Document:

exhibit10-107.htm

EXHIBIT 10-107

 

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED.  THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED.

 

	  

SECOND AMENDMENT TO

 DELTA CONNECTION AGREEMENT

This SECOND AMENDMENT TO DELTA CONNECTION AGREEMENT (this “Amendment”), is entered into as of the 1st day of April, 2012 (the “Effective Date”), by and among Pinnacle Airlines, Inc. (“Operator”), Pinnacle Airlines Corp. (“Parent”) and Delta Air Lines, Inc. (“Delta” and, together with Operator and Parent, the “Parties” and each individually, a “Party”).

 

 

WITNESSETH:

 

WHEREAS, Operator operates certain of its flights as “Delta Connection” flights using the “DL” designator code pursuant to the Delta Connection Agreement, dated effective April 27, 2007, which agreement was amended by that certain Amendment to Delta Connection Agreement dated as of July 1, 2010 (the “First Amendment”) (as amended, modified and supplemented from time to time, and together with all exhibits, schedules and attachments thereto, the “Agreement”);

WHEREAS, Delta, Parent, Operator and certain other subsidiaries of Parent (collectively, the “Pinnacle Debtors”) have entered into a commitment letter of even date herewith, pursuant to which Delta has agreed to provide the Pinnacle Debtors a $74,285,000 senior secured super-priority debtor-in-possession credit facility (the “DIP Credit Facility”), which may, subject to certain conditions, convert into an exit credit facility (the “Exit Loan”), all on the terms and conditions set forth in the Summary of Terms and Conditions attached to such commitment letter as Annex A (the commitment letter together with such term sheet, the “Commitment Letter”) in the event the Pinnacle Debtors elect to file a chapter 11 bankruptcy proceeding under title 11 of the United States Code (together, the “Bankruptcy Cases”) in the bankruptcy court (the “Bankruptcy Court”) on the petition date (the “Petition Date”); and

WHEREAS, Delta, Parent and Operator have entered into an Amended and Restated 2010 Delta Connection Agreement of even date herewith (as amended, modified and supplemented from time to time, and together with all exhibits, schedules and attachments thereto, the “2010 CRJ-900 Delta Connection Agreement”);

WHEREAS, Delta, Parent and Operator have entered into a Third Amended and Restated Airline Services Agreement of even date herewith (as amended,

  

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modified and supplemented from time to time, and together with all exhibits, schedules and attachments thereto, the “Airline Services Agreement”);

WHEREAS, Delta, Parent, Operator, and Mesaba Aviation, Inc., a Minnesota corporation and wholly-owned subsidiary of Pinnacle Corp., have entered into a Setoff and Mutual Release of even date herewith (the “Setoff and Release”), the terms of which are incorporated herein by reference as though fully restated in this Agreement, pursuant to which the parties thereto agreed to an offset of certain amounts in dispute between the parties thereto and to a mutual release of claims related to such disputed amounts; and

 

WHEREAS, the Parties desire to amend certain provisions of the Agreement and are entering into this Amendment contemporaneously with the execution and delivery of the Commitment Letter, the 2010 CRJ-900 Delta Connection Agreement, the Airline Services Agreement and the Mutual Release.

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, the Parties, intending to be legally bound, hereby agree as follows:

AGREEMENT

1.           Capitalized Terms.  All capitalized terms used, but not defined, herein shall have the respective meanings set forth in the Agreement.

2.           Amendments to the Agreement.  Effective as of the Effective Date, the Agreement shall be amended as follows:

A.           Amendment of Article 3 of the Agreement.  Article 3.H. of the Agreement shall be amended by inserting the following text at the end of the first paragraph of such article:

“All EAS subsidies received by Operator shall be paid to Delta promptly upon receipt and in any event within five (5) business days after such receipt.”

B.           Amendment of Article 4 of the Agreement.  Article 4 of the Agreement shall be amended by inserting the following text at the end of such article:

“E.           Essential Air Service.  With respect to Essential Air Service (“EAS”) cities designated by Delta to be operated by Operator from time to time hereunder:

1.           Operator agrees to (A) bid on and enter into EAS agreements with the DOT, at the direction of Delta, (B) maintain and comply with its

  

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obligations under such agreements during the Term, (C) provide air transportation services pursuant to any such agreement solely in connection with providing Delta Connection Flights hereunder, and (D) refrain from modifying or amending the terms of such agreements without the prior written consent of Delta;

2.           In the event this Agreement terminates (other than as a result of a breach by Operator or Parent hereunder) prior to the expiration or permitted termination of any EAS agreement entered into by Operator in accordance with the provisions hereof, then Delta will or will cause another carrier, to the extent permitted under the terms of such EAS agreement, to perform Operator’s obligations under such EAS agreement.”

C.           Amendment of Article 11.A of the Agreement.  Article 11.A of the Agreement is hereby amended by deleting such section in its entirety and replacing such section with the following:

“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, the “Term”).  With respect to each Aircraft, unless this Agreement is terminated earlier in accordance with its terms, this Agreement shall terminate in accordance with the following schedule:  (i) two (2) Aircraft (which specific Aircraft to be mutually agreed by Delta and Operator) shall be removed from service and the scope of this Agreement during January 2013 (on such dates in January 2013 as mutually agreed upon by Delta and Operator); (ii) three (3) Aircraft (which specific Aircraft to be mutually agreed by Delta and Operator) shall be removed from service and the scope of this Agreement during each of February, March and April, 2013 (on such dates in such months as mutually agreed upon by Delta and Operator); and (iii) the remaining four (4) Aircraft shall be removed from service and the scope of this Agreement during May 2013 (on such dates in May 2013 as mutually agreed upon by Delta and Operator), provided that, notwithstanding the above, (y) if Operator reasonably determines that Operator’s pilot training capacity would permit additional Aircraft to be removed during January and February 2013, then Delta shall have the right to accelerate the scheduled removal dates of Aircraft to be removed in March, April and May 2013 as set forth above to the months of January and February 2013 upon thirty (30) days’ prior written notice to Operator, and (z) if Operator fails to achieve any of the Operational Performance Standards set forth on Schedule 10 to the Agreement, Delta, in its sole discretion, shall have the right to accelerate removal of any or all of the Aircraft to such dates as Delta shall determine.”

D.           Amendment of Exhibit B to the Agreement.   The amounts set forth in the table of “Base Rate Costs” set forth in Exhibit B to the Agreement shall be amended by deleting the amounts set forth opposite the categories “Maintenance Overhead” and

  

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“Headquarter/Other Facilities” for calendar years 2012 and 2013 and replacing such amounts with [***] per Aircraft Month and [***] per Aircraft Month, respectively.

E.           [***]

3.           [***]

4.           General Unsecured Claim.  Delta and Operator agree that Delta shall be entitled to an allowed general unsecured claim in the Bankruptcy Cases based on Delta’s damages as a result of the modifications of the Agreement pursuant to this Amendment, including without limitation the early termination of the Agreement; provided, however, that (1) Delta and Operator reserve their rights as to the calculation of the amount of such claim and the allowed amount of the claim will be subject to the determination and approval of the Bankruptcy Court; and (2) Delta waives its right to have such general unsecured claim paid as a cure in connection with assumption of any executory contract between Operator and Delta.

5.           Status of Agreement.  Except as expressly provided in this Amendment, all of the terms and conditions of the Agreement remain in full force and effect and fully binding upon and enforceable against the Parties.

6.           Governing Law.  This Amendment shall be governed in accordance with the laws of the State of New York, notwithstanding the choice of law provisions thereof.

7.           Amendment.  This Amendment may not be amended or modified except by a written agreement executed on behalf of the Parties.

8.           Counterparts .  This Amendment may be executed in any number of counterparts and by the Parties on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

9.           No Third Party Beneficiary .  This Amendment is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Amendment.

[Signature page follows]

  

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives as of the day and year first above written.

	
 

DELTA AIR LINES, INC.

 

By:   /s/ Donald T. Bornhurst                                                  

Name:    Donald T. Bornhurst

Title:  Vice President, Delta Connection

	
 

PINNACLE AIRLINES, INC.

 

By:   /s/ Brian T. Hunt

Name:  Brian T. Hunt 

Title:  Vice President/General Counsel

 

	  	
 

PINNACLE AIRLINES CORP.

 

By:  /s/ Brian T. Hunt

Name:  Brian T. Hunt

Title:  Vice President/General Counsel

 

  

5exhibit10-108.htm

EXHIBIT 10-108

 

CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED.  THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED

           SETOFF AND MUTUAL RELEASE

 

This Setoff and Mutual Release (the “Setoff and Release”) is entered into as of April 1, 2012 (the “Effective Date”), between Delta Air Lines, Inc., a corporation organized and existing under the laws of Delaware (“Delta”), Pinnacle Airlines Corp., a corporation organized and existing under the laws of Delaware (“Pinnacle Corp.”), Pinnacle Airlines, Inc., a corporation organized and existing under the laws of Georgia (“Pinnacle”), and Mesaba Aviation, Inc., a corporation organized and existing under the laws of Minnesota (“Mesaba,” and together with Pinnacle Corp. and Pinnacle, each a “Pinnacle Party” and collectively, the “Pinnacle Parties”).

 

WHEREAS, on April 27, 2007, Delta, Pinnacle Corp., and Pinnacle entered into that certain Delta Connection Agreement (as amended or modified from time to time, the “2007 DCA”), which agreement was amended on July 1, 2010 pursuant to that certain Amendment to Delta Connection Agreement dated as of July 1, 2010 by and among Delta, Pinnacle Corp., and Pinnacle (the “2010 Amendment to 2007 DCA”);

 

WHEREAS, on July 1, 2010, Delta, Pinnacle Corp., Pinnacle, and Mesaba entered into that certain Delta Connection Agreement (as amended or modified from time to time, the “2010 DCA”);

 

WHEREAS, on July 1, 2010, Delta, Pinnacle Corp., Pinnacle, and Mesaba entered into that certain Second Amended and Restated Airline Services Agreement (as amended or modified from time to time, the “2010 ASA” and together with the 2007 DCA and the 2010 DCA, the “DCAs”);

 

WHEREAS, certain of the parties hereto, as applicable, desire to enter into that certain Second Amendment to Delta Connection Agreement, dated as of the Effective Date, which amends the 2007 DCA (the “Amended 2007 DCA”), that certain Amended and Restated Delta Connection Agreement, dated as of the Effective Date, which amends the 2010 DCA (the “Amended and Restated 2010 DCA”), and that certain Third Amended and Restated Airline Services Agreement, dated as of the Effective Date, which amends the 2010 ASA (the “Amended and Restated 2010 ASA,” and together with the Amended 2007 DCA and the Amended and Restated 2010 DCA, the “DCA Amendments”);

 

WHEREAS, this Setoff and Release is an exhibit to each of the DCA Amendments and is incorporated therein by reference as though fully restated in each such DCA Amendment; and

 

NOW, THEREFORE, in consideration of the premises and agreements contained herein, and to memorialize an agreement that is an essential, non-severable component of the agreements, understandings, and promises that have induced the parties hereto to enter into the DCA Amendments, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1. Upon the execution and delivery of the DCA Amendments, all amounts owed by Delta or any Pinnacle Party on account of the following items (the “Disputed Amounts”) shall be offset and released by the party owed such amounts such that immediately after the Effective Date, neither Delta nor any Pinnacle Party shall owe any amounts to any other party on account of such Disputed Amounts:

 

 [***]

 

2. Except on account of obligations created under this Setoff and Release, Delta, on behalf of itself and its affiliates, expressly releases, fully and finally, each of the Pinnacle Parties, their affiliates and their respective directors, officers, agents, employees, attorneys and other representatives, successors and assigns, past, present or future (collectively, the “Pinnacle Releasees”) from and against any and all (a) claims, causes of action, suits, demands, or accounts, each based upon the Disputed Amounts, which Delta or any of its affiliates may have ever had, may now have, or may hereafter have against any of the Pinnacle Releasees, and (b) debts, liabilities, guarantees, or obligations, each based upon the Disputed Amounts, which any of the Pinnacle Releasees may have ever had, may now have or may hereafter have to Delta or any of its affiliates, in each case (a) and (b), of any kind whatsoever, known or unknown, suspected or unsuspected, direct, indirect, or contingent, in contract or in tort, in law or in equity (collectively, the “Delta Claims”), arising at any time from the beginning of time to the Effective Date; provided, however, that this Setoff and Release does not constitute a termination of any agreements or instruments between Delta and/or any of its affiliates, on the one hand, and Pinnacle Corp., Pinnacle or Mesaba, on the other hand (all such Delta Claims released pursuant to this paragraph being referred to herein collectively as the “Delta Released Claims”).  Delta further covenants and agrees that it and its affiliates shall never institute or participate in any suit, action or proceeding, at law or in equity, against Pinnacle Releasees, by reason of, or based upon, any Delta Released Claim.

 

3. Except on account of obligations created under this Setoff and Release, each of the Pinnacle Parties, on behalf of itself and its affiliates, expressly releases, fully and finally, Delta and its affiliates and their respective directors, officers, agents, employees, attorneys and other representatives, successors and assigns, past, present or future (collectively, the “Delta Releasees”) from and against any and all (a) claims, causes of action, suits, demands, or accounts, each based upon the Disputed Amounts, which any Pinnacle Party or any of its affiliates may have ever had, may now have, or may hereafter have against any of the Delta Releasees, and (b) debts, liabilities, guarantees, or obligations, each based upon the Disputed Amounts, which any of the Delta Releasees may have ever had, may now have, or may hereafter have to any Pinnacle Party or any of its affiliates, in each case (a) and (b), of any kind whatsoever, known or unknown, suspected or unsuspected, direct, indirect, or contingent, in contract or in tort, in law or in equity (collectively, the “Pinnacle Claims”), arising at any time from the beginning of time to the Effective Date; provided, however, that this Setoff and Release does not constitute a termination of any agreements or instruments between any Pinnacle Party and/or any of its affiliates, on the one hand, and Delta, on the other hand (all such Pinnacle Claims released pursuant to this paragraph being referred to herein collectively as the “Pinnacle Released Claims” and together with the Delta Released Claims, the “Released Claims”).  Each Pinnacle Party further covenants and agrees that it and its affiliates shall never institute or participate in any suit, action, or proceeding, at law or in equity, against Delta Releasees, by reason of, or based upon, any Pinnacle Released Claim.

 

4. Without limiting the generality of the provisions of paragraphs 2 and 3 hereof, Delta and each Pinnacle Party agree(s) that applicable releases and discharges set forth in paragraphs 2 and 3 hereof are given regardless of whether the Released Claims or the consequences thereof or the facts on which they are based are known or unknown, anticipated or unanticipated, absolute or contingent, and whether or not such Released Claims could have been asserted at the time of the Effective Date.

 

5. Each of the DCA Amendments, along with any exhibits, appendices, addendums, schedules, and amendments thereto, including, but not limited to, this Setoff and Release, constitute a single integrated, non-severable agreement between the parties thereto.

 

6. The invalidity or unenforceability of any provision of this Setoff and Release shall not affect the validity or enforceability of any other provision of this Setoff and Release, which shall remain in full force and effect.  If any provision of this Setoff and Release is determined to be unenforceable, this Setoff and Release shall be enforced to the maximum extent, duration, or scope permitted by applicable law.

 

7. Each party acknowledges, confirms, and agrees that (a) the provisions of this Setoff and Release and their legal effect are fully understood by such party, (b) such party has voluntarily entered into this Setoff and Release, (c) such party has received disclosure of the arrangements and matters referenced herein to the satisfaction of such party, and (d) such party has had an opportunity to discuss this Setoff and Release with such party’s counsel to the satisfaction of such party.

 

8. Each of the Pinnacle Parties expressly warrants and represents that it and its affiliates have not sold, granted, transferred, or assigned or caused to be sold, granted, transferred, or assigned to any other person any portion of any Pinnacle Released Claims or any portion of any recovery or settlement to which such Pinnacle Releasees may be entitled in connection with the Pinnacle Released Claims.

 

9. Delta expressly warrants and represents that it has not sold, granted, transferred, or assigned or caused to be sold, granted, transferred, or assigned to any other person any portion of any Delta Released Claims or any portion of any recovery or settlement to which such Delta Releasees may be entitled in connection with the Delta Released Claims.

 

10. Each party hereto expressly acknowledges and agrees that neither this Setoff and Release, nor the furnishing of the consideration for this Setoff and Release, shall be deemed or construed at any time to be an admission by any Pinnacle Releasees or Delta Releasees of any liability or improper or unlawful conduct and each party hereto expressly denies any and all liability or improper or unlawful conduct relating to any and all Released Claims released and discharged under this Setoff and Release.

 

11. This Setoff and Release shall be governed by and construed in accordance with the laws of the State of New York without giving effect to choice of law principles.

 

12. This Setoff and Release may be executed in counterparts, and all counterparts so executed shall constitute one agreement, binding on the parties hereto, notwithstanding that such parties are not signatories to the same counterpart.

 

13. This Setoff and Release shall become effective as of the Effective Date.

 

 

 

 

[Signature page follows]

 

  

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Setoff and Release as of the day and year first written above.

 

DELTA AIR LINES, INC.

 

 

By:          /s/ Donald T. Bornhurst                                                     

Donald T. Bornhorst

Senior Vice President – Delta Connection

 

PINNACLE AIRLINES CORP.

 

 

By:          /s/ Brian T. Hunt                                                     

Brian T. Hunt

Vice President and General Counsel

 

PINNACLE AIRLINES, INC.

 

 

By:          /s/ Brian T. Hunt                                                     

Brian T. Hunt

Vice President and General Counsel

 

 

 

MESABA AVIATION, INC.

 

 

By:          /s/ Brian T. Hunt                                                     

Brian T. Hunt

Vice President and General Counsel

 

 

-Signature Page to Setoff and Mutual Release-

  

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