Exhibit 10.41
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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.
AMENDED AND RESTATED
AIRLINE SERVICES AGREEMENT
by and among
PINNACLE AIRLINES CORP.,
PINNACLE AIRLINES, INC.
and
NORTHWEST AIRLINES, INC.
Dated December 15, 2006
Effective as of January 1, 2007

 

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TABLE OF CONTENTS

              Page  
ARTICLE I DEFINITIONS
    1  
Section 1.01       Definitions
    1  
 
       
ARTICLE II PROVISION OF REGIONAL AIRLINE SERVICES
    11  
 
       
Section 2.01       Operation of Scheduled Flights
    11  
Section 2.02       Use of Designator, NW Identification and Related Matters
    11  
Section 2.03       Use of Other Designators
    11  
Section 2.04       Personnel and Dispatch Control
    11  
Section 2.05       Inventory Management
    11  
Section 2.06       Passenger Fares
    12  
Section 2.07       DOT Certification
    12  
Section 2.08       Compliance With Governmental Regulations
    12  
Section 2.09       Quality of Service
    12  
Section 2.10       Service Standards
    12  
Section 2.11       Service Recovery
    14  
Section 2.12       Annual Operating Plan
    15  
Section 2.13       Inflight Food, Beverages and Supplies
    15  
Section 2.14       Exclusivity Arrangements
    16  
Section 2.15       Other Operations
    16  
 
       
ARTICLE III EQUIPMENT
    16  
 
       
Section 3.01       Use of the Equipment
    16  
Section 3.02       Fleet Size and Related Matters
    17  
Section 3.03       Lease of the Equipment
    19  
Section 3.04       Terms of the Leases
    19  
Section 3.05       Manufacturer Benefits Agreement
    20  
Section 3.06       Equipment Maintenance, Servicing and Cleaning
    20  
Section 3.07       Third Party Guarantees and Warranties
    20  
Section 3.08       Related Transfer Arrangements
    21  
Section 3.09       Equipment Financing Coordination
    21  
Section 3.10       Spare Parts Inventory; Application of Credits
    22  
 
       
ARTICLE IV ANCILLARY ARRANGEMENTS
    22  
 
       
Section 4.01       Coordination with Pinnacle
    22  
Section 4.02       Ground Handling
    22  
Section 4.03       Facilities
    24  
Section 4.04       Data Communications
    26  
Section 4.05       Security
    26  

 

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              Page  
Section 4.06       Reservation Services
    27  
Section 4.07       Ticketing Services and Ticketing Procedures
    27  
Section 4.08       Baggage Handling Services
    28  
Section 4.09       Air Cargo Handling Services
    28  
Section 4.10       Use of COMAT
    29  
Section 4.11       Slots and Route Authorities
    30  
Section 4.12       Emergency Response and Family Assistance
    30  
 
       
ARTICLE V REVENUES, PAYMENTS AND SETOFF
    30  
 
       
Section 5.01       Revenues
    30  
Section 5.02       Payments to Pinnacle
    30  
Section 5.03       Block Hour and Cycle Rates; IOP Program Adjustment
    31  
Section 5.04       Fixed Costs
    33  
Section 5.05       Fuel
    33  
Section 5.06       Direct Expenses
    35  
Section 5.07       Billing
    37  
Section 5.08       Monthly Margin Calculation and Payment
    37  
Section 5.09       Annual Margin Adjustment Payment
    37  
Section 5.10       Rate Adjustments
    39  
Section 5.11       Reserved
    40  
Section 5.12       Revised Annual Margin Adjustment Payment
    40  
Section 5.13       Scheduled Flight Refund
    42  
Section 5.14       Performance Goals and Penalties
    43  
Section 5.15       Pinnacle Change of Control
    45  
Section 5.16       Credit Card Chargebacks
    45  
Section 5.17       Returned Checks
    46  
Section 5.18       Share Purchase
    45  
 
       
ARTICLE VI REPORTING OBLIGATIONS, AUDITING, INSPECTIONS AND
CONFIDENTIALITY/PUBLICITY
    47  
 
       
Section 6.01       Reporting Obligations
    47  
Section 6.02       Audits
    47  
Section 6.03       Inspections
    48  
Section 6.04       Confidentiality/Publicity
    48  
 
       
ARTICLE VII NORTHWEST IDENTIFICATION
    48  
 
       
Section 7.01       Identification License
    48  
Section 7.02       Designator License
    49  
Section 7.03       New Identifications
    49  
Section 7.04       Use of Identification
    49  
Section 7.05       Quality Control
    49  
Section 7.06       Reservation of Rights
    49  
Section 7.07       Ownership
    49  
Section 7.08       Termination
    50  

 

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              Page  
Section 7.09       Bankruptcy
    50  
 
       
ARTICLE VIII TAXES AND FEES
    50  
 
       
Section 8.01       Taxes and Fees
    50  
Section 8.02       Ticket Taxes and Fees
    50  
Section 8.03       Property Tax, Fuel Tax, and Sales and Use Tax Compliance
    51  
Section 8.04       Refunds of Tax
    52  
 
       
ARTICLE IX LIABILITY, INDEMNIFICATION AND INSURANCE
    52  
 
       
Section 9.01       Independent Contractor
    52  
Section 9.02       Indemnification
    53  
Section 9.03       Insurance
    54  
 
       
ARTICLE X TERM AND TERMINATION
    56  
 
       
Section 10.01       Term
    56  
Section 10.02       Termination by Either Party
    56  
Section 10.03       Termination by Northwest
    57  
 
       
ARTICLE XI MISCELLANEOUS
    58  
 
       
Section 11.01       Limitation on Performance
    58  
Section 11.02       Mutual Cooperation
    58  
Section 11.03       Representations and Warranties
    58  
Section 11.04       Assignment
    58  
Section 11.05       Governing Law
    58  
Section 11.06       Interline and Other Agreements
    58  
Section 11.07       Notices
    58  
Section 11.08       Parties
    59  
Section 11.09       Counterparts
    59  
Section 11.10       Severability
    59  
Section 11.11       Captions, Section Headings and Table of Contents
    60  
Section 11.12       Availability of Equitable Remedies; Procedures
    60  
Section 11.13       Exhibits
    60  
Section 11.14       Integration and Entire Agreement
    60  
Section 11.15       Relationship of Parties
    61  
Section 11.16       Amended and Restated 2003 ASA
    61  

 

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EXHIBITS

     
Exhibit A-1
  Aircraft Lease Form
Exhibit A-2
  Engine Lease Form
Exhibit B
  Hub City Facility Charges
Exhibit C
  Predicted Employee Bonuses and Incentives
Exhibit D
  Parity Pay Agreement
Exhibit E
  Pass Travel Privileges
Exhibit F
  CRJ Fuel Burn (Penalty) Formulas
Exhibit G
  Share Purchase Agreement

 

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AMENDED AND RESTATED
AIRLINE SERVICES AGREEMENT
     THIS AMENDED AND RESTATED AIRLINE SERVICES AGREEMENT (the “Agreement”) is
dated the 15th day of December, 2006 and made effective as of the 1st day of
January, 2007, by and among PINNACLE AIRLINES CORP., a Delaware corporation
(“Pinnacle Corp.”), PINNACLE AIRLINES, INC., a Georgia corporation and a
wholly-owned subsidiary of Pinnacle Corp. (“Pinnacle”), and NORTHWEST AIRLINES,
INC., a Minnesota corporation (“Northwest”).
WITNESSETH:
     WHEREAS, Pinnacle Corp., Pinnacle and Northwest desire to make certain
arrangements between them which will enable Pinnacle to provide Northwest with
commercial regional jet air transportation services;
     WHEREAS, Pinnacle and Northwest are parties to an Airline Services
Agreement dated as of January 14, 2003, as amended by Amendments No. 1 through
No. 5 (collectively, the “2003 ASA”), and Pinnacle Corp., Pinnacle and Northwest
desire to amend and restate the 2003 ASA effective as of January 1, 2007;
     WHEREAS, Pinnacle is a wholly-owned subsidiary of Pinnacle Corp;
     WHEREAS, Pinnacle Corp., Pinnacle and Northwest are each willing to perform
in the manner and upon the conditions and terms hereinafter set forth;
     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Northwest, Pinnacle Corp. and Pinnacle 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

 

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     (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.
     “ACARS” means the Aircraft Communications Addressing and Reporting System
which provides communications between the Aircraft and Pinnacle 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. Solely for purposes of this Agreement, after the Initial Contribution
(as defined in the Omnibus Agreement), Pinnacle Corp. and Pinnacle will not be
Affiliates of Northwest.
     “Air Cargo” means air freight, United States mail and small package
services appropriate for the Aircraft.
     “Air Cargo Handling Services” means the Air Cargo handling services to be
performed pursuant to Section 4.09.
     “Aircraft” means, (i) the one hundred twenty-four (124) CRJ-200/440
Canadair Regional Jet aircraft in Pinnacle’s fleet as of December 1, 2006,
(ii) the seventeen (17) additional CRJ-200 or CRJ-440 Canadair Regional Jet
aircraft when and as such aircraft are added to Pinnacle’s fleet pursuant to the
first sentence of Section 3.02(a)(i), and (iii) up to one hundred sixty-three
(163) additional CRJ-200/440 Canadair Regional Jet aircraft when, as and if such
aircraft are added to Pinnacle’s fleet pursuant to the second sentence of
Section 3.02(a)(i). Any Aircraft removed from Pinnacle’s fleet cease to be
“Aircraft” hereunder upon the date of such removal.
     “Aircraft Rental Expense” means the Basic Rent charged in the Leases
between Northwest and Pinnacle which shall be [***] per Aircraft per month for
the CRJ-200/440 Canadair Regional Jet Aircraft.
     “Airlink Carrier” means an airline operating regional jet and/or turboprop
air transportation services as a Northwest Airlink carrier pursuant to an
airline services agreement between such airline and Northwest.
     “ Airline Assets” means those assets used, as of the date of determination,
in the relevant Person’s operation as an air carrier.
     “Annual Operating Plan” shall have the meaning ascribed to such term in
Section 2.12.
     “Available CRJ Day” or “ACD” means a CRJ-200 or CRJ-440 Aircraft each day
after such Aircraft has been placed in service by Pinnacle and remains in
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Northwest (including non-scheduled Aircraft). A CRJ aircraft placed in service
by Pinnacle on January 1st would have 31 Available CRJ Days in January.
     “Available CRJ Days Report” means the report of Available CRJ Days to be
prepared by Pinnacle pursuant to Section 5.02(a).
     “Baggage Handling Services” means the baggage handling services to be
performed pursuant to Section 4.08.
     “Bankruptcy Court” shall have the meaning ascribed to such term in Section
3.02(a)(ii)(E).
     “Base Block Hour Rate” shall have the meaning ascribed to such term in
Section 5.03.
     “Base Cycle Rate” shall have the meaning ascribed to such term in Section
5.03.
     “Basic Rent” shall have the meaning ascribed to such term in the Leases.
     “Beneficial Ownership” has the meaning given such term as defined as of the
date hereof in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
as amended.
     “Block Hour” means the period of time (in minutes) beginning when an
Aircraft first moves from the ramp blocks in connection with a Scheduled Flight,
a Non-Scheduled Flight or a Charter Flight and ending when the Aircraft next
comes to a stop at the ramp at any station or other point of termination as
recorded by ACARS or another mutually agreed system, divided by sixty (60).
     “Block Hour Payment” means the payment for Block Hours to be made pursuant
to Section 5.02(b).
     “Block Hour Rate” shall have the meaning ascribed to such term in Section
5.03.
     “Block Hour Report” means the report to be prepared by Pinnacle pursuant to
Section 5.02(a).
     “Bombardier Agreement” means the Aircraft Heavy Maintenance Service
Agreement between Bombardier Services Corporation and Northwest Airlines, Inc.,
dated February 1, 2002, as amended or extended by Northwest; provided, however,
any material expansion of the scope of services to be performed under the
Bombardier Agreement shall be subject to the reasonable approval of Pinnacle.
     “Capital Stock” of any Person means any and all shares, interests, rights
to purchase, options, warrants, participation or other equivalents of or
interests in (however designated) the equity of such Person, including any
preferred stock.
     “Charter Flights” means revenue passenger flights using the Aircraft (other
than Scheduled Flights); provided, however, that the operational arrangements
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to be received by Pinnacle in respect of such Charter Flights are subject to the
same procedures and remuneration as a Scheduled Flight hereunder, unless
otherwise mutually agreed by Northwest and Pinnacle. To the extent that inflight
catering (food and beverage) exceeds that normally provided for on a Scheduled
Flight, the incremental cost and coordination of the catering will be the sole
responsibility of Northwest.
     “COMAT” means company material, including but not limited to priority
aircraft maintenance parts.
     “Contracted Service Cities” means those Service Cities at which a third
party performs substantially all Ground Handling Functions, excluding Hub
Cities.
     “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 at end of prior calendar year/PPI at end of two years prior)-1, but in
no event in excess of five percent (5%) and in no event less than zero. For
example, when calculating the block hour rate for 2007 in Section 5.10 (b), CPPI
is calculated as follows: (December 2006 PPI / December 2005 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 at end of prior calendar year/PPI at end of 2002)-1, but in no
event will the compound annual growth rate be in excess of five percent (5%) or
less than zero. For example, when calculating the block hour rate for 2005 in
Section 5.03 (a) CPPIB is calculated as follows: (December 2004 PPI /
December 2002 PPI) — 1.
     “CRJ Deliveries Report” means the report of deliveries of CRJ Aircraft to
Pinnacle to be prepared by Pinnacle pursuant to Section 5.02(a).
     “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
5.02(b).
     “Cycle Rate” shall have the meaning ascribed to such term in Section 5.03.
     “Cycle Report” means the report to be prepared by Pinnacle pursuant to
Section 5.02(a).
     “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.

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     “Designator” means “NW” or such other designator code selected by Northwest
from time to time in its sole discretion to identify Northwest’s own flights.
     “Direct Costs” means Northwest’s or Pinnacle’s, as applicable, actual cost
for goods and services without any surcharge for administrative or general
overhead expenses.
     “DOT” means the United States Department of Transportation or any successor
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 Pinnacle 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 and Spare Engines.
     “Equipment Rental Expense” means the Aircraft Rental Expense and the Spare
Engine Rental Expense.
     “FAA” means the Federal Aviation Administration or any successor
organization.
     “Facility Leases” shall have the meaning ascribed to such term in Section
4.03(g).
     “Fixed Cost Payment” means the payment for fixed costs to be made pursuant
to Section 5.02(b).
     “Fleet Value” means the total value of the Aircraft in Pinnacle’s fleet
used in calculating the premium for Pinnacle’s hull insurance (including war
risk).
     “Fuel Burn Penalty Payment” shall have the meaning ascribed to such term in
Section 5.05(e).
     “Fuel Price” shall have the meaning ascribed to such term in
Section 5.05(b).
     “GAAP” means generally accepted accounting practice and principles at the
time prevailing in the United States for companies engaged in businesses similar
to that of Pinnacle, consistently applied.
     “GE Agreements” means the Engine Service Agreement between Northwest
Airlines, Inc. and GE Engine Services, Inc., dated July 17, 2001, as amended or
extended by Northwest, and the General Terms Agreement between General Electric
Company and Northwest Airlines, Inc. for CF34-3B1 Turbofan Engines and Support,
dated July 11, 2001, as amended or extended by Northwest; provided, however, any
material expansion of the scope of services to be performed under the GE
Agreements shall be subject to the reasonable approval of Pinnacle.

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     “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 and the FAA.
     “Ground Handling Functions” shall have the meaning ascribed to such term in
Section 4.02.
     “Holding Company” means, as applied to a Person, any other Person of whom
such person is, directly or indirectly, a Subsidiary.
     “Hub Cities” means Memphis, Tennessee (“MEM”), Minneapolis/St. Paul,
Minnesota (“MSP”) and Detroit, Michigan (“DTW”).
     “Identification” means a trade name, trademark, service mark, graphic,
logo, distinctive color scheme or other trade dress, domain name and/or other
identification or indication of source or origin.
     “Initial Effective Date” means the date specified in Section 10.01 of this
Agreement.
     “IOP Payment” means the payment for IOP Program Incidents to be made
pursuant to Section 5.02(b).
     “IOP Program Incident” shall mean Northwest’s request that Pinnacle cancel
one or more Scheduled Flights as a result of Northwest’s initiation of its
Irregular Operating Procedures Program.
     “Lease” means (i) the leases, subleases and/or sub-subleases entered into
or to be entered into pursuant to Section 3.03 in respect of the CRJ-200/440
Aircraft substantially in the form of Exhibit A-1, and (ii) the leases,
subleases and/or sub-subleases entered into or to be entered into pursuant to
Section 3.03 in respect of Spare Engines substantially in the form of
Exhibit A-2.
     “Maintenance Facilities” shall have the meaning ascribed to such term in
Section 4.03(c).
     “Maintenance Program” shall have the meaning ascribed to such term in the
Leases.
     “Major Carrier” means an air carrier (other than Pinnacle and its
successors and any Subsidiary thereof or Northwest Airlines, Inc. and its
successors and any Subsidiary thereof), the annual passenger revenues of which
(including its Subsidiaries’ predecessor entities) for the most recently
completed fiscal year for which audited financial statements are available are
in excess of the Revenue Threshold as of the date of determination (or the U.S.
dollar equivalent thereof).

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     “Margin” means the operating margin determined in accordance with Sections
5.09 and 5.12.
     “Margin Adjustment Payment” means the payment to be made pursuant to
Sections 5.09 and 5.12.
     “Margin Payment” means the payment to be made pursuant to Sections 5.08 and
5.11.
     “Mesaba” means Mesaba Aviation, Inc., a Minnesota corporation, and/or
Mesaba Holdings, Inc., a Minnesota corporation, and their respective successors
and/or assigns.
     “Non-Scheduled Flights” means all flights using the Aircraft which are not
Scheduled Flights or Charter Flights.
     “Northwest Schedule Period” means the planned duration of various time
periods for which Northwest’s flight schedule is for sale in computer
reservation systems.
     “Northwest Service Cities” means those Service Cities at which Northwest
employees perform substantially all Ground Handling Functions and Northwest
provides required facilities.
     “Northwest Tickets” shall have the meaning ascribed to such term in Section
4.07(a).
     “NW Identification” means any Identification specifically selected by
Northwest from time to time in its sole discretion for use by Pinnacle in
connection with the Regional Airline Services (including without limitation
“Northwest Airlink” or any similar name).
     “Option Term” means (i) a period of six (6) months following the date of
termination if this Agreement is terminated by Northwest pursuant to
Section 10.02 or Section 10.03; or (ii) a period of thirty (30) days following
the date of termination if this Agreement is terminated by Northwest pursuant to
Section 10.01.
     “Performance Criteria” shall have the meaning ascribed to such term in
Section 5.14(a).
     “Performance Period” means each six (6) month period ending on a June 30 or
December 31 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.
     “Pinnacle Affected Company” means (a) Pinnacle and its successor, (b) any
Holding Company of Pinnacle, or (c) any Subsidiary of Pinnacle or its successor
or of any Holding Company of Pinnacle, that in each such case owns, directly or
indirectly, all or

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substantially all of the Airline Assets of Pinnacle or its successor, such
Holding Companies of Pinnacle and such Subsidiaries, taken as a whole.
     “Pinnacle Change of Control” means:
     (i) the direct or indirect 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) of Beneficial Ownership of 20% or more of the Capital
Stock or Voting Power of a Pinnacle Affected Company; provided, however, that a
Pinnacle Change of Control will not be deemed to have occurred if the holder of
Pinnacle Corp.’s Series A Preferred Stock has taken any action pursuant to
Pinnacle Corp’s certificate of incorporation to permit an acquisition
contemplated by this clause (i); or
     (ii) the direct or indirect acquisition by a Major Carrier, any of its
Affiliates or any combination thereof of Beneficial Ownership of 10% or more of
the Capital Stock or Voting Power of a Pinnacle Affected Company;
provided, however, that from and after Pinnacle’s compliance with Section 5.18
of the Agreement, “Pinnacle Change of Control” shall mean:
     (i) the direct or indirect 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) of Beneficial Ownership of 25% or more of the Capital
Stock or Voting Power of a Pinnacle Affected Company; or
     (ii) the direct or indirect acquisition by a Major Carrier, any of its
Affiliates or any combination thereof of Beneficial Ownership of 10% or more of
the Capital Stock or Voting Power of a Pinnacle Affected Company.
     “Pinnacle Identification” means any Identification selected by Pinnacle
from time to time for use in connection with the business of Pinnacle and/or
Pinnacle Corp.
     “Pinnacle Service Cities” means those Service Cities at which Pinnacle
employees perform substantially all Ground Handling Functions and Pinnacle
provides required facilities.
     ”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 Northwest.
     “QECs” mean quick engine change kits.
     “Regional Airline Services” means the provisioning by Pinnacle to Northwest
of Scheduled Flights and Charter Flights using the Aircraft in accordance with
this Agreement.
     “Renewal Term” shall have the meaning ascribed to such term in
Section 10.01.

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     “Revenue Passenger” means a revenue passenger flown on a Scheduled Flight
or a Charter Flight.
     “Revenue Threshold” means five hundred million dollars ($500,000,000), as
such amount may be increased based on the amount by which, for any date of
determination, the most recently published Consumer Price Index for all-urban
consumers published by the Department of Labor (the “CPI”) has increased to such
date above the CPI for calendar year 2001. For purposes hereof, the CPI for
calendar year 2001 is the monthly average of the CPI for the 12 months ending on
December 31, 2001.
     “Scheduled Flights” means revenue passenger flights (other than Charter
Flights) using the Aircraft which, regardless of frequency, are held out to the
public and published in the customary and applicable schedule distribution
systems, such as the Official Airline Guide, or published by Northwest in its
own system timetables. In addition, Scheduled Flights shall include all
regularly scheduled flights which are not revenue passenger flights as
determined by Northwest in its sole discretion.
     “Section 5.05 Report” means the report of Section 5.05 expenses to be
prepared by Pinnacle pursuant to Section 5.02(a).
     “Section 5.06 Report” means the report of Section 5.06 expenses to be
prepared by Pinnacle pursuant to Section 5.02(a).
     “Service Cities” means those cities identified from time to time by
Northwest to which Pinnacle shall provide Regional Airline Services.
     “Spare Engine Rental Expense” means the Basic Rent charged in the Leases
between Northwest and Pinnacle for the Spare Engines.
     “Spare Engines” means (i) the nine (9) General Electric CF34-3B1 spare
engines (including QECs where applicable in accordance with the respective Spare
Engine Lease) in Pinnacle’s fleet as of December 1, 2006, and (ii) additional
CF34-3B1 spare engines (including QECs where applicable in accordance with the
respective Spare Engine Lease) when, as and if such spare engines are added to
Pinnacle’s fleet pursuant to Section 3.02. Any Spare Engine removed from
Pinnacle’s fleet ceases to be a “Spare Engine” hereunder upon the date of such
removal.
     “Subsidiary” of any Person means any corporation, association, partnership,
joint venture, limited liability company or other business entity of which more
than 40% of the total Voting Power thereof or the Capital Stock thereof is at
the time Beneficially Owned or controlled, directly or indirectly by (1) such
Person, (2) such Person and one or more Subsidiaries of such Person, or (3) one
or more Subsidiaries of such Person.
     “Support Agreements” shall have the meaning ascribed to such term in
Section 3.08.
     “Termination Date” means the date on which this Agreement terminates
pursuant to Article X.

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     “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 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 amounts paid
by customers for transportation of persons or packages by air.
     “Ticketing Services” means the ticketing services to be performed pursuant
to Section 4.07.
     “Total Operating Cost” means all expenses directly associated with the
provision of Regional Airline Services under this Agreement, including but not
limited to those generally recognized as overhead, determined in accordance with
GAAP. For the avoidance of doubt, Total Operating Cost does not include net
interest expense and those items that are classified as extraordinary on the
audited financial statements.
     “Total Operating Income” means Total Operating Revenue minus Total
Operating Cost.
     “Total Operating Revenue” means the amounts Pinnacle receives from
Northwest pursuant to Section 5.02 or Section 5.14 (including penalties
accounted for as a reduction to revenue) of this Agreement, plus any revenues
Pinnacle receives as a result of performing ground handling services for Mesaba
or other airlines (as and if approved by Northwest), plus any payments Pinnacle
receives from a governmental entity intended to reimburse Pinnacle for lost
revenue, an inability to cover incurred operating expenses, or as a
reimbursement or offset to incurred expenses.
     “Traffic Referral” shall have the meaning ascribed to such term in Section
4.07(e).
     “Traffic Manifest” shall have the meaning ascribed to such term in Section
4.09(a).
     “Transaction Documents” means this Agreement, the Assumption and Claim
Resolution Agreement, dated as of the date hereof, among the parties hereto, the
Share Purchase Agreement, dated as of the date hereof, between Northwest and
Pinnacle Corp., and amendments to the Leases, dated on or about the date hereof,
to be made in connection with the foregoing agreements.
     “Voting Power” means, as of the date of determination, the voting power in
the general election of directors, managers or trustees, as applicable.
     “2003 ASA” shall have the meaning ascribed to such term in the preamble of
this Agreement.

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ARTICLE II
PROVISION OF REGIONAL AIRLINE SERVICES
     Section 2.01 Operation of Scheduled Flights. Subject to the terms and
conditions of this Agreement, Pinnacle shall use the Aircraft to operate
Scheduled Flights and Charter Flights as shall be designated by Northwest from
time to time in Northwest’s sole discretion. All schedules and aircraft routing
for such Scheduled Flights and all utilization of the Aircraft shall be
determined by Northwest from time to time, in its sole discretion, subject to
the reasonable operating constraints of Pinnacle taking into consideration
reasonable maintenance, crew training and Aircraft rotation requirements.
Scheduled block times shall be set in accordance with Northwest’s standards
unless otherwise mutually agreed by Northwest and Pinnacle. Minimum turn times
shall be mutually agreed to by Pinnacle and Northwest and set in conformity with
standard industry practices and Aircraft type.
     Section 2.02 Use of Designator, NW Identification and Related Matters.
Subject to the applicable provisions of Article VII below, Pinnacle shall
operate the Scheduled Flights and Charter Flights provided under this Agreement
using the Designator. The Scheduled Flights and Charter Flights shall be
identified by Pinnacle solely with flight numbers assigned by Northwest. Subject
to the applicable provisions of Article VII below, Pinnacle shall use only the
NW Identification for the Aircraft (except as otherwise required by Governmental
Regulations), and for all facilities (including Maintenance Facilities),
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 Pinnacle uniforms (including the use of the NW
Identification thereon) shall be determined by Northwest, provided that such
uniforms shall at all times be consistent with Northwest’s existing uniform
standards. Pinnacle shall not use the Pinnacle Identification for the Aircraft
(except as required by Governmental Regulation), facilities (including
Maintenance Facilities), signage, equipment, uniforms 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 Pinnacle from using the Pinnacle
Identification for general corporate purposes, investor relations, 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.
     Section 2.03 Use of Other Designators. Pinnacle shall not use on the
Aircraft the airline designator, Identification, or any other identifying
feature of a foreign or United States airline other than Northwest, without the
express prior written consent of Northwest, or unless Northwest directs Pinnacle
to use such other designator, Identification, or identifying feature.
     Section 2.04 Personnel and Dispatch Control. Pinnacle shall be responsible
for providing all crews (flight and cabin) to operate the Scheduled Flights and
any Charter Flights and for all aspects (personnel and other) of dispatch
control, including but not limited to load control.
     Section 2.05 Inventory Management. Northwest shall have complete control
over all inventory management functions for all Scheduled Flights and Charter
Flights operated pursuant to this Agreement, including, without limitation,
overbooking levels, discount seat

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levels, and allocation of seats among the various fare buckets. In performing
Pinnacle’s inventory management, Northwest shall conform in all material
respects to its own procedures and standards, taking into account the type of
Aircraft operated by Pinnacle.
     Section 2.06 Passenger Fares. Northwest shall be the sole authority for
filing tariffs for Scheduled Flights operated pursuant to this Agreement, and
Northwest 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 Northwest.
     Section 2.07 DOT Certification. Pinnacle has and shall maintain DOT
Certification and all other permits, licenses, certificates and insurance
required by governmental authorities and Article IX hereof to enable Pinnacle to
perform the services required by this Agreement.
     Section 2.08 Compliance With Governmental Regulations. All flight
operations, dispatch operations and flights and all other operations undertaken
by Pinnacle pursuant to this Agreement shall be conducted and operated by
Pinnacle in strict compliance with all Governmental Regulations, including,
without limitation, those relating to airport security, the use and
transportation of hazardous materials, flight crew and mechanic qualifications
and licensing requirements, crew training and hours. All Equipment shall be
operated and maintained by Pinnacle in strict compliance with all Governmental
Regulations, Pinnacle’s own operations manuals and maintenance manuals and
procedures, and all applicable equipment manufacturer’s instructions. At all
times, Pinnacle shall operate with the highest standards of care.
     Section 2.09 Quality of Service. Northwest policies, procedures,
performance standards (including but not limited to Northwest’s “Customers
First” customer service plan) and means of measurement thereof concerning the
provision of air passenger and air cargo services shall be applicable to all
services provided by Pinnacle under this Agreement. Pinnacle shall achieve at
least the same quality of airline service provided by Northwest, subject to
limitations imposed by the type of Aircraft used by Pinnacle, its route network,
the availability of equipment and facilities at the Service Cities and the
performance by Northwest of its obligations under this Agreement. Pinnacle shall
maintain adequate staffing levels to ensure at least the same level of customer
service and operational efficiency that Northwest achieves; Pinnacle shall
cooperate with Northwest in any way necessary or desirable to provide such
comparable level of customer service in connection with the operation of
Regional Airline Services; and Pinnacle shall maintain new hire and recurrent
training programs for all job descriptions which are reasonably acceptable to
Northwest.
     Section 2.10 Service Standards. Without limiting Section 2.09, Pinnacle
shall achieve the following specific performance standards (subject to
Section 5.15(b)(iii) and (iv) below):
     (a) Minimum Completion Factor. Pinnacle shall achieve not less than a [***]
completion factor for all Scheduled Flights which are scheduled to be operated
by Pinnacle during each Performance Period. Scheduled Flights which are

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cancelled at Northwest’s request (as determined by Northwest’s System Operations
Control (“SOC”) operations reporting group) will not be included in calculating
Pinnacle’s completion factor, and station overflys due to no passenger load will
not be considered a cancellation.
     (b) Minimum On-Time Reliability. Pinnacle shall achieve a [***] on-time
arrival within zero minutes factor and a [***] on-time departure within zero
minutes factor for all Scheduled Flights which are scheduled to be operated by
Pinnacle during each Performance Period. Scheduled Flights which are delayed at
Northwest’s request will not be included in calculating Pinnacle’s on-time
arrival and on-time departure factors.
     (c) Mishandled Luggage Factor. The number of incidents of mishandled
luggage by Pinnacle shall not exceed twelve [***] enplaned revenue passengers
during any Performance Period. The number of incidences of mishandled luggage
shall be determined by Northwest by dividing (i) the total number of
Pinnacle-caused claims at Pinnacle Service Cities, Northwest Service Cities,
Contracted Service Cities and the Hub Cities during the applicable Performance
Period, by (ii) the total number of enplaned revenue passengers during such
Performance Period as reported by Northwest. Notwithstanding the foregoing, the
parties agree that incidents of mishandled luggage where (i) DTW is the
responsible station, and (ii) such incidents are not due to Pinnacle’s actions,
will not be included in the mishandled luggage factor unless and until Pinnacle
performs luggage handling for its Scheduled Flights at DTW. In the event
incidents of mishandled luggage at DTW are excluded from the mishandled luggage
factor pursuant to the preceding sentence, the number of enplaned revenue
passengers at DTW during the corresponding time period will also be excluded
from the mishandled luggage factor, and no penalties will be applicable as to
such passengers. The parties further agree that mishandled luggage at MSP will
not be included in the mishandled luggage factor in the event Mesaba fails to
perform luggage handling in accordance with the standards set forth in the
handling agreement between Pinnacle and Mesaba and Northwest is unable to make
sufficient space available at MSP to allow Pinnacle to perform luggage handling
for its Scheduled Flights or make other mutually satisfactory luggage handling
arrangements. In the event incidents of mishandled luggage at MSP are excluded
from the mishandled luggage factor pursuant to the preceding sentence, the
number of enplaned revenue passengers at MSP during the corresponding time
period will also be excluded from the mishandled luggage factor, and no
penalties will be applicable as to such passengers.
     (d) Customer Complaints Factor. The number of customer complaints received
by Northwest in respect of Regional Airline Services shall not exceed [***]
enplaned revenue passengers during any Performance Period. The number of
customer complaints shall be determined by Northwest by dividing (i) the total
number of Pinnacle -caused complaints during the applicable Performance Period,
by (ii) the total number of enplaned revenue passengers during such Performance
Period as reported by Northwest.

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     (e) Vendor Performance. Northwest intends to enter into one or more ground
handling agreement(s) to handle Pinnacle flights in DTW and MSP with a
Northwest-selected vendor(s). If Northwest enters into such an agreement, then
Northwest agrees that such agreement will include performance metrics
substantially similar to the performance metrics in the ground handling services
agreement between Northwest and Pinnacle in place as of January 1, 2007. Should
the vendor not meet or exceed the performance standards in the ground handling
agreement for any three month period in MSP or DTW, then the “s” coded delays
and cancels at the applicable airport will be removed from Pinnacle’s
performance for the applicable period in determining whether Pinnacle has
satisfied the performance metrics under this Agreement. Should Pinnacle be the
ground handler in MSP or DTW, the “s” coded delays or cancel will remain. If
Northwest does not enter into an agreement with a Northwest-selected vendor to
handle Pinnacle flights in DTW and MSP, or if Northwest enters into such an
agreement but such agreement does not include performance metrics substantially
similar to the performance metrics in the ground handling services agreement
between Northwest and Pinnacle in place as of January 1, 2007, and the vendor
handling Pinnacle flights in DTW and MSP does not, for any three month period in
MSP or DTW, meet or exceed the performance metrics in the ground handling
services agreement between Northwest and Pinnacle in place as of January 1, 2007
(notwithstanding that such metrics may not be applicable to such vendor as
between such vendor and Northwest), then the “s” coded delays and cancels at the
applicable airport will be removed from Pinnacle’s performance for the
applicable period in determining whether Pinnacle has satisfied the performance
metrics under this Agreement
     Section 2.11 Service Recovery
     (a) Passenger Amenities. Pinnacle agrees to provide passenger amenities,
including, without limitation, denied boarding compensation, which Northwest
provides under Rule 245 of the Domestic General Rules No. 1 issued by Airline
Tariff Publishing Co. and ATA Resolution No. 120.20 or pursuant to any similar
contractual arrangement now existing or hereafter in effect or applicable to
Northwest. In any Pinnacle Service City, Contracted Service City or Hub City,
Pinnacle agrees (i) to handle oversold Scheduled Flights and the payment of
denied boarding compensation in accordance with Northwest’s standard policies
and procedures, (ii) to pay the full cost of providing passenger amenities
(either directly to the affected passengers or to Northwest as reimbursement for
the amounts paid by Northwest to such passengers) with the exception of denied
boarding compensation resulting from inventory oversales or other actions of
Northwest, and (iii) to report all denied boarding data to Northwest via both
the standard Northwest Ticket Agent Report (“TAR”) and the standard Northwest
Yield Management Flight Close-Out Denied Boarding Mask (“MASK”). In any Pinnacle
Service City, Contracted Service City or Hub City, for denied boarding
compensation resulting from inventory oversales or the actions of Northwest,
Pinnacle will pay the appropriate amount of denied boarding compensation to the
affected passengers and will invoice Northwest for such amount pursuant to
Section 5.07 below. Any such invoice will include sufficient detail and
supporting documentation to allow Northwest to verify the

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invoiced amount. Notwithstanding the foregoing, Pinnacle shall be responsible
for any discrepancy between the TAR and the MASK, and Northwest will invoice
Pinnacle for any amounts due based on reconciliation of those two reports. In
Northwest Service Cities, Northwest will provide all passenger amenities,
including but not limited to baggage delivery, at its sole cost.
     (b) Destination by other Means. If Pinnacle transports a revenue passenger
to his or her destination by another means (bus, train, taxi, etc.) due to a
flight cancellation, Northwest shall reimburse Pinnacle for the actual
transportation costs incurred to transport the passenger by such other means;
provided, however, that if the flight cancellation is necessitated by acts of
Pinnacle (e.g., crew curfews, maintenance-related delays, etc.), Pinnacle will
pay the costs incurred to transport the passenger by such other means. Pinnacle
shall use its best efforts to minimize the transportation of passengers by other
means and the costs associated therewith.
     Section 2.12 Annual Operating Plan. At least 90 days prior to January 1 of
each year during the term of this Agreement, Pinnacle and Northwest shall confer
and prepare an operating plan for the succeeding calendar year, which plan shall
include (i) Northwest’s forecast with respect to the schedule and routing for
all Scheduled Flights for such year, (ii) Northwest’s forecast of the Service
Cities to which Pinnacle shall operate Regional Airline Services, (iii)
Northwest’s forecast of specific dates for the commencement of service to new
Service Cities, if any, (iv) Northwest’s forecast of the number of Aircraft to
be added to or removed from Pinnacle’s fleet (subject to Section 3.02), and
(v) such other matters as Northwest and Pinnacle shall determine (as amended in
accordance with this Section 2.12, the “Annual Operating Plan”). Northwest and
Pinnacle shall meet and confer on a quarterly basis (or more frequently if
requested by either Northwest or Pinnacle) to review the implementation of the
Annual Operating Plan and to discuss any changes to the Annual Operating Plan.
In the event Northwest elects to alter the Annual Operating Plan during the
course of a year, Northwest shall use its reasonable best efforts to provide at
least sixty (60) days prior notice to Pinnacle. Notwithstanding the foregoing
provisions of Section 2.12, Northwest shall promptly notify Pinnacle of any
determination by Northwest to increase or decrease Pinnacle’s fleet size, and,
except as provided in Section 3.02(a)(ii) and Section 3.02 (a)(iii) below,
Northwest shall give Pinnacle no less than ninety (90) days prior notice.
Northwest agrees that any substantial increases in Pinnacle’s fleet size
pursuant to the preceding sentence are subject to Pinnacle’s reasonable
operating constraints.
     Section 2.13 Inflight Food, Beverages and Supplies. Unless otherwise
mutually agreed, Pinnacle will provide Aircraft catering services, food and
beverages for passengers and crews on Scheduled Flights in accordance with
Northwest’s specifications and directions and at Pinnacle’s sole cost. Pinnacle
shall be solely responsible for maintaining all licenses necessary for the
serving of inflight food and beverages on Scheduled Flights. Northwest shall
furnish Pinnacle, at Northwest’s sole cost, adequate supplies of its customary
inflight supplies including, but not limited to, the Northwest inflight
magazine, 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 Northwest. Notwithstanding anything to the contrary in this
Agreement, Northwest may, at its option, require Pinnacle upon ninety (90) days
prior written notice to utilize Northwest or a Northwest-designated contract
agent to provide catering

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services, food and beverages for passengers and crews on Scheduled Flights,
provided that (i) the Block Hour Rates set forth in Section 5.03 below are
adjusted as necessary to eliminate the costs of catering services, food and
beverages that were included in establishing the Block Hour Rates, and the
Direct Costs to Pinnacle of the new arrangement will be reimbursed pursuant to
Section 5.06 below, and (ii) the service standards applicable to any such
Northwest-designated contract agent are either reasonably satisfactory to
Pinnacle or no less stringent than the standards applicable to Northwest’s own
operations.
     Section 2.14 Exclusivity Arrangements. During the term of this Agreement,
neither Pinnacle Corp., Pinnacle, nor any Affiliate of Pinnacle Corp. shall
operate any flights to or from the Hub Cities using its own airline code or the
airline code, logo, or any other identifying feature of a foreign or United
States airline (other than Northwest) without the express prior written consent
of Northwest. Nothing in this Agreement shall preclude Northwest from
(i) entering into code share, alliance or other commercial cooperation
arrangements with any other airline, or (ii) entering into similar or other
arrangements with other carriers for the provisioning of regional airline
services using Canadair Regional Jets, turboprop aircraft or any other aircraft
to or from the Hub Cities, the same Service Cities or elsewhere.
     Section 2.15 Other Operations. Pinnacle Corp. and/or an Affiliate of
Pinnacle Corp. (including Pinnacle) may acquire aircraft and operate air
transportation services in its own name or on behalf of or in cooperation with
an airline other than Northwest, subject to Section 2.14, Section 6.01(b) and
Section 6.02(a) and the following conditions: (a) prior to the commencement of
the operation of twenty-four (24) or more aircraft by Pinnacle, Pinnacle Corp.
and/or an Affiliate of Pinnacle Corp. in its own name or on behalf of or in
cooperation with an airline other than Northwest, Pinnacle shall provide
Northwest with at least ninety (90) days advance written notice of the date on
which such level of operations will commence, (b) the parties shall negotiate in
good faith an adjustment to the Fixed Cost Payment resulting from the operating
cost efficiencies to be achieved by Pinnacle or to be shared between Pinnacle
and the newly commenced operation by Pinnacle Corp. and/or an Affiliate of
Pinnacle Corp., (c) any reductions in the Fixed Cost Payment shall be effective
on the date the twenty-fourth aircraft commences operation, and (d) if the
parties are unable to reach agreement with respect to such adjustment to the
Fixed Cost Payment within thirty (30) days after the twenty-fourth aircraft
commences operation, then the parties shall submit the dispute to arbitration in
accordance with Section 5.10(f) below.
ARTICLE III
EQUIPMENT
     Section 3.01 Use of the Equipment. Pinnacle 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
Pinnacle for any other purpose without the prior written consent of Northwest.

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     Section 3.02 Fleet Size and Related Matters.
     (a) Determination of Fleet Size. As of December 1, 2006, Pinnacle’s fleet
consisted of one hundred twenty-four (124) CRJ-200/440 Canadair Regional Jet
aircraft and nine (9) Spare Engines.
     (i) Equipment Additions. Northwest and Pinnacle agree that an additional
fifteen (15) CRJ-200/440 Aircraft shall be added to Pinnacle’s fleet on or
before January 31, 2007, one (1) additional CRJ-200/440 Aircraft shall be added
to Pinnacle’s fleet on or before August 31, 2007 and one (1) additional
CRJ-200/440 Aircraft shall be added to Pinnacle’s fleet on or before December
31, 2007 (the “Seventeen Aircraft”). In addition, Northwest may, at its option
and sole discretion, place up to an additional one hundred sixty-three
(163) CRJ-200/440 Canadair Regional Jet Aircraft and twenty-four (24) Spare
Engines in Pinnacle’s fleet.
     (ii) Equipment Removal Rights. Northwest and Pinnacle agree that Northwest
shall have the following equipment removal rights:
     (A) if Northwest places CRJ-200/440 Aircraft in Pinnacle’s fleet pursuant
to the second sentence of Section 3.02(a)(i), Northwest shall have the right
upon at least ninety (90) days prior written notice to remove one or more such
CRJ-200/440 Aircraft (and related Spare Engines) selected by Northwest from
Pinnacle’s fleet;
     (B) if Pinnacle has not reached an agreement with its pilots for a new
collective bargaining agreement by March 31, 2007, Northwest shall have the
right to remove from Pinnacle’s fleet the CRJ-200/440 Aircraft placed with
Pinnacle pursuant to the first sentence of Section 3.02(a)(i) above and
Northwest’s obligation to place additional CRJ-200/440 Aircraft with Pinnacle
pursuant to the first sentence of Section 3.02(a)(i) above shall be terminated
as of March 31, 2007; provided, however, that such Aircraft shall be removed at
a rate of no more than three Aircraft in any one-month period; and further
provided that if Pinnacle has reached an agreement with its pilots for a new
collective bargaining agreement by March 31, 2007, then on or prior to the later
of March 31, 2007 or the 30th day after Pinnacle reaches such an agreement,
Northwest shall designate, in its sole discretion, either a three (3) year term
or a ten (10) year term (commencing effective as of January 1, 2007) for all of
the CRJ-200/440 Aircraft placed (or to be placed) with Pinnacle pursuant to the
first sentence of Section 3.02(a)(i) above, and such Aircraft shall be removed
from Pinnacle’s fleet at the expiration of such time period;
     (C) from and after the date on which Pinnacle has entered into an agreement
with one or more other air carriers with respect to the operation of at least
twenty (20) additional regional jet aircraft in Pinnacle’s fleet, Northwest may,
at its option, elect to remove one (1) CRJ-200/440 Aircraft and related Spare
Engines selected by Northwest from Pinnacle’s base fleet of one hundred
twenty-four (124) CRJ-200/440 Aircraft (and related Spare Engines) for every two
(2) regional jet aircraft operated for such other air carrier(s) which are added
to Pinnacle’s fleet above the twenty (20) additional regional jet aircraft
operated for such other air carrier(s); provided, however, that (1) Northwest
shall provide Pinnacle with at least six (6) months prior written notice of
exercise of Northwest’s option to remove Equipment from Pinnacle’s fleet
pursuant to this provision, (2) Northwest shall not remove more than twenty
(20) CRJ-200/440 Aircraft and related Spare Engines from Pinnacle’s fleet
pursuant to this provision,

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and in any twelve month period Northwest shall not remove more than five
(5) CRJ-200/440 Aircraft and related Spare Engines from Pinnacle’s Fleet
pursuant to this provision, (3) the CRJ-200/440 Aircraft and related Spare
Engines removed from Pinnacle’s fleet pursuant to this provision shall not be
operated with the Designator and shall not be operated by a third party under
any type of operating, codeshare or other arrangement with Northwest, and
(4) Northwest shall receive the CRJ-200/440 Aircraft and related Spare Engines
removed from Pinnacle’s fleet pursuant to this provision in “as is” condition,
and, notwithstanding the terms of any of the applicable Leases to the contrary,
Pinnacle shall not be required to meet the return conditions contained in the
applicable Leases;
     (D) from and after the date on which additional aircraft are added to
Pinnacle’s fleet for a term extending at least until the Termination Date, which
carry the Designator and are configured with seventy (70) or more seats (the
“Replacement Aircraft”), Northwest may, at its option, remove one CRJ-200/440
Aircraft and related Spare Engines from Pinnacle’s base fleet of one hundred
twenty-four (124) CRJ-200/440 Aircraft (and related Spare Engines) for each
Replacement Aircraft added to Pinnacle’s fleet; provided, however, that
(1) Northwest shall provide Pinnacle with at least six (6) months prior written
notice of exercise of Northwest’s option to remove Equipment from Pinnacle’s
fleet pursuant to this provision, and (2) Northwest shall receive the
CRJ-200/440 Aircraft and related Spare Engines removed from Pinnacle’s fleet
pursuant to this provision in “as is” condition, and, notwithstanding the terms
of any of the applicable Leases to the contrary, Pinnacle shall not be required
to meet the return conditions contained in the applicable Leases;
     (E) Pinnacle acknowledges that on September 14, 2005 Northwest filed for
bankruptcy protection under Chapter 11 of the United States Bankruptcy Code and
Northwest’s bankruptcy proceeding is pending in the United States Bankruptcy
Court in the Southern District of New York (the “Bankruptcy Court”). If, prior
to Northwest’s emergence from bankruptcy, an agreement is reached between
Northwest and another Major Carrier that is intended to result in a merger of
the carriers or the acquisition of one carrier by the other, Northwest may, at
its option, elect prior to Northwest’s emergence from bankruptcy to remove any
Aircraft (and related Spare Engines) placed in Pinnacle’s fleet pursuant to
Section 3.02(a)(i) above plus up to twenty-four (24) additional Aircraft (and
related Spare Engines) (the “Twenty-Four Aircraft”); provided, however that such
Aircraft (and related Spare Engines) shall be removed at a rate of no more than
three Aircraft (and related Spare Engines) being removed in any one-month
period, and Northwest shall receive such Aircraft (and related Spare Engines)
removed from Pinnacle’s fleet pursuant to this provision in “as is” condition,
and, notwithstanding the terms of any of the applicable Leases to the contrary,
Pinnacle shall not be required to meet the return conditions contained in the
applicable Leases;
     (F) from and after January 1, 2008, in the event of a Pinnacle Change of
Control, Northwest may, at its option, remove CRJ-200/440 Aircraft and related
Spare Engines from Pinnacle’s fleet pursuant to Section 5.15(b) below; and
     (G) from and after December 31, 2017, Northwest may, at its option, remove
CRJ-200/440 Aircraft and related Spare Engines from Pinnacle’s fleet upon the
expiration of the applicable head leases.

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In the event any Equipment is removed from Pinnacle’s fleet, Pinnacle shall
cooperate with Northwest in good faith with respect to transition services,
transfer of aircraft records and related ancillary arrangements. For the
avoidance of doubt, each of Northwest’s Equipment removal rights pursuant to
this Section 3.02(a)(ii) is independent of each other removal right, and the
exercise of removal rights under one provision shall not reduce Northwest’s
removal rights under any other provision.
     (iii) Additional Equipment Removal Rights. Notwithstanding
Section 3.02(a)(ii), in the event of (A) a labor action or other event giving
rise to Northwest’s right to terminate this Agreement pursuant to
Section 10.03(e) and (B) Northwest has not yet exercised its termination rights,
(1) Northwest shall have the right to terminate Leases for, and take immediate
possession of, up to seventy-four (74) CRJ 200/440 Aircraft and related Spare
Engines selected by Northwest, and (2) if the labor action or other event
continues beyond 45 days Northwest shall have the right to select and terminate
Leases for, and take immediate possession of, up to that number of CRJ 200/440
Aircraft in excess of fifty (50) and the related Spare Engines.
     (iv) Unscheduled Aircraft. Subject to Pinnacle’s approval, which shall not
be unreasonably withheld, Northwest shall determine the appropriate level of
unscheduled Aircraft to be included in Pinnacle’s fleet from time to time.
     (v) Spare Engine Requirements. With respect to the appropriate quantity of
Spare Engines to be included in Pinnacle’s fleet in the event of Aircraft
removal or placement of additional Aircraft with Pinnacle, Northwest and
Pinnacle shall mutually determine the appropriate quantity of Spare Engines to
be included in Pinnacle’s fleet from time to time.
     Section 3.03 Lease of the Equipment. As of the December 1, 2006, Pinnacle
and Northwest (and/or an Affiliate of Northwest) have entered into Leases with
respect to the one hundred twenty-four (124) CRJ-200/440 Aircraft and nine
(9) Spare Engines in Pinnacle’s fleet and agree to enter into (or, as to
Northwest, Northwest agrees to cause such affiliate as Northwest may designate
to enter into) (a) amendments to the Leases as required to implement the terms
of this Agreement as amended, and (b) a Lease with respect to each additional
CRJ-200/440 Aircraft and each additional Spare Engine added to Pinnacle’s fleet
when and as Northwest takes delivery of such additional Equipment if Northwest
has determined to use such Equipment for Regional Airline Services pursuant to
this Agreement.
     Section 3.04 Terms of the Leases. Each Lease for the CRJ-200/440 Aircraft
and the Spare Engines shall be substantially in the forms of Exhibit A-1 and
Exhibit A-2, respectively, and shall include the following terms:
     (a) the term of each Lease shall be for a period ending on the Termination
Date; provided, however, no Lease shall be for a term longer than the term of
the related head lease, if any;
     (b) the rent for Aircraft shall equal the Aircraft Rental Expense and shall
be payable monthly in advance;

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     (c) the rent for Spare Engines shall equal the Spare Engine Rental Expense
and shall be payable monthly in advance; and
     (d) the Leases shall include such terms as are necessary to conform
provisions of the Leases to the head lease and to any ancillary documents
actually entered into by Northwest or its affiliate in connection with such
Equipment (to the extent Northwest requests conformation).
     Notwithstanding the foregoing provisions of this Section 3.04 or the
provisions of any Lease, the parties agree that the security deposit for the one
hundred twenty-four (124) CRJ-200/440 Aircraft in Pinnacle’s fleet as of the
date hereof shall equal the [***] ([***] per Aircraft) currently deposited with
Northwest and no additional security deposit shall be required for the placement
of up to seventeen (17) additional CRJ-200/440 Aircraft with Pinnacle. The
security deposit for CRJ-200/440 Aircraft placed at Pinnacle in excess of such
seventeen (17) Aircraft shall be equal to one month’s rent per each additional
Aircraft. The security deposit required for the placement of other aircraft at
Pinnacle with fifty-one (51) or more seats shall be equal to one month’s rent
per each additional aircraft.
     Section 3.05 Manufacturer Benefits Agreement. Northwest and Pinnacle have
entered into a Manufacturer Benefits Agreement.
     Section 3.06 Equipment Maintenance, Servicing and Cleaning. Pinnacle shall
be responsible for all aspects of the maintenance in accordance with the
Maintenance Program (including any maintenance or modifications required by FAA
airworthiness directives and all routine and non-routine maintenance), servicing
and cleaning (including painting of aircraft exteriors and replacement of worn
interior items) of the Equipment (except for ground handling as specified in
Section 4.02); provided, however, that with respect to the Canadair Regional Jet
Aircraft and Spare Engines, Pinnacle shall utilize General Electric for all
major shop-level engine maintenance and shall utilize Bombardier for heavy
airframe maintenance in accordance with the GE Agreements and the Bombardier
Agreement. In the event Pinnacle is or becomes a party to such Agreements,
Pinnacle shall not execute any amendment or side letter to any of those
Agreements without Northwest’s prior written consent. In the event spare engine
and/or spare parts pooling agreements are established for Airlink Carriers,
Pinnacle will participate in such agreements so long as such agreements
reasonably address Pinnacle’s inventory needs, logistics requirements and
configuration concerns. In the event Northwest enters into agreements for
auxiliary power unit (APU) maintenance, avionics maintenance and/or landing gear
overhauls with respect to the Aircraft, Pinnacle shall utilize the vendors in
such agreements for such services; provided, however, Pinnacle’s utilization of
such vendors shall be subject to (i) termination of Pinnacle’s existing vendor
contracts, if any, and Northwest’s payment of any early termination penalties
imposed pursuant to Pinnacle’s contracts and (ii) reasonably satisfactory
arrangements in respect of Pinnacle’s operational requirements.
     Section 3.07 Third Party Guarantees and Warranties. Pinnacle 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

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provided under the purchase, support or services agreement. Pinnacle shall not
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
Northwest.
     Section 3.08 Related Transfer Arrangements. All leases and subleases of
ground support equipment, simulators, tooling and spare parts inventory
agreements and vendor and/or maintenance agreements relating to items used
primarily for or services provided primarily to the Equipment (collectively
“Support Agreements”) entered into by Pinnacle after the Initial Effective Date
shall be assignable to Northwest without the consent of the other party to such
Support Agreement on termination of this Agreement. Pinnacle shall, at
Northwest’s option, assign such Support Agreements as Northwest shall designate
to Northwest on termination of this Agreement. Pinnacle shall use its best
efforts to obtain the consent of the other party to any such Support Agreements
in effect as of the Initial Effective Date and, subject to obtaining such
consents, if necessary, shall, at Northwest’s option, assign such Support
Agreements as Northwest shall designate to Northwest on termination of this
Agreement. On termination of this Agreement and during the Option Term,
Northwest shall have the option to purchase from Pinnacle all ground support
equipment, simulators, tooling and spare parts inventory then owned by Pinnacle
which are used primarily with or related primarily to the Equipment for an
amount equal to such assets’ then fair market value or depreciated book value,
whichever is less. In the event Northwest invokes its Equipment removal rights
under Section 3.02 above, on the Equipment removal date and for a period of
thirty (30) days thereafter, Northwest shall have the option to purchase from
Pinnacle all ground support equipment, simulators, tooling and spare parts
inventory then owned by Pinnacle which are used primarily with or related
primarily to the returning Equipment for an amount equal to such assets’ then
fair market value or depreciated book value, whichever is less. Upon request
from Northwest, Pinnacle shall make available to Northwest at no cost (i) the
Maintenance Program and Maintenance Manual (as defined in the Lease) for the
Equipment, and (ii) all other documentation required in order to operate and
maintain the Equipment, and Pinnacle agrees that Northwest may provide such
Maintenance Program, Maintenance Manual and other documentation to one or more
other carriers operating (or anticipated to operate) Canadair Regional Jet
aircraft on behalf of Northwest.
     Section 3.09 Equipment Financing Coordination.
     Pinnacle shall coordinate and cooperate with Northwest with respect to
Equipment sale, purchase and lease transactions. Such coordination and
cooperation shall include, but is not limited to, cooperating with Northwest 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 Northwest with financial information
(audited and unaudited) that Northwest may then provide to third parties,
assisting 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 Northwest (including but not limited to participating in meeting with the
manufacturer, potential investors and sources of financing or lease equity to
discuss Pinnacle’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.

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     Section 3.10 Spare Parts Inventory; Application of Credits. Northwest may,
at its option, purchase spare parts inventory items designated by Northwest from
Bombardier or other third parties and either sell such parts to Pinnacle at
Northwest’s Direct Cost or lease such parts to Pinnacle. Terms of the spare
parts lease agreement, including but not limited to, administration of
inventory, scope of inventory purchase and lease conditions, will be mutually
agreed. Northwest may, at its option, require Pinnacle to purchase spare parts
or inventory from Bombardier or other designated third parties. In addition,
Northwest may, at its option, require Pinnacle to purchase from Northwest,
manufacturer, supplier or servicer credits obtained from third parties at the
face value of the credits. However, in no event shall Pinnacle be required to
purchase credits from Northwest that Pinnacle cannot utilize within 180 days of
the date of purchase from Northwest.
ARTICLE IV
ANCILLARY ARRANGEMENTS
     Section 4.01 Coordination with Pinnacle.
     (a) Schedules and Timetables. Northwest shall file and maintain schedules
with all applicable schedule distribution systems for all Scheduled Flights, and
such schedules shall be filed and maintained by Northwest together with the
schedules for its flights. Northwest shall include and list all Scheduled
Flights providing Regional Airline Services in the schedule publication program
of Northwest. Northwest shall, at its expense and sole discretion, furnish to
Pinnacle an adequate supply of current printed Northwest timetables and
contracts of carriage consistent with Governmental Regulations and Northwest’s
timetable publication program. Northwest shall include Scheduled Flights
operated by Pinnacle in all appropriate flight information systems on which
Northwest flights are listed.
     (b) Travel Privileges. Northwest and Pinnacle shall each be entitled to
make available for their respective employees and members of their respective
Boards of Directors, the travel privileges set forth on Exhibit E attached
hereto in accordance with the terms and conditions set forth therein.
     (c) Weather Information. Upon request of Pinnacle or its flight crews,
Northwest shall at its sole cost furnish Pinnacle such United States Weather
Bureau information or data as may be available to Northwest pursuant to a
separate written agreement; provided, however, that neither Northwest nor its
employees will be responsible or liable for the accuracy thereof. So long as
Northwest shall maintain its communications link with the National Weather
Service, Northwest shall provide the necessary communications to permit Pinnacle
to continue providing weather data to the National Weather Service. Northwest
shall provide any available National Weather Service data through computer
link-up to Pinnacle.
     (d) Information Systems. Northwest and Pinnacle have concurrently entered
into a separate written agreement with respect to the information systems
support Northwest will provide to Pinnacle.
     Section 4.02 Ground Handling

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     (a) Passenger and Ramp Handling. At Northwest Service Cities, the ground
handling functions shall consist of the following Northwest- provided functions:
(a) all gate check-in activities, (b) all passenger enplaning/deplaning
services, including but not limited to sky cap and wheel chair services,
(c) aircraft loading/unloading services, including but not limited to airside
busing, (d) passenger ticketing, (e) jetbridge maintenance, (f) janitorial
services, and (g) deicing services, and the following functions to be performed
at Pinnacle’s option by Northwest (subject to the concurrence of Northwest’s
local station manager), by Pinnacle with its own employees or by a contract
agent: (a) pushback, tow or taxi, (b) airstarts, and (c) aircraft cleaning,
including but not limited to overnight cleaning, lavatory service and water
service (collectively, the “Ground Handling Functions”). At least thirty
(30) days before the start of services pursuant to a schedule change, Pinnacle
shall provide written notice to Northwest regarding Pinnacle’s election to use
Northwest, its own employees or a contract agent to perform the (a) pushback,
tow or taxi, (b) airstart, and/or (c) aircraft cleaning functions at each
Northwest Service City. With respect to each Northwest Service City where
Pinnacle elects to use its own employees or a contract agent to perform the
(a) pushback, tow or taxi, (b) airstart, and/or (c) aircraft cleaning functions,
Pinnacle shall include in its periodic Cycle reports (pursuant to
Section 5.02(a)) the following information: (x) the per turn amount incurred by
Pinnacle to have such functions performed by its own employees or a contract
agent at each such Northwest Service City, and (y) the number of Cycles operated
at each such Northwest Service City during the period covered by the report. In
the event Northwest performs all Ground Handling Functions the rate Northwest
charges Pinnacle shall be [***] per turn (cycle). If Pinnacle elects to use its
own employees or a contract agent to perform the (a) pushback, tow or taxi, (b)
airstart, and/or (c) aircraft cleaning functions, the [***] per turn rate shall
be reduced by the per turn amount Pinnacle incurred to have those functions
performed by its own employees or such contract agent. At Pinnacle Service
Cities, Pinnacle shall provide the Ground Handling Functions. At a Contracted
Service City, the Ground Handling Functions shall be provided utilizing a
contract agent. At DTW, MSP and any other Hub City, excluding MEM, Pinnacle
shall use its own personnel and equipment or a contract agent to perform the
Ground Handling Functions, except for (i) passenger ticketing, (ii) airside
busing, sky cap and wheel chair services, (iii) jetbridge maintenance
(iv) janitorial services, and (v) DTW deicing services, all of which services
Northwest shall provide [***]. In the event Pinnacle utilizes a contract agent
to perform substantially all of the Ground Handling Functions at DTW the rate
for such contracted services shall not exceed [***] per turn (cycle) multiplied
by (1+CPPIB), excluding commissary charges. Any charge for such services in
excess of [***] multiplied by (1+CPPIB) per turn shall be the sole cost of
Northwest. In the event Pinnacle utilizes a contract agent to perform
substantially all of the Ground Handling Functions at MSP the rate for such
contracted services shall not exceed [***] per turn (cycle) multiplied by
(1+CPPIB), including commissary charges. Any charge for such services in excess
of [***] multiplied by (1+CPPIB) per turn shall [***] Northwest. At MEM,
Pinnacle shall use its own personnel and equipment or a contract agent to
perform the Ground Handling Functions, except for (i) passenger ticketing, and
(ii) airside busing, sky cap and wheel chair services, all of which services
Northwest [***].
     Notwithstanding anything to the contrary in this Agreement, Northwest may,
at its option, require Pinnacle upon ninety (90) days prior written notice to
utilize Northwest, a Northwest-designated contract agent, or Pinnacle’s own
personnel and equipment to perform the Ground Handling Functions at any or all
of the Hub Cities, Contracted Service Cities and Pinnacle Service Cities,
provided that (i) in the event Northwest enters into a ground handling

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agreement with a contracted agent in a Contracted Service City, Northwest shall
charge Pinnacle [***] per turn (cycle) multiplied by (1+CPPIB), (ii) the city
classification pursuant to Section 5.03(b) will be revised to the extent
necessary, and (iii) the service standards applicable to any
Northwest-designated contract agent will be either reasonably satisfactory to
Pinnacle or no less stringent than the standards applicable to Northwest’s own
operations. Furthermore, in the event a city is converted from a Contracted
Service City to a Pinnacle Service City, the Northwest passenger ticket counter
(passenger ticketing function pursuant to Section 4.02 (d)) at such Service City
may only be staffed by one company designated by Northwest.
     Section 4.03 Facilities.
     (a) Hub Cities. Pinnacle will sublease from Northwest airport facilities at
the Hub Cities as set forth in mutually agreeable sublease agreements. The
applicable Hub City facility charges are set forth in Exhibit B. In the event
Pinnacle requires additional facilities at any of the Hub Cities caused by the
expansion of Regional Airline Services, Northwest shall use its reasonable
efforts to obtain such facilities and provide them to Pinnacle at no additional
charge to Pinnacle. Northwest and Pinnacle agree that Northwest may relocate
Pinnacle to comparable facilities at the Hub Cities, provided that Northwest
pays Pinnacle’s reasonable relocation expenses.
     (b) Service Cities. At Northwest Service Cities, Northwest shall provide
Pinnacle with the Ground Handling Functions pursuant to Section 4.02 hereof
utilizing Northwest’s owned and/or leased premises and equipment (including
jetbridges) located thereon. Northwest shall cooperate with Pinnacle’s efforts
to become a signatory carrier at such airports; provided, however, that if
Pinnacle becomes a signatory carrier at any such airport Pinnacle shall vote as
directed by Northwest on any matters submitted to the signatory carriers for a
vote. At Pinnacle Service Cities, Pinnacle shall be solely responsible for all
of its facilities and equipment requirements, excluding jetbridges, which shall
be the responsibility of Northwest; provided, however, if Northwest owns and/or
leases facilities at a Pinnacle Service City and elects to provide Ground
Handling Functions to Pinnacle pursuant to Section 4.02, Northwest shall provide
such services utilizing Northwest’s owned and/or leased premises and equipment
(including jetbridges) located thereon. At a Contracted Service City, Pinnacle
shall be solely responsible for all of its facilities and equipment
requirements, excluding jetbridges, which shall be the responsibility of
Northwest. In the event Northwest exercises its right, pursuant to Section 4.02,
to have a Northwest-designated contract agent perform the Ground Handling
Functions in a Contracted Service City, Northwest shall be solely responsible
for all facilities and equipment requirements. Northwest will determine in its
sole discretion whether a jetbridge will be used at all Service Cities.
     (c) Maintenance Facilities. Except as provided in Section 3.06 and Section
4.03(h), maintenance facilities used to perform maintenance on the Equipment
(“Maintenance Facilities”) pursuant to lease or ownership arrangements entered
into after the Initial Effective Date, shall be at such locations and pursuant
to terms mutually agreeable to both parties. In the event Northwest provides the

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Maintenance Facility to Pinnacle, it will do so according to the terms of a
mutually agreeable lease or sublease. Northwest shall reimburse Pinnacle on a
monthly basis in accordance with Sections 5.06 and 5.07 for such Maintenance
Facilities expenses incurred by Pinnacle. The cost to Pinnacle for Maintenance
Facilities leased or owned by Pinnacle as of the Initial Effective Date or
thereafter, will be reimbursed in accordance with Sections 5.06 and 5.07.
     (d) Landing Fees. Pinnacle shall be responsible for landing fees at all
airports to which it provides Regional Airline Services pursuant to this
Agreement and at all airports to which a Scheduled Flight, Non-Scheduled Flight
or Charter Flight is diverted.
     (e) Signage. Subject to Governmental Regulations, Pinnacle shall display at
all ticketing and check-in locations such signage or other forms of
advertisement to identify and promote Northwest’s service as Northwest may
specify and as approved by the relevant airport authority. All signage utilizing
the NW Identification shall be provided by Northwest at its sole cost, shall be
the property of Northwest and shall be subject to the applicable provisions of
Article VII below. Pinnacle shall not use the Pinnacle Identification on any
signage or other forms of advertisement used to identify or promote the Regional
Airlines Services (except as otherwise required by Governmental Regulations).
     (f) Related Transfer Arrangements. All leases and subleases of facilities
used in connection with Regional Airline Services, including Maintenance
Facilities for the Equipment (collectively, “Facilities Leases”) entered into by
Pinnacle after the Initial Effective Date shall be assignable to Northwest
without the consent of the other party to such Facility Lease on termination of
this Agreement, the withdrawal of Scheduled Flights from such airport or upon
written notice from Northwest to Pinnacle, provided that if the consent of the
facility lessor is required by contract or Governmental Regulations, Pinnacle
will use its best efforts to obtain such consent at the time the Facility Lease
is entered into and to incorporate such consent in the terms of the Facility
Lease. Pinnacle shall, at Northwest’s option, assign such Facilities Leases as
Northwest shall designate to Northwest on termination of this Agreement, the
withdrawal of Scheduled Flights from such airport or upon receipt of written
notice from Northwest. Pinnacle shall use its best efforts to obtain the consent
of the other party to such Facilities Leases in effect as of the Initial
Effective Date and, subject to obtaining such consents, if necessary, shall, at
Northwest’s option, assign such Facilities Leases as Northwest shall designate
to Northwest on termination of this Agreement, the withdrawal of Scheduled
Flights from such airport or upon receipt of written notice from Northwest. On
termination of this Agreement and during the Option Term, Northwest shall have
the option to purchase from Pinnacle all facilities used in connection with
Regional Airline Services, including Maintenance Facilities for the Equipment,
then owned by Pinnacle for an amount equal to such assets’ then fair market
value or depreciated book value, whichever is less. On the assignment of a
Facility Lease to Northwest or on the withdrawal of Scheduled Flights from an
airport and for a period of thirty (30) days thereafter, Northwest shall have
the option to purchase from Pinnacle all facilities used in

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connection with Regional Airline Services at such airport, including Maintenance
Facilities for the Equipment, then owned by Pinnacle for an amount equal to such
assets’ then fair market value or depreciated book value, whichever is less.
     (g) Facilities Lease Option. Notwithstanding anything to the contrary in
this Agreement, Northwest may, at its option, elect to hold the leasehold
interest in any facilities to be used by Pinnacle at any new or existing Service
City, and in the event Northwest exercises this option (i) Northwest shall enter
into a Facilities Lease with the lessor of such facilities, (ii) Pinnacle shall
utilize such facilities pursuant to a sub-lease or facilities use agreement with
Northwest, (iii) the rent/facilities charges payable by Pinnacle in such
sub-lease or facilities use agreement shall be the same as Northwest’s Direct
Cost under the Facilities Lease for the facilities used by Pinnacle, (iv) the
sub-lease or facilities use agreement shall terminate when Pinnacle ceases to
operate Regional Airline Services at the airport, and (v) Northwest shall lease
facilities which are reasonably suitable for Pinnacle’s operational needs and,
with respect to new Service Cities, Northwest shall complete the leasing
arrangements in a manner that will allow Pinnacle adequate time to prepare to
commence Regional Airline Services at the Service City in accordance with the
Annual Operating Plan or as otherwise scheduled by Northwest.
     Section 4.04 Data Communications. Northwest shall provide to Pinnacle at
all Service Cities and Hub Cities, [***], 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 Northwest in its airline
operations. In connection with the commencement of Regional Airline Services at
a new Service City, Northwest will provide Pinnacle with Northwest’s standard
Data Communications Equipment at Northwest’s [***]. Northwest and Pinnacle shall
enter into a separate written agreement with respect to the information
technology services to be provided by Northwest to Pinnacle in connection with
the Regional Airline Services operated under this Agreement.
     Section 4.05 Security. Northwest will provide for Pinnacle’s use the
security equipment in place, as of the Initial Effective Date, at all Service
Cites and the Hub Cities. Northwest agrees to provide, at Northwest’s sole
expense, for Pinnacle’s use at all new Pinnacle Service Cities and Contracted
Service Cities the same type of security equipment. Any additional security
equipment required due to future Governmental Regulations shall be provided by
Pinnacle at its sole expense at Pinnacle Service Cities and Contracted Service
Cities, and shall be provided by Northwest at its sole expense at Hub Cities and
Northwest Service Cities. At all Northwest Service Cities and the Hub Cities,
Northwest is solely responsible for Pinnacle’s allocated share of all
maintenance expenses associated with all security equipment and Pinnacle’s
allocated share of all personnel expenses (including overtime) associated with
the operation of the equipment and all airport security-related functions,
including, without limitation, passenger screening and activities related to
security directives imposed by Governmental Regulations. At Pinnacle Service
Cities and Contracted Service Cities, Pinnacle is solely responsible for all or
its allocated share of all maintenance expenses associated with all security
equipment and all or its allocated share of all personnel expenses (including
overtime) associated with the operation of

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the 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 as of the Initial Effective Date the U.S. government
was in the process of taking over airport security, and 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 of this Agreement,
Northwest 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 Northwest for its own reservations. All reservations shall
be made in the name of Northwest unless otherwise required by Governmental
Regulations. Northwest shall be sole owner of any customer or passenger data
relating to the Scheduled Flights and related reservation services.
     Section 4.07 Ticketing Services and Ticketing Procedures.
     (a) Ticketing Services. At all of its ticketing locations, Northwest shall,
at its sole expense, sell, issue and exchange tickets for passenger air
transportation on all Scheduled Flights to be operated pursuant to this
Agreement utilizing Northwest ticket stock and all related accounting forms
printed with the Northwest logo, name and format (“Northwest Tickets”).
Northwest hereby appoints Pinnacle as its agent, and Pinnacle hereby agrees to
act as Northwest’s agent, at all Pinnacle ticketing locations in connection with
the sale and issuance of all passenger tickets by Pinnacle and with the same
duties owed to Northwest in that capacity as is customary in the industry
between airlines. At all of its ticketing locations, Pinnacle shall sell, issue
and exchange Northwest Tickets for passenger air transportation on all Scheduled
Flights to be operated pursuant to this Agreement and to be provided by and over
the routes of Northwest (collectively, “Ticketing Services”). Nothing in this
Section 4.07(a) shall be deemed to alter or conflict with the provisions of
Section 9.01 hereof. Air carriers and other agencies other than Northwest may
also issue tickets for travel to be performed by Pinnacle.
     (b) Booking and Ticketing Procedures. The procedures followed and standards
applied by Pinnacle in booking flights and performing the Ticketing Services
shall conform in all material respects to Northwest’s own tariffs, procedures
and standards applicable to the booking of Northwest flights and the issuance of
Northwest Tickets and to the collection and remittance of the proceeds of such
sales. Pinnacle employees booking flights and performing Ticketing Services
shall adhere to Northwest’s procedures and standards as shall be provided to
Pinnacle in writing. In accordance with Section 8.02 below, Pinnacle shall be
responsible for collecting and shall pay to Northwest any Ticket Taxes and Fees
required to be collected under applicable law on Tickets sold by Pinnacle
utilizing Northwest ticket stock.
     (c) Frequent Flyer Program. Pinnacle agrees to accept Northwest frequent
flyer tickets and to provide transportation services pursuant to such tickets at
no charge to Northwest. All travel under the frequent flyer program solely on

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Pinnacle shall entitle a passenger to such credit as shall be equivalent to the
credit offered on Northwest for comparable mileage segments. Northwest will
provide such credit to members of its frequent flyer program who travel on
Pinnacle at no charge to Pinnacle.
     (d) Supplies. Northwest shall, at its sole expense, provide an adequate
supply of ticket office forms and specialized supplies (such as baggage tags,
but excluding normal office supplies such as paper, stationery, envelopes, memo
pads and the like) bearing the NW Identification for use by Pinnacle subject to
the applicable provisions of Article VII below.
     (e) Ticketing Costs. All travel agency commissions attributable to
Scheduled Flights shall be Northwest’s expense. Northwest shall pay all computer
reservation system fees attributable to passengers on Scheduled Flights. In the
event Governmental Regulations preclude the payment of these fees by Northwest
and Pinnacle then pays them, Northwest shall immediately begin paying Pinnacle a
“Traffic Referral” commission on a semi-monthly basis in an amount equal to such
fees formerly paid by Northwest for Pinnacle. Such commission shall be
retroactive to the date on which such fees were no longer lawfully paid by
Northwest and shall be included in the semi-monthly payments to be made by
Northwest pursuant to Section 5.02.
     Section 4.08 Baggage Handling Services. “Baggage Handling Services” shall
consist of the following:
     (a) At all Northwest Service Cities and Hub Cities, Pinnacle and Northwest
shall exchange and transfer baggage in accordance with procedures to be mutually
agreed upon and generally utilized by the parties.
     (b) The procedures utilized in performing such Baggage Handling Services
shall conform in all respects to Northwest’s own standards and procedures as
adapted to Pinnacle’s Aircraft and operations.
     (c) For purposes of baggage claims, Pinnacle will be treated as if it were
a party to standard industry ticketing and baggage agreements with Northwest and
other air carriers. Pinnacle will make available at the request of any passenger
excess valuation insurance, if any, offered by Northwest to the extent such
insurance covers Pinnacle’s flights and Northwest’s flights.
     Section 4.09 Air Cargo Handling Services. “Air Cargo Handling Services”
shall consist of the following:
     (a) At each location at which Northwest operates Ticketing Services,
Northwest shall at no charge to Pinnacle accept Air Cargo for shipment on
flights to be operated by and over the routes of Pinnacle or Northwest.
Northwest shall issue air waybills covering Air Cargo and shall prepare a
“Transfer Manifest” for each Pinnacle flight on which there shall be an Air
Cargo shipment which transfer manifest shall set forth all Air Cargo to be
carried on the flight.

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     (b) Northwest hereby appoints Pinnacle as its agent, and Pinnacle hereby
agrees to act as Northwest’s agent, at all Pinnacle ticketing locations in
connection with the sale and issuance of all air waybills by Pinnacle and with
the same duties owed to Northwest in that capacity as is customary in the
industry between airlines. Pinnacle agrees to observe all Northwest procedures
and standards applicable to the issuance of air waybills and to the collection
and remittance of the proceeds of such sales. Pinnacle employees performing such
duties shall adhere to Northwest’s procedures and standards as shall be provided
to Pinnacle in writing. In accordance with Section 8.02 below, Pinnacle shall be
responsible for collecting and shall pay to Northwest any Ticket Taxes and Fees
required to be collected under applicable law on air waybills sold by Pinnacle
utilizing Northwest air waybills. Nothing in this Section 4.09(b) shall be
deemed to alter or conflict with the provisions of Section 9.01 hereof. Air
carriers other than Northwest may also issue air waybills for cargo
transportation to be performed by Pinnacle.
     (c) Pinnacle shall provide Air Cargo handling services at Pinnacle’s
ticketing locations for and on behalf of Northwest for Air Cargo carried solely
on Pinnacle or on both a Pinnacle flight and a Northwest flight. Such handling
services shall be performed in accordance with Northwest’s procedures and
standards as provided to Pinnacle in writing, including but not limited to (1)
accepting all Air Cargo that Northwest accepts, such as pets/AVI (other live
animals), human remains, Priority Service (SPC) freight and perishables, unless
otherwise mutually agreed, and (2) keeping facilities open at least one and
one-half (1.5) hours before and one (1) hour after each Scheduled Flight for
customers to deliver and pick up Air Cargo.
     (d) For Air Cargo carried solely on Pinnacle or on both an Pinnacle flight
and a Northwest flight, Pinnacle and Northwest shall charge rates in accordance
with Northwest’s applicable rates and tariffs; such revenues shall be paid 100%
to and retained by Northwest.
     (e) For purposes of Air Cargo claims, Pinnacle will be treated as if it
were a party to standard industry ticketing and baggage agreements with
Northwest and other air carriers.
     (f) Northwest shall, at its sole expense, supply Pinnacle with all
necessary Air Cargo forms and supplies in an agreed upon form with the NW
Identification, subject to the applicable provisions of Article VII below.
Northwest and Pinnacle shall utilize such forms and supplies when accepting Air
Cargo for transport on Pinnacle’s flights.
     Section 4.10 Use of COMAT. Northwest and Pinnacle 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. Northwest’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 Pinnacle’s
on-time performance and completion factors. All access shall be consistent with
Northwest’s and Pinnacle’s respective published COMAT procedures and policies,
as amended from time to time. Northwest shall provide to Pinnacle at no cost and
on a non-discriminatory basis, access to Northwest’s VIP express cargo service
to the extent necessary for Aircraft out of service recovery.

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     Section 4.11 Slots and Route Authorities. During the term of this Agreement
(including any Renewal Terms) or upon the expiration or termination of this
Agreement, Northwest may, in its sole discretion, require Pinnacle to transfer
to Northwest or its designee at no charge any airport takeoff or landing slots,
route authorities or other regulatory authorities as Northwest shall designate
which have been or are being used for Regional Airlines Services under this
Agreement.
     Section 4.12 Emergency Response and Family Assistance. Northwest and
Pinnacle shall enter into a separate written agreement with respect to emergency
response and family assistance services to be provided to Pinnacle by Northwest
at no charge in connection with the Regional Airlines Services operated under
this Agreement.
ARTICLE V
REVENUES, PAYMENTS AND SETOFF
     Section 5.01 Revenues. Pinnacle 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
Northwest, including without limitation ticket change fees and other fees or
charges which are applicable pursuant to Northwest’s tariffs, unaccompanied
minor fees, beverage services, excess baggage fees and nonrevenue pass travel
charges.
     Section 5.02 Payments to Pinnacle.
     (a) Reports. Pinnacle shall provide to Northwest periodic reports with
respect to the number of actual, completed Block Hours, and Cycles by category
as defined in Section 5.03(b) of regional jet service flown by Pinnacle (each in
respect of Scheduled Flights, Charter Flights and Non-Scheduled Flights) in
accordance with the following schedule in each calendar month during the term of
this Agreement:

      Day of Month Report Due   Period Covered by Report
22
  1st — 15th of Month
7
  Complete Previous Month

Pinnacle shall also provide Northwest periodic reports with respect to its
Available CRJ Days, CRJ deliveries, and its expenses with respect to
Section 5.05 and Section 5.06 in accordance with the following schedule in each
calendar month during the term of this Agreement:

      Day of Month Report Due   Period Covered by Report
7
  Complete Previous Month

     (b) Payment Schedule. Northwest shall remit to Pinnacle by wire transfer of
immediately available funds by the close of business on the 30th day of each
calendar month (or

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the next banking day if the 30th is a bank holiday), as a provisional payment,
Pinnacle’s Block Hour Payment, Cycle Payment, IOP Payment and any payments due
pursuant to Section 5.05 below for the period covered by the Block Hour Report
and Cycle Report furnished by Pinnacle on the 22nd day of the month and the
payment due in respect of Equipment Rental Expense pursuant to Section 5.06
below.
Northwest shall remit to Pinnacle by wire transfer of immediately available
funds by the close of business on the 15th day of each month (or the next
banking day if the 15th is a bank holiday), as a final payment, Pinnacle’s Block
Hour Payment, Cycle Payment, IOP Payment, Fixed Cost Payment, Monthly Margin
Payment, any payments due pursuant to Section 5.05 or Section 5.06 below for the
preceding month and any payments due with respect to Charter Flights, less the
amount of the provisional payment made on the 30th day of the preceding month.
     For purposes of this Section 5.02, the above-referenced payments to
Pinnacle shall be calculated as follows for any applicable period:
     (i) the Block Hour Payment will be equal to the then applicable Block Hour
Rate multiplied by the number of actual, completed Block Hours reported in
Pinnacle’s Block Hour Report for such period for Scheduled Flights,
Non-Scheduled Flights and Charter Flights, plus
     (ii) the Cycle Payment will be equal to the then applicable Cycle Rates
multiplied by the number of actual, completed Cycles for each respective
category in Section 5.03(b) reported in Pinnacle’s Cycle Report for such period
for Scheduled Flights and Non-Scheduled Flights, plus
     (iii) the IOP Payment, if any, will be determined in accordance with
Section 5.03(c) below, plus
     (iv) any payments due pursuant to Section 5.05 below, plus
     (v) with respect to the payment to be made on the 15th day of each month,
Pinnacle’s Fixed Cost Payment determined in accordance with Section 5.04 below
and any payments due pursuant to Section 5.06 below, plus
     (vi) with respect to the payment to be made on the 15th day of each month,
the Monthly Margin Payment determined in accordance with Section 5.08 or
Section 5.11 below, as applicable.
Adjustments arising from Northwest’s audit of the Block Hour Report, Cycle
Report, Available CRJ Days Report, CRJ Deliveries Report, Section 5.05 Report,
or Section 5.06 Report may be made within ninety (90) days following the end of
each month. Any reference to the 30th day of a month in this Section 5 will be
deemed to mean the last day of February with respect to that month.
     Section 5.03 Block Hour and Cycle Rates; IOP Program Adjustment

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     (a) Block Hour Rate. The Block Hour Rate for the time period through
December 31, 2005 shall be calculated by multiplying the Base Block Hour Rate as
follows for the applicable period by (1 + CPPIB):

              Base Block Hour     Rate Period   CRJ-200/440
Initial Effective Date — 12/31/03
    [***]  
01/01/04 - 12/31/04
    [***]  
01/01/05 - 12/31/05
    [***]  

     (b) Cycle Rate. The Cycle Rates, with the exception of the NW Cities rate,
for the time period through December 31, 2005 shall be calculated by multiplying
the Base Cycle Rates as set forth below by (1+CPPIB). For calculation of the NW
Cities Base Cycle Rate, $750 of the Base Cycle Rate will remain flat, and the
remainder will be adjusted by multiplying by (1+CPPIB).

                              Base Cycle Rates - - CRJ 200/400     Initial
Effective             Date 12/31/03   01/01/04-12/31/04   01/01/05-12/31/05
DTW
    [***]       [***]       [***]  
MSP
    [***]       [***]       [***]  
MEM
    [***]       [***]       [***]  
NW Cities
    [***]       [***]       [***]  
CS Cities
    [***]       [***]       [***]  
PS Cities
    [***]       [***]       [***]  

NW Cities means Northwest Service Cities.
CS Cities means Contracted Service Cities.
PS Cities means Pinnacle Service Cities
     (c) IOP Program Incident Adjustment. If during any month during the term of
this Agreement Pinnacle cancels one or more Scheduled Flights in connection with
one or more IOP Program Incidents, Northwest shall pay to Pinnacle an amount
determined in accordance with the following formula:
     P=((IBH)*(BHR)*([***])) + ((ICYC)*(CYCR)*([***]))
     where,
     P is the IOP Payment to be made to Pinnacle,

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IBH is the number of scheduled Block Hours cancelled in connection with the IOP
Program Incident(s), calculated by the following formula:
IBH=Pinnacle scheduled Block Hours in Hub cancelled * (((% points of Pinnacle’s
Scheduled Flights in Hub cancelled)-(% points of Northwest scheduled flights in
Hub cancelled))/(% points of Pinnacle’s Scheduled Flights in Hub cancelled)),
BHR is the then applicable Block Hour Rate in which such IOP Program Incident(s)
occurred,
ICYC is the number of scheduled Cycles cancelled in connection with the IOP
Program Incident(s), calculated by the following formula:
ICYC=Pinnacle’s scheduled Cycles in Hub cancelled * (((% points of Pinnacle’s
Scheduled Flights in Hub cancelled)-(% points of Northwest scheduled flights in
Hub cancelled))/(% points of Pinnacle’s Scheduled Flights in Hub cancelled))),
and
CYCR is the then applicable Cycle Rate by category as defined in Section 5.03(b)
in which such IOP Program Incident(s) occurred.
     Section 5.04 Fixed Costs. Pinnacle’s Fixed Cost Payment arising from
operation of the Aircraft shall be calculated on a monthly basis as follows:
     Fixed Cost Payment = [***]
     where,
     [***]
     [***]
     [***]
     [***]
     [***]
     Section 5.05 Fuel.
     (a) Fuel Administration. Subject to Pinnacle’s consent (which shall not be
unreasonably withheld), Pinnacle will join the fuel consortium at a Service City
upon Northwest’s request. Northwest will provide to Pinnacle the following
fuel-related administrative services: (i) negotiation of fuel supply, fuel
storage and into-plane service contracts for the Aircraft, (ii) payment of all
into-plane and fuel invoices in respect of the Aircraft, (iii) monthly
reconciliations (by the 15th of the following month) with respect to fuel
boarded, inventory and purchases, and (iv) monthly reports with respect to fuel
boarded by station, flight and Aircraft. For the avoidance of doubt, Northwest
will not charge Pinnacle for fuel supply, fuel storage or into-plane services
with respect to the Aircraft.
     (b) Fuel Payment. Pinnacle shall have the right to audit on a semi-annual
basis the determination of the number of gallons of aircraft fuel boarded and
payment of all into-

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plane and fuel invoices in respect of the Aircraft and shall report any disputes
to Northwest. Any dispute not reported to Northwest within thirty (30) days of
the conclusion of such audit shall be deemed waived.
     Northwest’s fuel department shall have the right to audit on a monthly
basis the determination of the number of gallons of aircraft fuel boarded and
fuel price paid and shall report any disputes to Pinnacle. Any dispute not
reported to Pinnacle within thirty (30) days of the conclusion of such audit
shall be deemed waived.
     (c) Pinnacle Reporting Procedures. Pinnacle will provide to Northwest the
following fuel administrative service assistance: (i) timely Fuel Management
System (“FMS”) data entry by Pinnacle at Pinnacle Service Cities including
month-end reconciling to the fixed base operator (“FBO”) by the end of the
second business day, (ii) FMS coverage by Pinnacle when regular FMS person is on
vacation, leave, etc., (iii) Pinnacle will train new Pinnacle employees on FMS
due to turnover, vacation, etc., (iv) problems at FBO regarding supply of fuel
slips and bill of lading receipts will be addressed by Pinnacle personnel first
before involving the Northwest Fuel Department.
     (d) Fuel Burn Review Procedures — CRJ. Northwest and Pinnacle 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) Planned Zero Fuel Weight (ZFW)
     (iii) Auxiliary Power Unit (APU) Usage
     (iv) Cruise Speed
     (v) Cruise Altitude
     Pinnacle will be responsible for the development and setting of the annual
performance measure targets for the Aircraft, each as defined in Exhibit F, 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 (d)(i-v) 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 Northwest’s
review and approval. If the parties are unable to reach agreement, the
procedures set forth in Section 5.10(f) will be utilized to establish the annual
targets and the All-in Rate. 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.

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     Not later than sixty (60) days following the end of the year for which the
targets applied, Pinnacle shall (i) deliver to Northwest the analysis and
conclusion of Pinnacle’s performance for the year then ended with respect to
each of the performance measures and the All-in Rate, and (ii) provide Northwest
with the data used by Pinnacle to determine variances to each of the performance
measure targets and the All-in Rate in a format specified by Northwest. The
analysis shall include, but not be limited to, adjustment for changes in the
operating schedule from the Annual Operating Plan. For example, adjusting
planned taxi time or average length of flight to actual experience for the year
completed. Northwest shall have thirty (30) days from the receipt of Pinnacle’s
analysis to complete its review. If it is determined that Pinnacle exceeded one
or more of the targets for the annual performance measures, and the cause of
exceeding the targets was within the control of Pinnacle, a fuel penalty shall
be assessed per the formulas set forth in Exhibit F. If it is determined that
Pinnacle 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 Pinnacle, a fuel penalty shall be assessed per the
formula set forth in Exhibit F. Such penalty payment(s) shall be made in
accordance with Section 5.07.
     Section 5.06 Direct Expenses. Northwest will reimburse Pinnacle for the
following expenses at the Direct Cost to Pinnacle. Reimbursement for these
expenses paid or accrued by Pinnacle in the prior month, (other than the
Equipment Rental Expense) will be included in the wire transfer to Pinnacle on
the 15th of each subsequent month pursuant to Section 5.02(b) above. The
reimbursement of Equipment Rental Expense pursuant to Section 5.06(a)
attributable to a month will occur as part of the provisional payment on the
30th of such month pursuant to Section 5.02(b). Pinnacle will be responsible for
providing Northwest with a copy of all third party invoices and evidence of
payment needed to determine the expense amount and the timeliness of payment.
     (a) Equipment Rental Expense — less any performance guarantee payments or
credits that Pinnacle receives from the manufacturers.
     (b) Aviation Insurance — Aircraft hull insurance and aviation liability
insurance, including war risk liability and hull war risk insurance, subject to
the following:
Pinnacle’s aviation liability insurance (including war risk liability) expense
shall be the lesser of the expense based on the actual rates or [***] per
Pinnacle Revenue Passenger. Pinnacle’s hull insurance (including hull war risk
insurance) expense shall be the lesser of the expense based on the actual rates
or [***] of Pinnacle Fleet Value. The margin payment pursuant to Section 5.08 or
5.11 shall be based on the foregoing amounts. If Pinnacle’s actual aviation
insurance expense exceeds the amounts above, the incremental insurance expense
above the foregoing limits will be reimbursed by Northwest. In the event that
Pinnacle obtains aviation insurance coverage as part of Northwest’s aviation
insurance placement, the rates used to determine Pinnacle’s share of the
aviation insurance expenses shall be the same as the rates used to determine
Northwest’s expense for such insurance.

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     (c) Engine maintenance — The CRJ 200/440 engine maintenance performed
pursuant to the GE Agreements less any warranty payments or credits that
Pinnacle receives, including but not limited to those from GE, plus the cost of
materials and components used in connection with unscheduled off-wing
maintenance performed by Pinnacle (not including maintenance or replacement of
line replaceable units or QEC items). Pinnacle shall provide to Northwest, upon
reasonable request, documentation detailing the unscheduled event and cost of
each of the components. If Northwest and Pinnacle agree at any time to have such
engine work performed elsewhere, the reimbursement amount will be adjusted to
take into account the new arrangement. Notwithstanding the foregoing, Northwest
will not reimburse Pinnacle for engine maintenance performed pursuant to the GE
Agreements which is accomplished unreasonably in advance of the time such
maintenance is required in accordance with the Maintenance Program or which is
accomplished for the sole purpose of satisfying return conditions under the
Lease.
     (d) Airframe maintenance — The CRJ 200/440 airframe maintenance performed
pursuant to Bombardier Agreement less any warranty payments or credits that
Pinnacle receives, including but not limited to those from Bombardier. If
Northwest and Pinnacle agree at any time to have the maintenance work performed
elsewhere, the reimbursement amount will be adjusted to take into account the
new arrangement. Notwithstanding the foregoing, Northwest will not reimburse
Pinnacle for airframe maintenance performed pursuant to the Bombardier Agreement
which is accomplished unreasonably in advance of the time such maintenance is
required in accordance with the Maintenance Program or which is accomplished for
the sole purpose of satisfying return conditions under the Lease.
     (e) Deicing services and glycol — subject to the provisions of Section 4.02
and reimbursed accordingly:
     (i) Deicing services and glycol at Pinnacle Service Cities, Contracted
Service Cities and Hub Cities where a contracted agent is performing the
service.
     (ii) Glycol at Pinnacle Service Cities, Contracted Service Cities and Hub
Cities where Pinnacle performs the deicing function.
     (f) Maintenance Facilities, subject to the provisions of Section 4.03 (c).
     (g) CRJ 200/440 auxiliary power unit (APU) maintenance expense, CRJ 200/440
avionics maintenance expense and CRJ 200/440 landing gear overhaul expense less
any warranty payments or credits that Pinnacle receives with respect to any of
the foregoing expenses.
     (h) Hub City facility charges pursuant to Exhibit B.
     (i) Airport security-related equipment maintenance expenses and personnel
expenses incurred by Pinnacle pursuant to Section 4.05 less any government
reimbursement for such expenses.
     (j) Landing fees incurred for Pinnacle operations in DTW.
     (k) Property taxes, subject to the provisions of Section 8.03 less the
amounts of any refunds, subject to the provisions of Section 8.04.

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     Notwithstanding the foregoing, Northwest will not reimburse Pinnacle for
any late payment charges, penalties and/or fees which Pinnacle incurs in
connection with payment of the expenses listed above.
     Section 5.07 Billing. Northwest and Pinnacle shall bill each other on a
monthly basis in respect of amounts owed to each other under this Agreement not
contemplated under Section 5.02. If such billed items are not paid by the party
within sixty (60) days of the statement date, the aggregate amount of undisputed
items may be offset against or included in the next scheduled wire transfer
pursuant to Section 5.02(b). Disputed amounts must be paid when the dispute is
resolved, provided that such amount may be set off against or included in the
next scheduled wire transfer pursuant to Section 5.02(b) if the formerly
disputed amount is not paid within seven (7) days of resolution. Northwest may
also offset against the next scheduled wire transfer pursuant to Section 5.02(b)
the amount of any payment (including those under any Lease) with respect to
which Pinnacle shall have defaulted and shall have failed to cure before the
expiration of any applicable grace period.
     Section 5.08 Monthly Margin Calculation and Payment. Effective January 1,
2007, the monthly Margin Payment shall be calculated as follows:
     Monthly Margin Payment = (payments due to Pinnacle pursuant to
Sections 5.03, 5.04 and 5.06) * (.08 / .92)
     Section 5.09 Annual Margin Adjustment Payment. For the time period through
December 31, 2007, the parties will calculate Pinnacle’s Margin in accordance
with Section 5.09(a) and, if required pursuant to Section 5.09(b) below, one
party will make a Margin Adjustment Payment to the other party.
     (a) Calculation of the Total Operating Cost and the Margin. Not later than
ninety (90) days following the end of 2003, 2004, 2005, 2006 and 2007, Pinnacle
shall deliver to Northwest its audited financial statements including the
calculation of its operating margin for Regional Airline Services provided under
this Agreement for the prior year (the “Margin”) by dividing (x) Pinnacle’s
Total Operating Income for Regional Airline Services for such year by
(y) Pinnacle’s Total Operating Revenue for Regional Airline Services for such
year, subject to the following:
     In calculating the Margin, the amount of any penalties (accounted for as a
reduction to revenue) pursuant to Section 5.05, Section 5.13 and/or Section 5.14
below will not be included in Pinnacle’s Total Operating Revenue, and the
following expenses will not be included in Pinnacle’s Total Operating Cost:
     (1) Increment above predicted employee bonuses and incentives as set forth
in Exhibit C hereto. Predicted bonus and incentive levels are the amounts used
in calculating the Block Hour, Cycle and Fixed Cost Rates for 2003, 2004, 2005,
2006 and 2007, respectively.
     (2) Increment above market pay rates for Pinnacle’s employees per the
Parity Pay Agreement in Exhibit D.

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     (3) The amount of any penalties pursuant to Section 5.14 (if not accounted
for as a reduction to revenue).
     (4) The amount of any depreciation expense associated with capital
expenditures in excess of $250,000 which are designated by Northwest as
Section 5.09(a)(4) items because Northwest has determined that such capital
expenditures are not necessary after taking into consideration the Annual
Operating Plan and Pinnacle’s obligations under this Agreement, within
seventy-five (75) days after receiving written notice from Pinnacle of such
capital expenditure pursuant to Section 6.01(a)(iv) below.
     (5) The amount of any Fuel Burn Penalty Payment pursuant to Section 5.05(d)
(if not accounted for as a reduction to revenue).
     (6) The amount of any asset write-downs (excluding normal depreciation) or
extraordinary charges as defined by GAAP.
     (7) The amount of any fines or penalties paid by Pinnacle to any
governmental entity.
     (8) The CRJ 200/440 Aircraft and Spare Engine return costs including
termination costs incurred by Pinnacle pursuant to Section 3.02(b) above.
     (9) The amount of any late payment charges, penalties and/or fees incurred
by Pinnacle.
     (10) The amount of any payment from Pinnacle to Northwest pursuant to
Section 5.13 (if not accounted for as a reduction to revenue).
     (11) The amount of any non-recurring items or adjustments relating to
Northwest’s bankruptcy or the bankruptcy of Mesaba Airlines in the United States
Bankruptcy Court for the District of Minnesota.
     The Margin shall be expressed as a decimal rounded to the fourth place. The
calculation of the Margin shall be derived from Pinnacle’s reported financial
statements for such year and shall be determined in accordance with GAAP.
     (b) Annual Margin Adjustment Payment. With respect to each calendar year
through and including 2007, the Margin will be subject to the floors and
ceilings in the following table:

                          Period:   Revision Date - 2005   2006   2007
Ceiling:
    11 %     12 %     10 %
Floor:
    9 %     8 %     6 %

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With respect to each calendar year through and including 2007, if the Margin is
less than the applicable Floor, Pinnacle shall receive from Northwest an amount
determined as follows:
     Ppin = [Total Operating Cost/(1 — Floor)] — Rev
     where
Ppin is the amount payable to Pinnacle, Rev is Total Operating Revenue for
Regional Airline Services for the applicable calendar year excluding the items
listed in Section 5.09 (a),
     Floor is the applicable floor from the above table, and
     Total Operating Cost excludes Items 1-11 in Section 5.09(a) above.
With respect to each calendar year through and including 2007, if the Margin is
greater than the applicable Ceiling, Northwest shall receive from Pinnacle an
amount determined as follows:
     Pnw = Rev — [Total Operating Cost/(1 — Ceiling)]
     where,
Pnw is the amount payable to Northwest, Rev is Total Operating Revenue for
Regional Airline Services for the applicable calendar year excluding the items
listed in Section 5.09 (a),
     Ceiling is the applicable ceiling from the above table, and
     Total Operating Cost excludes items 1-11 in Section 5.09(a) above.
An amount payable pursuant to this Section 5.09 (b) is a “Margin Adjustment
Payment.” Northwest shall add in or setoff, as appropriate, any Margin
Adjustment Payment in the next wire transfer due to Pinnacle.
     (c) Audit of Total Operating Cost and the Margin. Northwest shall have the
right to audit the calculation of the Total Operating Cost, the Margin and the
Margin Adjustment Payment, and shall report any disputes to Pinnacle. Any
dispute not reported to Pinnacle in writing within ninety (90) days of the
receipt of the audited financial statements and Margin calculation by Northwest
shall be deemed waived. The payment in respect of any dispute shall be handled
as a disputed amount in accordance with Section 5.07.
     Section 5.10 Rate Adjustments. For the calendar year 2006, the Block Hour,
Cycle, and Fixed Cost Rates will be adjusted as described below.
     (a) One Time Adjustment Factor. Effective for the twelve-month period
beginning on January 1, 2006 (i) the Block Hour Rate used for the 2005 calendar
year will be multiplied by a One Time Adjustment Factor (OTAF) and multiplied by
(1 + CPPI), and (ii) the Cycle Rates shall be calculated by multiplying the Base
Cycle Rates for 2005, with the exception

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of [***] of the NW Cities rate, by (1 + CPPIB)* (OTAF). These adjusted rates
will be used for the twelve-month period beginning January 1, 2006. The OTAF
will be calculated as follows:
     (1) Determine Pinnacle’s actual operating expenses for the twelve-month
period ending December 31, 2005, excluding [***]
     (2) Determine the actual payment made to Pinnacle for the twelve month
period ending December 31, 2005, [***]
     (3) Divide the result of step (1) by the result of step (2).
     (b) Inflation Adjustment. Effective for 2007, (i) the Block Hour Rate used
for 2006 will be multiplied by (1+CPPI), and (ii) the Cycle Rates, with the
exception of [***] of the NW Cities rate, shall be calculated by multiplying the
Base Cycle Rates used for 2006 by (1 + CPPI), to establish the 2007 rates.
     (c) Fixed Cost Payment Adjustment. Effective for 2006 and 2007, the Fixed
Cost Payment formula will be multiplied by the OTAF.
     (d) Reserved.
     (e) So long as this Agreement remains in effect, the payment rates and
mechanisms set forth in Sections 5.02 through 5.06 will be re-set every fifth
year through good faith negotiations, commencing with the rates effective for
2013, utilizing a payment methodology consistent with the methodology utilized
during the prior five (5) year period; provided, however, that any increment
above market pay rates for Pinnacle’s employees, per the Parity Pay Agreement in
Exhibit D, will not be considered in re-setting such rates. The rates for the
years between each adjustment year will be determined by multiplying the prior
year’s rates by (1 + CPPI).
     (f) In the event the parties are unable to reach agreement on new payment
rates and mechanisms through good faith negotiations, the 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 party shall appoint
an expert, and the two experts so appointed shall appoint a third expert;
(ii) each party 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.
     Section 5.11 Reserved.
     Section 5.12 Revised Annual Margin Adjustment Payment. Effective for 2008
and each calendar year thereafter, the parties will calculate Pinnacle’s Margin
in accordance with Section 5.12(a) and, if required pursuant to Section 5.12(b)
below, one party will make a Margin Adjustment Payment to the other party.
     (a) Calculation of the Total Operating Cost and the Margin. Not later than
ninety (90) days following the end of 2008 and each subsequent calendar year
during the term of this Agreement, Pinnacle shall deliver to Northwest its
audited financial statements including the

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calculation of its operating margin for Regional Airline Services provided under
this Agreement for the prior year (the “Margin”) by dividing (x) Pinnacle’s
Total Operating Income for Regional Airline Services for such year by
(y) Pinnacle’s Total Operating Revenue for Regional Airline Services for such
year, subject to the following:
     In calculating the Margin, the amount of any penalties (accounted for as a
reduction to revenue) pursuant to Section 5.05, Section 5.13 and/or Section 5.14
below will not be included in Pinnacle’s Total Operating Revenue, and the
following expenses will not be included in Pinnacle’s Total Operating Cost:
     (1) Increment above predicted employee bonuses and incentives as set forth
in Exhibit C hereto. Predicted bonus and incentive levels are the amounts used
in calculating the Block Hour, Cycle and Fixed cost rates for 2007, grown each
year by multiplying by (1 + CPPI).
     (2) The amount of any penalties pursuant to Section 5.14 (if not accounted
for as a reduction to revenue).
     (3) The amount of any depreciation expense associated with capital
expenditures in excess of $250,000 which are designated by Northwest as
Section 5.13(a)(3) items because Northwest has determined that such capital
expenditures are not necessary after taking into consideration the Annual
Operating Plan and Pinnacle’s obligations under this Agreement, within
seventy-five (75) days after receiving written notice from Pinnacle of such
capital expenditure pursuant to Section 6.01(a)(iv) below.
     (4) The amount of any Fuel Burn Penalty Payment pursuant to Section 5.05(d)
(if not accounted for as a reduction to revenue).
     (5) The amount of any asset write-downs (excluding normal depreciation) or
extraordinary charges as defined by GAAP.
     (6) The amount of any fines or penalties paid by Pinnacle to any
governmental entity.
     (7) The CRJ 200/440 Aircraft and Spare Engine return costs including
termination costs incurred by Pinnacle pursuant to Section 3.02 (b) above.
     (8) The amount of any late payment charges, penalties and/or fees incurred
by Pinnacle.
     (9) The amount of any payment from Pinnacle to Northwest pursuant to
Section 5.13 (if not accounted for as a reduction to revenue).
     (10) The amount of any non-recurring items or adjustments relating to
Northwest’s bankruptcy or the bankruptcy of Mesaba Airlines in the United States
Bankruptcy Court for the District of Minnesota.

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     The Margin shall be expressed as a decimal rounded to the fourth place. The
calculation of the Margin shall be derived from Pinnacle’s reported financial
statements for such year and shall be determined in accordance with GAAP.
     (b) Annual Adjustment to Margin Payment.
     With respect to each calendar year effective 2008, if the Margin is greater
than 8% but less than or equal to 13%, Northwest shall receive from Pinnacle an
amount determined as follows:
     Pnw = (Rev — [Total Operating Cost/(0.92)]) / 2
     where,
     Pnw is the amount payable to Northwest,
Rev is Total Operating Revenue for Regional Airline Services for the applicable
calendar year excluding the items listed in Section 5.12 (a), and
     Total Operating Cost excludes items 1-10 in Section 5.12(a) above.
     With respect to each calendar year effective 2008, if the Margin is greater
than 13%, Northwest shall receive from Pinnacle an amount determined as follows:
     Pnw = (Rev — [Total Operating Cost/(0.895)])
     where,
     Pnw is the amount payable to Northwest,
Rev is Total Operating Revenue for Regional Airline Services for the applicable
calendar year excluding the items listed in Section 5.12 (a), and
     Total Operating Cost excludes items 1-10 in Section 5.12(a) above.
     An amount payable pursuant to this Section 5.12(b) is a “Margin Adjustment
Payment.” Northwest shall add in or setoff, as appropriate, any Margin
Adjustment Payment in the next wire transfer due to Pinnacle.
     (c) Audit of Total Operating Cost and the Margin. Northwest shall have the
right to audit the calculation of the Total Operating Cost, the Margin and the
Margin Adjustment Payment, and shall report any disputes to Pinnacle. Any
dispute not reported to Pinnacle in writing within ninety (90) days of the
receipt of the audited financial statements and Margin calculation by Northwest
shall be deemed waived. The payment in respect of any dispute shall be handled
as a disputed amount in accordance with Section 5.07.
     Section 5.13 Non-Scheduled Flight Refund.

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     With respect to each calendar year during the term of this Agreement,
Northwest shall within thirty (30) days from the receipt of the final Block Hour
and Cycle Report received pursuant to Section 5.02 for the immediately preceding
year, calculate and notify Pinnacle of the ratio of actual Block Hours for
Non-Scheduled Flights to actual Block Hours for Scheduled Flights and the ratio
of actual Cycles for Non-Scheduled Flights to actual Cycles for Scheduled
Flights. In the event that either ratio exceeds [***], Pinnacle shall remit to
Northwest (through a set-off of the next amount due from the Section 5.02 wire
transfer) an amount equal to the following:
     Refund Calculation:
Actual Block Hours and/or Cycles for Non-Scheduled Flights in excess of [***] of
the actual Block Hours and Cycles for Scheduled Flights, respectively,
multiplied by the Block Hour Rate and Cycle Rate, respectively, in effect for
the immediately preceding year pursuant to Section 5.03 and as adjusted pursuant
to Section 5.10, plus the amount of any Margin Payments previously paid by
Northwest to Pinnacle in connection with such excess Block Hours and/or Cycles;
provided, however, that no refund will be paid to Northwest with respect to
Non-Scheduled Flights which are Aircraft delivery flights. For purposes of this
calculation, the cycle rate used will be the average of the then applicable
Cycle Rates weighted by the number of Cycles in each category in
Section 5.03(b).
     Section 5.14 Performance Levels and Penalties.
     (a) Pinnacle shall be subject to certain performance levels and penalties
as described in this Section 5.14(a) (“Performance Criteria”) which shall be
deducted from the Block Hour Payment. If Pinnacle does not achieve the
performance criterion, then a penalty shall be charged against amounts owing to
Pinnacle. Any penalty charge incurred by failing to meet Performance Criteria
shall be made in the wire transfer due on the 30th day of the second month
following the end of the Performance Period in question pursuant to
Section 5.02(b). The applicable performance levels and penalties are as follows:
   (i) Completion Factor (calculated in accordance with Section 2.10 (a)):

                              Additional                   Penalty     Penalty  
  Neutral  
Performance Level
    [***]       [***]       [***]  
Penalty per enplaned revenue passenger
    [***]       [***]       [***]  

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   (ii) On-Time Factors (calculated in accordance with Section 2.10(b)):
     Departure [***]

                              Additional                   Penalty     Penalty  
  Neutral  
Performance Level
    [***]       [***]       [***]  
Penalty per enplaned revenue passenger
    [***]       [***]       [***]  

     Arrival [***]

                              Additional             Penalty   Penalty   Neutral
Performance Level
    [***]       [***]       [***]  
Penalty per enplaned revenue passenger
    [***]       [***]       [***]  

     In conjunction with Pinnacle’s on-time arrival performance, Pinnacle’s
target block time performance [***] shall not exceed [***]. If Pinnacle’s actual
block time performance [***] exceeds [***], Pinnacle’s actual arrival
performance [***] will be adjusted downward by [***] per [***] percentage point
in excess of [***]
   (iii) Luggage Mishandled (calculated in accordance with Section 2.10 (c)):

                              Additional             Penalty   Penalty   Neutral
Performance Level (incidents per [***] enplaned revenue passengers)
    [***]       [***]       [***]  
Penalty per enplaned revenue passenger
    [***]       [***]       [***]  

   (iv) Customer complaints (calculated in accordance with Section 2.10 (d)):

                              Additional             Penalty   Penalty   Neutral
Performance Level (incidents per [***] enplaned revenue passengers)
    [***]       [***]       [***]  
Penalty per enplaned revenue passenger
    [***]       [***]       [***]  

The parties will review the penalty levels for customer complaints after the
first year this Agreement is in effect and make such adjustments as are mutually
agreed.
     (b) Reconciliation of Performance Standards. For each Performance Period,
(i) Northwest shall determine the total number of enplaned revenue passengers on
Scheduled Flights operated by Pinnacle, (ii) Pinnacle shall prepare a
reconciliation of its actual performance to the

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targeted performance with respect to its completion factor and its on-time
factor and (iii) Northwest shall prepare a reconciliation of Pinnacle’s actual
performance to targeted performance with respect to Pinnacle’s incidences of
mishandled luggage and its number of customer complaints. Such reconciliations
will be completed and delivered to the other within thirty (30) days after the
end of each Performance Period. Northwest and Pinnacle will have the right to
audit the reconciliation 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 Performance Period shall be deemed waived. The
payment of in respect of any discrepancy shall be handled as a disputed amount
in accordance with Section 5.07.
     (c) Additional Performance Criteria. During the term of this Agreement,
Northwest may propose other performance criteria for Pinnacle’s operations
pursuant to this Agreement. The parties agree that they will meet upon the
introduction of additional performance levels for Northwest’s operations, to
develop similar performance targets for Pinnacle, taking into account the
differences in operations between the two companies, and shall use their best
commercially reasonable efforts to develop a system of performance levels and
penalties for Pinnacle’s performance with respect thereto in a manner consistent
with the performance standards agreed to herein.
     Section 5.15 Pinnacle Change of Control. In the event a Pinnacle Change of
Control shall have occurred prior to Pinnacle’s compliance with Section 5.18 of
this Agreement, then Sections 5.08, 5.09 and 5.12 shall be terminated effective
immediately. In the event a Pinnacle Change of Control shall have occurred from
and after Pinnacle’s compliance with Section 5.18 of this Agreement,
(i) Northwest may, at its option, remove up to sixty-two (62) of the CRJ-200/440
Aircraft and related Spare Engines, as selected by Northwest, from Pinnacle’s
base fleet of one hundred twenty-four (124) CRJ-200/440 Aircraft (and related
Spare Engines) on a schedule designated by Northwest in its sole discretion;
provided, however, that (A) the Aircraft (and related Spare Engines) shall be
removed from Pinnacle’s fleet at a rate of no more than one-third of the
Aircraft (and related Spare Engines) being removed in any twelve month period,
and (B) notwithstanding the terms of any of the applicable Leases to the
contrary, Pinnacle shall not be required to comply with the return conditions in
the Leases to the extent that no Event of Default (as defined in the Leases) has
occurred and is continuing at the time of the Change of Control; (ii) Northwest
may, at its option, extend the term of the Agreement for a period of five years
and no rate adjustment pursuant to Section 5.10(e) above shall apply during such
five year period; (iii) the minimum completion factor set forth in
Section 2.10(a) of this Agreement shall be increased to ninety-six percent
(96%), and (iv) for purposes of Section 2.10 of the Agreement the definition of
Performance Period shall be amended in its entirety to read as follows:
“‘Performance Period’ means a rolling three (3) month period during the term of
this Agreement.”
     Section 5.16 Credit Card Chargebacks.
     (a) Pinnacle shall be billed for credit card chargebacks resulting from
Pinnacle’s noncompliance with Northwest’s credit card acceptance procedures.
Northwest shall apply the same card acceptance procedures and standards to
Pinnacle as applied to Northwest by Northwest’s credit card contractors.
Northwest will inform Pinnacle in writing regarding any

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material changes in Northwest’s agreements with its credit card contractors to
the extent such changes will impact the procedures and standards to be applied
by Pinnacle.
     (b) With respect to all credit card charge forms returned to Pinnacle by
Northwest, Northwest will furnish Pinnacle with a complete written explanation
of the reason therefore accompanied by relevant documentation received from the
credit card issuer or credit card holder.
     (c) Upon receipt of a chargeback, Pinnacle shall have a reasonable period
of time, but not to exceed 30 days, to review the validity of the chargeback
notice. If the chargeback is valid (within the scope of the circumstances for
the chargeback), Pinnacle shall remit to Northwest within 30 days a gross amount
equal to such credit card charge form. If, in Pinnacle’s good faith opinion, the
chargeback is not valid, Pinnacle will so notify Northwest and provide Northwest
with a complete written explanation of the transaction together with any
necessary supporting documentation within the 30-day period.
     (d) All revisions to Northwest’s credit card acceptance procedures must be
in writing and must be submitted to Pinnacle at least 30 days in advance of the
effective date of such procedures or such shorter notification period as
Northwest may utilize in notifying its own personnel
     Section 5.17 Returned Checks.
     (a) Pinnacle shall be billed pursuant to Section 5.07 above for all
returned checks resulting from Pinnacle’s non-compliance with Northwest’s check
acceptance procedures.
     (b) Northwest will furnish Pinnacle with a complete written explanation of
the reason therefore, accompanied with the relevant documentation.
     (c) Pinnacle shall refund Northwest the full amount of the dishonored check
within 30 days. If, in Pinnacle’s reasonable opinion, the charge is not valid,
Pinnacle will so notify Northwest and provide Northwest with a complete written
explanation of the transaction together with any necessary supporting
documentation within the 30-day period.
     (d) All revisions to Northwest’s check acceptance procedures will be in
writing and will be submitted to Pinnacle at least 30 days in advance of the
effective date of such procedures or such shorter notification period as
Northwest may utilize in notifying its own personnel.
Section 5.18 Share Purchase
     Pinnacle Corp. and Northwest shall each perform their respective
obligations set forth in the Share Purchase Agreement, a form of which is
attached hereto as Exhibit G and which provides for the purchase by Pinnacle
Corp. of the share of Pinnacle Corp.’s Series A Preferred Stock held by
Northwest on January 2, 2008.

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ARTICLE VI
REPORTING OBLIGATIONS,
AUDITING, INSPECTIONS AND CONFIDENTIALITY/PUBLICITY
     Section 6.01 Reporting Obligations.
     (a) Certain Notices to Northwest. With respect to the Regional Airline
Services operated pursuant to this Agreement, Pinnacle shall give prompt written
notice to Northwest of (i) any litigation involving an uninsured claim of more
than $1,000,000 against Pinnacle, (ii) any proceeding before any governmental
agency which, if adversely determined, would materially and adversely affect
Pinnacle’s financial condition, affairs, operations or prospects, including but
not limited to any significant FAA enforcement or civil penalty action,
(iii) any other matter which would materially and adversely affect the financial
condition, affairs, operations or prospects of Pinnacle or its ability to
perform its obligations under this Agreement, and (iv) any proposed
extraordinary capital expenditures and all capital expenditures in excess of
$250,000. Pinnacle shall also provide Northwest the reports specified in
Section 2.11(a) above and shall report to Northwest not later than the last day
of each month its 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. Pinnacle Corp. and Pinnacle shall
promptly provide to Northwest notice of and adequate information regarding any
material weaknesses or reportable conditions noted in any management letters
received by either company from its independent auditors and the company’s
responses thereto. With respect to the Regional Airline Services operated
pursuant to this Agreement, Pinnacle Corp., Pinnacle and all Affiliates of
Pinnacle Corp. shall also provide Northwest with monthly financial statements,
annual expense budgets and periodic business plans and related projections.
     (c) Certain Notices to Pinnacle. Northwest shall report to Pinnacle not
later than the last day of each month the number of incidences of mishandled
luggage and the number of customer complaints for the previous month related to
the Regional Airline Services provided hereunder. Upon the reasonable prior
written request by Pinnacle, Northwest shall make available its books and
records related to incidences of mishandled luggage and customer complaints in
connection with the Regional Airline Services provided hereunder.
     Section 6.02 Audits.
     (a) Compliance Audits. Upon the reasonable prior written request by
Northwest, Pinnacle Corp. and Pinnacle shall make available for inspection by
Northwest their respective books and the books of all of their Subsidiaries and
Affiliates, including but not limited to general ledger backup (monthly) for
financial statements and records, to the extent that such books and records
relate to the provision of Regional Airline Services operated pursuant to this
Agreement, and otherwise to the extent reasonably necessary to audit Pinnacle
Corp.’s and Pinnacle’s compliance with the terms hereof. Northwest shall also be
entitled to make copies and notes of such information as it deems necessary and
to discuss such records and the finances and

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accounts of Pinnacle Corp. and Pinnacle with each Company’s Chief Financial
Officer or other employee or agent of Pinnacle Corp. or Pinnacle knowledgeable
about such records.
     (b) Inventory Audits. At Northwest’s request, during the term of this
Agreement Pinnacle and Northwest shall conduct an annual inventory audit of all
spare parts, tooling and ground support equipment owned by Northwest and leased
to Pinnacle or owned by Northwest and supplied to Pinnacle. Such audit shall not
be requested more than one time per calendar year. In conducting such audit, the
parties shall tabulate the quantity and type of all spare parts and ground
support equipment including recognition of spare parts and ground support
equipment which were scrapped in the preceding year(s). Such audit, when
completed and agreed to by both parties, shall be final.
     Section 6.03 Inspections. Northwest shall be entitled to conduct on-site
observations of Pinnacle’s in-flight service, flight, maintenance, technical
operations, gate-check in service, ground operations, Aircraft cleaning and any
and all other services and operations performed under this Agreement to monitor
Pinnacle’s operations in the same manner as similar functions are evaluated at
Northwest. The purpose of such inspections shall be to determine Pinnacle’s
compliance with applicable Governmental Regulations, state and local laws,
equipment manufacturer’s instructions and the standards established by this
Agreement. Pinnacle’s operation will be evaluated according to the same standard
as Northwest taking into account the differences in size and operational
capabilities between the two airlines. Such inspections may be announced or
unannounced, but under no circumstances shall they interfere with the operation
of Pinnacle’s business. Northwest shall report the findings of any such
inspection to Pinnacle in writing. Pinnacle shall provide a timely written
response detailing a plan of corrective action to remedy any deficiencies noted
in an inspection. If any deficiency comes to the attention of Pinnacle through
audits or any other means, Pinnacle shall take immediate corrective action.
     Section 6.04 Confidentiality/Publicity. Each of Northwest and Pinnacle
agrees that, except as otherwise required by Governmental Regulations or any
other applicable law, it shall not disclose to others and shall keep
confidential the terms of this Agreement and any confidential, non-public
information concerning the other that it obtains as a result of or pursuant to
this Agreement. Pinnacle shall not issue any press release or public
announcement relating to new Scheduled Flights, the cessation of Scheduled
Flights in any Service City, schedule changes, customer initiatives, marketing
programs or promotions, without Northwest’s prior written approval of the press
release or public announcement. In any such press release or public
announcement, Pinnacle shall identify itself as a Northwest Airlink carrier.
ARTICLE VII
NORTHWEST IDENTIFICATION
     Section 7.01 Identification License. Northwest hereby grants to Pinnacle a
non-exclusive, non-transferable, non-sublicensable license to use the NW
Identification in connection with its operation of the Regional Airline Services
as authorized hereunder.

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     Section 7.02 Designator License. Northwest hereby grants to Pinnacle a
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,
Northwest may change any NW Identifications and/or Designators upon notice to
Pinnacle. After receipt of such notice, Pinnacle shall, as soon as practicable,
but no later than thirty (30) days thereafter, commence use solely of the new NW
Identifications and/or Designators and cease all use of any superseded ones.
Northwest shall reimburse Pinnacle for the reasonable out-of-pocket expenses
incurred by Pinnacle in making such changes.
     Section 7.04 Use of Identification. Northwest shall have exclusive control
over the use and display of all NW Identifications and Designators, and Pinnacle
shall comply with all policies and guidelines of Northwest in this regard.
Pinnacle shall use the NW Identifications and Designators in good faith, in a
dignified manner and in compliance with good trademark practice. Pinnacle shall
use the NW Identifications and Designators exactly as prescribed by Northwest,
and shall not use (i) any stylization, abbreviation or variation thereof or
(ii) the NW Identifications and Designators in connection or combination with
any other Identification, in each case, without Northwest’s prior written
consent, which may be withheld in its sole discretion.
     Section 7.05 Quality Control. Pinnacle shall use the NW Identifications and
Designators only in connection with products and services that comply with the
high standards of quality associated with Northwest. At Northwest’s request,
Pinnacle shall submit representative samples to Northwest of all uses by
Pinnacle of the NW Identifications and Designators pursuant to this Agreement,
including Sections 2.02, 4.03(f), 4.07(d) and 4.09(e). Pinnacle shall receive
the prior written approval of Northwest for any new uses of the NW
Identifications and Designators, including on any advertising and promotional
materials. Once such approval is received, Pinnacle 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
Pinnacle hereunder are expressly reserved by Northwest, including without
limitation the right to use or license others to use any NW Identifications or
Designators. Pinnacle shall not use the NW Identification or Designator except
as expressly authorized herein, and has no right to use any other Identification
of Northwest other than the specific NW Identification in the exact form
prescribed by Northwest from time to time.
     Section 7.07 Ownership. Pinnacle hereby acknowledges that, as between the
parties, Northwest is the sole owner of the names “Northwest” and “Northwest
Airlink,” the initials “NW,” and any Designators or NW Identifications related
thereto or otherwise licensed to Pinnacle hereunder. Pinnacle agrees not to
directly or indirectly question attack, contest or impugn the validity and/or
Northwest’s rights in the Designators and NW 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
Northwest in this regard. Pinnacle agrees to cooperate fully with Northwest in
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Northwest’s rights in the Designators and NW Identifications, subject to
reimbursement for its out-of-pocket expenses.
     Section 7.08 Termination. Should this Agreement expire or terminate for any
reason, the licenses in Sections 7.01 and 7.02 shall immediately terminate
(although Sections 7.07 and 7.08 shall survive), and Pinnacle 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 NW Identifications and to
avoid any customer confusion or the suggestion or appearance that Pinnacle
continues to have an operating relationship with Northwest.
     Section 7.09 Bankruptcy. The parties intend that the identity of Pinnacle
as the licensee hereunder is a material condition to Northwest’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 Pinnacle. Therefore, in the event
Pinnacle becomes subject to a bankruptcy proceeding, the parties intend that
this Agreement shall not be assumed and/or assigned by Pinnacle or its
representative without Northwest’s consent.
ARTICLE VIII
TAXES AND FEES
     Section 8.01 Taxes and Fees.
     (a) Pinnacle shall be liable for and pay the amount of any taxes (other
than Ticket Taxes and Fees which are addressed separately in Section 8.02
below), 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 Pinnacle, and (ii) the performance of Regional
Airline Services pursuant to this Agreement.
     (b) Excluded from the coverage of Section 8.01(a) are any taxes based on
the net income of Northwest.
     Section 8.02 Ticket Taxes and Fees.
     (a) For all sales by Pinnacle using Northwest ticket stock or air waybills,
Pinnacle shall be responsible for (1) collecting all Ticket Taxes and Fees, and
(2) remitting such Ticket Taxes and Fees to Northwest at the same time as the
revenues to which the Ticket Taxes and Fees relate are received by Northwest.
Northwest then shall be responsible for remitting to the appropriate
governmental entities and taxing authorities Ticket Taxes and Fees remitted by
Pinnacle to Northwest.

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     (b) Pinnacle shall indemnify, defend, and hold harmless Northwest and its
current or former officers, directors, employees, agents, and its affiliates
(the “NW Indemnitees”) from and against all assessments or payments for Ticket
Taxes and Fees related to all sales by Pinnacle using Northwest ticket stock or
air waybills, and any interest and/or penalties related thereto. This
indemnification specifically includes, but is not limited to, assessments or
payments under Sections 4261, 4263, 4271, 4291, 6662, 6672, 6861 or 7275 of the
Internal Revenue Code of 1986, as amended, and any successor provisions.
Pinnacle further agrees as part of this indemnification to reimburse the NW
Indemnitees for any reasonable out-of-pocket expenses, including attorneys’ fees
and expenses, the NW Indemnitees have incurred in connection with any such
assessment or payment. The obligations of Pinnacle under this Section 8.02(b)
shall remain in effect and shall survive without limitation the termination of
this Agreement.
     Section 8.03 Property Tax, Fuel Tax, and Sales and Use Tax Compliance.
     (a) On the date thirty (30) days after Northwest hires an appropriate
individual to prepare Pinnacle property tax returns (the “Commencement Date”),
Northwest shall become responsible for administering Pinnacle’s property taxes,
both real property and personal property. Northwest shall be responsible for
notifying Pinnacle in writing of the Commencement Date. As of the Commencement
Date, Northwest shall prepare all property tax returns once the appropriate
information is gathered by Pinnacle and Northwest. Northwest shall prepare the
property tax returns with the same care, diligence, and expertise used in filing
the property tax returns of Northwest. As of the Commencement Date, Northwest
also shall be responsible for (1) the review of Pinnacle’s property tax
assessment notices and accompanying workpapers, and the resolution of any
disputes regarding such notices; (2) the review of Pinnacle’s property tax
bills; (3) the preparation and filing of any property tax refund claims; and
(4) the management of any audits of Pinnacle’s property taxes. Northwest and
Pinnacle shall cooperate to ensure that Pinnacle’s property tax returns, refund
claims, and property tax bills are reviewed and signed by the properly
authorized individual(s). Depending on who signs the property tax returns or
refund claims, Northwest and Pinnacle shall cooperate to ensure the timely
filing of such property tax returns and refund claims.
     (b) With respect to fuel taxes, Northwest and Pinnacle shall cooperate to
ensure that Pinnacle is filing appropriate fuel tax returns and refund claims to
minimize Pinnacle’s taxes. Northwest shall determine which entity, Northwest or
Pinnacle, shall be responsible for preparing and filing appropriate fuel tax
returns and refund claims. Unless Northwest determines otherwise and notifies
Pinnacle in writing, Pinnacle shall be responsible for all Pinnacle fuel tax
filings and payments. Upon the request of Northwest, Northwest shall be entitled
to review any actual or proposed Pinnacle fuel tax filings. Pinnacle shall
notify Northwest of the commencement of any fuel tax audit. Prior to resolving
any fuel tax audit, Pinnacle shall receive approval from Northwest to resolve
any such audit.
     (c) With respect to sales and use taxes, Northwest and Pinnacle shall
cooperate to ensure that Pinnacle is filing appropriate sales and use tax
returns and refund claims to minimize Pinnacle’s taxes. Northwest shall
determine which entity, Northwest or Pinnacle, shall be responsible for
preparing and filing appropriate sales and use tax returns and refund claims.
Unless Northwest determines otherwise and notifies Pinnacle in writing, Pinnacle
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be responsible for all Pinnacle sales and use tax filings and payments. Upon the
request of Northwest, Northwest shall be entitled to review any actual or
proposed Pinnacle sales and use tax filings. Pinnacle shall notify Northwest of
the commencement of any sales or use tax audit. Prior to resolving any sales or
use tax audit, Pinnacle shall receive approval from Northwest to resolve any
such audit.
     (d) To the extent requested by Northwest, Pinnacle shall cooperate with
Northwest to minimize Pinnacle’s property, fuel, excise, sales, use,
value-added, or similar transactional taxes. Pinnacle shall in good faith and
using reasonable best efforts supply Northwest with such information and
documents reasonably requested by Northwest to minimize Pinnacle’s property,
fuel, excise, sales, use, value-added, or similar transactional taxes. Unless
Northwest determines otherwise, Pinnacle shall use its reasonable best efforts
to seek any and all applicable refunds or credits of excise, sales, use,
value-added, or similar transactional taxes paid by Pinnacle.
     Section 8.04 Refunds of Tax. To the extent Northwest prepares and/or is
responsible for pursuing any refunds or refund claims related to Pinnacle’s
fuel, excise, sales, use, value-added or similar transactional taxes, Northwest
shall be entitled to retain one hundred percent (100%) of the amount of any such
refund, credit or other benefit. To the extent Pinnacle prepares or is
responsible for pursuing any such refunds or refund claims, Pinnacle shall
retain thirty percent (30%) of the amount of any such refund, credit or other
benefit (inclusive of interest) it receives, and the remaining seventy percent
(70%) (inclusive of interest) shall be paid to Northwest within ten (10) days of
its receipt or recognition of benefit by Pinnacle. Any refunds, credits or other
benefits received related to Pinnacle’s property taxes will be retained by
Pinnacle and will act to reduce Pinnacle’s direct expenses pursuant to
Section 5.06(l).
ARTICLE IX
LIABILITY, INDEMNIFICATION AND INSURANCE
     Section 9.01 Independent Contractor.
     (a) Except for the limited purpose described in Section 5.01 hereof,
Pinnacle shall act as an independent contractor. The employees, agents and/or
independent contractors of Pinnacle engaged in performing any of the services
Pinnacle is obligated to perform pursuant to this Agreement shall be employees,
agents and independent contractors of Pinnacle for all purposes and under no
circumstances shall employees, agents or independent contractors of Pinnacle be
deemed to be employees, agents or independent contractors of Northwest. Except
for the limited purpose described in Section 5.01 hereof, in its performance of
obligations under this Agreement, Pinnacle shall act, for all purposes, as an
independent contractor and not as an agent for Northwest. Northwest shall have
no supervisory power or control over any employees, agents or independent
contractors engaged by Pinnacle in connection with Pinnacle’s performance of its
obligations hereunder, and all complaints or requested changes in procedure
shall, in all events, be transmitted by Northwest to a designated representative
of Pinnacle. Nothing contained in this Agreement is intended to limit or
condition Pinnacle’s control over its operation or the conduct of its business
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financial losses which may result from the operation of the air services to be
provided by Pinnacle hereunder.
     (b) Northwest shall act as an independent contractor. The employees, agents
and/or independent contractors of Northwest engaged in performing any of the
services Northwest is to perform pursuant to this Agreement shall be employees,
agents and independent contractors of Northwest for all purposes and under no
circumstances shall employees, agents and independent contractors of Northwest
be deemed to be employees, agents or independent contractors of Pinnacle. In
performing its obligations under this Agreement, Northwest shall act, for all
purposes, as an independent contractor and not as an agent for Pinnacle.
Pinnacle shall have no supervisory power or control over any employees, agents
or independent contractors engaged by Northwest in connection with the
performance of its obligations hereunder, and all complaints or requested
changes in procedure shall, in all events, be transmitted by Pinnacle to a
designated representative of Northwest. Nothing contained in this Agreement is
intended to limit or condition Northwest’s control over its operation or the
conduct of its business as an air carrier.
     Section 9.02 Indemnification.
     (a) Each party assumes full responsibility for any and all liability to its
own officers, employees or agents on account of injury or death resulting from
or sustained in the performance of their respective services under this
Agreement. Each party shall indemnify, defend, protect, save and hold harmless
the other party, its officers, employees, and agents from and against any and
all liabilities, claims, demands, suits, judgments, damages and losses
(including the costs, fees and expenses in connection therewith and incident
thereto) brought against the other party, its officers, employees or agents by
or on behalf of any other person, by reason of damage to or destruction of
property of any such person, or injury to or death of such person, caused by or
arising out of any act or omission by the indemnifying party occurring while
this Agreement is in effect. Notwithstanding the foregoing, neither party shall
be liable for indemnifying the other for claims of third parties if caused by
the gross negligence or willful misconduct of the other. Each party shall give
the other party prompt and timely notice if it has actual knowledge of any claim
made or suit instituted against the other party which in any way results in
indemnification hereunder, and the other party shall have the right to
compromise or participate in the defense of such claim or suit to the extent of
its own interest.
     (b) Northwest shall indemnify Pinnacle against any physical loss of or
damage to the Aircraft caused by Northwest’s negligent operation of ground
support equipment or other acts or omissions of Northwest in performing Ground
Handling Functions pursuant to Section 4.02 above; provided, however, that
Northwest’s liability shall be limited to any such loss or damage to the
Aircraft not exceeding the amount of the deductible with respect to such
Aircraft under Pinnacle’s hull risk insurance policy, except that loss or damage
in respect of any incident below $3,000 shall not be indemnified. For the
avoidance of doubt, Northwest shall not be liable to Pinnacle for any
consequential loss or damage arising from physical loss of or damage to the
Aircraft, and Pinnacle shall not make any claim against Northwest and shall
indemnify it against any liability in respect of any and all such consequential
loss or damage howsoever arising.

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     (c) The obligations of Pinnacle and Northwest under the indemnity and
insurance provisions contained herein 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.
     (d) If Pinnacle joins the fuel consortium at a Service City (i) Pinnacle
shall indemnify Northwest against any liabilities, claims, demands, suits,
judgments, fines, penalties, and actual damages (including the costs, fees and
expenses in connection therewith and incident thereto) brought against
Northwest, its officers, employees or agents by or on behalf of any other
person, by reason of Pinnacle’s acts or omissions in connection with or related
to its participation in the fuel consortium at such Service City and which occur
while this Agreement is in effect, and (ii) Northwest shall indemnify Pinnacle
against any liabilities, claims, demands, suits, judgments, fines, penalties,
and actual damages (including the costs, fees and expenses in connection
therewith and incident thereto) brought against Pinnacle, its officers,
employees or agents by or on behalf of any other person, by reason of the acts
or omission of Northwest or any other party to such fuel consortium in
connection with or related to the participation of Northwest or such other party
in the fuel consortium at such Service City and which occur while this Agreement
is in effect. Except as set forth in this Section 9.02(d), in all other respects
the terms of the Agreement regarding relative liabilities and indemnification
among the parties hereto govern claims, damages, or liabilities caused by or
arising from the act or omission of any party hereto.
     Section 9.03 Insurance.
     (a) Pinnacle agrees, at its sole expense, to maintain in full force and
effect the following insurance coverage with respect to Regional Airline
Services:
     (1) Workers’ compensation and occupational disease insurance, subject to
the laws of the states wherein this Agreement is being performed. Such coverage
shall include employers liability insurance with a minimum limit of $1,000,000
per incident.
     (2) Comprehensive aviation bodily injury and property damage liability
insurance with limits of not less than $1 billion combined single limit per
occurrence (or such other minimum amount as may be reasonably requested by
Northwest from time to time in the event Pinnacle no longer obtains airline
liability insurance coverage as part of the Northwest’s aviation insurance
placement), including, but not limited to, aircraft liability, passenger legal
liability, premises and property damage liability, hangar keepers liability and
baggage and cargo liability. Such insurance shall include personal injury and
contractual liability, and shall also include war risk and allied perils, hijack
and confiscation coverage with a limit of not less than $1 billion per incident.
     (3) All risk hull insurance on the Aircraft, including hull war risk
coverage as required by Northwest.
     (b) Prior to the commencement of Regional Airline Services under this
Agreement and at least annually thereafter, certificates of insurance in a form
satisfactory to Northwest shall be delivered to Northwest evidencing compliance
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the insurance terms of this Agreement. All of the above policies shall have
deductible amounts as established by Northwest, and, in any event, all of the
above insurance shall be written through an insurance company or companies
reasonably satisfactory to Northwest, and the certificates of insurance shall be
of a type that unconditionally obligates the insurer to notify Northwest in
writing at least thirty (30) days (or such lesser period as may be available for
war peril coverage) in advance of the effective date in the event of any
material change in or cancellation of such insurance. The policies of insurance
required by paragraphs (2) and (3) of Section 9.03(a) shall provide coverage for
events which occur during the policy period, are continuing in nature and not on
a claims made basis, and shall include endorsements that provide:
     (1) That the Underwriters acknowledge that the indemnification and hold
harmless provisions of this Agreement are insured under Pinnacle’s blanket
contractual liability coverage.
     (2) That Northwest, its officers, agents and employees are named as
additional insureds thereunder.
     (3) That the insurance is primary with respect to the matters within such
coverage, irrespective of any insurance carried by Northwest.
     (4) That with respect to the interest of Northwest, the insurance shall not
be invalidated by any breach of warranty by Pinnacle.
     (5) That provide a severability of interest/cross liability endorsement.
     (6) That the insurer shall waive its subrogation rights against Northwest,
its officers, agents and employees.
     (7) That any waiver of rights of subrogation against other parties by
Pinnacle will not affect the coverage provided with respect to Northwest.
     The parties acknowledge and agree that endorsements (2) through (7) above
are only applicable in the event Pinnacle obtains liability insurance coverage
that is not part of Northwest’s aviation insurance placement.
     (c) In the event the U.S. Government reimburses Pinnacle or its Affiliates
for excess insurance costs incurred as a result of the September 11, 2001
terrorist attacks or other such occurrences, Pinnacle will promptly remit such
reimbursement, including the applicable Margin Payment, if any, to Northwest in
immediately available funds.

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ARTICLE X
TERM AND TERMINATION
     Section 10.01 Term. The 2003 ASA was made effective as of January 1, 2003
(the “Initial Effective Date”) and subject to the approval of this Agreement and
the other Transaction Documents by the Bankruptcy Court, this Agreement shall be
made effective as January 1, 2007 (the “Effective Date”). Unless earlier
terminated as provided herein, this Agreement shall continue in effect until
December 31, 2017 and shall thereafter automatically be extended for successive
five (5) year renewal periods (each a “Renewal Term”) unless Northwest gives not
less than two years’ advance notice of non-renewal prior to December 31, 2017 or
the commencement of any Renewal Term, in which case the Agreement will terminate
on December 31, 2017 or the last day of the then applicable Renewal Term, as the
case may be.
     Section 10.02 Termination by Either Party.
     (a) In the event that Pinnacle Corp., Pinnacle or Northwest (i) makes a
general assignment for the benefit of creditors or becomes insolvent, (ii) files
a voluntary petition in bankruptcy, (iii) petitions for or acquiesces in the
appointment of any receiver, trustee or similar officer to liquidate or conserve
its business or any substantial part of its assets, (iv) commences under the
laws of any competent jurisdiction any proceeding involving its insolvency,
bankruptcy, reorganization, readjustment of debt, dissolution, liquidation or
any other similar proceeding for the relief of financially distressed debtors,
(v) becomes the object of any proceeding or action of the type described in
(iii) or (iv) above and such proceeding or action remains undismissed or
unstayed for a period of at least thirty (30) days, or (vi) is divested of a
substantial part of its assets for a period of at least thirty (30) days, then
Pinnacle Corp. or Pinnacle (in the event the foregoing occurs with respect to
Northwest) or Northwest (in the event the foregoing occurs with respect to
Pinnacle Corp. or Pinnacle) may by written notice terminate this Agreement
immediately.
     (b) Except as otherwise provided in Section 10.03, in the event of a breach
of a nonmonetary provision of this Agreement by either party remaining uncured
for more than thirty (30) days after receipt of written notification of such
default by the nondefaulting party, or in the case of a breach requiring more
than thirty (30) days notice to cure, the defaulting party does not begin and
pursue with due diligence a method of cure within thirty (30) days after receipt
of written notification specifying in reasonable detail the nature of such
default from the nondefaulting party, then the nondefaulting party may terminate
this Agreement at its sole option.
     (c) In the event of a breach of a monetary provision of this Agreement by
either party and such default remaining uncured for more than thirty (30) days
after receipt of written notification specifying in reasonable detail the nature
of such default from the nondefaulting party, then the nondefaulting party may
terminate this Agreement at its sole option.

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     Section 10.03 Termination by Northwest. Notwithstanding the provisions of
Section 10.02(b), Northwest shall have the right to terminate this Agreement
immediately and at its sole option if:
     (a) Pinnacle shall default in the payment of any amount due under any Lease
and such default shall continue for more than the period of grace, if any,
specified therein and shall not have been waived.
     (b) Pinnacle shall default with respect to any other terms of any Lease,
such default shall continue for more than the period of grace, if any, specified
therein and shall not have been waived.
     (c) Pinnacle shall fail to comply with the provisions of Section 9.03 and,
as a result thereof, the insurance required thereunder is not in effect.
     (d) Pinnacle shall fail to comply with the provisions of Section 6.03.
     (e) More than fifty percent (50%) of the Aircraft do not operate any
Scheduled Flights for more than seven (7) consecutive days or twenty-five
percent (25%) of the Aircraft do not operate any Scheduled Flights for more than
twenty-one (21) consecutive days, other than as a result of (1) an FAA order
which grounds all commercial flights of all air carriers or grounds a specific
Aircraft type of all air carriers, (2) a scheduling action by Northwest, or
(3) Northwest’s inability to perform its obligations under this Agreement as a
result of a strike by Northwest employees.
     (f) Pinnacle’s FAA or DOT Certification is for any reason suspended or
revoked or otherwise not in full force and effect so as to permit Pinnacle to
perform the Regional Airline Services required under this Agreement.
     (g) A Pinnacle Change of Control shall have occurred; provided, however,
that subject to Pinnacle’s compliance with Section 5.18 of the Agreement, this
Section 10.03(g) shall be deleted effective as of the closing under the Share
Purchase Agreement.
     (h) Pinnacle or a Pinnacle Affected Company shall commence operating an
aircraft type which causes Northwest to be in violation of its collective
bargaining agreement with its pilots as in effect on the Effective Date.
     (i) The person elected to replace Philip H. Trenary as Chief Executive
Officer of Pinnacle and Pinnacle Corp. and any successor Chief Executive Officer
of Pinnacle and Pinnacle Corp. shall not be reasonably acceptable to Northwest;
provided, however, that subject to Pinnacle’s compliance with Section 5.18 of
the Agreement, this Section 10.03(i) shall be deleted effective as of the
closing under the Share Purchase Agreement.
     (j) Pinnacle shall default with respect to the material terms of any other
agreement between Pinnacle and Northwest, and such default shall continue for
more than the period of grace, if any, specified therein and shall not have been
waived.

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ARTICLE XI
MISCELLANEOUS
     Section 11.01 Limitation on Performance. The obligation of either Northwest
or Pinnacle to perform under the terms of this Agreement shall be limited or
modified by, and neither carrier shall be deemed to be in default hereunder as a
result of any of the following causes:
     (a) Acts of God or the public enemy, civil war, insurrections or riots;
fires, floods, explosions, embargoes, earthquakes or serious accidents,
epidemics, or quarantine restrictions; any act of government, governmental
priorities, allocations, orders or Governmental Regulations affecting materials
or facilities, inability after due and timely diligence to procure materials,
accessories, equipment or parts; or due to any other cause to the extent it is
beyond that carrier’s practical control or not occasioned by that carrier’s
fault or negligence.
     (b) Cessation, slow-down or interruption of work, or any other labor
disturbance involving Northwest.
     Section 11.02 Mutual Cooperation. Northwest and Pinnacle shall use their
reasonable best efforts to cooperate with each other in performing their
respective obligations under this Agreement.
     Section 11.03 Representations and Warranties. Except as expressly set forth
herein, neither Northwest nor Pinnacle shall make any representations or
warranties, expressed or implied, under or in connection with this Agreement.
     Section 11.04 Assignment. This Agreement may not be assigned by any party
without the prior written consent of the other parties.
     Section 11.05 Governing Law. This Agreement shall be governed in accordance
with the laws of the State of Minnesota, notwithstanding the choice of law
provisions thereof.
     Section 11.06 Interline and Other Agreements. Northwest agrees, to the
extent it has the right to do so, to permit Pinnacle to avail itself of all its
rights, privileges and amenities pursuant to its interline agreements and all
industry trade or other agreements between Northwest and any other air carriers.
Northwest shall take all action and execute such documents as may be necessary
to enable Pinnacle to avail itself of the maximum benefits afforded by such
agreements. Subject to Northwest’s prior written approval, Pinnacle may enter
interline agreements with air carriers other than those air carriers covered by
the two preceding sentences.
     Section 11.07 Notices. All notices given hereunder shall be given in
writing and shall be delivered in person or deposited in the United States mail,
certified or registered mail, return receipt requested, with adequate postage
prepaid, or given by Pinnacle courier, telex, facsimile, or other expedient
written means, addressed as follows:

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     If to Northwest:
  Northwest Airlines, Inc.
 
  Department A6100
 
  2700 Lone Oak Parkway
 
  Eagan, Minnesota 55121
 
  [***]
 
  [***]
 
   
     With copies to:
  Northwest Airlines, Inc.
 
  Department A1180
 
  2700 Lone Oak Parkway
 
  Eagan, Minnesota 55121
 
  [***]
 
  [***]
 
   
 
  Northwest Airlines, Inc.
 
  Department A6030
 
  2700 Lone Oak Parkway
 
  Eagan, Minnesota 55121
 
  [***]
 
  [***]
 
   
     If to Pinnacle :
  Pinnacle Airlines, Inc.
 
  1689 Nonconnah Parkway
 
  Suit 111
 
  Memphis, Tennessee 38132
 
  [***]
 
  [***]

or to such other address as the respective parties hereto shall designate by
notice in writing to the other party. Notices shall be deemed received and given
on the date of delivery or the date of refusal of delivery as shown by the
return receipt.
     Section 11.08 Parties. Except as provided to the contrary herein, this
Agreement, and the rights and obligations created hereunder, shall be binding
upon and inure to the benefit of the respective parties hereto and their
respective successors and permitted assigns.
     Section 11.09 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement.
     Section 11.10 Severability. If any term of this Agreement shall be
judicially determined to be illegal, invalid or unenforceable at law or in
equity, it shall be deemed to be void and of no force and effect to the extent
necessary to bring such term within the provisions of any such applicable law or
laws, and such terms as so modified and the balance of the terms of this
Agreement shall remain enforceable.

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     Section 11.11 Captions, Section Headings and Table of Contents. Captions,
section headings and the Table of Contents used herein are for convenience only
and are not a part of this Agreement and shall not be used in construing it.
     Section 11.12 Availability of Equitable Remedies; Procedures.
     (a) In the event of a breach by either party of any provision of this
Agreement, the nonbreaching party may give notice thereof to the breaching
party, which notice shall specify in reasonable detail the nature of the breach
and shall demand that the breaching party either cure the breach or refrain from
conduct constituting the breach (herein the “conduct”), as may be applicable. If
(i) the breaching party has not cured the breach or refrained from the conduct,
as may be applicable, within ten (10) days following receipt of the notice from
the nonbreaching party, or (ii) the breaching party does not begin within ten
(10) days following receipt of the notice to pursue with reasonable diligence a
method of cure or begin to take steps toward ceasing the conduct where the
breach or conduct is such that it requires more than ten (10) days to cure or to
cease, as may be applicable, then the nonbreaching party may seek to compel
performance by the breaching party in accordance with the provisions of
paragraph (b) below. If, upon receiving a notice contemplated by this paragraph
(a), a breaching party believes that a breach has not occurred or that the
conduct specified in the notice does not constitute a breach of the provisions
of this Agreement, but the breaching party nonetheless cures the alleged breach
or refrains from the conduct within ten (10) days following receipt of such
notice, such party may thereafter proceed in accordance with the provisions of
paragraph (b) below to seek a determination of whether a breach occurred or
whether the specified conduct constituted a breach of the provisions of this
Agreement.
     (b) Because a breach of the provisions of this Agreement could not
adequately be compensated by money damages, any party shall be entitled,
following notification in accordance with the provisions of paragraph (a) above,
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. Further, in the event any party refrains from the conduct of any
activity alleged in a notice received pursuant to paragraph (a) above to
constitute a breach of the provisions of this Agreement, such party may
thereafter proceed promptly to bring an action in the District Court, County of
Hennepin, State of Minnesota, for an expedited judicial determination as to
whether the conduct specified constitutes a breach of the provisions of this
Agreement and, upon a determination that the conduct does not constitute a
breach, such party may promptly thereafter recommence such conduct.
     Section 11.13 Exhibits. The Exhibits attached hereto are intended to be an
integral part of this Agreement and are incorporated into the Agreement by
reference for all purposes.
     Section 11.14 Integration and Entire Agreement. This Agreement (including
the Exhibits) and the ancillary documents entered into in connection therewith
are intended by the parties as a complete statement of the entire agreement and
understanding of the parties with respect to the subject matter hereof and all
matters between the parties related to the

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subject matter herein and therein set forth. This Agreement may only be amended
or modified by a written agreement between Pinnacle, on the one hand, and
Northwest, on the other, which specifically references this Agreement and
expressly provides for such amendment.
     Section 11.15 Relationship of Parties. Nothing in this Agreement shall be
interpreted or construed as establishing between the parties a partnership,
joint venture or other similar arrangement.
     Section 11.16 Amended and Restated 2003 ASA. The parties agree that the
2003 ASA is hereby amended and restated effective as of the Effective Date. It
is the intent of the parties hereto that all rights, privileges, obligations and
duties of the parties arising prior to the Effective Date, including the
calculation of any amounts due to any party in respect of such period, shall be
governed by the provisions of the 2003 ASA; and all rights, privileges,
obligations and duties of the parties arising from and after the Effective Date,
including the calculation of any amounts due to any party in respect of such
period, shall be governed by the provisions of the 2003 ASA.

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     IN WITNESS WHEREOF, Northwest, Pinnacle and Pinnacle Corp. have executed
this Agreement on December 15, 2006.

      PINNACLE AIRLINES, INC   NORTHWEST AIRLINES, INC.       By: /s/
 
President and CEO   By: /s/
 

      PINNACLE AIRLINES CORP           By: /s/
 
President and CEO    

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EXHIBIT A-1
AIRCRAFT LEASE FORM
Please refer to Exhibit 10.2 to Pinnacle Corp.’s Registration Statement on
Form S-1 (File No. 333-83354).

A-1

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EXHIBIT A-2
ENGINE LEASE FORM
Please refer to Exhibit 10.3 to Pinnacle Corp.’s Registration Statement on
Form S-1 (File No. 333-83354).

A-2

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EXHIBIT B
HUB CITY FACILITY CHARGES
Rental rates chargeable to Pinnacle for the sub-leased space at the Hub Cities
shall be as follows:
     MSP — [***] per month
     DTW — [***] per month
     MEM — [***] per month

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EXHIBIT C
PREDICTED EMPLOYEE BONUSES AND INCENTIVES

                                                              Subsequent    
2003   2004   2005   Years
Employee Bonuses & Incentives
    [***]       [***]       [***]       [***]  

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EXHIBIT D
PARITY PAY AGREEMENT
Parity Pay Agreement
The parties agree that labor costs resulting from pay rates in excess of Parity
Pay Rates for the pilot, flight attendant, customer service/reservations agent,
ramp service, and mechanic workgroups will be excluded from Total Operating Cost
when calculating the Margin pursuant to Section 5.10(a) and 5.13(a).
The parties agree that labor costs resulting from any significant work rule
and/or Premium changes, in lieu of above Parity Pay Rates will be excluded from
Total Operating Cost when calculating the Margin pursuant to Section 5.10(a) and
5.13(a).
The parties agree that labor costs resulting from benefits which are in excess
of industry parity for the pilot, flight attendant, customer
service/reservations agent, ramp service, and mechanic workgroups will be
excluded from Total Operating Cost when calculating the Margin pursuant to
Section 5.10(a) and 5.13(a).
The following definitions are used throughout this parity pay agreement:
     “Comparison Airlines” shall have the meaning throughout Exhibit D as the
five largest (by revenue) publicly traded U.S. domestic regional airlines
operating primarily regional jet aircraft.
     “Premiums” shall mean separate line, longevity, shift, license, skill or
other premiums.
     “RAA” shall mean the Regional Airline Association, Washington, D.C.
Definitions provided in the sections below are applicable only to the section in
which such terms appear.
Pilot and Flight Attendant Employees
A. Procedures
Pinnacle’s Pay Rates for the pilot and flight attendant workgroups plus hourly
impact of any Bonus Rate are compared to Parity Pay Rates.
If Pay Rates exceed Parity Pay Rates in any classification, the labor cost for
that classification will be multiplied by the overage percentage and such
product will be deducted from Total Operating Cost for purposes of calculating
the Margin.
Significant work rule and Premiums changes are evaluated on a case by case
basis.
B. Definitions
     “Pay Rates” shall be the top of scale hourly rates of pay excluding
Premiums.

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     "Bonus Rate” shall be the average bonus payment divided by the timeframe
covered (based on 2,080 hours per year).
     "Parity Pay Rates” shall be the simple average of the Pay Rates at the
Comparison Airlines within a classification. In the event that a comparison
airline reduces or eliminates its Premiums and simultaneously increases its
basic hourly rates, the portion of the basic hourly rate equal to the Premiums
shall be excluded in determining Parity Pay Rates.
Customer Service/Reservations Agent, Ramp Service and Mechanic Employees
A. Procedures
Pinnacle’s actual Pay for customer service/reservations agent, ramp service, and
mechanic workgroups is compared to projected Parity Pay.
If Pay exceeds Parity Pay in any classification, the difference will be deducted
from Total Operating Cost for purposes of calculating the Margin.
Significant work rule and Premiums changes are evaluated on a case-by-case
basis.
B. Definitions
     “Pay” is the sum of all customer service/reservation, agent, ramp service
and mechanic employees pay, including any bonus payments, within a
classification (i.e. customer service agents) and shall exclude Premiums and any
overtime premium.
     “Parity Pay” shall be the sum of all customer service/reservation, agent,
ramp service and mechanic employees Pay re-calculated using the Parity Pay Scale
in place of actual Pay rates.
     “Parity Pay Scale” shall be constructed by taking the average pay rates for
Pay steps for all levels new hire to year 10 (top step) of the Comparison
Airlines as reported by the RAA.
Benefits — All Employees
A. Procedures
Pinnacle’s actual Benefits for all above employee groups are compared to the
average Benefits of the same or similar classifications of the Comparison
Airlines as reported by the RAA.
B. Definitions
     “Benefits” include but are not limited to pension, 401(k), health and
dental insurance, life and disability insurance, and other post retirement
benefits. Benefits are evaluated on an individual basis (i.e. Pinnacle’s pilot
pension is compared to the average pilot pension at the Comparison Airlines as
reported by the RAA).

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Data Requirements
In order to assess compliance with the Parity Pay Agreement, Pinnacle agrees to
provide Northwest with data including but not limited to the following:

      - Total labor costs by workgroup or classification (e.g. pilot)         -
Pay scales to the extent they exist for all Pinnacle’s workgroups.         - Pay
scales for the Comparison Airlines as reported by the RAA for requested
workgroups.         - Individual employees’ information including workgroup,
longevity or hire date, bonus payments received, hourly rate(s) of pay, hours
paid at hourly rate(s) of pay, projected hours paid at each pay step (1 — 10) if
not currently paid based on a defined pay scale, for requested workgroups.

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EXHIBIT E
PASS TRAVEL PRIVILEGES
I. Overview
It is understood and agreed that Northwest has purchased and therefore controls
all seat inventory on Northwest coded flights operated by Pinnacle Airlines
subject to the Airline Services Agreement entered into by Northwest and Pinnacle
Airlines. Northwest, in its sole discretion, shall set all prices and control
all seat inventory on Pinnacle flights operated under the Northwest code.
Seats on Northwest coded flights operated by Pinnacle have an intrinsic value to
Northwest and by definition persons occupying perishable seats, either on a
positive space or space available basis, have revenue opportunity costs
(displacement, dilution, etc.) to Northwest. Northwest will therefore establish
the policies for utilizing its valuable and perishable product inventory.
Northwest shall have the right, in its sole discretion, to establish pass travel
policies for all persons on all Northwest Flights, including those operated by
Pinnacle Airlines.
II. Definitions
“Northwest Flights” shall mean all flights operated by Northwest or Pinnacle
Airlines under the Northwest designator code. If and to the extent Northwest
enters into an agreement with any regional carrier other than Pinnacle Airlines
that provides for pass travel on the terms set forth herein, the term “Northwest
Flights” shall include the flights operated by such carrier under the Northwest
designator code.
“Pinnacle Business Travel” shall mean employee travel that is required to run
Pinnacle Airlines’ operations, perform employee job functions, meet with
Pinnacle Airlines vendors, attend company/industry meetings/training, or conduct
company business.
By definition, business travel to conduct company business would require a
meeting with another person (internal or external) and the vast majority of the
trip’s duration should be related to the business objective. If a pleasure trip
is taken in conjunction with a business trip, the pleasure portion must be flown
space available. Examples:

1. Extend business trip for personal reasons before/after.

Example: Business trip from city A to city B. After meeting is complete,
employee extends trip by 2 days in city B for personal reasons. Return flight
from city B is leisure space available at the employee’s normal boarding
priority.

2. Round Robin. Business trip from city A to B. After business is complete,
employee travels from city B to city C for personal reasons, then returns to
city A.

— Flights from B to C and C to A are leisure space available.

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Things that would not quality as “Business” would be

- Emergency travel, funeral travel, etc.
- Familarization trips to visit cities where no business is conducted
- Employee recognition/rewards
- Any travel related to personal reasons
- Any travel by any person who is not an employee, such as a spouse or family
member
In enforcing Northwest’s business travel policies, Pinnacle Airlines must
exercise good faith in determining what is valid company business and in doing
so must comply with Northwest’s business travel definition and policies, as such
definitions and policies may be changed from time to time by Northwest in its
sole discretion.
“Leisure Travel” shall mean any travel that does not qualify as Pinnacle
business travel.
III. Travel Privileges of Pinnacle Airlines Employees on Northwest Flights
1. Travel Authority Cards.
Northwest shall have the sole authority to issue travel authority cards for
travel on Northwest Flights (which by definition includes Northwest coded
flights operated by Pinnacle Airlines). Pinnacle Airlines will not be entitled
to issue travel authority cards on Northwest Flights; however, it may submit a
request for the issuance of travel authority cards for travel on Northwest to
the Northwest Pass Bureau and Northwest, in its sole discretion, shall determine
whether or not to grant any such request.

2.   Requests for Travel Passes on Behalf of Any Person Other Than
Employees/retirees/family members of employees of Pinnacle Airlines.

Any request for pass travel on Northwest Flights for any person other than
employees, retirees or family members of employees of Pinnacle Airlines (for
example, employees of airlines other than Pinnacle Airlines) may be submitted to
the Northwest Pass Bureau for approval and Northwest, in its sole discretion,
shall determine whether or not to grant any such request.
3. Ticket Donations.
Northwest agrees to provide Pinnacle Airlines with [***] positive space
(inventory controlled) tickets per year for charitable donations to be made at
Pinnacle Airline’s discretion.
4. Collateral (i.e., free tickets, upgrades, Worldclub passes, elite
memberships, etc.).
Northwest agrees to provide Pinnacle Airlines with [***] per year of collateral
to be used for Pinnacle Airline’s business purposes (i.e., for sales, marketing,
service recovery, etc.). Northwest shall determine from time to time the types
of collateral to be made available to Pinnacle Airlines and the unit cost for
each type of collateral product. The list of collateral products and the unit
costs thereof as of the date hereof are set forth on Attachment A attached
hereto. Ordering will be handled via Northwest’s GMS process.

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5. Business Travel by Pinnacle Employees on Northwest Flights.
    A. Officers and Board of Directors of Pinnacle Airlines:
Northwest agrees to issue to the President and CEO of Pinnacle Airlines an F1
positive space travel card that is valid for travel on Northwest Flights by the
President and CEO and his or her spouse and eligible dependent children so long
as such officer is employed by Pinnacle Airlines. This card will be valid for
business or leisure travel.
Pursuant to his prior employment agreement, Northwest will issue to Curt Sawyer,
Vice President & Chief Financial Officer of Pinnacle Airlines a Y1 positive
space travel card that is valid for travel on Northwest Flights by Mr. Sawyer
and his spouse and eligible dependent children so long as Mr. Sawyer is employed
by Pinnacle Airlines. This card will be valid for business or leisure travel.
Northwest will issue to other officers of Pinnacle Airlines (up to a maximum of
8 individuals) travel privileges on Northwest Flights consistent with the travel
privileges to which managing directors of Northwest are entitled from time to
time. Currently such privileges are as follows:
Business Travel:       B1/F2 travel card.
Leisure Travel:       [***] B1 trip events per year.
Members of the Board of Directors of Pinnacle Airlines who are not employees
will be entitled to receive a Y1 positive space travel card that is valid for
travel by such Board member and his or her spouse and eligible dependent
children on Northwest Flights operated by Pinnacle. The card will be valid for
Pinnacle business purposes and for leisure travel only. The card will not be
valid for business travel on behalf of any person, company or entity other than
Pinnacle Airlines.
    B. Other Management (Exempt) Employees of Pinnacle Airlines.

  1)   Pinnacle Airlines may designate up to [***] management (exempt) employees
who will be eligible for B1 (coach positive space, capacity controlled) business
travel on Northwest Flights. Pinnacle Airlines shall submit the list of such
employees to Northwest annually and Northwest may, in its sole discretion,
approve or disapprove any employee whose name appears on such list for such
travel privileges.     2)   All other management (exempt) employees of Pinnacle
Airlines who are not entitled to the travel privileges described in B.1) above
may travel on Northwest Flights with boarding priority 2W, and, to the extent
Pinnacle Airlines desires that any such employee travel on a Northwest Flight
for Pinnacle business purposes with higher priority, Pinnacle Airlines may
submit its request for positive space travel to the Northwest Pass Bureau for
approval. Northwest, in its sole discretion, shall determine whether or not to
grant any such request.

    C. Non-Management (Non-Exempt) and Contract Employees of Pinnacle Airlines.

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Non-management (non-exempt) and contract employees of Pinnacle Airlines must
request approval from the Northwest Pass Bureau for any travel on Northwest
Flights for Pinnacle Airlines business purposes. Northwest, in its sole
discretion, shall determine whether or not to grant any such request. Any such
approved travel for Pinnacle Airlines business purposes by such employees shall
be on a space available basis.
    D. Pinnacle Airlines Operational Travel Requirements.

  1)   Deadhead travel and travel for pilot or flight attendant FAA-mandated
training. Pinnacle Airlines may book travel on Northwest Flights with boarding
priority of B1 for pilot and flight attendant deadhead and FAA-mandated travel.
The purpose of such travel must be supported by crew scheduling, crew bid
reports, training schedules or other records of Pinnacle Airlines’ operations.
Such records must be maintained for not less than one (1) year and made
available for audit by Northwest upon request.

  —   Any deadhead booking must contain the following restriction: “No
origin/dest or date changes allowed, per Revenue Management.”

Any booking without the above stated restriction will be subject to a [***] fee.

  —   Any Y1 booking must be pre-approved by Northwest. Any Y1 booking made
without Northwest’s pre-approval will be subject to a [***] one-way fee.     —  
Y1 exceptions should be requested from Northwest Day-of-Departure (DoD) desk.

Under no circumstance may positive space bookings be used to transport Pinnacle
Airlines flight crews to or from their home (i.e., commuting) or for other
non-operational purposes.

  2)   Aircraft on Ground (AOG).

In the event Pinnacle Airlines’ operations require the transportation of
Pinnacle Airlines’ mechanics or other required personnel due to AOG, Pinnacle
shall request approval from the Northwest DoD desk for such travel at boarding
priority B1, or if necessary, Y1. Northwest, in its sole discretion, shall
determine whether or not to grant any such request.
6. Travel by Interview Candidates, Consultants or Vendors of Pinnacle Airlines.
Pinnacle Airlines will be entitled to purchase travel on Northwest Flights for
consultants, vendors and interview candidates of Pinnacle Airlines to attend
meetings at Pinnacle Airlines locations for Pinnacle Airlines business purposes
only on the terms and conditions set forth in the Northwest Pricing Bulletin
BN138, attached hereto as Attachment 2. This Pricing Bulletin is subject to
change by Northwest on an annual basis.
7. Leisure Travel by Employees of Pinnacle Airlines.
It is understood that Northwest maintains complete control over the grant of all
travel privileges on all Northwest Flights, including non-revenue space
available boarding priority. Northwest shall be entitled to all fees and charges
collected for pass travel and

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Pinnacle Airlines shall not under any circumstances impose any fees, charges or
surcharges on any pass travel on Northwest Flights operated by Pinnacle Airlines
other than those set forth herein or specifically authorized by Northwest.
Pinnacle Airlines shall be responsible for the payment to Northwest of pass
travel fees and charges relating to travel by employees of Pinnacle Airlines or
their family members, registered domestic partners or companions, and all
amounts collected by Pinnacle Airlines from its employees shall be collected on
behalf of Northwest and payable to Northwest on a monthly basis as provided in
Section III.9.
Travel by Pinnacle Airlines Employees on Northwest Flights Operated by Pinnacle
Airlines:
Pinnacle Airlines shall administer pass travel policies on Northwest Flights
operated by Pinnacle in a manner that is wholly consistent with Northwest’s
policies as they currently exist and may in the future be changed by Northwest
in its sole discretion and shall communicate clearly such policies to its
employees. Pinnacle Airlines shall be responsible for enforcing such pass
policies with respect to travel by its employees on Northwest Flights and shall
notify Northwest in the event of any violations.
Pinnacle Airlines agrees to conform its existing pass travel policies and
programs to those of Northwest as soon as reasonably practicable after the date
of the Agreement. Such conforming changes include but are not limited to the
following:
   1) The boarding priority for Pinnacle employees on Northwest Flights will be
as follows:

              Flights Operated By Pinnacle         Employee Category   Northwest
  Pinnacle
Management (exempt)
  5W
Seniority date   5
Seniority date
Non-management (non-exempt) and contract
  5W
Seniority date   5
Seniority date
Parents
  6W
Seniority date   6P
Seniority date

Pinnacle Airlines shall under no circumstances grant travel privileges on any
Northwest Flights at a boarding priority that deviates from that stated above.

2)   Fees for travel by Employees and Parents of Employees. Northwest’s current
pass travel policies provide for the following fees for pass travel by employees
and parents of employees:

Management (exempt): No service charge. International taxes apply.

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Non-management (non-exempt) and contract employees shall be subject to the
following fees:

                                              Services Fees     International
Taxes       Domestic     International               Coach     First     Coach  
  First          
Employee less than 5 years service
    [***]       [***   See Attachment 3   See Attachment 3   As applicable

  OW   OW                        
Employee > 5 years service
    [***]       [***]     None   See Attachment 3   As applicable
Parent
    [***]       [***]     See Attachment 3   See Attachment 3   As applicable

  •   All pass travel fees and charges shall be subject to change at Northwest’s
discretion, provided that fees and charges applicable to employees of Pinnacle
Airlines shall be no higher than those applicable to comparable employees of
Northwest     •   Pass travel fees shall apply to all Northwest Flights
(including Pinnacle Airlines employees flying on Northwest Flights operated by
Pinnacle Airlines).

   4) Companion/Buddy Travel Program.

  a)   Pinnacle Airlines must terminate its existing companion/buddy pass travel
program.     b)   Pinnacle Airlines must terminate all pass travel by any
persons who are not employees of Pinnacle Airlines or family members of Pinnacle
Airlines employees (including without limitation employees of airlines other
than Pinnacle Airlines or Northwest) on Northwest Flights operated by Pinnacle
Airlines unless such travel is specifically permitted hereunder or an authorized
officer of Northwest approves such pass travel in writing. Northwest shall
provide Pinnacle Airlines with a list of officers of Northwest who are
authorized to approve pass travel not provided for herein.

Pinnacle Airlines will be entitled to establish a new companion/buddy program
for Pinnacle Airlines employees for travel on Northwest Flights operated by
Pinnacle Airlines as follows:

  •   Each employee of Pinnacle Airlines will receive 16 one-way trips each
calendar year on Northwest Flights operated by Pinnacle. Companion/Buddy travel
passes may not be used on Northwest Flights operated by Northwest.

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  •   The companion of the Pinnacle Airlines employee must travel with the
employee.     •   Fees: The fees payable by Pinnacle Airlines employees for
companion/buddy travel on Northwest Flights operated by Pinnacle Airlines shall
be consistent with the fees payable by Northwest employees for companion travel
on Northwest Flights operated by Northwest.     •   Boarding priority:

                      Flights Operated By       Northwest     Pinnacle  
Boarding Priority
    N/A       5B  

  5)   Registered Domestic Partners. Registered domestic partners of Pinnacle
Airlines employees will be entitled to pass privileges on Northwest Flights in
accordance with Northwest’s registered domestic partner program.

8. Booking/Ticketing:
Pinnacle Airlines agrees to use its best efforts to establish a link between its
employee database system and that of Northwest to facilitate the automated
booking of travel by Pinnacle Airlines employees. Until such link is
established, Pinnacle Airlines and Northwest shall cooperate to exchange such
data and reports as are deemed necessary to facilitate pass travel in accordance
with the provisions hereof. Northwest and Pinnacle Airlines shall each bear
their own costs and expenses associated with establishing such links.
Once the linking of Pinnacle Airlines’ and Northwest’s employee database systems
are implemented, Pinnacle Airlines employees will be permitted to book positive
space and space available travel in accordance with the provisions hereof using
Northwest automated systems (RADAR, IVR) and via Northwest Reservations, as
needed.
All travel must be by electronic tickets only, when eligible. Travel shall be by
Northwest travel cards or easy write forms for non-eligible e-ticket
destinations. The use of trip passes, Pinnacle Airlines ticket stock, or other
such documents for travel on Northwest Flights operated by Pinnacle shall be
strictly prohibited.
9. Payment of Fees
Northwest shall invoice Pinnacle Airlines on a monthly basis for all travel pass
fees and charges applicable to travel by employees of Pinnacle Airlines, family
members, companions and registered domestic partners of such employees, and for
travel by Pinnacle Airlines vendors, interview candidates, etc. hereunder on any
Northwest Flight. Pinnacle Airlines shall pay to Northwest all invoiced amounts
within 30 days after the date of the invoice. Pinnacle Airlines may elect not to
collect from its own employees the pass travel fees and charges applicable to
travel by Northwest employees so long as it pays such fees and charges to
Northwest on behalf

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of its employees pursuant to the foregoing. Any amounts collected by Pinnacle
Airlines for pass travel on Northwest Flights operated by Pinnacle Airlines
shall be collected on behalf of and for the benefit of Northwest and remitted in
accordance with the foregoing. Pinnacle Airlines shall have no right or interest
in and to such amounts.
10. Revocation/Termination/Modification/Amendment of Pass Privileges. All pass
travel benefits described herein are deemed to be privileges and are subject to
revocation by Northwest in the event of a failure to comply with the provisions
hereof and the terms and conditions of Northwest’s pass travel policies, as the
same may be changed from time to time by Northwest in its sole discretion.
Notwithstanding the foregoing, Northwest agrees that any changes in Northwest’s
pass travel policies during the term of the Airline Services Agreement between
Northwest and Pinnacle Airlines shall not (i) reduce the amount of tickets or
collateral described in Sections 3 and 4 hereof, respectively, (ii) reduce the
relative boarding priority to which Pinnacle Airlines employees are entitled to
travel on Northwest Flights pursuant to Sections 5 and 7 hereof, or (iii)
increase the fees and charges payable by Pinnacle Airlines employees for pass
travel benefits on Northwest Flights above those amounts payable by comparable
employees of Northwest for the same benefits.
11. Audit
Northwest shall be entitled to audit all records of Pinnacle Airlines to verify
compliance with the provisions hereof.
IV. Travel Privileges of Persons Other than Pinnacle Airlines Employees on
Northwest Flights
Northwest shall have the right, in is sole discretion, to establish pass travel
policies for all persons on all Northwest Flights, including those operated by
Pinnacle Airlines. Pinnacle shall administer travel and accommodate passengers
on Northwest Flights operated by Pinnacle consistent with all such policies
established by Northwest.
It is understood and agreed that leisure travel benefits for Northwest employees
will include boarding priority equal to Pinnacle employees on Northwest Flights
operated by Pinnacle Airlines, based on seniority. Northwest employees traveling
with companions/buddies will board with priority 5B. Northwest’s employee travel
fee structure will apply to all leisure travel by Northwest employees on
Northwest Flights operated by Pinnacle Airlines and Pinnacle Airlines shall
under no circumstances charge any additional fees, surcharges or other amounts
to Northwest or Northwest employees traveling on Northwest Flights operated by
Pinnacle Airlines.

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Exhibit F
CRJ Fuel Burn (Penalty) Formulas
Note: The formulas below are to be used for the calculation of fuel burn penalty
as it pertains to each performance measure and the All-in Rate. 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 (i.e. Cruise Speed and Altitude), the parties mutually agree to
document those formulas when those performance measures are implemented. Per
Section 5.05(d), the All-in Rate is first adjusted for the variances that exist
with respect to each performance measure, 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 variance is deemed within the
control of Pinnacle. An example for a month is illustrated in Attachment 1
hereto.
1. Excess Planned Fuel on Arrival (FOA)
Monthly Penalty:
(Average Actual FOA in lbs-Target) x CTC / [***] / Block Hours per Cycle x Total
Block Hours x Fuel cost per gallon
Plus Margin applicable to the fuel expense reimbursement pursuant to
Section 5.08 or 5.11.
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 Northwest per
Section 5.05(a)(ii) including into-plane fees and taxes.

2. Excess Planned Zero Fuel Weight (ZFW)
Monthly penalty:
(Average Planned ZFW — Average Actual ZFW-target tolerance in lbs) x CTC x CTC /
[***] / Block Hours per Cycle x Total Block Hours x Fuel cost per gallon
Plus Margin applicable to the fuel expense reimbursement pursuant to
Section 5.08 or 5.11.
Assumptions:

•   Block Hours based on scheduled and unscheduled operations   •   Cost to
Carry (CTC) varies with average enroute time; CTC = ([***] x Avg ETE) + [***]

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•   Fuel cost per gallon = actual price per gallon incurred by Northwest per
Section 5.05(a)(ii) including into-plane fees and taxes.

3. Excess Auxiliary Power Unit (APU) Burn
Monthly Penalty:
(Average Actual APU hrs per flight hour-Target) x Flt to Blk Hour Ratio x Total
Block Hours x [***] / [***] x Fuel cost per gallon
Plus Margin applicable to the fuel expense reimbursement pursuant to
Section 5.08 or 5.11.
Assumptions:

•   APU burn rate = [***] pph per Bombardier (w/Air and electric load)   •   APU
runs almost exclusively w/air load but not necessarily electric. Reduction in
rate w/electric removed insignificant per 9E   •   Flight hours and Block hours
based on all 9E operations (scheduled and unscheduled)   •   Fuel cost per
gallon = actual price per gallon incurred by Northwest per Section 5.05(a)(ii)
including into-plane fees and taxes.

4. Cruise Speed To be determined.
5. Cruise Altitude To be determined.
6. 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 1
hereto)
Monthly Penalty:
(Actual All-in Gallons per block hour-Target) x Total Block Hours x Fuel cost
per gallon
Plus Margin applicable to the fuel expense reimbursement pursuant to
Section 5.08 or 5.11.
Assumptions:

  •   Fuel cost per gallon = actual price per gallon incurred by Northwest per
Section 5.05(a)(ii) including into-plane fees and taxes.

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All-in Gallons per Block Hour (Baseline history)

                                                                               
                              Jan   Feb   Mar   Apr   May   Jun   Jul   Aug  
Sep   Oct   Nov   Dec   Ann AVG
2003 Actual
                                                                               
                       
2004 Actual
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]       [***]  

Block/Flight Hours

                                                                               
                              Jan     Feb     Mar     Apr     May     Jun    
Jul     Aug     Sep     Oct     Nov     Dec     Ann AVG  
2003 Block Minutes
                                                            [***]       [***]  
    [***]       [***]       [***]       [***]  
2004 Block Minutes
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]                                                    
2003 Flight Minutes
                                                    [***]       [***]      
[***]       [***]       [***]       [***]       [***]  
2004 Flight Minutes
    [***]       [***]       [***]       [***]       [***]       [***]          
                                                 
2003 Cycles
                                                    [***]       [***]      
[***]       [***]       [***]       [***]       [***]  
2004 Cycles
    [***]       [***]       [***]       [***]       [***]       [***]          
                                                 
2003 Flt/Blk Hr Ratio
                                                    [***]       [***]      
[***]       [***]       [***]       [***]       [***]  
2004 Flt/Blk Hr Ratio
    [***]       [***]       [***]       [***]       [***]       [***]          
                                                 
2003 Avg Blk Hr per Flt
                                                    [***]       [***]      
[***]       [***]       [***]       [***]       [***]  
2004 Avg Blk Hr per Flt
    [***]       [***]       [***]       [***]       [***]       [***]          
                                                 
Cost To Carry 1
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]          

APU Hours per Flight Hour

                                                                               
                              Jan     Feb     Mar     Apr     May     Jun    
Jul     Aug     Sep     Oct     Nov     Dec     Ann AVG  
2003 Actual
                                                            [***]       [***]  
    [***]       [***]       [***]       [***]  
2004 Actual
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]                                                  
2005 Target
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]       [***]  
 
GPFH Adjustment (reduc)/incr 2
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]          
GPBH Adjustment (reduc)/incr
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]          

Planned FOA (lbs) [***]

                                                                               
                              Jan     Feb     Mar     Apr     May     Jun    
Jul     Aug     Sep     Oct     Nov     Dec     Ann AVG  
2003 Actual
                                                            [***]       [***]  
    [***]       [***]       [***]       [***]  
2004 Actual
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]                                                  
2005 Target
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]       [***]  
 
GPBH Adjustment (reduc)/incr 3
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]          

F-3

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Execution Copy
Flight Planned vs Actual ZFW (lbs)

                                                                               
                              Jan     Feb     Mar     Apr     May     Jun    
Jul     Aug     Sep     Oct     Nov     Dec     Ann AVG  
2003 Actual Variance
                                                            [***]       [***]  
    [***]       [***]       [***]       [***]  
2004 Actual Variance
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]                                                  
2005 Target
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]       [***]  
 
GPBH Adjustment (reduc)/incr 4
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]          

All-in Gallons per Block Hour (adjusted)

                                                                               
                              Jan     Feb     Mar     Apr     May     Jun    
Jul     Aug     Sep     Oct     Nov     Dec     Ann AVG  
2005 Estimate
    [***]       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]       [***]  

Worksheet Formulae

     
1 Cost to Carry
  ((Flt Min/Cycles) * [***]) + [***], from FPCCM analysis
2 APU hours per flight hour adjustment
  (Target — (Avg Actual APU hrs per flight hour)) x [***]/[***]
3 Planned FOA adjustment
  ((Target — (Average Actual FOA in lbs)) x CTC/[***])/(block hours per flight)
4 Planned vs. Actual ZFW adjustment
  ((((Target tolerance) — (Avg Planned ZFW — Avg Actual ZFW)) x CTC x
CTC)/[***])/(block hours per flight)

Worksheet Assumptions

         
Cost To Carry (CTC) varies with avg enroute time
  NOTES:   All-in Gallons per Block Hour is an estimate based on several
uncontrollable variables.
APU burn rate [***]
      Aug 03 — Nov 03 ZFW numbers are estimates.
Flight hrs in APU calcs based on all 9E ops (scheduled and unscheduled)
      Any ASA target number must be tied to the Block to Flight hour ratio.

F-4

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Execution Copy
Exhibit G
Share Purchase Agreement

G-1

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Execution Copy
SHARE PURCHASE AGREEMENT
     This SHARE PURCHASE AGREEMENT, dated as of December 20, 2006 (this
“Agreement”), by and between PINNACLE AIRLINES CORP., a Delaware corporation
(“Pinnacle Corp.”), and NORTHWEST AIRLINES, INC., a Minnesota corporation
(“Northwest”).
     WHEREAS, contemporaneous with the execution of this Agreement, Northwest,
Pinnacle Corp. and Pinnacle Airlines, Inc., a wholly owned subsidiary of
Pinnacle Corp. (“Pinnacle Airlines”) have entered into an amendment and
restatement of that certain Airline Services Agreement dated of the date hereof
(the “ASA”);
     WHEREAS, pursuant to Section 5.18 of the ASA, Northwest, Pinnacle Corp. and
Pinnacle Airlines have agreed to enter into this Agreement;
     WHEREAS, Northwest is the holder of one share of Series A Preferred Stock
of Pinnacle Corp. (the “Share”), which has the designations, rights,
preferences, powers, restrictions and limitations set forth in the Certificate
of Designations of Series A Preferred Stock filed by Pinnacle Corp. with the
Secretary of State of the State of Delaware on January 15, 2003 (the
“Certificate of Designations”); and
     WHEREAS, Pinnacle Corp., subject to the terms and conditions set forth
herein, desires to purchase from Northwest, and Northwest desires to sell to
Pinnacle Corp., the Share on the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
Definitions
     SECTION 1.1 Certain Defined Terms. As used herein, the following terms have
the meaning set forth below:
     “Governmental Entity” means any domestic or foreign governmental or
regulatory authority, agency or commission, including courts of competent
jurisdiction.
     “Lien” means any lien, encumbrance, security interest, charge, mortgage,
pledge or restriction on transfer of any nature whatsoever.
     “Person” means any individual, entity, firm, corporation, partnership,
association, limited liability company, joint stock company, trust, or
unincorporated organization.

 

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ARTICLE II
Purchase and Sale of the Share
     SECTION 2.1 Purchase and Sale of the Share. Upon the terms and subject to
the conditions of this Agreement, Northwest agrees to sell and convey the Share
to Pinnacle Corp., and Pinnacle Corp. agrees to purchase the Share from
Northwest, free and clear of all Liens, in exchange for a cash payment (the
“Purchase Price”) equal to Twenty Million Dollars ($20,000,000.00); provided,
however, in the event that on or before the Closing Date (as defined below)
Northwest removes any aircraft from Pinnacle Airlines’ fleet pursuant to Section
3.02(a)(ii)(E) of the ASA, the Purchase Price shall be reduced to Ten Dollars
($10.00); and provided further that in the event Northwest removes any of the
Twenty-Four Aircraft (as defined in the ASA) pursuant to Section 3.02(a)(ii)(E)
of the ASA after the Closing Date, then Northwest shall re-pay to Pinnacle an
amount equal to $19,999,990.00, which obligation shall constitute an
administrative expense obligation under Bankruptcy Code §503 of Northwest to
Pinnacle Corp.
     SECTION 2.2 Closing.
          (a) The purchase and sale of the Share (the “Closing”) shall take
place on January 2, 2008 or such other date as is mutually agreed upon by the
parties (the “Closing Date”) and at the time and location mutually agreed upon
by the parties.
          (b) At the Closing, Pinnacle Corp. shall deliver the Purchase Price to
Northwest by wire transfer of immediately available funds to an account
designated in writing by Northwest.
          (c) At the Closing, Northwest shall deliver to Pinnacle Corp. the
stock certificate representing the Share, accompanied by stock powers duly
endorsed for transfer to Pinnacle Corp.
     SECTION 2.3 Conditions to Northwest’s Obligation to Close. The obligation
of Northwest to close its sale of the Share to Pinnacle Corp. hereunder is
subject to the satisfaction of the following conditions:
          (a) Each of the representations and warranties of Pinnacle Corp. set
forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date.
          (b) As of the Closing Date, neither Pinnacle Corp. or Pinnacle
Airlines shall be in default of its obligations under the ASA, nor shall the ASA
have theretofore been terminated by Pinnacle Corp. or Pinnacle Airlines or by
Northwest as a result of a default by Pinnacle Corp. or Pinnacle Airlines in any
of their respective obligations under the ASA.
          (c) No Governmental Entity shall have entered and maintained in effect
an injunction or other similar order enjoining consummation of the transactions
provided for herein, and no action or proceeding shall have been instituted and
remain pending before a Governmental Entity to restrain or prohibit the
transactions contemplated by this Agreement, nor

-2-

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shall any Governmental Entity have notified any party to this Agreement that
consummation of the transactions contemplated hereby would constitute a
violation of the laws of the United States and that it intends to commence
proceedings to restrain the consummation of the transactions contemplated hereby
unless such agency shall have withdrawn such notice prior to the Closing.
          (d) All consents, approvals, authorizations or orders of or filings
with any Governmental Entity and/or any other Person required for the
consummation of the transactions contemplated herein by Pinnacle Corp. shall
have been obtained or made.
     SECTION 2.4 Condition to Pinnacle Corp.s’ Obligation to Close. The
obligation of Pinnacle Corp. to close its purchase of the Share hereunder is
subject to the satisfaction of the following conditions:
          (a) Each of the representations and warranties of Northwest set forth
in this Agreement shall be true and correct as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date.
          (b) No Governmental Entity shall have entered and maintained in effect
an injunction or other similar order enjoining consummation of the transactions
provided for herein, and no action or proceeding shall have been instituted and
remain pending before a Governmental Entity to restrain or prohibit the
transactions contemplated by this Agreement, nor shall any Governmental Entity
have notified any party to this Agreement that consummation of the transactions
contemplated hereby would constitute a violation of the laws of the United
States and that it intends to commence proceedings to restrain the consummation
of the transactions contemplated hereby unless such agency shall have withdrawn
such notice prior to the Closing.
          (c) All consents, approvals, authorizations or orders of or filings
with any Governmental Entity and/or any other Person required for the
consummation of the transactions contemplated herein by Northwest shall have
been obtained or made.
ARTICLE III
Representations and Warranties concerning Northwest and Pinnacle Corp.
     Northwest represents and warrants to Pinnacle Corp. as follows:
     SECTION 3.1 Organization and Good Standing of Northwest. Northwest is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota.
     SECTION 3.2 Authority. Northwest has all requisite power and authority to
enter into this Agreement. The execution and delivery by Northwest of this
Agreement and the consummation by Northwest of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of
Northwest. This Agreement has been duly and validly executed and delivered by
Northwest and constitutes (assuming the due and valid execution and delivery by
Pinnacle Corp. of this Agreement) the legal, valid and binding obligations of

-3-

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Northwest, enforceable against Northwest in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting enforcement of creditors’ rights generally and by
general equitable principles.
     SECTION 3.3 No Conflicts. The execution, delivery and performance by
Northwest of this Agreement and the consummation of the transactions
contemplated hereby will not (i) result in a breach of any of the terms or
provisions of the Articles of Incorporation or the Bylaws of Northwest,
(ii) violate any material law applicable to Northwest, or (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or any obligation to repay) under, any of the
terms, conditions or provisions of any indenture, mortgage, note, bond, license,
government registration, contract, lease, agreement or other instrument or
obligation to which Northwest is a party or by which Northwest or any of its
assets may be bound, except such violations, breaches and defaults which are not
reasonably likely to have a material adverse effect on Northwest or on the
legality, validity or enforceability of this Agreement.
     SECTION 3.4 Consents and Approvals. The execution and delivery by Northwest
of this Agreement and the consummation of the other transactions contemplated
hereby do not require any filing by Northwest with, or approval or consent of,
any Governmental Entity which has not already been made or obtained.
     SECTION 3.5 Brokers or Finders. Northwest has not employed any investment
banker, broker or finder or incurred any liability for any investment banking
fees, brokerage fees, commissions or finders’ fees in connection with the
transactions contemplated by this Agreement.
     SECTION 3.6 Title to the Share; No Liens. Northwest has good record and
beneficial title to the Share, free and clear of all Liens.
ARTICLE IV
Representations and Warranties of Pinnacle Corp.
     Pinnacle Corp. represents and warrants to Northwest as follows:
     SECTION 4.1 Organization and Good Standing of Pinnacle Corp.. Pinnacle
Corp. is a corporation duly organized, validly existing and in good standing
under the laws of Delaware.
     SECTION 4.2 Authority. Pinnacle Corp. has all requisite power and authority
to enter into this Agreement. The execution and delivery by Pinnacle Corp. of
this Agreement and the consummation by Pinnacle Corp. of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Pinnacle Corp., and this Agreement has been duly and validly
executed and delivered by Pinnacle Corp. and constitutes (assuming the due and
valid execution and delivery by Northwest of this Agreement) the legal, valid
and binding obligations of Pinnacle Corp. enforceable against Pinnacle Corp. in
accordance with their terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and by general equitable principles.

-4-

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     SECTION 4.3 No Conflicts. The execution, delivery and performance by
Pinnacle Corp. of this Agreement and the consummation of the transactions
contemplated hereby will not (i) result in a breach of any of the terms or
provisions of the Certificate of Incorporation or the Bylaws of Pinnacle Corp.,
(ii) violate any material law applicable to Pinnacle Corp., or (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or any obligation to repay) under, any of the
terms, conditions or provisions of any indenture, mortgage, note, bond, license,
government registration, contract, lease, agreement or other instrument or
obligation to which Pinnacle Corp. is a party or by which Pinnacle Corp. or any
of its assets may be bound, except such violations, breaches and defaults which
are not reasonably likely to have a material adverse effect on Pinnacle Corp. or
on the legality, validity or enforceability of this Agreement.
     SECTION 4.4 Consents and Approvals. The execution and delivery by Pinnacle
Corp. of this Agreement and the consummation of the other transactions
contemplated hereby do not require any filing by Pinnacle Corp. with, or
approval or consent of, any Governmental Entity which has not already been made
or obtained, except for such filings, consents or approvals that will have been
obtained on or prior to the Closing Date.
     SECTION 4.5 Brokers and Finders. Neither Pinnacle Corp. nor any of its
officers, directors or employees has employed any investment banker, broker or
finder or incurred any liability for any investment banking fees, brokerage
fees, commissions or finders’ fees in connection with the transactions
contemplated by this Agreement.
ARTICLE V
Miscellaneous
     SECTION 5.1 Survival of Agreement. All representations, warranties and
agreements made by Northwest and Pinnacle Corp. herein shall be considered to
have been relied upon by Pinnacle Corp. and Northwest, respectively, and shall
survive the execution and delivery of this Agreement and the sale and purchase
of the Share and any disposition thereof, regardless of any investigation made
by a Pinnacle Corp. or Northwest in respect thereof, until the expiration of the
period of the applicable statute of limitations.
     SECTION 5.2 Assignment. This Agreement and the rights hereunder shall not
be assignable or transferable by any party hereto (by operation of law or
otherwise) without the prior written consent of all of the other parties hereto.
     SECTION 5.3 Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
     SECTION 5.4 Expenses. Whether or not the transactions contemplated hereby
are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.

-5-

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     SECTION 5.5 Amendments. The terms and provisions of this Agreement may not
be amended except by a written instrument signed by all the parties hereto.
     SECTION 5.6 Counterparts, Effectiveness. This Agreement may be executed in
any number of counterparts, each of which shall be considered an original, but
all such counterparts shall together constitute but one and the same contract.
This Agreement shall not, however, be effective, unless and until all of the
named parties hereto execute counterparts of this Agreement.
     SECTION 5.7 Construction. Definitions shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronouns shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” Any references to any agreement,
instrument, statute or regulation is to it as amended and supplemented from time
to time (and in the case of statute or regulation, to any successor provision).
The headings of Articles, Sections or other subdivisions have been inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning of or interpretation of such agreement or instrument.
     SECTION 5.8 Severability. Every provision of this Agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such term or provision shall be enforced to the maximum
extent permitted by law and, in any event, such illegality or invalidity shall
not affect the validity of the remainder of this Agreement.
     SECTION 5.9 Non-Waiver. No provision of this Agreement shall be deemed to
have been waived except if the giving of such waiver is contained in a written
notice given to the party claiming such waiver, and no such waiver shall be
deemed to be a waiver of any other or further obligation or liability of the
party or parties in whose favor the waiver was given.
     SECTION 5.10 Applicable Law. This Agreement and the rights and obligations
of the parties hereto shall be interpreted and enforced in accordance with and
governed by the laws of the State of Delaware applicable to agreements made and
to be performed wholly within that jurisdiction, without reference to the
conflicts of law provisions thereof.
     SECTION 5.11 Entirety of Agreement. This Agreement and the ASA set forth
the entire understanding of the parties with respect to the transactions
contemplated hereby, and merge and supersede all prior and contemporaneous
understandings, representations and warranties with respect to such
transactions. Except as expressly set forth in this Agreement or the ASA, none
of the parties hereto or thereto makes any representation or warranty to any
other party.
     SECTION 5.12 Notices. Any notice, request, consent or communication under
this Agreement shall be effective only if it is in writing and (i) personally
delivered, (ii) sent by certified or registered mail, return receipt requested,
postage prepaid (iii) sent by a nationally recognized overnight delivery
service, with delivery confirmed, or (iv) telexed or telecopied, with receipt
confirmed, addressed as follows:

-6-

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     If to Northwest:
  Northwest Airlines, Inc.
 
  Department A6100
 
  2700 Lone Oak Parkway
 
  Eagan, Minnesota 55121
 
  Attn: Vice President — Market Planning
 
  Facsimile No: (612) 727-7113
 
   
     With a copy to:
  Northwest Airlines, Inc.
 
  Department A1180
 
  2700 Lone Oak Parkway
 
  Eagan, Minnesota 55121
 
  Attn: General Counsel
 
  Facsimile No: (612) 726-7123
 
   
     If to Pinnacle Corp.:
  Pinnacle Airlines Corp.
 
  1689 Nonconnah Parkway
 
  Suit 111
 
  Memphis, Tennessee 38132
 
  Attn: President
 
  Facsimile No: 901-348-4103

or to such other address as the respective parties hereto shall designate by
notice in writing to the other party. Notices shall be deemed received and given
on the date of delivery or the date of refusal of delivery as shown by the
return receipt.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Share
Purchase Agreement as of the day and year first above written.

            NORTHWEST:
      By:   /s/ J. Timothy Griffin         Name:   J. Timothy Griffin       
Title:   EVP, Marketing and Distribution     

            PINNACLE CORP.:
      By:   /s/ Philip H. Trenary         Name:   Philip H. Trenary       
Title:   President and CEO     

-7-