in no
event in excess of *** and in no event less than zero.  For example, when
calculating the Block Hour Rate for 2014 in Section 1.03, CPPI is calculated as
follows: (2013 PPI / 2012 PPI) – 1.
 
“CPPIB” means the percent increase, if any, in the PPI for finished goods
published by the United States Department of Labor, Bureau of Labor Statistics,
defined as (PPI for the prior calendar year/PPI for the year of 2009)-1, but in
no event will the compound annual growth rate be in excess of *** or less than
zero.  For example, when calculating the Block Hour Rate for 2012 in the Section
1.03, CPPIB is calculated as follows: (2011 PPI / 2009 PPI) – 1.
 
“Cycle” means an actual takeoff at an origin city and landing at a destination
city of an Aircraft in connection with a Scheduled Flight, a Non-Scheduled
Flight or a Charter Flight.
 
“Cycle Payment” means the payment for Cycles to be made pursuant to Section
1.01(a) of this Exhibit A.
 
“Cycle Rate” shall have the meaning ascribed to such term in Section 1.02 of
this Exhibit A.
 
“Direct Expenses” shall have the meaning ascribed to such term in Section 1.03
of this Exhibit A.
 

 
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“Direct Expense Payment” means the payment for Direct Expenses to be made
pursuant to Section 1.01(a) of this Exhibit A.
 
“Equipment Rental Expense” means the Aircraft Rental Expense, the Spare Engine
Rental Expense and the QEC Rental Expense.
 
“Flight Operations Rate” shall have the meaning ascribed to such term in Section
1.02(d)(vi) of this Exhibit A.
 

 
“Fuel Burn Penalty Payment” shall have the meaning ascribed to such term in
Section 1.04 of this Exhibit A.
 
“Monthly Payment” means the payment each month to be made pursuant to Section
1.01(a) of this Exhibit A.
 
“Monthly Rate” shall have the meaning ascribed to such term in Section 1.02 of
this Exhibit A.
 
 “PPI” means Producer Price Index for finished goods published by the United
States Department of Labor, Bureau of Labor Statistics, and, if no longer
published, any comparable successor index selected by Delta.
 
 “QEC Rental Expense” means the Basic Rent charged in the Leases between Delta
and an Operator with respect to each of the QECs.
 

 
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Attachment B
 
Aircraft Fuel Burn (Penalty) Formulas
 
Note: The formulas below are to be used for the calculation of Fuel Burn Penalty
Payments as they pertain to each performance measure and the All-in Rate in
Section 1.04 of Exhibit A.  The Penalty, while settled on an annual basis, is
based on a monthly calculation.  The result of the calculation for each
performance measure shall be netted together to produce a net Penalty, if one
should exist.  To the extent that formulas do not yet exist the parties mutually
agree to document those formulas when those performance measures are
implemented.  Per Section 1.04, the All-in Rate is first adjusted for the
variances that exist with respect to each performance measure and actual
operating schedule, and then to the extent an unfavorable variance to budget
exists, the penalty formula below for the All-in Rate is applied.  A Penalty is
assessed if the cause of the All-in Rate variance is deemed within the control
of an Operator.  An example for a month is illustrated below in Attachment C
hereto.
 
1.           Excess Planned Fuel on Arrival (PFOA)
 
Monthly Penalty:
(Average Planned FOA in lbs-Target) x CTC / *** / Block Hours per Cycle x Total
Block Hours x fuel cost per gallon

Assumptions:
·  
Block Hours based on scheduled and unscheduled operations/Cycles that returned
legitimate FOA values (on the flight history database)

·  
Cost to Carry (CTC) varies with average enroute time; CTC = (*** x Avg ETE) ***

·  
Fuel cost per gallon = actual price per gallon incurred by Delta, including
into-plane fees and taxes.

Definition:
Planned Fuel on Arrival (PFOA) is comprised of:
 
1)
Domestic Reserve Fuel.  This is a fixed amount of fuel required by FAR to be
carried on all operations.

 
2)
Alternate Fuel.  This is the fuel required to fly from the intended destination
to an alternate destination.  This fuel is required on some but not all flights
according to FAR and the applicable Operator’s policies related to destination
weather.

 
3)
Holding fuel (Contingency).  This fuel is required, by FAR and the applicable
Operator’s policies, for expected holding, potential delays and diversions.

2.           Excess Auxiliary Power Unit (APU) Burn
 
Monthly Penalty:
(Average Actual APU hrs per Cycle-Target) x Total Cycle x *** x Fuel cost per
gallon

 
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Assumptions:
·  
APU burn rate = *** per CRJ900 Aircraft (w/Air and electric load)

·  
APU runs almost exclusively w/air load but not necessarily electric

·  
Cycles based on all Operator operations (scheduled and unscheduled)

·  
Fuel cost per gallon = actual price per gallon incurred by Delta per Section
1.04 of this Exhibit A including into-plane fees and taxes.

3.           All-in Rate (to be applied after adjusting for known variances to
performance measures above as shown in the sample calculation set forth in
Attachment C hereto)

Monthly Penalty:
(Actual All-in Gallons per block hour-Target) x Total Block Hours x Fuel cost
per gallon

Assumptions:
·  
Fuel cost per gallon = actual price per gallon incurred by Delta per Section
1.04 of this Exhibit A including into-plane fees and taxes.

 
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Attachment C
 
Example of One Month Penalty Calculation
 

***

 
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Attachment D
 

***
 

 
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EXHIBIT B
 
Pass Travel Privileges
 
DELTA CONNECTION EMPLOYEE NON-REVENUE SPACE AVAILABLE PASS TRAVEL POLICIES
 
***
 

J-1
 
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Exhibit C
 

 
Cancellation Codes
 

 
19A – Substitution – Air Operations
 
19B – Substitution – Information Services
 
19C – Substitution – Flight Operations
 
19D – Substitution – Inflight Services
 
19E – Substitution – Maintenance
 
19F – Substitution – Airport Customer Service
 
19G – Inter Carrier Substitution – Delta Requestd
 
19H – Delta Requested Cancellation
 

 
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EXHIBIT D

 
 
PERFORMANCE LEVELS AND MINIMUM STANDARDS ESTABLISHMENT

 

 
***
 

 
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