ex10-65.htm


    


      Exhibit
        10.65

      


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

                                                                                                                                                Execution
        Copy

      


      DELTA
        CONNECTION

      AGREEMENT

      


      


      This
        Delta Connection Agreement (this
        "Agreement"), dated and effective the 27th day of April, 2007 (the “Agreement
        Date”), is among Delta Air Lines, Inc., whose principal address is 1030 Delta
        Boulevard, Atlanta, Georgia  30320 ("Delta"), Pinnacle Airlines Corp.,
        whose principal address is 1689 Nonconnah Boulevard, Suite 111, Memphis,
        TN  38132 (“Parent”) and Pinnacle Airlines, Inc., whose principal
        address is 1689 Nonconnah Boulevard, Suite 111, Memphis, TN  38132
        (“Operator”).

      


      WHEREAS,
        Delta operates the Delta
        Connection program; and

      


      WHEREAS,
        Parent is the owner of all
        of the outstanding capital stock of Operator;

      


      WHEREAS,
        Delta desires Operator to
        operate certain aircraft as a Delta Connection carrier; and

       

              
WHEREAS,
        Operator
        desires for Delta to perform and provide various marketing, schedule and
        fare
        related, and other services for Operator in connection with the Delta Connection
        program; and

      


      WHEREAS,
        Delta is willing to perform
        and provide various marketing, schedule and fare related, and other services
        for
        Operator in connection with the Delta Connection program; and

      


      WHEREAS,
        this Agreement will enhance
        the ability of Operator and Delta to serve the public and the communities
        that
        they serve or may choose to serve; and

      


      WHEREAS,
        Parent will cause Operator
        to perform its obligations under this Agreement pursuant to the terms and
        conditions of Article 27 below and the other terms and conditions
        hereof;

      


      NOW,
        THEREFORE, for and in
        consideration of the foregoing premises and the mutual undertakings set forth
        herein and other good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, Delta and Parent (on behalf of itself and
        Operator), intending to be legally bound, hereby agree as follows:

      


      ARTICLE 1.  FARES AND RULES PUBLICATION.

      


      A.  Delta
        Connection Program and Appointment of Delta as Agent.  Operator
        hereby appoints Delta as its agent to publish its fares, schedules and related
        information under Delta’s two letter flight designator code in city pairs
        specified by Delta on (i) the sixteen (16) CRJ-900 aircraft set forth on
        Exhibit A attached hereto (the “Initial Aircraft”), (ii) up to an
        additional [***] CRJ-900 aircraft, in Delta’s sole discretion, when, as and if
        Delta elects to add any such aircraft to Operator’s Delta Connection fleet under
        this Agreement, provided Delta provides Operator with at least one hundred
        twenty days (120) prior written notice of any such election and (iii) any
        other
        aircraft subsequently agreed by the parties to be operated by Operator within
        the Delta Connection program (collectively, the “Aircraft”), and Delta hereby
        accepts such appointment.  Delta hereby grants Operator the authority
        to operate as a Delta Connection carrier, and Operator hereby accepts such
        grant, to conduct air transportation operating the Aircraft utilizing certain
        services together with certain trademarks and service marks owned by Delta
        or
        which Delta has the right to use, all as provided herein.

       

      B.  Fares,
        Rules and Seat Inventory.  Delta, in its sole discretion, shall
        establish and publish all fares and related tariff rules for all seats, cargo
        and freight on the Aircraft, including fares and rules for local traffic
        in the
        city pairs served by such Aircraft.  In addition, Delta will control
        all seat inventory and revenue management (including non-revenue passenger)
        decisions for the Aircraft.

       

      C.  Schedules
        Publication.  Delta, in its sole discretion, shall establish and
        publish all schedules for the Aircraft, including city-pairs served,
        frequencies, and timing of scheduled departures, taking into consideration
        the
        Aircraft type, maintenance requirements, crew scheduling requirements, aircraft
        rotation requirements and applicable route, slot or other regulatory
        restrictions.  So that the information can be properly disseminated to
        Operator for pilot and flight attendant staffing, and related operational
        requirements, Delta will, from time to time, notify Operator of the preliminary
        schedule times, frequencies and related information for the Aircraft no later
        than seventy-five (75) days prior to the commencement of such
        schedule.  Operator shall provide to Delta the proposed block times
        for the Aircraft, Aircraft performance analysis on operational items such
        as
        passenger and baggage limitations (together with relevant assumptions) and
        airfield appropriateness applicable to airports specified in Delta’s request for
        each of the city pair proposed by Delta no later than fourteen (14) days
        of
        Operator’s receipt of the preliminary schedule times provided by
        Delta.   Notwithstanding the above, upon written notice to
        Operator, Delta may assume responsibility for establishing the Aircraft block
        times.  Regardless of whether Delta or Operator establishes the
        Aircraft block times, such block times shall be based on a block time
        reliability rate of between [***] and [***] or the block time reliability
        rate
        used for scheduling Delta mainline service, whichever is greater.  No
        later than [***] days prior to the commencement of such schedule, Delta will
        notify Operator of the final schedule times, frequencies and related information
        for the Aircraft.  Where practical, Delta will collaborate with
        Operator to determine mutually optimal schedules.  Operator shall
        operate the Aircraft in the city pairs designated by Delta, subject to the
        frequency and other scheduling requirements established by Delta from time
        to
        time.  In addition, it is agreed and understood that Delta may utilize
        and schedule any of the Aircraft to perform various charter operations on
        behalf
        of Delta as can be reasonably accommodated by Operator, including without
        limitation after taking into consideration Operator’s maintenance requirements
        for the Aircraft.

      


      Notwithstanding
        anything to the contrary in this Agreement, except for maintenance servicing
        (with no revenue passengers), in no event shall any Delta Connection Flights
        be
        scheduled, nor shall Operator operate any Delta Connection Flights, in or
        out of
        [***].

      


      D.  In-Service
        Schedule.  Operator hereby covenants and agrees that the Aircraft
        shall be available to be placed into service as contemplated by this Agreement
        no later than the dates set forth on Exhibit A-1.  In addition to any
        other rights and remedies Delta may have under this Agreement, in the event
        that
        any Aircraft is not ready to be placed into service as contemplated by this
        Agreement by the applicable date set forth on Exhibit A-1 as a result of
        any
        action or inaction of Operator or Parent, Operator shall pay Delta an amount
        of
        [***] per day that each such Aircraft is late in being available to be placed
        into such service, up to a maximum of [***]  per
        Aircraft.  If any Aircraft is more than thirty (30) days late being
        placed into service past the applicable dates set forth on Exhibit A-1 as
        a
        result of any action or inaction of Operator or Parent, then Operator and
        Parent
        shall be deemed in material breach of this Agreement, and Delta, in addition
        to
        any other rights and remedies Delta may have under this Agreement, Delta
        shall
        have the right to immediately terminate this Agreement, upon written notice
        to
        Operator, at any time prior to such Aircraft being placed into Delta Connection
        service pursuant to this Agreement.  Upon any such termination of this
        Agreement by Delta, Operator shall not owe any amounts to Delta pursuant
        to this
        Section 1(D) for any days after the effective date of such
        termination.

      


      E.  Spare
        Aircraft.  Notwithstanding anything in this Article 1 or elsewhere in
        this Agreement to the contrary, one of the sixteen (16) CRJ-900 initial Aircraft
        set forth on Exhibit A attached hereto shall be designated as a spare aircraft,
        which will not be scheduled for Delta Connection Flights but may be used
        by
        Operator to replace another Aircraft in the operation of a Delta Connection
        Flight that otherwise would be cancelled and/or used to meet applicable
        maintenance requirements.

      


      ARTICLE
        2.  LIMITATION OF USE.

      


      A.  Operator
        agrees that, except as otherwise directed or approved in writing by Delta,
        in
        Delta’s sole discretion, (i) the Aircraft may be used only to provide the air
        services contemplated by this Agreement (including charter flights pursuant
        to
        Section 1(C) hereof, the “Delta Connection Flights”), (ii) the Delta Connection
        Flights shall only be operated under Delta’s “DL” flight designator code except
        as otherwise directed by Delta,  and (iii) the Aircraft may not be
        used by Operator for any other purpose including, without limitation, flying
        for
        any other airline, providing charter services other than pursuant to Section
        1(C) hereof, or on Operator’s own behalf.

      


      B.  Without
        the prior written consent of Delta, neither Operator, nor any affiliate of
        Operator, shall use outside the scope of this Agreement any of the services,
        facilities or equipment provided, or caused to be provided, by Delta, or
        an
        affiliate of Delta, to Operator in connection with the Aircraft or the Delta
        Connection Flights.  With respect to any ancillary facilities or
        equipment obtained by Operator pursuant to the terms hereof specifically
        for use
        by Operator in connection with providing the services contemplated by this
        Agreement, or otherwise provided by Delta to Operator for such use, such
        use for
        the benefit of Delta shall have priority over any other use contemplated
        by
        Operator. With respect to facilities, equipment owned, leased or otherwise
        used
        by Operator, Delta shall have the right to designate on a reasonable basis
        and
        from time to time, in which case Operator shall use reasonable commercial
        efforts to use such property to carry out Operator’s obligations under this
        Agreement, provided that Operator shall have no obligation to use such
        designated property if such use would increase Operator’s costs of providing
        such service to Delta or otherwise adversely affect Operator’s performance
        hereunder.  Nothing herein shall obligate Parent or Operator to use
        any ground service equipment, aircraft or aircraft engines hereunder that
        are
        used primarily for the benefit of other operations of Parent or
        Operator.

      


      ARTICLE 3.  COMPENSATION.

      


      Base
        Compensation.  Commencing after the operation of the initial Delta
        Connection Flight, except as set forth elsewhere in this Agreement, in exchange
        for the flying and operation of the Aircraft pursuant to the terms and
        conditions of this Agreement, Delta shall pay Operator the “Base Rate Costs” and
        the “Pass Through Costs” (each as such term is defined below, and collectively,
        the “Direct Costs”) and the “Reimbursable Costs” (as such term is defined
        below), in each case, as relates to the operation of the Delta Connection
        Flights and as determined in accordance with this Agreement. It is understood
        that Direct Costs and other Reimbursable Costs shall be based on market based,
        direct operating costs and generally accepted accounting principles (“GAAP”),
        and specifically exclude any pre-paid expenses except as expressly provided
        herein.  In addition, in any month in which Operator achieves a
        completion rate for the Delta Connection Flights of at least [***] Delta
        shall
        pay Operator a mark-up (the “Base Mark-up”) of [***] of such Direct Costs
        incurred during such month, subject to certain
        exceptions,  limitations and adjustments set forth
        below.  Any Delta Connection Flight operated with no revenue
        passengers or not completed within [***]) hours of its scheduled arrival
        time
        shall be deemed not completed for purposes of determining Operator’s eligibility
        to any Base Mark-up, “Monthly Incentive Compensation” or “Semi-Annual Incentive
        Compensation” (each, as defined below), unless operated at the direction of
        Delta.  In addition, if (i) on a given day a disproportionate number
        of the Delta Connection Flights into or out of the Delta hub airport which
        such
        flights are scheduled to operate vis-à-vis all Delta and Delta Connection
        operated flights into or out of such hub are canceled for weather related
        or Air
        Traffic Control ("ATC") related reasons on such day (a “Disproportionate ATC
        Cancellation”) or (ii) Delta requests operator to cancel one or more Delta
        Connection Flights (a “Delta Directed Cancellation” and together with
        Disproportionate ATC Cancellation, a “Disproportionate Cancellation”), then,
        such Disproportionate Cancellations shall be excluded from the calculation
        of
        Operator’s completion rate for purposes of determining Operator’s eligibility to
        any Base Mark-up, “Monthly Incentive Compensation” or “Semi-Annual Incentive
        Compensation.”  If Delta requests Operator to cancel one or more Delta
        Connection Flights, Operator shall comply with any such request within the
        time
        period reasonably requested by Delta.  In the event Operator does not
        cancel any such Delta Connection Flights (each, an "Operator Non-Cancelled
        Flight"), then each such Operator Non-Cancelled Flight, for purposes of this
        Agreement, shall not be regarded as a completed flight, nor included as a
        Disproportionate Cancellation, and Delta shall not be obligated to pay Operator
        any Base Compensation, incentive compensation, or any other reimbursements
        in
        connection with such Operator Non-Cancelled Flights.  For any Delta
        Directed Cancellation, unless such cancellation becomes an Operator
        Non-Cancelled Flight, Operator shall be compensated for its Direct Costs
        incurred in connection with such Delta Directed Cancellation, other than
        maintenance-related costs set forth on Exhibit B, for which Operator shall
        receive no compensation.

      


      (i)  The
        “Base Rate Costs” shall include certain direct operating costs recorded in
        accordance with generally accepted accounting principles (“GAAP”) incurred by
        Operator in its operation of the Delta Connection Flights.  The Base
        Rate Costs for each of calendar years 2007 through 2015 are set forth on
        Exhibit B attached hereto and incorporated
        herein.    The Base Rate Costs shall be paid on a unit basis
        as set forth on Exhibit B.

      


      (ii)  The
        “Pass Through Costs” shall include the following variable costs incurred by
        Operator in connection with its operation of the Delta Connection Flights
        for
        which Delta shall bear the risk of price and volume fluctuations,
provided that such costs shall be reconciled on a monthly basis to
        reflect the actual costs incurred by Operator:

      


      
        	
                (1)  

              	
                Landing
                  Fees;

              


      

      


      
        	
                (2)  

              	
                Hull
                  Insurance;

              


      

       

      
        	
                (3)  

              	
                Passenger
                  Liability Insurance;

              


      

      


      
        	
                (4)  

              	
                War
                  Risk Insurance;

              


      

      


      
        	
                (5)  

              	
                Fuel
                  Expense – Operator’s actual fuel and into-plane expenses, plus associated
                  taxes (excluding any fuel purchases made, or caused to be made,
                  by Delta
                  for the benefit of Operator); provided, however, any Mark-Up of the
                  Fuel Expense shall assume a price of [***] per gallon fuel
                  price;

              


      

      


      
        	
                (6)  

              	
                Glycol
                  and de-icing services (but not if provided by Delta or an affiliate
                  or
                  designee of Delta);

              


      

      


      
        	
                (7)  

              	
                Catering
                  Costs (but not if provided by Delta or an affiliate or designee
                  of
                  Delta);Security (but not if provided by Delta or an affiliate or
                  designee
                  of Delta);

              


      

      


      
        	
                (8)  

              	
                Property
                  Taxes;

              


      

      


      
        	
                (9)  

              	
                All
                  costs to change the initial Delta Connection livery of any Aircraft
                  pursuant to any request by Delta;

              


      

      


      
        	
                (10)  

              	
                Engine
                  Maintenance Expense, provided such expense shall not, in any event,
                  exceed the per completed block hour rates identified as Heavy Engine
                  and
                  Maintenance Reserve in Exhibit B (or such other amount mutually
                  agreed upon by the parties), unless otherwise required by
                  Delta;

              


      

      


      
        	
                (11)  

              	
                Ground
                  Handling Services, including without limitation all costs and charges
                  specified in the ground handling agreement referenced in Section
                  26(A)
                  below (but not if provided free of charge to Operator by Delta
                  or an
                  affiliate or designee of Delta);
                  and

              


      

      


      
        	
                (12)  

              	
                “Terminal
                  Facility Rent and Use Charges” – Operator’s actual applicable terminal
                  facility rent and use charges (including common use, ramp rent
                  and jet
                  bridge expenses), including without limitation facilities maintenance
                  and
                  operation expenses, but excluding any such rent and use charges
                  if
                  premises are provided by Delta or any affiliate or designee of
                  Delta.

              


      

      


      
        	
                (13)  

              	
                Aircraft
                  Debt Service, provided such expense shall not, in any event, exceed
                  [***] per aircraft per month.

              


      

      


      Notwithstanding
        the foregoing, Pass Through Costs shall not include any late payment charges,
        penalties and/or fees which Operator incurs in connection with the payment
        of
        the expenses listed above.  Estimates of certain of the initial Pass
        Through Costs are set forth on Exhibit B.  Any costs or expense
        not included either as a Pass Through Cost, Reimbursable Cost, Non-Reimbursable
        Cost or Delta Cost shall be deemed a Base Rate Cost.

      


      B.  Reimbursable
        Costs not Subject to Mark-up.  Delta shall reimburse Operator for
        [***] of the costs incurred for the following items (“Reimbursable Costs”), but
        it is expressly agreed that no Mark-Up (including any potential incentive
        compensation as set forth in Section 3(E) below) of such costs shall be paid
        by
        Delta:

      


      
        	
                (1)  

              	
                Any
                  Federal Aviation Administration (“FAA”) or Department of Transportation
                  (“DOT”) fines administered or levied against Operator due to an action
                  or
                  omission principally caused by Delta or an affiliate of
                  Delta.

              


      

      


      C.  Non-Reimbursable
        Costs.  The parties hereby acknowledge and agree that Operator
        shall be solely responsible and Delta shall not be responsible, nor
        reimburse Operator, for any of the following costs:

      


      
        	
                (1)  

              	
                any
                  and all FAA, DOT or any other government or regulatory agency fines
                  administered or levied against Operator due to any action or omission
                  not
                  principally caused by Delta or an affiliate of Delta;
                  and

              


      

      


      
        	
                (2)  

              	
                Passenger
                  amenities costs and other interrupted trip expenses, including
                  without
                  limitation denied boarding compensation, food and lodging expenses
                  and
                  other transportation costs incurred by Operator due to any action
                  or
                  omission principally caused by Operator or an affiliate of Operator;
                  and

              


      

      


      
        	
                 

              	
                (3)  Any
                  Pass Through Costs determined to be unreasonable by Delta, based
                  on then
                  current objective market conditions, provided that Delta shall
                  give
                  Operator at least sixty (60) days advance written notice of any
                  such
                  determination, and discuss such costs with Operator prior to making
                  such a
                  determination.

              


      

      


      D.  Delta
        Costs.  The parties acknowledge and agree that the following costs
        related to Operator’s services hereunder shall be paid directly by Delta and
        shall not be included in the Base Compensation or any incentive compensation
        calculation or payment:

      


      
        	
                (1)  

              	
                Travel
                  agency commissions, if any;

              


      

      
        	
                (2)  

              	
                Credit
                  card fees;

              


      

      
        	
                (3)  

              	
                Reservations
                  handling charges;

              


      

      
        	
                (4)  

              	
                Booking
                  fees;

              


      

      
        	
                (5)  

              	
                Frequent
                  flyer charges;

              


      

      
        	
                (6)  

              	
                Denied
                  boarding costs, except as set forth in Section 3(C)(3)
                  above;

              


      

      
        	
                (7)  

              	
                Advertising;

              


      

      
        	
                (8)  

              	
                Glycol
                  and de-icing services (if provided by Delta or an affiliate or
                  designee of
                  Delta);

              


      

      
        	
                (9)  

              	
                Terminal
                  Facility Rent and use charges, including without limitation facilities
                  maintenance and operations costs (if premises are provided by Delta
                  or an
                  affiliate or designee of Delta);

              


      

      
        	
                (10)  

              	
                Fuel
                  and fuel management expenses (if provided or cause to be provided
                  by Delta
                  or an affiliate or designee of Delta);
                  and

              


      

      
        	
                (11)  

              	
                The
                  cost of any “Support Services” (as defined in Article 8 herein) and any
                  ticketing services, if provided, or cause to be provided, by Delta
                  or an
                  affiliate or designee of Delta.

              


      

      


      E.  Incentive
        Compensation.

      


      
        	
                1.  

              	
                Definitions.  The
                  parties agree that for purposes of this Agreement the following
                  terms
                  shall have the respective meanings as set forth
                  below:

              


      

      


      
        	
                a.  

              	
                “Monthly
                  Incentive Goal” shall mean with respect to each month during the Term, the
                  monthly goals set forth in paragraph 1 of Schedule 3 attached
                  hereto with respect to each of:  (i) completion rate and (ii)
                  on-time arrival (collectively, “Monthly Performance
                  Categories”).

              


      

      


      
        	
                b.  

              	
                “Semi-Annual
                  Goal” shall mean, with respect to each of the semi-annual periods
                  identified in paragraph 2 of Schedule 3 attached hereto, the
                  semi-annual goals set forth therein with respect to each of (i)
                  completion
                  rate, (ii) on-time arrival and (iii) customer satisfaction rating
                  (collectively, “Semi-Annual Performance Categories”) (Semi-Annual
                  Performance Categories and Monthly Performance Categories, collectively,
                  “Performance Categories”).

              


      

      


      
        	
                2.  

              	
                Monthly
                  Incentive Compensation.  In addition to the Base
                  Compensation, Operator shall have the opportunity to earn additional
                  compensation (the “Monthly Incentive Compensation”) based upon its actual
                  performance in the Monthly Performance Categories as compared to
                  the
                  applicable Monthly Incentive Goal.  For each month during the
                  Term of this Agreement, Delta shall pay Operator an additional
                  [***]
                  mark-up of the Direct Costs (subject to the limitations set forth
                  in this
                  Agreement, as calculated monthly based on the actual direct costs
                  incurred
                  by Operator in operating the Delta Connection Flights during such
                  month)
                  for each of the following performance goals that Operator achieves
                  during
                  such month:

              


      

      


      
        	
                (i)  

              	
                Actual
                  completion rate (excluding cancellations due to charter flights
                  pursuant
                  to Section 1(C) hereof and Disproportionate Cancellations) for
                  its Delta
                  Connection Flights equal to or greater than the applicable Monthly
                  Incentive Goal; and

              


      

      


      
        	
                (ii)  

              	
                Actual
                  on-time arrival (A-14) rate for its Delta Connection Flights equal
                  to or
                  greater than the applicable Monthly Incentive
                  Goal.

              


      

      


      
        	
                3.  

              	
                Semi-Annual
                  Incentive Compensation.  In addition to the Base
                  Compensation and the Monthly Incentive Compensation, Operator shall
                  have
                  the opportunity to earn additional compensation (the “Semi-Annual
                  Incentive Compensation”) based upon its semi-annual performance in the
                  Semi-Annual Performance Categories as compared to the Semi-Annual
                  Incentive Goal for each Semi-Annual Performance
                  Category.  During each six-month period (measured from each
                  January 1 through June 30 and July 1 through December 31) during
                  each year
                  of the Term of this Agreement, Delta shall pay Operator a
                  [***]  mark-up of the Direct Costs (subject to the limitations
                  set forth in this Agreement, as calculated based on the actual
                  direct
                  costs incurred by Operator in operating the Delta Connection Flights
                  during such six-month period) for such six-month period for each
                  of the
                  following performance goals that Operator achieves during the applicable
                  six-month period:

              


      

      


      (i)
        Actual Completion rate (excluding cancellations due to charter flights pursuant
        to Section 1(C) hereof and Disproportionate Cancellations) for its Delta
        Connection Flights equal to or greater than the applicable Semi-Annual Incentive
        Goal;

      


      (ii)
        Actual on-time arrival (A-14) rate for its Delta Connection Flights equal
        to or
        greater than the applicable Semi-Annual Incentive Goal; and

      


      (iii)
        Actual semi-annual customer satisfaction rating for its Delta Connection
        Flights
        is greater than the applicable Semi-Annual Incentive Goal.

      


      F.  Margin
        Cap.  Within sixty (60) days after the end of each calendar year
        during the Term, Operator shall provide Delta a certificate (the “Margin
        Certificate”) signed on behalf of Operator by its chief financial officer, that
        states the actual total margin that Operator earned on operating the Delta
        Connection Flights (the “Actual Margin”) during such calendar year, as
        calculated below.  Such Margin Certificate shall include an exhibit
        that fully sets forth Operator’s calculation of its Actual Margin and certify to
        the accuracy of the Actual Margin.  Actual Margin for any given
        calendar year shall be determined, on a pre-tax basis, by subtracting (y)
        Operator’s aggregate actual Direct Costs incurred to operate the Delta
        Connection Flights for such calendar year, excluding all Pass Through Costs
        for
        (i) Aircraft Debt Service and (ii) Engine Maintenance from (z) the total
        payments made by Delta to Operator for such Delta Connection Flights for
        such
        year, including any and all Base Mark-up, Monthly Incentive Compensation
        and
        Semi-Annual Compensation, excluding (i) any credits Operator receives as
        a
        result of any Cost Savings Initiative or Delta Sourcing Initiative pursuant
        to
        Section 3(G) below, (ii) all payments from Delta to reimburse Operator its
        Pass
        Through Costs for (a) Aircraft Debt Expense and (b) Heavy engine maintenance
        and
        other maintenance reserves (the “Total Payments”), and dividing such difference
        by the Total Payments.  In the event that Operator’s Actual Margin is
        greater than [***],
        Operator shall pay Delta an amount equal to the amount necessary to reduce
        the
        Total Payments such that the Actual Margin for such calendar year will equal
        [***].  Any
        payment made pursuant to this Section 3(F) shall be made within thirty (30)
        days
        of Delta receiving the Margin Certificate.

      


      G.  Cost
        Reductions.  At all times during the Term, Operator shall use its
        reasonable commercial efforts to reduce its Direct Costs in the following
        cost
        categories (the “Reducible Costs”):

      


      1.  Base
        Rate Costs:

      


      
        	
                (i)  

              	
                Heavy
                  airframe maintenance;

              


      

      


      
        	
                (ii)  

              	
                Components;

              


      

      


      
        	
                (iii)  

              	
                Hanger
                  lease costs;

              


      

      


      
        	
                (iv)  

              	
                Simulator
                  Costs; and

              


      

      


      
        	
                (v)  

              	
                Crew
                  lodging.

              


      

      


      2.  Pass
        Through Costs:

      


      (i)           Liability
        insurance;

      


      (ii)           Hull
        insurance;

      


      (iii)          War
        risk insurance; and

      


      (iv)          Fuel
        (burn rate reductions).

      


      In
        addition, Delta maintains the right to develop cost savings initiatives which
        will enable Operator to reduce its Reducible Costs (each, a “Cost Savings
        Initiative”).  Provided any such Cost Savings Initiative does not
        materially interfere with or adversely affect other contractual or legal
        obligations of Parent or Operator in existence at such time or materially
        interfere with the Operator’s operational or maintenance standards or
        performance requirements, each as necessary to perform the services contemplated
        by this Agreement, Operator shall use its commercially reasonable efforts
        to
        implement all such Cost Savings Initiatives identified by either Operator
        or
        Delta.

      


      In
        addition, Delta may assist Operator in obtaining goods and services in
        connection with operating the Aircraft and/or the Delta Connection Flights
        in a
        more economical manner, including, without limitation, via bulk purchasing
        and
        inventory management systems and processes (each, a “Delta Sourcing
        Initiative”).  If Delta initiates or identifies any such Delta
        Sourcing Initiative, Operator is obligated to use its reasonable commercial
        efforts to participate in such initiative, but only to the extent that such
        participation would not materially interfere with or adversely affect other
        contractual or legal obligations of Parent or Operator in existence at such
        time
        or materially interfere with the Operator’s operational or maintenance standards
        or performance requirements, each as necessary to perform the services
        contemplated by this Agreement.

      


      A
        baseline for each of the Direct Costs shall be established using (i) with
        respect to Pass Through Costs, the actual Pass Through Costs incurred by
        Operator in connection with operating the Delta Connection Flights during
        the
        previous twelve (12) months and (ii) with respect to Base Rate Costs, Operator’s
        Base Rate Costs set forth on Exhibit B hereto. Any such baseline shall be
        adjusted to reflect situations in which this methodology does not properly
        reflect future costs (e.g. annual escalation, contractual increases and one
        time
        occurrences).  Savings realization will be measured against these
        baselines for purposes of determining the amount of savings to be shared
        among
        Delta and Operator. Baselines shall be reestablished by Delta at the end
        of each
        contract year during the Term.

      


      Realized
        savings associated with each Cost Savings Initiative or Delta Sourcing
        Initiative shall be allocated between the parties as follows:

      


      1.  With
        respect to realized savings for Reducible Costs that are Base Rate Costs,
        Delta
        will retain [***] of the net benefit and Operator will retain
        [***]  of the net benefit throughout the remaining Term of the
        Agreement.  In order to effectuate the cost savings benefit allocation
        contemplated hereby, upon implementation of any such initiative, the applicable
        Base Rate Cost(s) set forth in Exhibit B shall be adjusted and modified
        downward accordingly.  Any realized savings on Base Rate Costs not set
        forth above shall be retained solely by Operator.

      


      2.  With
        respect to realized savings for Reducible Costs that are Pass Through Costs,
        Delta will retain [***]  of the net benefit and Operator will retain
        [***]  of the net benefit throughout the remaining Term of the
        Agreement.  With regard to a Cost Savings Initiative or Delta Sourcing
        Initiative that affects Pass Through Costs, the parties agree to meet and
        confer
        prior to implementation on the appropriate methodology by which Operator
        calculates and retains its portion of realized savings.  Any realized
        savings on any Pass Through Costs not set forth above shall be retained by,
        and
        for the sole benefit of, Delta.

      


      3.  Notwithstanding
        Section 3(G)(1) above, with respect to all maintenance expenses (excluding
        line
        maintenance) initially jointly sourced by Delta and Operator, all savings
        achieved through such sourcing shall accrue to, and for the sole benefit
        of,
        Delta.  In such event, the applicable rates in Exhibit B will be
        revised to reflect the reduced maintenance rates.  Delta and Operator
        shall work together in good faith to timely source any such maintenance services
        prior to the occurrence of the first applicable maintenance event.

      


       

      Operator
        and Delta shall establish a supplier scorecard process to monitor the
        performance and the impact of the Cost Savings Initiatives and Delta Sourcing
        Initiatives.  Notwithstanding anything to the contrary in this
        Agreement, this Section 3(G) shall not require either Parent or Operator
        to
        enter into any particular agreement that would apply to operations of Parent
        or
        Operator other than Delta Connection Flights.

      


      H.  Accounting
        Provisions.  Delta shall retain all revenues (including, without
        limitation, passenger, cargo, mail, food, beverage and duty-free services
        or any
        other revenue including, without limitation, any guaranteed or incentive
        payments from airport, local or municipal authorities in connection with
        scheduling flights to such airport or locality or any federal funds payments)
        in
        connection with the operation of the Delta Connection
        Flights.  Operator shall promptly remit to Delta all monies with
        respect to all airline ticket sales, on-board sales, baggage charges, passenger
        charges, cargo sales and all other revenue collected by Operator or any agent
        or
        employee of Operator in connection with the operation of the Aircraft (including
        credit card transactions).

      


      On
        each
        of the 7th,
        14th, 21st
        and
        28th day of
        each month (or if not a business day, on the following business day) after
        operation of the initial Delta Connection Flight, Delta will advance to Operator
        twenty-five percent (25%) of the estimated monthly Direct Costs and Base
        Mark-Up
        (collectively, the “Base Compensation”).  Such payment shall be made
        via wire transfer or through the Airline Clearing House (the “Clearing House”),
        in Delta’s discretion (but in any event on the dates set forth above) or, if any
        such payment from Delta is not paid on such dates, then in Operator’s
        discretion.  In computing the amount of the advance, Delta will use
        the projected fuel costs, and the estimated number of weekly revenue block
        hours, departures and passengers.

      


      Within
        thirty (30) days following the end of each month, Delta and Operator will
        reconcile the actual Direct Costs incurred by Operator for the Base
        Compensation, the final operating results (including actual performance in
        the
        Performance Categories) of, and actual revenue block hours flown by, Operator
        with the estimated payments made pursuant to the previous paragraph. Within
        five
        (5) business days of completing such reconciliation, Delta or Operator, as
        the
        case may be, shall pay, via wire transfer or the Clearing House in Delta’s
        discretion, to an account designated by the other party, monies equal to
        the
        reconciled amount.  If certain actual costs are not known by the end
        of such 30-day period, Operator shall provide Delta with a good faith estimate
        of such unknown costs and such estimated amount shall be included in the
        initial
        30-day reconciliation.  As soon as commercially reasonable, such
        estimated amounts shall be reconciled with the actual costs for such expenses,
        and  Delta or Operator, as the case may be, shall pay, via wire
        transfer or the Clearing House in Delta’s discretion, to an account designated
        by the other party, monies equal to the reconciled amount.

      


      Notwithstanding
        anything herein to the contrary, in the event Operator is unable to operate
        any
        of the Aircraft, or any of the Delta Connection Flights, for any reason other
        than as a result of weather, fire, war, terrorism, other act of hostilities,
        an
        industry-wide ATC action, an industry-wide directive by the FAA, TSA or other
        governmental agency or act of God, Delta shall not be obligated to pay Operator
        any portion of the Base Compensation, Base Mark-up, incentive compensation,
        or
        any other amounts, in connection with such non-operated Aircraft and Delta
        Connection Flights.  If the non-operated Aircraft or Delta Connection
        Flight is caused by weather, fire, war, terrorism, other act of hostilities,
        an
        industry-wide ATC action, an industry-wide directive by the FAA, TSA or other
        governmental agency or act of God, Delta shall only be obligated to pay
        Operator’s the following fixed costs associated with the non-operated Aircraft
        or Delta Connection Flight:  Aircraft Debt Service, Hull Insurance and
        Property Taxes, but not any variable costs, Base Mark-up, incentive
        compensation, or any other amounts with respect to such non-operated Aircraft
        and Delta Connection Flights during the period that Operator is unable to
        operate such Aircraft or the Delta Connection Flights.

      


      I.  Audit
        of Costs, Operations and Service Levels.  Operator shall maintain
        complete and accurate books and records to support and document all revenues,
        costs and expenses related to the Aircraft and its Delta Connection operations
        hereunder, in accordance with generally accepted accounting principles
        consistently applied and in accordance with the accounting policies and
        procedures used by the parties to develop the Direct Costs.  Delta’s
        in-house finance staff and any independent consultants selected by Delta
        shall
        be entitled, following reasonable notice to Operator, to audit and inspect
        Operator’s books and records relevant to the services provided hereunder, the
        service levels achieved, and the determination of charges due pursuant to
        this
        Agreement for the sole purposes of (i) prospectively adjusting the Base Rate
        Amount in connection with any annual review pursuant to Section 3(G) hereof
        and/or (ii) auditing Reimbursable Costs, Pass Through Costs, Other Reimbursable
        Costs, any Mark-up or incentive compensation due or paid hereunder and the
        Margin Cap.  Any such audit will be conducted during regular business
        hours and be paid for by Delta unless such audit determines that Operator
        owes
        Delta in excess of [***], in which case Operator shall pay Delta the costs
        and
        expenses incurred by Delta in connection with such audit.

      


      J.  Right
        of Set-off.  Any party may offset against any payment to be made
        to any other party hereto (including the next scheduled payment by Delta
        to be
        made pursuant to Section 3(H) above) the amount of any payment that such
        other
        party or any of its affiliates owes to such first party or any of its affiliates
        but has not made when due (taking into account any cure period), unless such
        overdue payment is subject to a good faith dispute.

      


      ARTICLE 4.  
        TICKETING SERVICES; SIGNAGE; FACILITIES; SLOTS AND ROUTES.

      


      A.  Ticketing
        Services.  Either Delta or Operator will provide primary airport
        ticketing services in connection with the Delta Connection Flights, and,
        if
        applicable, the other party will provide supplemental ticketing services
        for the
        Delta Connection Flights at Delta's airport ticketing locations and will
        use
        Delta ticket stock for such purposes.

      


      B.  Signage.  Unless
        otherwise agreed by the parties, Delta will design, provide and pay for
        appropriate airport and other signage installed after the Effective Date
        to
        reflect the Delta Connection and the relationship between Operator and
        Delta.  The nature and type of such signage will be in the sole
        discretion of Delta, subject to any airport, governmental or quasi-governmental
        restrictions or requirements, and to any contractual or other obligations
        of
        Parent or Operator, and the location of such signage will be limited to
        passenger-related facilities from which Parent or Operator provides services
        to
        Delta hereunder.  Delta will be responsible for installing and
        maintaining all such signage, but the parties will mutually determine which
        party will obtain any necessary formal or informal approvals from appropriate
        airport or other authorities to install such signage.  The parties
        will fully cooperate with each other in all endeavors relating to such signage
        and any necessary approvals.

      


      C.  Facilities.

      


      (1)  In
        connection with the
        Delta Connection Flights, and subject to clause (2) below, Operator shall
        use
        the gates and facilities designated by Delta from time to time at the locations
        in which Operator operates such Delta Connection Flights. No other use of
        such
        gates and other facilities by Operator or parties other than Delta shall
        be
        allowed without Delta’s express written consent.

      


      (2)  Delta’s
        right to
        designate gates and other facilities to be used by Operator in connection
        with
        providing Delta Connection Flights shall include the right at each airport,
        in
        Delta’s discretion, to either: (a) provide for use of some or all of the needed
        facilities to Operator through mutually acceptable subleases, ground handling
        agreements, licenses, permits or otherwise; or (b) require Operator to directly
        obtain use of passenger-related and aircraft-related facilities used or to
        be
        used exclusively for Delta Connection Flights from the airport operator or
        other
        lessors, and shall not include the right to designate gates or other facilities
        then used by Operator for operations other than Delta Connection
        Flights.   Delta and Operator agree that Delta may relocate Operator
        to comparable facilities at the service locations, provided that Delta
        reimburses Operator for its reasonable relocation expenses.

      


      (3)  Operator
        shall use its
        reasonable commercial efforts to ensure that all leases, subleases, permits,
        licenses and other use agreements of airport terminal facilities entered
        into by
        Operator for use exclusively in connection with Delta Connection Flights
        (each,
        a “Facility Lease” and collectively, “Facilities Leases”) shall be assignable to
        Delta or Delta’s designee, at Delta’s election, without the consent of the other
        party to such Facility Lease on termination of this Agreement, the withdrawal
        of
        Delta Connection Flights from such airport or upon written notice from Delta
        to
        Operator, provided that if the consent of the facility lessor is required
        by contract or governmental regulations, Operator will use its reasonable
        commercial efforts to obtain such consent at the time the Facility Lease
        is
        entered into and to incorporate such consent in the terms of the Facility
        Lease
        or otherwise at such time as Delta may direct.  Subject only to
        Operator obtaining any necessary consent of such other party, Operator shall
        assign to Delta or Delta’s designee (i) all Facilities Leases upon termination
        of this Agreement, (ii) all Facilities Leases at a particular airport upon
        the
        withdrawal of all Delta Connection Flights from such airport, and (iii) such
        Facilities Leases as Delta shall designate at any time upon receipt of written
        notice from Delta. If Delta elects and if the other party to the Facilities
        Lease agrees, instead of an assignment, any such transfer can be accomplished
        by
        either: (x) a termination of the applicable Operator Facilities Lease and
        a
        direct lease of such premises to Delta or Delta’s designee; or (y) a release of
        premises designated by Delta from the applicable Operator Facility Lease
        and
        lease of such premises directly to Delta or Delta’s designee.

      


      (4)  Operator
        shall use its
        reasonable commercial efforts to ensure that all Facilities Leases entered
        into
        by Operator shall expressly provide that Delta or Delta’s designee, at Delta’s
        election, shall have the right to sublease any or all of the premises covered
        by
        the applicable Facilities Lease without the consent of the other party to
        such
        Facility Lease on termination of this Agreement, the withdrawal or reduction
        of
        Delta Connection Flights from such airport or upon written notice from Delta
        to
        Operator, provided that if the consent of the facility lessor is required
        by contract or governmental regulations, Operator will use its reasonable
        commercial efforts to obtain such consent at the time the Facility Lease
        is
        entered into and to incorporate such consent in the terms of the Facility
        Lease
        or otherwise at such time as Delta may direct.  Subject only to Operator
        obtaining any necessary consent of such other party, Operator shall, at Delta’s
        option, sublease the premises Delta specifies under any applicable Facilities
        Lease to Delta or Delta’s designee on termination of this Agreement, the
        withdrawal of Delta Connection Flights from such airport or upon receipt
        of
        written notice from Delta.  If Delta or Delta’s designee enters into
        such a sublease, at Delta’s option, Operator shall enter into a sub-sublease of
        all or the portion of the subleased premises that Delta designates.

      


      (5)  In
        addition to Delta’s
        other options with respect to premises occupied by Operator pursuant to any
        Facilities Lease, sublease or sub-sublease, Delta shall have the right from
        time
        to time to direct Operator to handle or allow Delta to handle other carriers
        designated by Delta at any such premises.  If Operator is the handling
        carrier, it will do so on terms consistent with the applicable Facilities
        Lease
        and handling arrangements and fees reasonably acceptable to Delta and
        Operator.

      


      (6)  Operator
        shall not
        assign, transfer, sublease, alter, amend, modify or terminate any Facilities
        Lease to which it is a party without the prior written consent of
        Delta.

      


      (7) Notwithstanding
        anything to the contrary in this Agreement, Delta may, at its option, elect
        to
        enter the Facilities Lease in lieu of Operator for any facilities to be used
        by
        Operator at any new or existing city to be served by Operator pursuant to
        this
        Agreement, and in the event Delta exercises this option (i) Delta shall enter
        into a Facilities Lease with the lessor of such facilities, (ii) Operator
        shall
        utilize such facilities pursuant to a sublease, license agreement, permit,
        facilities use agreement or ground handling agreement with Delta, (iii) at
        Delta’s option, the sublease, facilities use agreement or ground handling
        agreement shall terminate when Operator ceases to operate Delta Connection
        Flights at the airport, and (iv) Delta shall enter into agreements for
        facilities which are reasonably suitable for Operator’s operational needs. If
        for any reason Delta fails to provide such facilities, such failure shall
        not be
        a breach hereof and Operator shall be obligated to secure such facilities
        within
        a reasonable period of time.

      


      (8)  At
        any location in
        which Operator is the signatory carrier of the applicable Facility Lease,
        Operator shall vote as directed by Delta on any matters submitted to the
        signatory carriers for a vote.

      


      (9)  Operator
        shall comply
        with all requirements of such Facilities Leases, subleases and sub-subleases
        described in this Section 4(C) and an event of default by Operator under
        any
        such agreements for a material Facilities Lease shall be a breach of this
        Agreement.  If Operator receives any notice of default or breach with
        respect to any Facilities Lease, Operator shall promptly provide a copy to
        Delta, consult with Delta on handling and advise Delta on Operator’s plans for
        resolving the matter.

      


      D.  Slots
        and Route Authorities.  During the Term of this Agreement
        (including any renewal terms) or upon the expiration or termination of this
        Agreement, Delta may, in its sole discretion, require Operator to transfer
        to
        Delta or its designee at no charge any airport takeoff or landing slots,
        route
        authorities or other regulatory authorities as Delta shall designate which
        were
        obtained and have been or are being used for Delta Connection Flights under
        this
        Agreement, provided that Operator shall not be required to acquire any airport
        takeoff or landing slot, route authority or other regulatory authority without
        the acquisition cost paid by Operator, if any, being treated as a Pass Through
        Costs under this Agreement.

      


      ARTICLE 5.  CUSTOMER SERVICES.

      


      A.  Operator
        will handle all customer related services in connection with the Delta
        Connection Flights in a professional, businesslike and courteous
        manner.  In order to ensure a high level of customer satisfaction for
        the Delta Connection Flights, Operator will (i) establish and maintain customer
        handling procedures and policies for the Delta Connection Flights that are
        substantially similar to those utilized by Delta (“Customer Service Policies”)
        and (ii) establish, maintain and enforce employee conduct, appearance and
        training standards and policies for the Delta Connection Flights that are
        substantially similar to those used by Delta.  All uniforms worn by
        Operator employees on the Delta Connection Flights and by any Operator employees
        providing support services in connection with such flights shall be subject
        to
        the prior approval of Delta and shall at all times be consistent with Delta’s
        existing uniform standards.

      


      B.  Operator
        and Delta will periodically meet to discuss and review Operator's customer
        handling procedures and policies for the Delta Connection Flights to ensure
        compliance with this Article 5.  Each party will seek to set forth
        concerns and complaints under this Article 5 in writing to the other
        party.  To the extent Delta advises Operator of any deviation from
        Article 5(A) hereof, the parties shall meet to mutually determine appropriate
        solutions and to agree to the terms of a corrective action plan and the timing
        of its implementation.  In the event Operator shall fail, in any
        material respect, to adopt or implement any such agreed corrective action
        plan
        in the time period described therein, any such failure may be deemed a material
        breach of this Agreement.

      


      C.  Operator
        shall adopt as its own, for the Delta Connection Flights, Delta’s Terms and
        Conditions of Contract of Carriage (“Contract of Carriage”), baggage liability
        policies and denied boarding compensation policies, each as amended from
        time to
        time, and be bound by their respective terms with respect to its operation
        of
        Delta Connection Flights.

      


      ARTICLE 6.                          [RESERVED].

      


      ARTICLE
        7.  FREQUENT FLYER PARTICIPATION.  During the Term of
        this Agreement, the parties agree that passengers on Operator’s Delta Connection
        Flights will be eligible to participate in the Delta SkyMiles frequent flyer
        program, as may be amended from time to time, or any other similar program
        developed by Delta (the “Program”) and all Program award tickets will be honored
        for travel on Delta Connection Flights on the following terms and
        conditions:

      


      A.  Administration.  Administration
        of the Program shall be performed by and at the cost of Delta.  Delta
        will promote and administer the Program.

      


      B.  Program
        Information.  Title and full and complete ownership rights to
        Program membership data and information developed by Delta, wherever located,
        shall remain with Delta or an affiliate of Delta.  Operator
        understands and agrees that such data and information constitutes Delta’s (or
        its affiliates’) proprietary information.  Any membership lists,
        labels, data, or other compiled membership information supplied to Operator
        in
        any form and any and all copies thereof are to be used by Operator exclusively
        in the performance of its obligations under this Agreement and will not be
        otherwise used, sold, licensed, leased, transferred, stored, duplicated or
        transmitted, in any form or by any means, without Delta’s prior written
        consent.  All such information will either be returned to Delta or
        destroyed at Delta’s request.

      


      C.  Accrual
        and Redemption.  Passengers on the Delta Connection Flights shall
        be eligible to accrue and redeem Program mileage on such
        flights.  Passengers traveling pursuant to award travel under the
        Program shall be considered passengers for all purposes under this
        Agreement.

      


      ARTICLE
        8.  SUPPORT SERVICES.  Notwithstanding anything to the
        contrary in this Agreement, from time to time during the Term, Delta may,
        at is
        sole discretion, require Operator to utilize Delta, an affiliate of Delta
        or a
        another third party designated by Delta for certain services or products
        including, without limitation, catering and on-board provisioning; aircraft
        and
        engine maintenance and ground handling (collectively, “Support Services”),
        provided such services and products are not more costly to Operator than
        the
        alternative services or products they are replacing or would replace and
        do not
        materially interfere with the operational or maintenance standards or
        performance requirements of Operator, each as necessary to perform the services
        contemplated by this Agreement. or adversely affect other contractual or
        legal
        obligations of Parent or Operator in effect at such time.

      


      ARTICLE
        9.  AUTOMATION SERVICES.   Delta may provide
        Operator the following automation and related services for the Delta Connection
        Flights, and if provided by Delta, Operator agrees to participate in such
        services in the manner and subject to the conditions described
        below.

      


      A.  Internal
        Reservations Equipment.  Delta shall provide or arrange for the
        provision to Operator of an electronic reservations system (currently referred
        to as “Deltamatic” but including any successor reservations system adopted by
        Delta) and shall provide Operator with: (i) the ability to access passenger
        name
        records, (ii) automated ticketing capabilities, (iii) operational messaging
        switching capabilities, (iv) the ability to update Delta Connection Flight
        information, (v) the ability to distribute flight releases and weather packages,
        and (vi) perform other reservations-related functions for the Delta Connection
        Flights (Deltamatic and any successor system are hereinafter referred to
        as the
“Res System”).  Delta reserves the right to modify the functionality
        of the Res System at any time.  Operator will use the Res System made
        available by Delta for the Delta Connection Flights only.

      


      B.  Delta’s
        Rights and Obligations.

      


      1.  Delta
        will install or
        cause to be installed the equipment requested by Operator at the locations
        set
        forth on Exhibit C to this Agreement and shall provide Operator
        connection to the Res System.  The equipment described on Exhibit
        C and any software installed on the Equipment at the time of its delivery
        to
        Operator is hereinafter referred to as the “Equipment.”  Operator
        understands and agrees that: (i) all Equipment shall remain the sole property
        of
        Delta; (ii) Operator shall not remove any identifying marks from the Equipment;
        (iii) Operator shall not subject the Equipment to any lien (other than lessor’s
        liens or other liens generally applicable to equipment installed at such
        locations); and (iv) Delta may enter Operator’s premises to remove the Equipment
        immediately upon termination of this Agreement.  Exhibit C may
        be amended from time to time by mutual agreement of the parties to reflect
        the
        installation, removal or relocation of Equipment.

      


      2.  Delta
        will provide
        initial and recurrent training to Operator training staff and other key
        designated personnel in the use of the Res System, at Delta’s training centers
        unless otherwise agreed.  Delta may remove from a training program any
        Operator employee who is not satisfactorily participating therein.

      


      3.  Delta
        will promptly
        provide, or arrange to provide, all repairs and maintenance services required
        for the Equipment and will use reasonable business efforts to keep the Equipment
        and the Res System in good repair and condition.  Operator will not
        perform or attempt to perform repairs or maintenance of any kind on the
        Equipment without prior consultation with Delta and will promptly contact
        Delta
        regarding the need for repairs or maintenance.

      


      C.  Operator’s
        Rights and Obligations.

      


      1.  Operator
        will not for any
        reason relocate or remove any of the Equipment without Delta’s prior written
        consent.  Delta will pay all costs associated with the installation,
        relocation, purchase, regular maintenance, repair (other than for loss or
        damage
        for which is Operator is responsible) or removal of Equipment.

      


      2.  Operator
        will use the
        Equipment and the Res System in strict conformity with the training and
        operating instructions provided by, or arranged to be provided by,
        Delta.  Without limiting the generality of the foregoing, unless
        authorized by Delta, Operator will not use the Res System to develop or publish
        any reservation, ticketing, sales, cargo, tariff or other guide, to provide
        services not authorized by this Agreement to third parties, to train persons
        other than Operator’s employees in the use of the Equipment or the Res System,
        or for other uses designated by Delta in writing as
        prohibited.  Operator may not publish, disclose or otherwise make
        available to any third party the compilations of air carrier service or fares
        obtained from the Res System; provided, however, that Operator may use
        specific air carrier service and fare data for the benefit of its
        customers.

      


      3.  Operator
        will encourage
        and allow its employees using the Res System to attend training sessions
        related
        to the Res System, and it is Operator’s responsibility to ensure that each
        employee using the Res System receives full and adequate training on the
        Res
        System.

      


      4.  Operator
        will use its
        reasonable commercial efforts to protect the Equipment from loss, damage
        or
        theft and to prevent its unauthorized use or improper
        operation.  Operator will make no alterations to the Equipment and
        will return the Equipment to Delta upon the termination of this Agreement
        in the
        same condition as received, excepting only ordinary wear and tear in the
        normal
        course of Operator’s operations.  Operator will obtain and maintain
        insurance for the Equipment against all risks of damage and loss, including
        without limitation loss by fire, theft and such other risks of loss as are
        customarily insured in a standard all-risk policy.  Such insurance
        shall also provide the following:

      


      (a)  Full
        replacement value
        coverage for the Equipment (subject to policy deductibles);

      


      (b)  An
        endorsement naming
        Delta as the loss payee to the extent of its interest in the Equipment;
        and

      


      (c)  An
        endorsement requiring
        the insurer to give Delta at least thirty (30) days prior written notice
        of any
        intended cancellation, nonrenewal or material change of coverage;
provided that only ten (10) days prior written notice of cancellation,
        nonrenewal or material change of coverage need be given in the event that
        such
        cancellation, nonrenewal or material change in coverage is caused solely
        by
        failure to make a premium payment.

      


      Upon
        request by Delta, Operator will promptly provide satisfactory evidence of
        the
        insurance required pursuant to this Section 9(C)(4).  Notwithstanding
        the foregoing, Operator shall be liable to Delta for any loss or damage to
        the
        Equipment, regardless of cause, occurring while the Equipment is in the
        possession, custody or control of Operator.

      


      5.  Operator
        waives any
        proprietary rights that it may have with respect to information entered into
        the
        Res System.

      


      D.  Entry
        and Inspection.  Persons designated or authorized by Delta may
        enter Operator’s premises during normal business hours for the purposes of (a)
        monitoring, inspecting, and reviewing Operator’s use of and operations with
        respect to the Res System, (b) performing repairs or maintenance on the
        Equipment, (c) installing, removing, replacing or relocating the Equipment
        (unless otherwise permitted by this Agreement), or (d) training or retraining
        Operator’s employees in the use of the Res System; provided that such
        activities may not unreasonably interfere with Operator’s business.

      


      E.  Limitations
        on Liability.  In addition to any other limitations on liability
        set forth herein:

      


      1.  Neither
        Parent, Operator
        nor Delta is responsible for errors or inaccuracies in the availability records,
        fare quotes, or other information contained in the Res System at any time,
        for
        any planned or unplanned interruptions, delays or malfunctions in the operation
        of the Res System or the Equipment or for the merchantability or fitness
        for a
        particular purpose of any of the data or Equipment made available to
        Operator.

      


      2.  EXCEPT
        AS SET FORTH IN
        PARAGRAPH F BELOW, EACH OF PARENT, OPERATOR AND DELTA HEREBY WAIVES AND RELEASES
        THE OTHER PARTIES AND THEIR AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
        EMPLOYEES AND AGENTS FROM ANY AND ALL OBLIGATIONS AND LIABILITIES AND ALL
        OF
        THEIR RIGHTS, CLAIMS AND REMEDIES AGAINST THE OTHER PARTIES OR THEIR AFFILIATES
        OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, EXPRESS
        OR
        IMPLIED, ARISING BY LAW OR OTHERWISE, DUE TO ANY DEFECTS OR INTERRUPTIONS
        OF
        SERVICE IN, OR ERRORS OR MALFUNCTIONS BY, SOFTWARE, THE EQUIPMENT, THE RES
        SYSTEM OR ITS USERS, INCLUDING ALL LIABILITY, OBLIGATION, RIGHT, CLAIM, OR
        REMEDY IN TORT, AND INCLUDING ALL LIABILITY, OBLIGATION, RIGHT, CLAIM OR
        REMEDY
        FOR LOSS OF REVENUE OR PROFIT OR ANY OTHER DIRECT, INDIRECT, INCIDENTAL,
        SPECIAL
        OR CONSEQUENTIAL DAMAGES.  FURTHER, DELTA DISCLAIMS AND EACH OF
        PARENT AND OPERATOR HEREBY WAIVES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
        BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR INTENDED
        USE
        RELATING TO THE RES SYSTEM, THE EQUIPMENT, DATA, OR SERVICES FURNISHED
        HEREUNDER.

      


      F.  Patent
        and Copyright Indemnity.  Delta will indemnify each of Parent and
        Operator, its Affiliates and their respective directors, officers, employees
        or
        agents, against, and will defend or settle, at its own expense, any action
        brought against Parent, Operator or their Affiliates or any of their respective
        directors, officers, employees or agents, to the extent that it is based
        on, a
        claim that the Res System provided by Delta pursuant to this Agreement, in
        its
        normal use, or any part thereof, infringes any U.S. copyright or patent;
        and
        Delta will pay those costs, damages and attorney's fees finally awarded against
        Parent, Operator or their Affiliates or any of their respective directors,
        officers, employees or agents in any such action attributable to any such
        claim,
        but such defense, settlements and payments are conditioned on the
        following:  (1) the provisions of Section 12(C) below, including those
        relating to notice and control of defense, shall apply; (2) that Parent and
        Operator shall cooperate with Delta in a reasonable way to facilitate the
        settlement or defense of such claim, provided that Delta shall pay all of
        Parent’s and Operator’s reasonable expenses in connection with any such
        cooperation requested by Delta; and (3) should such Res System become, or
        in
        Delta’s opinion be likely to become, the subject of such claim of infringement,
        then Operator shall permit Delta, at Delta’s option and expense, either to (a)
        procure for Operator the right to continue using the Res System, or (b) replace
        or modify the same so that it becomes noninfringing and functionally equivalent,
        or (c) upon failure of (a) and (b) above despite the reasonable efforts of
        Delta, accept immediate termination of this Agreement as it relates to such
        system.  This paragraph (F) states the entire liability of Delta with
        respect to the infringement of copyrights and patents by the Res System provided
        hereunder or the operation thereof.

      


      ARTICLE
        10.  OPERATIONAL PERFORMANCE REQUIREMENTS.

      


      A.  Operator
        agrees to provide the following information to Delta for each day during
        the
        Term of this Agreement on the next business day after the applicable day;
        provided, however, the information in sub-paragraph (iv) shall be
        provided by Delta to Operator on a monthly basis within ten (10) days after
        the
        last day of each such month:

      


      (i)  The
        number of
        mishandled bags per 1,000 passengers (including, without limitation,
        international and non-revenue passengers) flown on Delta Connection Flights
        during such day based on the information available in the World Tracer System
        (or similar or successor system used by Operator).

      


      (ii)  The
        completion rate (actual) of the Delta Connection Flights during such day.
        Unless
        revised in accordance with Section 10(C) below, Operator shall maintain a
        completion rate as set forth on Schedule 10 attached hereto and made a
        part hereof.  For purposes of this Agreement, Delta Connection Flights
        operated with no revenue passengers or completed over four (4) hours late
        shall
        be considered as cancelled.

      


      (iii)  The
        number of
        scheduled Delta Connection Flights that do not arrive at their scheduled
        destination prior to 15 minutes after their respective scheduled arrival
        times
        during such day. Unless revised in accordance with Section 10(C) below, Operator
        shall maintain a percentage of on-time arrivals as set forth on Schedule
        10 attached hereto and made a part hereof.

      


      (iv)  Operator’s
        overall
        customer satisfaction rating as complied and reported by the Customer
        Satisfaction Monitor, or any successor thereto or replacement
        thereof.  Unless revised in accordance with Section 10(C) below,
        Operator shall maintain a customer satisfaction rating as set forth on
Schedule 10 attached hereto and made a part hereof.

      


      B.  Each
        of the requirements set forth on Schedule 10 shall be defined as the
“Operational Performance Standards.”  If Delta is concerned about
        Operator’s performance in connection with any of the Operational Performance
        Standards set forth on Schedule 10, Operator agrees to discuss with Delta
        such performance and potential ways to improve such performance at Delta’s
        request.  The parties shall have ten (10) days to determine
        appropriate solutions and/or a corrective action plan, and Operator agrees
        to
        diligently comply with the terms and conditions of any such solutions and
        corrective action plans that are mutually agreed by the parties.

      


      C.  The
        parties recognize and agree that the Operational Performance Standards set
        forth
        on Schedule 10 may be modified or adjusted by mutual agreement of the
        parties hereto from time to time during the Term of this Agreement.

      


      D.
        Delta
        shall provide to Operator information and other data in its possession relating
        to the (i) number of mishandled bags, (ii) denied boarding, (iii) disability
        complaints and (iv) DOT complaints for the Delta Connection Flights operated
        by
        Operator submitted to, or retained pursuant to regulations promulgated by,
        the
        U.S. Department of Transportation.

      


      ARTICLE 11.  TERM AND TERMINATION.

      


      A.           This
        Agreement shall commence as of the Agreement Date and shall terminate upon
        the
        last of the dates described in the following sentence, unless the Agreement
        is
        terminated earlier in accordance with its terms (such period, and any extension
        or renewal thereof, the “Term”).  As to any particular Aircraft,
        unless this Agreement is terminated earlier in accordance with its terms,
        this
        Agreement shall terminate (x) with respect to each Aircraft described in
        clauses
        (i) and (ii) of Article 1 Section A, upon the tenth (10th) anniversary
        of
        the initial in-service date of such Aircraft, and (y) with respect to any
        Aircraft described in clause (iii) of Article 1 Section A, upon such date
        as
        shall be mutually agreed by Delta and Operator.  Notwithstanding the
        above, at any time on or after the [***] anniversary of the Agreement Date,
        either party shall have the right to remove up to [***] of the Aircraft capacity
        from the scope of the Agreement each year during the Term
        thereafter.

      


      B.  Notwithstanding
        the provisions of Section 11(A), either party may terminate this Agreement
        immediately if the other party files a voluntary petition in bankruptcy,
        makes
        an assignment for the benefit of creditors, fails to secure dismissal of
        any
        involuntary petition in bankruptcy within sixty (60) days after the filing
        thereof, or petitions for reorganization, liquidation, or dissolution under
        any
        federal or state bankruptcy or similar law.

      


      C.  Notwithstanding
        the provisions of Section 11(A), in the event of a material breach of this
        Agreement by either party remaining uncured for more than thirty (30) days
        after
        receipt of written notification of such breach by the nonbreaching party,
        then
        the nonbreaching party may immediately terminate this Agreement at its sole
        option.

      


      D.  Notwithstanding
        the provisions of Section 11(A), in the event a “Force Majeure Event” (as
        defined in Article 19) substantially prevents one party’s performance of its
        obligations pursuant to this Agreement, for a period of ten (10) or more
        consecutive days, Delta may (i) temporarily suspend some or all of the Aircraft
        from the scope of this Agreement upon written notice to the Operator, or
        (ii)
        terminate this Agreement in its entirety upon thirty (30) days prior written
        notice to Operator.

      


      E.  Notwithstanding
        the provisions of Sections 11(A), (B), (C) and (D), Delta shall have the
        right
        to terminate this Agreement immediately and at its sole option upon the
        occurrence of one or more of the following:

      


      (i)  Operator
        or Parent agrees to merge into or with any entity, agrees to be acquired
        by any
        entity, agrees to sell substantially all of its assets or enters into a letter
        of intent, or similar document, to merge into or with any entity, to be acquired
        by any entity, or to sell substantially all of its assets (each such event,
        a
“Merger”);

      


      (ii)  The
        acquisition, after the Agreement Date, by any individual, entity or group
        (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
        Act of 1934 (as amended, the “Exchange Act”)) (a “Person”) of beneficial
        ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
        Act)
        of more than forty-nine percent (49%) of either (a) the then outstanding
        shares
        of common stock of Operator or Parent, or (b) the combined voting power of
        the
        then outstanding voting securities of Operator or Parent entitled to vote
        generally in the election of such entity’s directors or managers, as applicable
        (each such event, a “Change of Control”);

      


      (iii)  Operator’s
        level of safety with respect to its operation of the Aircraft or the Delta
        Connection Flights is not reasonably satisfactory to Delta;

      


      (iv)  a
        breach by Operator of Section 17(G) hereof;

      


      (v)  Operator’s
        failure to pass, in Delta’s reasonable discretion, a safety and codeshare audit
        to be conducted by Delta, at its sole discretion, at any time during the
        Term of
        this Agreement;

      


      (vi)  Operator
        fails to achieve any of the Operational Performance Standards set forth on
        Schedule 10 with respect to the Delta Connection Flights during any (y)
        two (2) consecutive months or (z) three (3) months during any consecutive
        six
        (6) month period;

      


      (vii)  a
        material breach by Operator or Parent of any representation or warranty in
        Section 16(A)(5);

      


      (viii)  Operator’s
        failure to comply with the insurance provisions of Articles 13 and 14
        hereof;

      


      (ix)  Operator’s
        FAA or DOT Certification is for any reason suspended or revoked or otherwise
        not
        in full force and effect so as to permit Operator to operate the Delta
        Connection Flights required under this Agreement;

      


      (x)  Operator
        shall commence operating an aircraft type which causes Delta to be in violation
        of its collective bargaining agreement with its pilots, as may be amended
        from
        time to time; and

      


      (xi)    any
        breach by Operator or Parent of that certain Assignment and Assumption Agreement
        of even date herewith by and among Operator, Parent, Delta and Bombardier
        Inc.
        (the “Assignment and Assumption Agreement”) including without limitation any
        failure to make any PDP Payments (as defined therein) due under the Pinnacle
        Purchase Agreement (as defined therein) on a timely basis or any failure
        to
        accept delivery of any aircraft tendered for delivery under the Pinnacle
        Purchase Agreement in compliance with the terms thereof.

      


      F.  Termination
        of this Agreement for any reason shall not relieve either party of rights
        and
        obligations incurred prior to the effective date of termination.  A
        party’s right to terminate this Agreement shall be in addition to any other
        rights or remedies, in law or equity, available to such party.

      


      ARTICLE 12.  INDEPENDENT
        CONTRACTORS; LIABILITY PROVISIONS.

      


      A.  Operator
        shall act as an independent contractor.  The employees, agents and/or
        independent contractors of Operator engaged in performing any of the services
        Operator is obligated to perform pursuant to this Agreement shall be employees,
        agents and independent contractors of Operator for all purposes and under
        no
        circumstances shall employees, agents or independent contractors of Operator
        be
        deemed to be employees, agents or independent contractors of Delta.  In its
        performance of obligations under this Agreement, Operator shall act, for
        all
        purposes, as an independent contractor and not as an agent for Delta. 
Delta shall have no supervisory power or control over any employees, agents
        or
        independent contractors engaged by Operator in connection with Operator’s
        performance of its obligations hereunder, and all complaints or requested
        changes in procedure shall, in all events, be transmitted by Delta to a
        designated representative of Operator.  Nothing contained in this Agreement
        is intended to limit or condition Operator’s control over its operation or the
        conduct of its business as an air carrier, and Operator assumes all risks
        of
        financial losses which may result from the operation of the air services
        to be
        provided by Operator hereunder.

      


      B.  Delta
        shall act as an independent contractor. The employees, agents and/or independent
        contractors of Delta engaged in performing any of the services Delta is to
        perform pursuant to this Agreement shall be employees, agents and independent
        contractors of Delta for all purposes and under no circumstances shall
        employees, agents and independent contractors of Delta be deemed to be
        employees, agents or independent contractors of Operator.  In performing
        its obligations under this Agreement, Delta shall act, for all purposes,
        as an
        independent contractor and not as an agent for Operator.  Operator shall
        have no supervisory power or control over any employees, agents or independent
        contractors engaged by Delta in connection with the performance of its
        obligations hereunder, and all complaints or requested changes in procedure
        shall, in all events, be transmitted by Operator to a designated representative
        of Delta.  Nothing contained in this Agreement is intended to limit or
        condition Delta’s control over its operation or the conduct of its business as
        an air carrier.

      


      C.  Parent
        and Operator, jointly and severally, shall be liable for and hereby agrees
        fully
        to defend, release, discharge, indemnify, and hold harmless Delta and its
        affiliates, and each of their respective directors, officers, employees and
        agents (each, a “Delta Indemnitee”) from and against any and all claims,
        demands, damages, liabilities, suits, judgments, actions, causes of action,
        losses, costs and expenses of any kind, character or nature whatsoever (in
        each
        case whether groundless or otherwise), including reasonable attorneys' fees,
        costs and expenses in connection therewith and expenses of investigation
        and
        litigation thereof, which may be suffered by, accrued against, charged to,
        or
        recoverable from any Delta Indemnitee in any manner arising out of, connected
        with, or attributable to this Agreement, the performance, improper performance,
        or nonperformance of any and all obligations to be undertaken by Operator
        pursuant to this Agreement, or the operation, non-operation, or improper
        operation of Operator's aircraft, equipment or facilities at any location,
        excluding only claims, demands, damages, liabilities, suits, judgments, actions,
        causes of action, losses, costs and expenses resulting from the gross negligence
        or willful misconduct of any Delta Indemnitee.  Operator will do all
        things necessary to cause and assure, and will cause and assure, that Operator
        will at all times be and remain in custody and control of all aircraft,
        equipment, and facilities of Operator, and no Delta Indemnitee shall, for
        any
        reason, be deemed to be in custody or control, or a bailee, of Operator's
        aircraft, equipment or facilities.

      


      D.  Delta
        shall be liable for and hereby agrees fully to defend, release, discharge,
        indemnify, and hold harmless Operator, and each of its directors, officers,
        employees, and agents (each, an “Operator Indemnitee”) from and against any and
        all claims, demands, damages, liabilities, suits, judgments, actions, causes
        of
        action, losses, costs and expenses of any kind, character or nature whatsoever
        (in each case whether groundless or otherwise), including reasonable attorneys'
        fees, costs and expenses in connection therewith and expenses
        of  investigation and litigation thereof, which may be suffered by,
        accrued against, charged to, or recoverable from any Operator Indemnitee
        in any
        manner arising out of, connected with, or attributable to Delta’s performance,
        improper performance or nonperformance of any and all obligations to be
        undertaken by Delta pursuant to this Agreement,  or the operation,
        non-operation or improper operation of Delta's aircraft, equipment or facilities
        at any location, excluding only claims, demands, damages, liabilities, suits,
        judgments, actions, causes of action, losses, costs and expenses resulting
        from
        the gross negligence or willful misconduct of any Operator
        Indemnitee.   Delta will do all things necessary to cause and
        assure, and will cause and assure, that Delta will at all times be and remain
        in
        custody and control of any aircraft, equipment and facilities of Delta used
        in
        connection with performance of this Agreement, and no Operator Indemnitee
        shall,
        for any reason, be deemed to be in the custody or control, or a bailee, of
        such
        Delta aircraft, equipment or facilities.

      


      E.  Operator
        and Delta agree to comply with all lawful rules, regulations, directives
        and
        similar instructions of appropriate governmental, judicial and administrative
        entities including, but not limited to, airport authorities, the Federal
        Aviation Administration and the Department of Transportation (and any successor
        agencies) with respect to operations covered by this Agreement.

      


      F.  OTHER
        THAN ANY WARRANTIES SPECIFICALLY CONTAINED IN THIS AGREEMENT, EACH PARTY
        DISCLAIMS AND THE OTHER PARTY HEREBY WAIVES ANY WARRANTIES, EXPRESS OR IMPLIED,
        ORAL OR WRITTEN, WITH RESPECT TO THIS AGREEMENT OR ITS PERFORMANCE OF ITS
        OBLIGATIONS HEREUNDER INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
        MERCHANTABILITY OR FITNESS FOR INTENDED USE RELATING TO ANY EQUIPMENT, DATA,
        INFORMATION OR SERVICES FURNISHED HEREUNDER.  EACH PARTY AGREES THAT
        THE OTHER PARTY IS NOT LIABLE TO IT OR ANY OTHER PERSONS FOR CONSEQUENTIAL
        OR
        PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES.

      


      G.  Indemnification
        Claims.  A party (the “Indemnified Party”) entitled to
        indemnification from the other party under the terms of this Agreement (the
        “Indemnifying Party”) shall provide the Indemnifying Party with prompt written
        notice (an “Indemnity Notice”) of any third party claim which the Indemnified
        Party believes gives rise to a claim for indemnity against the Indemnifying
        Party hereunder, and the Indemnifying Party shall be entitled, if it accepts
        financial responsibility for the third party claim, to control the defense
        of or
        to settle any such third party claim at its own expense and by its own counsel;
        provided that the Indemnified Party’s prior written consent (which may
        not be unreasonably withheld or delayed) must be obtained prior to settling
        any
        such third party claim.  If the Indemnifying Party does not accept
        financial responsibility for the third party claim or fails to defend against
        the third party claim that is the subject of an Indemnity Notice within thirty
        (30) days of receiving such notice (or sooner if the nature of the third
        party
        claim so requires), or otherwise contests its obligation to indemnify the
        Indemnified Party in connection therewith, the Indemnified Party may, upon
        providing written notice to the Indemnifying Party, pay, compromise or defend
        such third party claim.  The Indemnified Party shall provide the
        Indemnifying Party with such information as the Indemnifying Party shall
        reasonably request to defend any such third party claim and shall otherwise
        cooperate with the Indemnifying Party in the defense of any such third party
        claim.  Except as set forth above in this Section 12(G), the
        Indemnified Party shall not enter into any settlement or other compromise
        or
        consent to a judgment with respect to a third party claim as to which the
        Indemnifying Party has an indemnity obligation hereunder without the prior
        written consent of the Indemnifying Party (which may not be unreasonably
        withheld or delayed), and the entering into any settlement or compromise
        or the
        consent to any judgment in violation of the foregoing shall constitute a
        waiver
        by the Indemnified Party of its right to indemnity hereunder to the extent
        the
        Indemnifying Party was prejudiced thereby.  Any Indemnifying Party
        shall be subrogated to the rights of the Indemnified Party to the extent
        that
        the Indemnifying Party pays for any Loss suffered by the Indemnified Party
        hereunder.  Notwithstanding anything contained in this Section 12(G)
        to the contrary, Parent, Operator and Delta will cooperate in the defense
        of any
        claim imposed jointly against them or as the result of the conduct of the
        other.

      


      ARTICLE 13.  WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY

      INSURANCE PROVISIONS.

      


      A.  For
        purposes of workers’ compensation insurance, Delta's employees, agents and
        independent contractors under no circumstances shall be deemed to be, or
        shall
        be, employees, agents or independent contractors of Operator.

      


      B.  For
        purposes of workers’ compensation insurance, Operator's employees, agents and
        independent contractors under no circumstances shall be deemed to be, or
        shall
        be, the employees, agents or independent contractors of Delta.

      


      C.  Each
        party assumes full responsibility for, and liability to, its own employees
        on
        account of injury, or death resulting therefrom, sustained in the course
        of
        their employment.  Each party, with respect to its own employees,
        accepts full and exclusive liability for the payment of applicable workers'
        compensation and employers' liability insurance premiums with respect to
        such
        employees, and for the payment of all taxes, contributions or other payments
        for
        unemployment compensation and old age benefits, and other similar benefits
        now
        or hereafter imposed upon employers by any government or agency thereof having
        jurisdiction in respect of such employee.  Each party also agrees to
        make such payments and to make and file all reports and returns and to do
        all
        things necessary to comply with all applicable laws at any time imposing
        such
        taxes, contributions, or payments.

      


      D.  Each
        party will have their workers’ compensation insurance carrier endorse its policy
        to provide a waiver of subrogation against the other party.

      


      ARTICLE 14.  INSURANCE PROVISIONS.

      


      A.  Operator
        shall procure and maintain in full force and effect during the term of this
        Agreement policies of insurance of the types and in the minimum amounts set
        forth below, with such insurers and under such terms and conditions as are
        satisfactory to Delta (subject to Section 14(H) below):

      


      
        	
                 

              	
                1.

              	
                All
                  risk hull insurance and hull war risk insurance on an agreed value
                  basis,
                  not to exceed replacement value, except as required by financing
                  agreements.

              


      

      


      
        	
                 

              	
                2.

              	
                Comprehensive
                  aviation liability (including premises, products and completed
                  operations)
                  covering bodily injury, personal injury and property damage in
                  an amount
                  not less than [***] per occurrence; provided, however, that
                  non-passenger personal injury coverage may be limited to [***]
                  per
                  occurrence.

              


      

      


      
        	
                 

              	
                3.

              	
                Workers'
                  compensation for statutory limits.

              


      

      


      
        	
                 

              	
                4.

              	
                Employer's
                  liability in an amount not less than
                  [***].

              


      

      


      
        	
                 

              	
                5.

              	
                Baggage
                  liability.

              


      

      


      
        	
                 

              	
                6.

              	
                Cargo
                  liability in an amount not less than [***] per loss, casualty or
                  disaster.

              


      

      


      
        	
                 

              	
                7.

              	
                Automobile
                  liability in an amount not less than [***] combined single limit
                  per
                  occurrence.

              


      

      


      
        	
                 

              	
                8.

              	
                War,
                  Hijacking and Other Allied Perils insurance protecting against
                  the perils
                  in AVN52D, as amended from time to time, or its U.S. equivalent
                  in an
                  amount not less than [***] per occurrence.  Such insurance may
                  be maintained through a combination of primary and excess
                  layers.

              


      

      


      9.      Insurance
        required by any Facilities Lease.

      


      B.  Operator
        shall cause the policies of insurance described in Article 14(A) above to
        be
        duly and properly endorsed by Operator's insurance underwriters as
        follows:

      


      
        	
                 

              	
                1.

              	
                As
                  to the policies of insurance described in Articles 14(A)(1), (A)(2),
                  (A)(3), (A)(4), (A)(5), (A)(6), (A)(7) and (A)(8):  (a) to
                  provide that any waiver of rights of subrogation against other
                  parties by
                  Operator will not affect the policy requirements provided in Section
                  14(A)
                  above with respect to Delta, its affiliates, and their directors,
                  officers, employees and agents; and (b) to provide that Operator's
                  underwriters shall waive all subrogation rights arising out of
                  this
                  Agreement against Delta, its affiliates, and their directors, officers,
                  employees and agents without regard to any breach of warranty on
                  the part
                  of Operator.

              


      

      


      
        	
                 

              	
                2.

              	
                As
                  to the policies of insurance described in Articles 14(A)(2), (A)(5),
                  (A)(6), (A)(7) and (A)(8):  (a) to provide that Delta, its
                  affiliates, and their directors, officers, employees and agents
                  shall be
                  named as additional insured parties thereunder; and (b) to provide
                  that
                  such insurance shall be primary insurance as respects any insurance
                  carried by Delta.

              


      

      


      
        	
                 

              	
                3.

              	
                As
                  to the policies of insurance described in Articles 14(A)(2), (A)(7)
                  and
                  (A)8):  (a) to provide a cross-liability clause for Delta and
                  Operator and their respective affiliates, and their directors,
                  officers,
                  employees and agents; and (b) to provide contractual liability
                  insurance
                  coverage for liability assumed by Operator under this
                  Agreement.

              


      

      


      
        	
                 

              	
                4.

              	
                As
                  to any insurance obtained from foreign underwriters, to provide
                  that Delta
                  may maintain against such underwriters a direct action in the United
                  States upon such insurance policies and, to this end, to include
                  a
                  standard service of process clause designating a United States
                  attorney in
                  Washington, D.C. or New York, New
                  York.

              


      

      


      C.  Operator
        shall cause each of the insurance policies to be duly and properly endorsed
        to
        provide that such policy or policies or any part or parts thereof shall not
        be
        canceled, terminated or materially altered, changed or amended by Operator's
        insurance underwriters until after thirty (30) days' written notice to Delta,
        which thirty (30) days' notice shall commence to run from the date such notice
        is actually received by Delta.

      


      D.  Not
        later than the Effective Date, and upon renewal thereafter or upon request
        by
        Delta, Operator shall furnish Delta evidence satisfactory to Delta of the
        aforesaid insurance coverages and endorsements, including certificates
        certifying that the aforesaid insurance policy or policies with the aforesaid
        limits are duly and properly endorsed as aforesaid and are in full force
        and
        effect.

      


      E.  Operator
        shall not take any action, or fail to take any action, that will cause the
        insurance and endorsements required to be maintained by Operator pursuant
        to
        this Agreement to be invalidated.  In the event Operator fails to
        maintain in full force and effect any of the insurance and endorsements required
        to be maintained by Operator pursuant to Article 14(A), Delta shall have
        the
        right (but not the obligation) to procure and maintain such insurance or
        any
        part thereof on behalf of Operator.  The cost of such insurance shall
        be payable by Operator to Delta upon demand by Delta.  The procurement
        of such insurance or any part thereof by Delta does not discharge or excuse
        Operator's obligation to comply with the provisions set out
        herein.  Operator agrees not to cancel, terminate or materially alter,
        change or amend any of the policies until after providing thirty (30) days'
        advance written notice to Delta of Operator's intent to so cancel, terminate
        or
        materially alter, change or amend such policies of insurance, which thirty
        (30)
        day notice period shall commence to run from the date notice is actually
        received by Delta.

      


      F.  With
        respect to all claims against Operator (but not against Delta) with respect
        to
        which Operator is not entitled to be indemnified by Delta pursuant to Article
        12(B), whether or not covered by the insurance policies set forth in this
        Article 14 or otherwise, Delta is responsible only for filing an initial
        report
        and has no other obligations with respect to such claims, and Operator is
        fully
        responsible for handling all adjustments, settlements, negotiations, litigation
        and similar activities in any way related to or connected with such
        claims.

      


      G.  Subject
        to Section 14(H) below, the parties hereby agree that from time to time during
        the term of this Agreement Delta may require Operator to procure and maintain
        insurance coverages in amounts in excess of the minimum amounts set forth
        in
        Article 14(A) should the circumstances and conditions of Operator's operations
        under this Agreement be deemed, in Delta's sole discretion, to require
        reasonable increases in any or all of the foregoing minimum insurance coverages;
        provided that such insurance coverages are reasonably obtainable in the
        insurance market and that the costs thereof are all Pass Through
        Costs.

      


      H.  Notwithstanding
        anything to the contrary contained in this Article 14, Delta acknowledges
        that:

      


      
        	
                 

              	
                1.

              	
                without
                  waiving any rights it may have in the future if such policies change,
                  Delta has reviewed the policies of insurance currently maintained
                  by
                  Operator and determined that the insurers providing such policies
                  and the
                  terms and conditions of such policies are satisfactory to Delta
                  for
                  purposes of Section 14(A) above;
                  and

              


      

      


      
        	
                 

              	
                2.

              	
                Delta’s
                  rights to approve the insurers providing such policies and the
                  other terms
                  and conditions of such policies for purposes of Section 14(A) above,
                  and
                  Delta’s rights to require additional insurance coverages pursuant to
                  Section 14(G) above, shall be waived for so long as Operator participates
                  in a joint insurance program administered by Northwest Airlines,
                  Continental Airlines or any other legacy carrier; provided that the
                  foregoing waiver shall not constitute a waiver or otherwise reduce
                  or
                  excuse Operator’s obligation to provide the insurance specified in clauses
                  1 through 9 of Section 14(A).

              


      

      


      ARTICLE 15.  OPERATIONS OF OPERATOR AS A DELTA CONNECTION
        CARRIER.

      


      A.  Delta
        and Operator agree that, subject to the provisions of this Agreement, Operator
        will operate the Delta Connection Flights exclusively as a Delta Connection
        carrier.  Unless otherwise agreed by Delta, Operator will operate all
        Delta Connection Flights and the Aircraft with the passenger seat capacity
        permitted by law or regulation and otherwise as determined by Delta from
        time to
        time.  Operator shall not change any of the Aircraft specifications
        without the prior consent of Delta.

      


      B.  Operator
        acknowledges and agrees that participation in the Delta Connection program
        obligates Operator to offer and maintain a professional, high quality level
        of
        service in terms of schedules, customer service and the
        like.  Accordingly, at the request of Delta, the parties
        will:  (a) meet to mutually review and discuss the services,
        operations and plans of Operator and Delta for the Delta Connection program;
        and
        (b) jointly develop a written business plan for the Delta Connection operations
        and services of Operator.  Operator will comply with the business
        plans so developed.

      


      C.  Delta
        shall have the right, from time to time, to inspect Operator’s Delta Connection
        Service, including without limitation Operator’s in-flight service, flight,
        maintenance, technical operations, gate-check in service, ground operations,
        Aircraft cleaning and any and all other services and operations performed
        by
        Operator in connection with the Delta Connection Flights.  Such
        inspections may be announced or unannounced, but under no circumstances shall
        they interfere with the operation of Operator’s business. Failure on the
        part of Delta to conduct such inspections shall not relieve Operator of its
        obligations to conform with the service and performance standards set forth
        in
        this Agreement.

      


      ARTICLE
        16.  REPRESENTATIONS AND WARRANTIES.

      


      A.  Representations;
        Warranties and Covenants of Parent and Operator.  Each of Parent
        and Operator represents and warrants to Delta as of the date hereof as
        follows:

      


      (1)  Organization
        and
        Qualification.  Each of Parent and Operator is a duly organized
        and validly existing corporation in good standing under the laws of its state
        of
        incorporation and has the corporate power and authority to own, operate and
        use
        its assets and operate the Delta Connection Flights.

      


      (2)         Authority
        Relative to this Agreement.  Each of Parent and Operator has the
        corporate power and authority to execute and deliver this Agreement and to
        consummate the transactions contemplated hereby in accordance with the terms
        hereof.  The execution and delivery of this Agreement and the
        consummation of the transactions contemplated hereby have been duly authorized
        by all necessary corporate action on the part of each of Parent and
        Operator.  This Agreement has been duly and validly executed and
        delivered by each of Parent and Operator and is, assuming due execution and
        delivery thereof by Delta and that Delta has full legal power and right to
        enter
        into this Agreement, a valid and binding obligation of each of Parent and
        Operator, enforceable against each of them in accordance with its
        terms.

      


      (3)  Conflicts;
        Defaults.  Neither the execution or delivery of this Agreement nor
        the performance by Parent and Operator of the transactions contemplated hereby
        will (i) violate, conflict with, or constitute a default under any of the
        terms
        of such entity’s articles of incorporation, by-laws, or any provision of, or
        result in the acceleration of any obligation under, any contract, sales
        commitment, license, purchase order, security agreement, mortgage, note,
        deed,
        lien, lease, agreement or instrument, including without  limitation,
        any order, judgment or decree relating to the Delta Connection Flights, (ii)
        result in the creation or imposition of liens in favor of any third person
        or
        entity, (iii) violate any law, statute, judgment, decree, order, rule or
        regulation of any governmental authority, or (iv) constitute any event which,
        after notice or lapse of time or both, would result in such violation, conflict,
        default, acceleration or creation or imposition of liens.

      


      (4)  Broker.  Neither
        Parent nor Operator has retained or agreed to pay any broker or finder with
        respect to this Agreement and the transactions contemplated hereby.

      


      (5)  Compliance.  All
        air transportation services performed pursuant to this Agreement or otherwise
        by
        Operator shall be conducted in full compliance with all applicable statutes,
        orders, rules, regulations and notifications, whether now in effect or hereafter
        promulgated, of all governmental agencies having jurisdiction over its
        operations, including, but not limited to, the FAA, DOD, and DOT. Operator’s
        compliance with such governmental statutes, orders, rules, regulations and
        notifications will be the sole and exclusive obligation of Operator, and
        Delta
        will have no obligation, responsibility, or liability, whether direct or
        indirect, with respect to such matters.

      


      B.  Representations
        and Warranties of Delta.  Delta represents to each of Parent and
        Operator as of the date hereof as follows:

      


      (1)  Organization
        and
        Qualification.  Delta is a duly incorporated and validly existing
        corporation in good standing under the laws of the State of Delaware and
        has the
        corporate power and authority to own, operate and use its assets and to operate
        the Delta Connection program.

      


      (2)  Authority
        Relative to
        this Agreement.  Delta has the corporate power and authority to
        execute and deliver this Agreement and to consummate the transactions
        contemplated hereby in accordance with the terms hereof.  The
        execution and delivery of this Agreement and the consummation of the
        transactions contemplated hereby have been duly authorized by all necessary
        corporate action on the part of Delta.  This Agreement has been duly
        and validly executed and delivered by Delta and is, assuming due execution
        and
        delivery thereof by Parent and Operator and that each of Parent and Operator
        has
        full legal power and right to enter into this Agreement, a valid and binding
        obligation of Delta, enforceable against Delta in accordance with its
        terms.

      


      (3)         Conflicts;
        Defaults.  Neither the execution or delivery of this Agreement nor
        the performance by Delta of the transactions contemplated hereby will (i)
        violate, conflict with, or constitute a default under any of the terms of
        Delta’s articles of incorporation, by-laws, or any provision of, or result in
        the acceleration of any obligation under, any contract, sales commitment,
        license, purchase order, security agreement, mortgage, note, deed, lien,
        lease,
        agreement or instrument, including without limitation, any order, judgment
        or
        decree relating to the Delta Connection Flights, (ii) result in the creation
        or
        imposition of any liens in favor of any third person or entity, (iii) violate
        any law, statute, judgment, decree, order, rule or regulation of any
        governmental authority, or (iv) constitute any event which, after notice
        or
        lapse of time or both, would result in such violation, conflict, default,
        acceleration or creation or imposition of liens.

       

                    
        (4)  Broker.  Delta has not retained or agreed to pay
        any broker or finder with respect to this Agreement and the transactions
        contemplated hereby.

       

                                    
        (5)  Compliance.  All air transportation-related
        actions performed pursuant to this Agreement or otherwise by Delta shall
        be
        conducted in full compliance with all applicable statutes, orders, rules,
        regulations and notifications, whether now in effect or hereafter promulgated,
        of all governmental agencies having jurisdiction over its operations, including,
        but not limited to, the FAA, DOD, and DOT. Delta’s compliance with such
        governmental statutes, orders, rules, regulations and notifications will
        be the
        sole and exclusive obligation of Delta, and neither Parent nor Operator will
        have any obligation, responsibility, or liability, whether direct or indirect,
        with respect to such matters.

      


      ARTICLE
        17.  COVENANTS OF OPERATOR.  Operator hereby covenants
        and agrees that:

      


      A.  If
        requested by Delta at any time during the Term of this Agreement, Operator
        shall
        place its flight designator code on certain flights operated by Delta or
        an
        affiliate of Delta.

      


      B.  During
        the Term of this Agreement, Operator shall not, on the same operating
        certificate as the Aircraft, own, lease or operate for any purpose any aircraft,
        whether for itself, Delta or another carrier, that will cause Delta to be
        in
        violation of its collective bargaining agreement with its pilots, or, with
        respect to Operator’s commencing the ownership, lease or operation of a new type
        or size aircraft in the future, as such agreement may have been amended at
        such
        time.  In furtherance of the above, as of the Agreement Date, Operator
        shall not, on the same operating certificate as the Aircraft, own, lease
        or
        operate any turbo-prop aircraft that is configured with more than seventy-two
        (72) seats.  With respect to regional jet aircraft, as of the
        Agreement Date, Operator may operate, on the same operating certificate as
        the
        Aircraft, for itself or a carrier other than Delta, any number of regional
        jet
        aircraft that is certificated for up to 106 seats, but configured with no
        more
        than ninety-seven (97) seats, provided such aircraft is not operated on
        any city pair that is served by Delta or an affiliate of Delta.

      


      C.  Operator
        shall not enter into any binding agreement or arrangement (or series of
        agreements or arrangements) with any third party (excluding any employee
        collective bargaining units) for the procurement of any goods or services
        relating to Operator, the Aircraft or operation of any of the Delta Connection
        Flights that will result in a material increase in Operator’s Pass Through Costs
        to perform its services hereunder without the prior written consent of Delta,
        which consent shall not be unreasonably withheld (it being understood that
        Delta’s consent shall not be required if Operator does not pass any such
        increased costs to Delta as Pass Through Costs).

      


      D.  At
        the request of Delta, Operator agrees to enter into such agreement(s) with
        another air carrier as may be necessary to implement share code-sharing on
        the
        Delta Connection Flights with such other air carrier.

      


      E.  Operator
        agrees that any pilot furloughed by Delta will be given preferential new
        hire
        opportunities at Operator if such pilot completes all new hire paper work,
        meets
        all new hire airman and medical qualifications, satisfies background checks
        and
        successfully completes an interview and employment process, subject to any
        other
        preferences arising from existing contractual arrangements to which Parent
        or
        Operator is currently a party as of the Agreement Date.  Operator and
        Delta shall determine and implement mutually acceptable procedures and processes
        to effectuate the new hire opportunity commitment set forth
        above.  Delta agrees to offer preferential interviews for employment
        to airmen employed by Operator, subject to Delta's objectives for diversity
        and
        experience among newly hired pilots.

      


      F.  Operator
        shall file all reports and plans relating to its operations with the DOD,
        DOT, FAA, NTSB or any state or airport authority, and Operator shall promptly
        furnish Delta with copies of all such reports and such other available traffic
        and operating reports as Delta may request from time to
        time.  Additionally, Operator will promptly furnish Delta with a copy
        of every report and plan that Operator prepares, whether or not such report
        is
        filed with the FAA, NTSB or any other governmental agency, relating to any
        accident or incident involving an Aircraft when such accident or incident
        is
        claimed to have resulted in the death or injury to any person or the loss
        of,
        damage to or destruction of any property.

      


      G.  All
        flight operations, dispatch operations and flights and all other operations
        undertaken by Operator pursuant to this Agreement shall be conducted and
        operated by Operator in strict compliance with all Governmental Regulations,
        including, without limitation, those relating to airport security, the use
        and
        transportation of hazardous materials, flight crew and mechanic qualifications
        and licensing requirements, crew training and hours.  All Aircraft shall be
        operated and maintained by Operator in strict compliance with all Minimum
        Maintenance Standards, all Governmental Regulations, Operator’s own operations
        manuals and maintenance manuals and procedures, and all applicable equipment
        manufacturer’s instructions.  No later than one (1) year after the
        Effective Date, Operator shall apply and close out its inspection to establish
        its registration as an IOSA Operator and maintain such registration at all
        times
        thereafter during the Term.  At all times, Operator shall operate with
        the highest standards of care.

      


      H.  In
        the event Parent is no longer a public reporting company, Operator shall
        furnish
        to Delta (1) within 45 days after the end of each of the three interim calendar
        quarters, unaudited financial statements including Operator's then current
        corporate balance sheet and profit and loss statement and  (2) within
        91 days after the end of Operator's fiscal year, Operator's then current,
        audited financial statements including, either separately or on a consolidated
        basis, the balance sheet and the profit and loss statement, together with
        associated footnotes, and a copy of the independent auditor's
        report.  Notwithstanding the reporting status of Parent, Operator
        shall furnish to Delta within 91 days after the end of Operator's fiscal
        year, a
        profit and loss statement with respect to Operator’s Delta Connection operations
        prepared by SEC line-item and certified by Operator’s chief financial
        officer.

      


      ARTICLE 18.  CONTRACT INTERPRETATION.

      


      A.  This
        Agreement is subject to, and will be governed by and interpreted in accordance
        with, the laws of the State of New York, excluding conflicts of laws principles,
        and of the United States of America.  Any action or proceeding seeking
        to enforce any provision of, or based on any right arising out of, this
        Agreement may only be brought in the courts of the State of New York in New
        York
        County, or, if it has or can acquire jurisdiction, in the United States District
        Court for the Southern District of New York, and each of the parties hereto
        irrevocably consents to the exclusive jurisdiction of such courts (and of
        the
        appropriate appellate courts) in any such action or proceeding and waives,
        to
        the fullest extent permitted by law, any objection to venue laid
        therein.  Process in any action or proceeding referred to in the
        proceeding sentence may be served on any party anywhere in the
        world.  Each party further agrees to waive any right to a trial by
        jury.

      


      B.  The
        descriptive headings of the several articles and sections of this Agreement
        are
        inserted for convenience only, confer no rights or obligations on either
        party,
        and do not constitute a part of this Agreement.

      


      C.  Time
        is of the essence in interpreting and performing this Agreement.

      


      D.  This
        Agreement (including the Exhibits and Schedules hereto) constitutes the entire
        understanding between the parties with respect to the subject matter hereof,
        and
        any other prior or contemporaneous agreements, whether written or oral, are
        expressly superseded hereby.

      


      E.  If
        any part of any provision of this Agreement shall be invalid or unenforceable
        under applicable law, such part shall be ineffective to the extent of such
        invalidity or unenforceability only, without in any way affecting the remaining
        parts of such provision or the remaining provisions.

      


      F.  This
        Agreement may be executed in any number of counterparts, including via
        facsimile, each of which shall be deemed to be an original and all of which,
        taken together, shall constitute one and the same instrument.

      


      G.  Because
        a breach of the provisions of this Agreement could not adequately be compensated
        by money damages, any party shall be entitled to an injunction restraining
        such
        breach or threatened breach and to specific performance of any provision
        of this
        Agreement and, in either case, no bond or other security shall be required
        in
        connection therewith, and the parties hereby consent to the issuance of such
        injunction and to the ordering of specific performance. 

      


      H.  NO
        PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
        INCLUDING LOST REVENUES, LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC ADVANTAGE,
        ARISING FROM THIS AGREEMENT OR ANY BREACH HEREOF.

      


      ARTICLE 19.  CIRCUMSTANCES BEYOND THE PARTIES' CONTROL.

      


      With
        the
        exception of outstanding rights and obligations, and subject to Section 3(H)
        hereof, each party will be relieved of its obligations under this Agreement
        in
        the event, to the extent and for the period of time that performance is delayed
        or prevented caused by any acts of God, acts of terrorism or hostilities,
        war,
        strike, labor disputes, work stoppage, fire, act of government, court order,
        or
        any other act reasonably beyond the control of that party, including but
        not
        limited to, non-delivery or delay in delivery of the Aircraft or delay in
        the
        completion of required training of the Operator’s employees by the Aircraft
        manufacturer (each, a “Force Majeure Event”).

      


      ARTICLE 20.  NO LICENSE GRANTED.

      


      A.  This
        Agreement is not, and shall not be construed to be, a license for either
        party
        to use the trade names, trademarks, service marks, or logos of the other
        party,
        or its affiliates, without such party's prior written consent.

      


      B.  Operator
        will conduct all operations described herein under the service mark “Delta
        Connection.”  Delta hereby grants to Operator a nonexclusive,
        nontransferable, non-sublicensable license to use certain trademarks, service
        marks, logos and trade names that Delta owns or has the right to use, including,
        “Delta,” “Delta Connection,” “SkyMiles,” and the Delta widget design
        (collectively, the “Delta Marks”) in connection with the services to be rendered
        by Operator pursuant to this Agreement; provided, however, that at any
        time during the Term of this Agreement, Delta may alter, amend or revoke
        the
        license hereby granted and require Operator’s use of a new or different Delta
        Mark in connection with the services provided hereunder as Delta may determine
        in its sole discretion.

      


      C.  Operator
        hereby acknowledges Delta’s right to use the Delta Marks, further acknowledges
        the validity of the Delta Marks, and agrees that it will not do anything
        in any
        way to infringe or abridge Delta’s, or any of its affiliates’, rights in the
        Delta Marks or directly or indirectly to challenge the validity of the Delta
        Marks.

      


      D.  Except
        as set forth in Section 20(B) above, Operator shall not use any of the Delta
        Marks without Delta’s prior written consent.

      


      E.  Nothing
        in this Agreement shall be construed to give Operator the exclusive right
        to use
        any of the Delta Marks, or to abridge Delta’s right to use or license any of its
        trademarks, service marks, trade names or logos(collectively, “Identification”)
        and to license such other uses of such Identification as Delta or its affiliates
        may desire.

      


      F.  Should
        this Agreement be canceled or otherwise terminated for any reason as set
        forth
        in Article 11 hereof, all right to use the Delta Marks shall revert to Delta
        and
        shall not thereafter be used by Operator in any form or fashion.

      


      G.  Branding.

      


      1.  Livery.  Each
        of the Aircraft shall be in the color scheme, including exterior paint and
        interior upholstery and appointments (“Livery”) of the Delta Connection Livery,
        as provided by Delta to Operator from time to time.  Any changes to
        the initial Livery of any of the Aircraft shall be done on a schedule as
        mutually agreed by the parties, and at Delta’s cost.

      


      2.  On
        Board
        Branding.  Delta shall control all on board branding and in-flight
        materials including, without limitation, in-flight publications, food and
        beverage products, paper goods and service ware.  In the event of any
        change to the on-board branding or in-flight materials, Delta shall be
        responsible for reimbursing Operator for any reasonable costs and expenses
        incurred by Operator in connection therewith.  Operator shall be
        solely responsible for maintaining all licenses necessary for the serving
        of
        in-flight food and beverages on the Delta Connection Flights.

      


      ARTICLE 21.  MODIFICATION AND WAIVER.

      


      No
        amendment, modification, supplement, termination or waiver of any provision
        of
        this Agreement, and no consent to any departure by either party therefrom,
        shall
        in any event be effective unless in writing signed by authorized representatives
        of both parties, and then only in the specific instance and for the specific
        purpose given.

      


      ARTICLE 22.  NOTICES.

      


      Unless
        otherwise provided herein, all
        notices, requests and other communications required or provided for hereunder
        shall be in writing (including telecopy or similar teletransmission or writing)
        and shall be given at the following addresses:

      


      (1)  If
        to
        Delta:

      


      Delta
        Air Lines, Inc.

      1030
        Delta Blvd.

      Atlanta,
        GA  30354

      Dept.
        915

      Attn:
        Vice President- Delta
        Connection

      Telecopy:  [***]

      


      with
        copies to:

      


      Delta
        Air Lines, Inc.

      1030
        Delta Boulevard

      Atlanta,
        GA  30354

      Dept.
        981

      Attn:
        Executive V.P. and General
        Counsel

      Telecopy:  [***]

      (2)  If
        to Parent or
        Operator:

      


      Pinnacle
        Airlines Corp.

      1689
        Nonconnah Boulevard

      Suite
        111

      Memphis,
        Tennessee 38132

      Attention:  Chief
        Financial
        Officer

      Telecopy:  [***]

      


      with
        copies to:

      


      Kevin
        P. Lewis

      Vinson
&
Elkins
        LLP

      1001
        Fannin Street

      2500
        First City Tower

      Houston,
        Texas 77002

      Telecopy:
        [***]

      


      Any
        such
        notice, request or other communication shall be effective (i) if given by
        mail,
        upon the earlier of receipt or the third business day after such communication
        is deposited in the United States mails, registered or certified, with first
        class postage prepaid, addressed as aforesaid or (ii) if given by any other
        means including, without limitation, by air courier, when delivered at the
        address specified herein.  Delta or Operator may change its address
        for notice purposes by notice to the other party in the manner provided
        herein.

      


      ARTICLE 23.  ASSIGNMENT.

      


      This
        Agreement shall bind and inure to the benefit of Delta, Parent and, subject
        to
        Section 27 below, Operator, and their respective successors and assigns;
        provided, however, neither party may assign or transfer this Agreement or
        any portion hereof to any person or entity except as provided in Article
        27 or
        otherwise without the express written consent of the other party.  Any
        assignment or transfer, by operation of law or otherwise, without such consent
        shall be null and void and of no force or effect.

      


      ARTICLE 24.  GOOD FAITH.

      


      Each
        party shall exercise good faith in its dealings with the other party hereto
        and
        in performance of its obligations under this Agreement.

      


      ARTICLE
        25.  CONFIDENTIALITY.

      


      A.  Except
        as otherwise provided below, each party shall, and shall ensure that its
        directors, officers, employees, affiliates and professional advisors
        (collectively, the “Representatives”), at all times, maintain strict confidence
        and secrecy in respect of all Confidential Information (as defined below)
        of the
        other party (including its affiliates) received directly or indirectly as
        a
        result of this Agreement.  If a party (the “Disclosing Party”) in good
        faith determines that it is required to disclose any Confidential Information
        of
        other party (the “Affected Party”) in order to comply with any applicable law or
        government regulation, or under the terms of a subpoena or order issued by
        a
        court or governmental body, it shall (a) notify the Affected Party immediately
        of the existence, terms and circumstances surrounding such request, (b) consult
        with the Affected Party on the advisability of taking legally available steps
        to
        resist or narrow such request and (c) if any disclosure of Confidential
        Information is required to prevent the Disclosing Party from being held in
        contempt or subject to other legal penalty, furnish only such portion of
        the
        Confidential Information as it is legally compelled to disclose and use
        commercially reasonable efforts (at the cost of the party whose Confidential
        Information is being protected) to obtain an order or other reliable assurance
        that confidential treatment shall be accorded to the disclosed Confidential
        Information.  Each party agrees to transmit Confidential Information
        only to such of its Representatives as required for the purpose of implementing
        and administering this Agreement, and shall inform such Representatives of
        the
        confidential nature of the Confidential Information and instruct such
        Representatives to treat such Confidential Information in a manner consistent
        with this Article 25.

      


      For
        purposes of this Agreement,
“Confidential Information” shall mean (a) all confidential or proprietary
        information of a party, including, without limitation, trade secrets,
        information concerning past, present and future research, development, business
        activities and affairs, finances, properties, methods of operation, processes
        and systems, customer lists, customer information (such as passenger name
        record
        or “PNR” data) and computer procedures and access codes; and (b) the terms and
        conditions of this Agreement and any reports, invoices or other communications
        between the parties given in connection with the negotiation or performance
        of
        this Agreement; and (c) excludes (i) information already in a party’s possession
        prior to its disclosure by other party; (ii) information obtained from a
        third
        person or entity that is not prohibited from transmitting such information
        to
        the receiving party as a result of a contractual, legal or fiduciary obligation
        to the party whose information is being disclosed; (iii) information that
        is or
        becomes generally available to the public, other than as a result of disclosure
        by a party in violation of this Agreement; or (iv) information that has been
        or
        is independently acquired or developed by a party, or its affiliate, without
        violating any of its obligations under this Agreement.

      


      Notwithstanding
        the provisions of
        this Section 25(A) to the contrary, the parties acknowledge that this Agreement
        may constitute a material contract for purposes of Parent’s disclosure
        obligations arising under the Securities Act of 1933, as amended, and/or
        the
        Securities Exchange Act of 1934, as amended, and that Parent may make any
        such
        required disclosure, subject to the prior review by, and meaningful consultation
        with, Delta.

      


      B.  Each
        party acknowledges and agrees that in the event of any breach of this Article
        25, the Affected Party shall be irreparably and immediately harmed and could
        not
        be made whole by monetary damages.  Accordingly, it is agreed that, in
        addition to any other remedy at law or in equity, the Affected Party shall
        be
        entitled to an injunction or injunctions (without the posting of any bond
        and
        without proof of actual damages) to prevent breaches or threatened breaches
        of
        this Article 25 and/or to compel specific performance of this Article
        25.

      


      C.  The
        confidential obligations of the parties under this Article 25 shall survive
        the
        termination or expiration of this Agreement.

      


      ARTICLE
        26.  ADDITIONAL DOCUMENTS.

      


      The
        parties hereby covenant and agree, contemporaneously with the execution of
        this
        Agreement, to execute and deliver the following additional documents in
        connection with this Agreement:

      


      A.  A
        ground handling agreement, providing for ground handling by Delta (or Delta’s
        designee) at certain stations operated by Operator;

      


      B.  An
        Employee Free and Reduced Rate Interline Travel Agreement (the “Interline
        Agreement”).  The additional terms and conditions set forth on
Schedule 26 attached hereto and incorporated herein shall apply with
        respect to employee non-revenue passenger travel; and

      


      C.
        The Assignment and Assumption
        Agreement.

      


      In
        addition, the parties covenant and agree, prior to the operation of the initial
        Delta Connection Flight, to execute and deliver an agreement for the provision
        of emergency response services to be provided by Delta and Operator with
        respect
        to Delta Connection Flights, in form and substance reasonably satisfactory
        to
        each of Delta and Operator.

      


      ARTICLE
        27.  PARENT GUARANTEE AND CHANGE OF OPERATOR.

      


      A.  Parent
        hereby unconditionally and irrevocably guarantees to Delta the due and punctual
        performance by Operator of each of Operator’s obligations, agreements and
        covenants arising under this Agreement and under each term and condition
        hereof
        (collectively, the “Obligations”).  If Operator shall fail or be
        unable to perform any such Obligation as and when the same shall be required
        to
        be performed, then Parent, at its sole cost and expense, shall be obligated
        to
        promptly perform or cause to be promptly performed each such Obligation in
        accordance with the terms hereof and thereof.  This guaranty is a
        guaranty of payment, performance and compliance and not of collectibility
        and is
        in no way conditioned or contingent upon any attempt to collect from or enforce
        performance or compliance by Operator or upon any other event or condition
        whatsoever.  If for any reason any payment Obligation amount shall not
        be paid by Operator when due, Parent shall immediately pay such amount to
        the
        person entitled thereto pursuant to this Agreement, as if such amount
        constituted the direct and primary obligation of Parent and regardless of
        whether any person has taken any steps to enforce any rights against Operator
        to
        collect such amount.

      


      B.         To
        the fullest extent permitted under applicable law, the obligations of Parent
        hereunder shall be absolute and unconditional, shall be continuing and remain
        in
        full force and effect until final and irrevocable payment or performance,
        and
        shall not be released, discharged, affected or impaired in any respect
        by:  (a) any amendment, modification, or cancellation of, or addition
        or supplement to this Agreement; (b) any exercise, acceleration, extension,
        compromise, settlement, non-exercise, waiver, release, or cancellation by
        Delta
        of any right, remedy, power or privilege under or related to this Agreement
        or
        any other guaranty of any obligations of Operator; (c) the invalidity or
        unenforceability, in whole or in part, of this Agreement; (d) any change
        in the
        corporate existence, structure or ownership of Operator or Parent or any
        insolvency, bankruptcy, reorganization or other similar proceeding affecting
        either of them or their assets; or (e) any other occurrence, circumstance,
        happening or event whatsoever, whether similar or dissimilar to the foregoing,
        whether foreseen or unforeseen, and any other circumstance which might otherwise
        constitute a legal or equitable defense, release or discharge of the liabilities
        of a guarantor or surety, or which might otherwise limit recourse against
        Parent.  If acceleration of the time for the performance or payment of
        any Obligation is stayed upon the insolvency, bankruptcy or reorganization
        of
        Operator, all Obligations that are subject to acceleration under the terms
        of
        this Agreement shall nonetheless be performed or payable hereunder by
        Parent.

      


      C.         Parent
        hereby specifically agrees that it shall not be necessary or required as
        a
        condition to enforcement of the obligations hereunder against it, that there
        be
        (and Parent, to the fullest extent permitted by applicable law, specifically
        waives) diligence, presentment, or protest of any kind whatsoever with respect
        to this guaranty by Parent or the Obligations; such waiver includes, without
        limitation: (i) presentment for payment upon Operator or Parent or the making
        of
        any protest; (ii) any requirement to exhaust any remedies exercisable upon
        a
        default under this Agreement or to give any notice of non-performance or
        non-payment; (iii) any other circumstance whatsoever that might otherwise
        constitute a legal or equitable discharge, release or defense of a guarantor
        or
        surety; or (iv) so long as any Obligation remains outstanding, any right
        of
        subrogation by virtue of any performance or payment made
        hereunder.  Parent agrees that any payment or performance of the
        Obligations guaranteed hereunder or other act that tolls any statute of
        limitations applicable to enforcement of the Obligations shall similarly
        operate
        to toll any statute of limitations applicable to any liability of Parent
        pursuant to this Article 27.  In addition, to the fullest extent
        permitted by applicable law, Parent waives the benefit and advantage of any
        and
        all valuation, stay, appraisement, extension or redemption laws which, but
        for
        this provision, agreement and waiver, might be applicable to any sale made
        under
        any judgment, order or decree of any court or otherwise based on the guaranty
        of
        Parent pursuant to this Article 27.  All waivers made by Parent in
        this Section 27(C) and elsewhere throughout this Article 27 are intentional
        and
        made by Parent after due consideration of all the consequences
        thereof.

      


      D.         All
        of the terms and conditions of this Article 27 shall be binding upon and
        shall
        inure to the benefit of the respective successors and assigns of the parties;
        provided that Parent may not assign, delegate or otherwise transfer any
        of its rights or obligations hereunder without the consent of
        Delta.

      


      E.         Notwithstanding
        the provisions of Article 23 or any other provision of this Agreement, subject
        to the commercially reasonable consent of Delta, at anytime prior to the
        initial
        in-service date of the first Aircraft placed into Delta Connection service,
        Operator may assign all of its rights and obligations hereunder to another
        wholly-owned subsidiary of Parent, provided that such assignee and Parent
        shall
        execute an assignment agreement in form and substance reasonably satisfactory
        to
        Delta and whereby such assignee agrees to undertake all of Operator’s past,
        present and future obligations and liabilities hereunder and succeeds to
        its
        rights and privileges hereunder, and Parent acknowledges the continuing effect
        of Sections 27(A), (B) and (C) above.


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      


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

      


      


      


      Pinnacle
        Airlines,
        Inc.                                                Pinnacle
        Airlines
        Corp.                                              Delta
        Air Lines, Inc.

      


      


      


      By:
        /s/ Philip H.
        Trenary                                             By:
/s/ Philip H.
        Trenary                                                    By:
/s/ Edward Bastian

      


      Name:
        Philip H.
        Trenary                                     
        Name: Philip H.
        Trenary                                                    Name:  Edward
        Bastian

      


      Title:
        President &
CEO                                               Title:
        President &
CEO                          
                            Title:
        Exec. Vice President & CFO

      


      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      EXHIBIT
        A

      


      The
        Aircraft

      


      16
        CRJ-900 aircraft

      


      


      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      EXHIBIT
        A-1

      


      Aircraft
        In-Service Schedule

      


      


      


      The
        Aircraft shall be available to be placed into Delta Connection service in
        accordance with the following in-service schedule:

      


      
        	
                Aircraft

              	
                In-Service
                  Date*

              
	
                2

              	
                [***]

              
	
                1

              	
                [***]

              
	
                2

              	
                [***]

              
	
                2

              	
                [***]

              
	
                1

              	
                [***]

              
	
                1

              	
                [***]

              
	
                1

              	
                [***]

              
	
                1

              	
                [***]

              
	
                2

              	
                [***]

              
	
                1

              	
                [***]

              
	
                1

              	
                [***]

              
	
                1

              	
                [***]

              


      

      


      *In-service
        dates are based on current estimates of aircraft
        deliveries.  Deliveries are to take place in the month preceding the
        aircraft in-service date listed above.  Dates may change when delivery
        schedule is finalized with the aircraft manufacturer.

      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Exhibit
        B

      


      


      


      


      


      
        	
                Base
                  Rate Costs

              	
                Unit

              	
                Unit
                  Rates ($)

              
	 	 	 	
                2007

              	
                2008

              	
                2009

              	
                2010

              	
                2011

              	
                2012

              	
                2013

              	
                2014

              	
                2015

              	
                2016

              	
                2017

              
	 	
                Total
                  Flat Cost

              	
                Fixed

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Flight
                  Ops

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                In-Flight

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Other
                  MX

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Other
                  MX

              	
                Completed
                  Departures

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Maintenance
                  Overhead

              	
                Per
                  Month

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Headquarter/Other
                  facilities

              	
                Per
                  Month

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Dispatch

              	
                Completed
                  Departures

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Overhead

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Pass-Through
                  Cost Estimates

              	
                Unit

              	
                Unit
                  Rates ($)

              
	 	 	 	
                2007

              	
                2008

              	
                2009

              	
                2010

              	
                2011

              	
                2012

              	
                2013

              	
                2014

              	
                2015

              	
                2016

              	
                2017

              
	 	
                Heavy
                  Engine

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Maintenance
                  Reserve

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Aircraft
                  Rent

              	
                Aircraft
                  Months

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Fuel

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Landing
                  Fees

              	
                Completed
                  Departures

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Aviation
                  Liability Insurance

              	
                Completed
                  Block Hours

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Hull
                  and War Risk Insurance

              	
                Aircraft
                  Months

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              
	 	
                Property
                  Taxes

              	
                Aircraft
                  Months

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              	
                [***]

              


      

      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Exhibit
        C

      


      


      RES
        SYSTEM EQUIPMENT

      


      


      


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

      


      
        	
                1.  

              	
                Headquarters

              


      

      


      
        	
                2.  

              	
                Dispatch

              


      

      


      
        	
                3.  

              	
                Training

              


      

      


      
        	
                4.  

              	
                Maintenance
                  base for the Aircraft

              


      

      


      
        	
                5.  

              	
                Stations
                  handled by Operator, if any.

              


      


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Schedule
        3

      


      Monthly
        Incentive Goals

      


      


      


      


      1.           Monthly
        Incentive Goals for monthly completion rate and monthly on-time arrival
        rate:

      


      Completion:  The
        lesser of [***] or the actual completion rate of Delta mainline operations
        in
        similar geographic markets as the Delta Connection Flights during the same
        applicable month.  A flight shall be “completed” only if it arrives
        within 4 hours of scheduled arrival.

      


      On-Time
        Arrival:  The lesser of [***] or the actual on time
        arrival rate of Delta mainline operations in similar geographic markets as
        the
        Delta Connection Flights during the same applicable month.  A flight
        shall be “on-time” if the flight arrives within 15 minutes of scheduled
        arrival.

      


      


      Semi-Annual
        Incentive Goals

      


      


      2.           Semi-Annual
        Incentive Goals for semi-annual completion rate, semi-annual on-time arrival
        rate and semi-annual customer satisfaction rating:

      


      Completion:  The
        lesser of [***] or the “Adjusted Completion Rate” of Delta mainline operations
        (“Adjusted Completion Rate” equal to Delta mainline’s actual completion rate
        plus [***] of the difference between Delta mainline’s actual completion rate and
        [***]) in similar geographic markets as the Delta Connection Flights during
        the
        same applicable semi-annual period.  A flight shall be “completed”
only if it arrives within 4 hours of scheduled arrival.

      


      On-Time
        Arrival:  The lesser of [***] or the “Adjusted Arrival
        Rate” of Delta mainline operations (Adjusted Arrival Rate equal to Delta
        mainline’s actual arrival rate plus [***] of the difference between Delta
        mainline’s actual arrival rate and [***]) in similar geographic markets as the
        Delta Connection Flights during the same applicable semi-annual
        period.  A flight shall be “on-time” if the flight arrives within 15
        minutes of scheduled arrival.

      


      Customer
        Satisfaction: Greater than the average for all regional carriers
        during the applicable semi-annual period.


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Schedule
        10

      


      


      MIMIMUM
        PERFORMANCE REQUIREMENTS

      


      


      


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

      


      


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

      


      


      3.  Overall
        Customer Satisfaction:  the industry average of all regional
        carriers.

      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Schedule
        11

      


      


      Termination
        Fee

      


      


      


      


      
        	
                Month
                  of Termination

              	
                 Fee
                  Payable to Operator

              
	 	 
	
                April,
                  2007

              	
                [***]

              
	
                May,
                  2007

              	
                [***]

              
	
                June,
                  2007

              	
                [***]

              
	
                July,
                  2007

              	
                [***]

              
	
                August,
                  2007

              	
                [***]

              
	
                September,
                  2007

              	
                [***]

              
	
                October,
                  2007

              	
                [***]

              
	
                November,
                  2007

              	
                [***]

              
	
                December,
                  2007

              	
                [***]

              


      

      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      Schedule
        26

      


      


      Additional
        Terms and Conditions for
Employee Non-Revenue Pass
        Travel

      


      


      
        	
                ·  

              	
                Operator
                  shall cause its eligible employees to pay to Delta a [***] per
                  eligible
                  employee yearly activation fee for Delta Travel
                  package.

              


      

      
        	
                ·  

              	
                In
                  addition, Delta shall charge Operator the following service fee
                  for each
                  itinerary flown by any Eligible Operator employee or his or her
                  eligible
                  pass riders:  [***] per mile + [***] per
                  segment.  Delta will provide such data to Operator no less
                  frequently than monthly.  Delta has right to adjust such rate
                  from time to time based on Delta’s actual cost to provide the booking and
                  flight services.

              


      

      
        	
                ·  

              	
                Delta
                  shall be entitled to withhold any such yearly activation fees and
                  service
                  fees from any payments due Operator pursuant to the
                  Agreement.

              


      

      
        	
                ·  

              	
                Each
                  (i) Operator employee dedicated to the Delta Connection operations
                  conducted by Operator and (ii) management employee of Operator
                  or Parent
                  who spends a substantive amount of his or her time supporting Operator’s
                  Delta Connection operations, and his or her eligible pass riders
                  will be
                  assigned a PPR number/passport authorization dedicated to the Delta
                  operations (e.g. 34XXXXXXX).

              


      

      
        	
                ·  

              	
                Excluding
                  Comair, Inc., Atlantic Southeast Airlines, Inc. and SkyWest Airlines,
                  Inc., the terms and conditions of Operator’s employee non-revenue pass
                  travel program will be substantially similar, in the aggregate,
                  to the
                  terms and conditions of the employee non-revenue pass travel program
                  of
                  any other Delta Connection air carrier operating under a capacity
                  purchase
                  arrangement similar to Operator’s.