Document:

Exhibit
10.6

 

[EXECUTION
COPY]

 

REVOLVING
CREDIT FACILITY

 

 

January 14, 2003

 

Pinnacle Airlines, Inc.

1689 Nonconnah Blvd.

Suite 111

Memphis, Tennessee  38132

 

	
  Attention:

  	
   

  	
  Mr. Curtis E. Sawyer

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

Revolving Credit Facility

 

Gentlemen:

 

We are pleased to make available to you a revolving
credit facility, on the terms and subject to the conditions set forth in this
letter agreement.  For convenience only,
we have included section captions in this letter agreement.  Schedule I annexed hereto lists
the defined terms used in this letter agreement and the Sections in which those
terms are defined.

 

SECTION 1.  The Loans.  We agree, on the terms and subject to the
conditions hereinafter set forth, to make loans (the “Loans”) to you
from time to time during the period from the date hereof to the date (the “Termination
Date”) which is the earliest of:

 

(a)                                  December
31, 2003, provided that, in the event you are unable to arrange the
Replacement Credit Facility on or prior to such date, such date may be extended
by you on at least ten Business Days’ prior written notice from you to us
furnished no earlier than December 10, 2003 to a date set forth in such notice
and in no event later than December 31, 2004;

 

(b)                                 the
date notice is given by us to you pursuant to Section 14;

 

(c)                                  the
date on which you obtain the Replacement Credit Facility; and

 

(d)                                 the
date on which the Airline Services Agreement is terminated.

 

The aggregate amount of all Loans outstanding from
time to time may not exceed $50,000,000, as such amount may be reduced pursuant
to Section 4 (such amount, as so reduced, being the “Commitment
Amount”).  Each Loan must be in an
amount which is an integral multiple of $100,000.  Subject to the terms hereof, you may from time to time borrow,
prepay and reborrow amounts pursuant hereto.

 

 

SECTION 2.  Making the Loans.  We will make Loans on at least two Business
Days’ prior written notice from you to us (a “Borrowing Notice”)
specifying the proposed amount and date (which must be a Business Day) of such
Loan.  Not later than 4:00 P.M.
(Minneapolis time) on the date of such Loan and upon fulfillment of the
conditions set forth in Sections 9 and 10, the proceeds of
such Loan will be made available to you in immediately available funds at such bank
in the United States as you may designate from time to time in writing to
us.  The term “Business Day”
means a day of the year on which banks are not required or authorized to close
in Minneapolis, Minnesota.

 

SECTION 3.  Interest, etc.  Interest will accrue on the unpaid principal
amount of each Loan from the date such Loan is made until such principal amount
is paid in full (after, as well as before, judgment) at the Reference
Rate.  Interest on each Loan will be
payable on the last Business Day of each calendar month and on the Termination
Date.

 

The “Reference Rate” means a per annum rate of
interest equal to the sum of:

 

(i)                                     1%
per annum

 

plus

 

(ii)                                  the
higher of

 

(A)                              the
rate of interest most recently announced by JPMorgan Chase Bank (“Chase”)
at its principal office in New York City as its prime rate, and

 

(B)                                the
rate of interest most recently offered to Chase in the interbank market as the
overnight federal funds rate plus .5%.

 

The Reference Rate is not necessarily intended to be
the lowest rate of interest determined by Chase in connection with extensions
of credit.  Changes in the rate of
interest on Loans will take effect simultaneously with each change in the
Reference Rate.  On any overdue
principal amount of any Loan, you will pay interest (after, as well as before,
judgment) payable on demand, at a fluctuating interest rate per annum (the “Default
Rate”) equal to 4% per annum over the Reference Rate in effect from time to
time (but not less than the Reference Rate in effect at the time of the
applicable default).

 

SECTION 4.  Reduction of the
Commitment Amount.  You may, upon at
least five Business Days’ notice to us, terminate or permanently reduce the
unused portion of the Commitment Amount, provided that each partial
reduction must be in a minimum amount of $1,000,000 and an integral multiple of
$100,000.

 

SECTION 5.  Repayment.  On the Termination Date, the then aggregate
outstanding principal amount of all Loans will be due and payable in full.

 

2

 

SECTION 6.  Prepayments.  You may, upon at least two Business Days’
notice to us, prepay the outstanding principal of the Loans, in whole or in
part, on any Business Day, in each case with accrued interest to the date of
such prepayment on the principal amount prepaid; provided, however,
that each partial prepayment shall be in a principal amount in an integral
multiple of $ 100,000.

 

SECTION 7.  Payments,
Set-Off, Computations, etc.  Any
term or provision of this letter agreement to the contrary notwithstanding, you
and we hereby agree as follows:

 

(a)                                  Your
payments due hereunder or under any instrument delivered hereunder must be made
by you (in immediately available funds) not later than 12:00 noon (Minneapolis
time) on the day when due in lawful money of the United States to us at such
account as we may from time to time designate in writing to you.  Each such payment must be made by you free
and clear of (and without deduction for) any and all present and future taxes,
levies, imposts, deductions, charges, withholdings and all liabilities with
respect thereto, excluding income and franchise taxes of the United States and
any political subdivision thereof.

 

(b)                                 All
computations of interest described in Section 3 will be made by us
on the basis of a year of 365 or 366 days, as the case may be, for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest is payable.  Each computation by us of interest hereunder will be conclusive
and binding for all purposes, absent manifest error.

 

(c)                                  Whenever
any payment to be made hereunder or under the Note or any other instrument
delivered hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time will, in such case, be included in the computation of payment
of interest.

 

SECTION 8.  Evidence of Debt.  Your indebtedness to us resulting from each
Loan made from time to time hereunder will be evidenced by your promissory note
(the “Note”), in substantially the form attached hereto as Exhibit A,
delivered to us pursuant to clause (a) of Section 9.  You hereby irrevocably authorize us to make
(or cause to be made) appropriate notations on the grid attached to the Note
(or on a continuation of such grid attached to the Note and made a part
thereof), which notations, if made, will evidence, inter  alia,
the date of, the outstanding principal of, and the interest rate applicable to,
all Loans evidenced thereby.  Failure to
record any notation on such grid (or on any such continuation), or any error
with respect thereto, will not, however, limit or otherwise affect your
obligations hereunder or under the Note to make payments of principal of or
interest on the Loans when due.  We will
also maintain an account or accounts evidencing your indebtedness to us
resulting from each Loan made from time to time and the amounts of principal
and interest payable and paid from time to time hereunder.  In any legal action or proceeding in respect
of this letter agreement, the entries made in such account or accounts will be
conclusive evidence of the existence and amounts of your obligations to us
therein recorded, absent manifest error.

 

3

 

SECTION 9.  Conditions
Precedent to Initial Loan.  Our
obligation to make the initial Loan hereunder is subject to the condition
precedent that we receive, prior to or concurrently with the making of such
Loan, the following documents and instruments, each dated the date of such
Loan, in form and substance satisfactory to us:

 

(a)                                  the
Note;

 

(b)                                 from
Pinnacle Airlines Corp., a Delaware corporation (“Guarantor”), a
guaranty in the form of Exhibit B attached hereto (the “Guaranty”);

 

(c)                                  certified
copies of:

 

(i)                                     your
and Guarantor’s by-laws and certificate of incorporation; and

 

(ii)                                  all
documents evidencing other necessary corporate or other action with respect to
this letter agreement, the Note, the Guaranty and each other document or
instrument to be delivered hereunder or in connection herewith;

 

(d)                                 certified
copies of all necessary governmental authorizations and approvals, if any, with
respect to this letter agreement, the Note and each other document or
instrument to be delivered hereunder or in connection herewith; and

 

(e)                                  officer’s
certificates, dated the date of such initial Loan, from each of you and
Guarantor certifying as to

 

(i)                                     resolutions
of your and Guarantor’s Board of Directors then in full force and effect authorizing
the execution, delivery and performance of this letter agreement, the Note, the
Guaranty and the other documents and instruments to be executed hereunder, and

 

(ii)                                  the
incumbency and true signatures of the officers duly authorized to sign this
letter agreement, the Note, the Guaranty and the other documents and
instruments to be delivered hereunder.

 

SECTION 10.  Conditions
Precedent to All Loans.  Our
obligation to make each Loan (including the initial Loan) shall be subject to
the further conditions precedent that on the date of such Loan:

 

(a)                                  The
following statements shall be true, and each of the giving of the applicable
Borrowing Notice for such Loan and the acceptance by you of the proceeds of
such Loan shall constitute a representation and warranty by you that on the
date of such Loan such statements are true:

 

(i)                                     the
representations and warranties contained in Section 11 are true and
correct on and as of the date of such Loan as though made on and as of such
date; and

 

4

 

(ii)                                  no
event has occurred and is continuing, or would result from such Loan, which
constitutes an Event of Default or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.

 

(b)                                 We
will have received such other approvals, opinions or documents as we may
reasonably request, and all such approvals, opinions and documents shall be in
form and substance reasonably satisfactory to us.

 

SECTION 11.  Representations
and Warranties.  You represent and
warrant as follows:

 

(a)                                  You
are a corporation duly organized, validly existing and in good standing under
the laws of the State of Georgia, and you are duly qualified to do business and
are in good standing as a foreign corporation in each jurisdiction where the
nature of your business requires such qualification.

 

(b)                                 Your
execution, delivery and performance of this letter agreement, the Note and each
other document or instrument delivered in connection herewith are within your
corporate powers, have been duly authorized by all necessary corporate action,
and do not contravene

 

(i)                                     your
charter or by-laws;

 

(ii)                                  any
law, rule or regulation applicable to you (including, without limitation,
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System); or

 

(iii)                               any
contractual restriction binding on or affecting you.

 

(c)                                  No
authorization, approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for your due execution,
delivery and performance of this letter agreement or the Note.

 

(d)                                 This
letter agreement is, and the Note when delivered hereunder will be, your legal,
valid and binding obligations enforceable against you in accordance with their
respective terms.

 

(e)                                  Your
audited balance sheet as at December 31, 2001, and your related audited
statements of income and stockholders’ equity for the fiscal year then ended,
copies of which have been furnished to us, fairly present your financial
condition as at such date and the results of your operations for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied.

 

(f)                                    There
is no action, suit or proceeding pending against, or, to your knowledge,
threatened against or affecting, you or Guarantor before any court or
arbitrator or any governmental body, agency or official in which the amount of
the claim thereunder exceeds $1,000,000 individually or $3,000,000 in the
aggregate (unless fully covered by insurance) or in which there is a reasonable
possibility of an adverse decision which could materially adversely affect your
business, financial position or results of 

 

5

 

operations or which in any manner questions the validity of this letter
agreement, the Note or the Guaranty.

 

(g)                                 You
are not an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended;
nor are you a “holding company”, a “subsidiary company” of a “holding company”,
or an “affiliate” of a “holding company” or of a “subsidiary company” of a
“holding company”, within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

 

(h)                                 You
are not in default in any material respect under any of your obligations to
banks or other financial institutions or with respect to any Federal or state
agency.

 

(i)                                     The
proceeds of all Loans shall be used solely to finance your working capital
needs.

 

(j)                                     You
are a citizen of the United States (as defined in Section 40102(a)(15) of Title
49 of the United States Code) holding a carrier operating certificate issued by
the Secretary of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code (or any successor provision) for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo.

 

(k)                                  Each
of your employee benefit plans (as defined in the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) is in full compliance with
all applicable requirements of ERISA and the Internal Revenue Code of 1986, as
amended, no steps have been taken to terminate any such plan and no
contribution failure has occurred with respect to any such plan sufficient to
give rise to a lien under ERISA.  No
condition exists or event or transaction has occurred with respect to any such
plan which might result in the incurrence by you of any material liability,
fine or penalty.

 

(l)                                     All
factual information heretofore or contemporaneously furnished by or on behalf
of you in writing to us for purposes of or in connection with this letter
agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of you to us will be, true and accurate
in every material respect on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading.

 

SECTION 12.  Affirmative
Covenants.  So long as any Loan
remains unpaid or we have any commitment hereunder to make Loans to you, you
will, unless we otherwise consent in writing:

 

(a)                                  Maintain
Property.  Keep all property useful
and necessary in your business, taken as a whole, in good working order and
condition; maintain insurance as 

 

6

 

required by the Airline Services Agreement; and furnish to us, upon our
written request, full information as to the insurance carried.

 

(b)                                 Business
Activities.  Continue to engage
solely in the business described in the Airline Services Agreement and
preserve, renew and keep in full force and effect your corporate existence and
your rights, privileges and franchises which are necessary or desirable in the
normal conduct of your business.

 

(c)                                  Books
and Records.  Keep proper books of
record and account in conformity with generally accepted accounting principles,
and permit our representatives to visit and inspect any of your properties, to
examine and make abstracts from any of your books and records and to discuss
your affairs, finances and accounts with your officers, employees and
independent public accountants, all at such reasonable times and as often as
may reasonably be desired.

 

(d)                                 Compliance
with Laws, etc.  Comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include paying before the same become delinquent, all taxes,
assessments and governmental charges imposed upon you or upon any of your
properties, except to the extent contested in good faith and by appropriate
proceedings promptly instituted and diligently pursued.

 

(e)                                  Reporting
Requirements.  Furnish to us:

 

(i)                                     as
soon as available and in any event within 45 days after the end of each of your
first three quarters of each of your fiscal years, your balance sheets as of
the end of such quarter and statements of income and stockholders’ equity for
the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, certified by your chief financial officer;

 

(ii)                                  as
soon as available and in any event within 120 days after the end of each of
your fiscal years, a copy of your annual report for such year containing financial
statements for such year certified in a manner acceptable to us by Ernst &
Young LLP or other independent public accountants acceptable to us;

 

(iii)                               not later than five days
prior to the beginning of each fiscal quarter, a projected cash balance on a
daily basis for such fiscal quarter, prepared in detail reasonably satisfactory
to us;

 

(iv)                              as
soon as possible and in any event within five days after the occurrence of any
Event of Default and any event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default, continuing on the date of such
statement, a statement of your chief financial officer setting forth details of
such Event of Default or event and the action which you have taken and propose
to take with respect thereto;

 

(v)                                 promptly
after the sending or filing thereof, copies of all reports which you or
Guarantor send to any of your security holders, and copies of all 

 

7

 

reports and registration statements which you or Guarantor file with
the Securities and Exchange Commission or any national securities exchange;

 

(vi)                              promptly
after the filing or receiving thereof, copies of all reports and notices which
you file under ERISA with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or which you receive from
such Corporation or any other government agency; and

 

(vii)                           such other information
respecting your condition or operations, financial or otherwise, as we may from
time to time reasonably request.

 

All financial statements
furnished to us by you pursuant to this clause (e) shall be prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the financial statements
described in clause (e) of Section 11.

 

(f)                                    Air
Carrier Status.  Remain a
certificated air carrier in accordance with the provisions of clause (j)
of Section 11.

 

(g)                                 Replacement
Credit Facility.  Use your best
efforts to obtain a replacement credit facility to replace this letter
agreement (the “Replacement Credit Facility”) on or prior to March 31,
2003, provided that if no Replacement Credit Facility is obtained by
such date, you will continue to use your best efforts to obtain a Replacement
Credit Facility at the earliest possible date.

 

SECTION 13.  Negative
Covenants.  So long as any Loan
remains unpaid or we have any commitment hereunder to make Loans to you, you
will not, unless we otherwise consent in writing:

 

(a)                                  Debt.  Create or suffer to exist any Debt, except
that certain promissory note, dated January 14, 2003 and payable to the order
of NWA Inc. in the original principal amount of $200,000,000.

 

(b)                                 Liens,
etc.  Create or suffer to exist any
lien, security interest or other charge or encumbrance, or any other type of
preferential arrangement, upon or with respect to any of your properties,
whether now owned or hereafter acquired, or assign any right to receive income,
in each case to secure or provide for the payment of any Debt of any Person.

 

(c)                                  Lease
Obligations.  Create or suffer to
exist any obligations for the payment of rental for any property under leases
or agreements to lease except as described in an Annual Operating Plan prepared
pursuant to the Airline Services Agreement.

 

(d)                                 Dividends,
etc.  Declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any of your classes of capital stock,
or purchase, redeem or otherwise acquire 

 

8

 

for value any shares of any of your classes of capital stock or any
warrants, rights or options to acquire any such shares, now or hereafter
outstanding.

 

(e)                                  Acquisition
of Assets.  Acquire any aircraft,
facilities or other business interests except in connection with the
performance of your obligations to us under the Airline Services Agreement.

 

(f)                                    Loans
and Advances, etc.  Make any loan,
advance or other investment in any Person other than United States Treasury
securities and money market funds carrying a minimum rating of A1/P1 from
Standard & Poor’s Ratings Services, except for travel advances to
employees.

 

(g)                                 Transactions
with Affiliates.  Enter into any
transaction or series of related transactions with any of your affiliates,
other than on terms and conditions substantially as favorable to you as would
reasonably be obtained by you at that time in a comparable arm’s-length
transaction with a Person other than an affiliate.

 

(h)                                 Mergers,
etc.  Merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or any material portion of your
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock of, any Person, or form any
subsidiary.

 

(i)                                     Capital
Expenditures.  Make any capital
expenditures except as described in an Annual Operating Plan prepared pursuant
to the Airline Services Agreement.

 

SECTION 14.  Events of
Default.  If any of the following
events (“Events of Default”) occurs and is continuing:

 

(a)                                  you
fail to pay

 

(i)                                     any
principal of any Loan when due;

 

(ii)                                  any
interest on any Loan within one Business Day after the date when due; or

 

(iii)                               any
other amounts payable hereunder within three days Business Days after the date
when due;

 

(b)                                 any
representation or warranty made by you or Guarantor in or in connection with
this letter agreement or the Guaranty proves to have been incorrect in any
material respect when made;

 

(c)                                  you
fail to perform or observe any covenant or agreement contained in Section 13;

 

(d)                                 you
or Guarantor fail to perform or observe any other term, covenant or agreement
contained in this letter agreement, the Note or the Guaranty on your or its
part 

 

9

 

to be performed or observed and any such failure remains unremedied for
ten days after written notice thereof is given to you by us;

 

(e)                                  you
or Guarantor fail to make, when due or within any applicable grace period, any
payment in respect of any indebtedness or other contractual obligation (other
than that evidenced by the Note) exceeding $50,000 in aggregate amount;

 

(f)                                    any
event or condition occurs which results in the acceleration of the maturity of
any indebtedness or other contractual obligation of yours or of Guarantor,
exceeding $50,000 in aggregate principal amount at the time outstanding or
which permits (or, with the giving of notice or lapse of time or both, would
enable) the holder of such indebtedness or other contractual obligation or any
Person acting on such holder’s behalf to accelerate the maturity thereof;

 

(g)                                 you
or Guarantor admit in writing your or its inability to pay debts, or make a general
assignment for the benefit of creditors; or any proceeding is instituted by or
against you or Guarantor seeking to adjudicate you or it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or composition of
you or it or your or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking appointment of a receiver,
trustee or other similar official for you or Guarantor or for any substantial
part of your or its property; or you or Guarantor take any corporate action to
authorize any of the actions set forth above in this clause (g);

 

(h)                                 one
or more final judgments or orders for the payment of money in excess of
$1,000,000 individually or $3,000,000 in the aggregate shall be rendered
against you or Guarantor and such judgment or order shall continue unsatisfied
and unstayed for a period of 30 days;

 

(i)                                     a
Pinnacle Change in Control shall occur;

 

(j)                                     you
shall provide any flying services or other airline services of the nature
provided to us pursuant to the Airline Services Agreement for any Person other
than us;

 

(k)                                  we
are entitled to terminate the Airline Services Agreement;

 

(l)                                     you
or Guarantor fail to perform or observe any term, covenant or agreement
contained in any other agreement with us or any of our affiliates on your or
its part to be performed or observed and any such failure remains unremedied
for ten days after written notice thereof given to you by us; or

 

(m)                               any
of the following events shall occur with respect to any of your employee
benefit plans:  the institution of any
steps by you or any other Person to terminate any such plan if, as a result
thereof, you could be required to make a contribution to such plan, or could
reasonably expect to incur a liability or obligation to such plan, in excess of
$50,000; or a contribution failure occurs with respect to any such plan
sufficient to give rise to a lien under ERISA.

 

10

 

then, if any Event of Default described in the preceding clause (g)
shall occur, our commitment under Section 1 (if not theretofore
terminated) shall automatically terminate and the outstanding principal amount
of all outstanding Loans and all other obligations hereunder and under the
related documents shall automatically be and become immediately due and
payable, without notice or demand.  If
any Event of Default (other than any Event of Default described in the
preceding clause (g)) shall occur for any reason, whether voluntary or
involuntary, and be continuing, we may by notice to you declare all or any
portion of the outstanding principal amount of the Loans and other obligations
hereunder and under the related documents to be due and payable and/or the
commitment under Section 1 (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other
obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the commitment shall terminate.

 

SECTION 15.  Amendments, etc.  No amendment to or waiver of any provision
of this letter agreement, the Note, the Guaranty or any other document or
instrument delivered in connection herewith, nor consent to any departure by
you therefrom, will in any event be effective unless the same is in writing and
signed by us and then such amendment, waiver or consent will be effective only
in the specific instance and for the specific purpose for which given.

 

SECTION 16.  Notices, etc.  All notices and other communications
provided for hereunder must be in writing (including facsimile communication)
and mailed or facsimiled or delivered, if to you, at your address set forth
above; and if to us, at our address at 2700 Lone Oak Parkway, Eagan, MN 55121,
Attention: Senior Vice President and Treasurer; or, as to each of us, at such
other address as designated by one of us in a written notice to the other.  All such notices and communications will,
when mailed or facsimiled, be effective when deposited in the mails or sent by
facsimile (receipt confirmed), respectively, addressed as aforesaid, except
that notices to us will not be effective until received by us.

 

SECTION 17.  No Waiver;
Remedies.  No failure on our part to
exercise, and no delay on our part in exercising, any right hereunder or under
the Note or the Guaranty will operate as a waiver thereof; nor will any single
or partial exercise of any right hereunder or under the Note or the Guaranty or
any other document or instrument delivered in connection herewith preclude any
other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 18.  Accounting and
Certain Other Terms.  All accounting
terms not specifically defined herein shall be construed and consistently
applied in accordance with those generally accepted accounting principles
applied in the preparation of the financial statements referred to in clause (e)
of Section 11, except as otherwise stated herein.  In addition, for purposes of this letter
agreement, the following terms will have the following meanings:

 

“Airline Services Agreement” means that certain
Airline Services Agreement, dated as of January 14, 2003, between you and us.

 

“Debt” means, when used with reference to any
Person:

 

11

 

(i)                                     indebtedness
of such Person for borrowed money,

 

(ii)                                  obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments,

 

(iii)                               obligations of such
Person to pay the deferred purchase price of property or services,

 

(iv)                              obligations
of such Person as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, consistently applied,
recorded as capital leases,

 

(v)                                 obligations
of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above, and

 

(vi)                              liabilities
of such Person in respect of unfunded vested benefits under plans covered by
Title IV of ERISA, together with the regulations thereunder, in each case as in
effect from time to time.

 

“Person” means an individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

 

“Pinnacle Change of Control” has the meaning
provided in the Airline Services Agreement.

 

SECTION 19.  Costs and
Expenses.  You agree to pay on
demand all of our costs and expenses, including reasonable legal fees and
expenses, in connection with the enforcement of this letter agreement, the
Note, the Guaranty and any other document or instrument delivered hereunder.

 

SECTION 20.  Right of Set-off.  Upon the occurrence and during the continuance
of any Event of Default, we are hereby authorized at any time and from time to
time, without notice to you (any such notice being expressly waived by you), to
set off and apply any and all indebtedness at any time owing by us to or for
your credit or account against any and all of your obligations now or hereafter
existing under this letter agreement, the Note or any other document or
instrument delivered in connection herewith, irrespective of whether or not we
have made any demand under this letter agreement, the Note or any other
document or instrument delivered in connection herewith, and although such
obligations may be unmatured.  Our
rights under this Section 20 are in addition to other rights and
remedies (including other rights of set-off) which we may have.

 

SECTION 21.  Indemnification
and Survival.  In consideration of
the execution and delivery of this letter agreement by us, you hereby
indemnify, exonerate and hold us and each of our officers, directors, employees
and agents (collectively, the “Indemnified Parties”) free and 

 

12

 

harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities,
damages and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys’ fees and disbursements
(collectively, the “Indemnified Liabilities”), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to

 

(a)                                  any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loan;

 

(b)                                 the
entering into and performance of this letter agreement by any of the
Indemnified Parties (including any action brought by or on behalf of you as the
result of any determination by us pursuant to Section 10 not to
fund any borrowing);

 

(c)                                  any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
and you; or

 

(d)                                 the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission, discharging or releases from, any real property owned or operated by
you of any hazardous material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any environmental
law), regardless of whether caused by, or within the control of, you,

 

except for any such Indemnified Liabilities arising
for the account of a particular Indemnified Party by reason of the relevant
Indemnified Party’s gross negligence or wilful misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, you
hereby agree to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.  Your obligations under this Section 21
and under Section  19 shall in each case survive any termination
of this letter agreement, the payment in full of all obligations hereunder and
the termination of our commitment hereunder. 
The representations and warranties made by you in this letter agreement
shall survive the execution and delivery of this letter agreement and the
making of any Loan hereunder.

 

SECTION 22.  Severability.  Whenever possible each provision of this
letter agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this letter agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this letter agreement.

 

SECTION 23.  Entire Agreement.  THIS LETTER AGREEMENT, THE GUARANTY AND THE
NOTE CONSITITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT
TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR
ORAL, WITH RESPECT THERETO.

 

13

 

SECTION 24.  Binding Effect; Execution in
Counterparts; Section Captions; Governing Law.  This letter agreement, the Note and each other document or
instrument delivered in connection herewith shall be binding upon and inure to
the benefit of you and us and your and our respective successors and assigns,
except that you will not have the right to assign your rights hereunder or any
interest herein.  We may assign to any
Person all or any part of, or any interest in (including participation
interests), our rights and benefits hereunder, and under the Note and each
other document or instrument delivered in connection herewith, and to the
extent of such assignment such assignee will have the same rights and benefits
against you as it would have had if it were us hereunder.  This letter agreement may be executed by you
and us in counterparts, each of which will be deemed to be an original and all
of which will constitute but one and the same agreement.  The various headings of this letter
agreement are inserted for convenience only and shall not affect the meaning or
interpretation of any provision of this letter agreement.  THIS LETTER AGREEMENT, THE NOTE AND EACH
OTHER DOCUMENT OR INSTRUMENT DELIVERED IN CONNECTION HEREWITH SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF MINNESOTA, UNITED STATES OF AMERICA.

 

SECTION 25.  Forum Selection and Consent to
Jurisdiction.  YOU HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

 

(a)                                  SUBMIT
FOR YOURSELF AND YOUR PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS LETTER AGREEMENT AND THE OTHER RELATED DOCUMENTS TO WHICH YOU ARE A PARTY,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF MINNESOTA, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE DISTRICT OF MINNESOTA,  AND APPELLATE COURTS FROM ANY THEREOF;

 

(b)                                 CONSENT
THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVE ANY
OBJECTION THAT YOU MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN
AN INCONVENIENT COURT AND AGREE NOT TO PLEAD OR CLAIM THE SAME;

 

(c)                                  AGREE
THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO YOU AT YOUR ADDRESS SET FORTH IN
SECTION 16 OR AT SUCH OTHER ADDRESS OF WHICH WE SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO; AND

 

(d)                                 AGREE
THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.

 

14

 

SECTION 26. Waiver of Jury Trial.  YOU AND WE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS YOU OR WE MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS LETTER AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO (INCLUDING THE
NOTE AND THE GUARANTY), OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF YOU OR US.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR OUR ENTERING INTO
THIS LETTER AGREEMENT.

 

15

 

If the terms of this letter agreement are satisfactory
to you, please indicate your agreement and acceptance thereof by executing a
counterpart of this letter agreement and returning it to us.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  NORTHWEST
  AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  B. Matthews

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  PINNACLE
  AIRLINES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Curtis
  E. Sawyer

  	
   

  
	
  Title:

  	
  Vice
  President and CFO

  	
   

  
									

 

16

 

EXHIBIT A

 

PROMISSORY NOTE

 

	
  $50,000,000

  	
   

  	
  January 14, 2003

  

 

 

FOR VALUE RECEIVED, the undersigned, PINNACLE
AIRLINES, INC., a Georgia corporation (the “Borrower”), HEREBY PROMISES TO PAY
to the order of NORTHWEST AIRLINES, INC. (the “Lender”) on the Termination Date
under the Letter Agreement (as defined below) the principal sum of FIFTY
MILLION DOLLARS ($50,000,000) or, if less, the then aggregate outstanding
principal amount of all Loans outstanding under the Letter Agreement (as
defined below).

 

The Borrower also promises to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Letter Agreement (as defined below).

 

Both principal and interest are payable in lawful
money of the United States of America in immediately available funds free and
clear of, and without deduction for or on account of, any and all present and
future taxes, levies, imposts, deductions, charges, withholdings and all
liabilities with respect thereto, all as set forth in the Letter
Agreement.  All Loans, and all payments
made on account of principal hereof, will be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto which is a part of
this promissory note.

 

This promissory note is the Note referred to in, and
is entitled to the benefits of, the letter agreement dated January 14, 2003 (as
the same may be amended, restated or otherwise modified or supplemented from
time to time, the “Letter Agreement”), between the Borrower and the
Lender, which Letter Agreement, among other things, contains provisions for
acceleration of the Loans upon the occurrence of certain stated events and also
for optional prepayments on account of principal hereof upon the terms and
conditions specified in the Letter Agreement.

 

THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, UNITED STATES OF
AMERICA.

 

	
   

  	
  PINNACLE
  AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

LOANS AND PRINCIPAL
AMOUNTS

 

	
  Date

  	
   

  	
  Amount of
  Loan Made

  Reference Rate

  	
   

  	
  Amount of
  Principal Repaid

  Reference Rate

  	
   

  	
  Unpaid
  Principal Balance

  Reference Rate

  	
   

  	
  Total

  	
   

  	
  Notation
  Made

  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

 

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”),
dated as of January 14, 2003, made by PINNACLE AIRLINES CORP., a Delaware
corporation (the “Guarantor”), in favor of NORTHWEST AIRLINES, INC., a
Minnesota corporation (the “Lender”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, pursuant to a letter agreement, dated as of
January 14, 2003 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “Letter Agreement”),
between Pinnacle Airlines, Inc., a Georgia corporation (the “Borrower”),
and the Lender, the Lender has extended a commitment to make loans to the
Borrower; and

 

WHEREAS, as a condition precedent to the making of the
initial Loan under the Credit Agreement, the Guarantor is required to execute
and deliver this Guaranty; and

 

WHEREAS, the Guarantor has duly authorized the
execution, delivery and performance of this Guaranty; and

 

WHEREAS, it is in the best interests of the Guarantor
to execute this Guaranty inasmuch as the Guarantor will derive substantial
direct and indirect benefits from the Loans made from time to time to the
Borrower by the Lender pursuant to the Letter Agreement;

 

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Lender to
make the Loans (including the initial Loan) to the Borrower pursuant to the
Letter Agreement, the Guarantor agrees, for the benefit of the Lender, as
follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1.   Certain
Terms.   The following terms
(whether or not underscored) when used in this Guaranty, including its preamble
and recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

 

“Borrower” is defined in the first recital.

 

“Guaranteed Obligations” is defined in Section
2.1

 

“Guarantor” is defined in the preamble.

 

 

“Guaranty” is defined in the preamble.

 

“Lender” is defined in the preamble.

 

“Letter Agreement” is defined in the first
recital.

 

SECTION 1.2.   Letter
Agreement Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in
the Letter Agreement.

 

ARTICLE II

 

GUARANTY
PROVISIONS

 

SECTION 2.1.   Guaranty.   The Guarantor hereby absolutely,
unconditionally and irrevocably (all of the following guaranteed and
indemnified obligations being collectively called the “Guaranteed
Obligations”)

 

(a)                                  guarantees
the full and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all obligations
of the Borrower now or hereafter existing under the Letter Agreement and the
Note, whether for principal, interest, fees, expenses or otherwise, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent or now or hereafter existing or due or to become due (including in
all cases all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)), and

 

(b)                                 indemnifies
and holds harmless the Lender and each holder of the Note for any and all costs
and expenses (including reasonable attorney’s fees and expenses) incurred by
the Lender or such holder, as the case may be, in enforcing any rights under
this Guaranty.

 

SECTION 2.2.   Acceleration of Guaranty.   The Guarantor agrees that, in the event of
the dissolution or insolvency of the Borrower or the Guarantor, or the
inability or failure of the Borrower or the Guarantor to pay debts as they
become due, or an assignment by the Borrower or the Guarantor for the benefit
of creditors, or the commencement of any case or proceeding in respect of the
Borrower or the Guarantor under any bankruptcy, insolvency or similar laws, and
if such event shall occur at a time when any of the Guaranteed Obligations may
not then be due and payable, the Guarantor will pay to the Lender forthwith the
full amount which would be payable hereunder by the Guarantor if all such
Guaranteed Obligations were then due and payable.

 

SECTION 2.3.   Guaranty
Absolute, etc.   This Guaranty shall
in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until all
Guaranteed Obligations have been paid in full and the commitment of 

 

C-2

 

the Lender under the Letter Agreement shall have terminated.  The Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Letter
Agreement, the Note and each other document under which they arise, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lender or any holder of the
Note with respect thereto.  The
liability of the Guarantor under this Guaranty shall be absolute, unconditional
and irrevocable irrespective of:

 

(a)                                  any lack of validity,
legality or enforceability of the Letter Agreement or the Note;

 

(b)                                 the
failure of the Lender or any holder of the Note

 

(i)                                     to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other Person (including any other guarantor) under the
provisions of the Letter Agreement, the Note or otherwise, or

 

(ii)                                  to
exercise any right or remedy against any other guarantor of, or collateral
securing, any Guaranteed Obligations;

 

(c)                                  any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Guaranteed Obligations, or any other extension, compromise or renewal of any
Guaranteed Obligation;

 

(d)                                 any
reduction, limitation, impairment or termination of any Guaranteed Obligations
for any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Guarantor hereby waives any
right to or claim of) any defense or set off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Guaranteed Obligations;

 

(e)                                  any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Letter Agreement or the Note;

 

(f)                                    any
addition, exchange, release, surrender or nonperfection of any collateral, or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by the Lender or any holder of the Note securing
any of the Guaranteed Obligations; or

 

(g)                                 any
other circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, the Borrower, any surety or any guarantor.

 

SECTION 2.4.   Reinstatement, etc.   The Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored 

 

C-3

 

by the Lender or any holder or the Note upon the insolvency, bankruptcy
or reorganization of the Borrower or otherwise, as though such payment had not
been made.

 

SECTION 2.5   Waiver,
etc.   The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect
to any of the Guaranteed Obligations and this Guaranty and any requirement that
the Lender or any holder of the Note protect, secure, perfect or insure any
security interest or lien, or any property subject thereto, or exhaust any
right or take any action against the Borrower or any other Person (including
any other guarantor) or entity or any collateral securing any Guaranteed
Obligations.

 

SECTION 2.6.  Waiver
of Subrogation.  The Guarantor
hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Borrower that arise from the existence, payment,
performance or enforcement of the Guarantor’s obligations under this Guaranty
or any other document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of the Lender against the Borrower or any collateral which the Lender
now has or hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including the right
to take or receive from the Borrower, directly or indirectly, in cash or other
property or by set-off or in any manner, payment or security on account of such
claim or other rights.  If any amount
shall be paid to the Guarantor in violation of the preceding sentence and the
Guaranteed Obligations shall not have been paid in cash in full and the
commitment of the Lender under the Letter Agreement and any other commitments
by the Lender to the Borrower have not been terminated, such amount shall be
deemed to have been paid to the Guarantor for the benefit of, and held in trust
for, the Lender, and shall forthwith be paid to the Lender to be credited and
applied upon the Guaranteed Obligations, whether matured or unmatured.  The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Letter Agreement and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.

 

SECTION 2.7.  Successors,
Transferees and Assigns; Transfers of Note, etc.  This Guaranty shall:

 

(a)                                  be
binding upon the Guarantor, and its successors, transferees and assigns; and

 

(b)                                 inure
to the benefit of and be enforceable by the Lender, each holder of the Note and
each of their respective successors, transferees and assigns.

 

Without limiting the
generality of the foregoing clause (b), the Lender may assign or
otherwise transfer (in whole or in part) the Note or any Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof granted to the Lender
under the Letter Agreement, the Note, this Guaranty or otherwise, subject,
however, to any contrary provisions in such assignment or transfer.

 

C-4

 

ARTICLE III

 

REPRESENTATIONS
AND WARRANTIES

 

The Guarantor hereby represents and warrants unto the
Lender as follows:

 

(a)                                  The
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its business requires such qualification.

 

(b)                                 The
execution, delivery and performance of this Guaranty by the Guarantor is within
its corporate powers, have been duly authorized by all necessary corporate
action, and do not contravene the Guarantor’s charter or bylaws, any law, rule
or regulation applicable to the Guarantor or any contractual restriction
binding on or affecting the Guarantor.

 

(c)                                  No
authorization, approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for the due
execution, delivery and performance of this Guaranty by the Guarantor.

 

(d)                                 This
Guaranty is the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms.

 

(e)                                  The
Guarantor is not an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended; nor is the Guarantor a “holding company”, a “subsidiary company” of
a “holding company”, or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

 

ARTICLE IV

 

COVENANT

 

The Guarantor covenants and agrees that, so long as any portion of the
Guaranteed Obligations shall remain unpaid or the Lender shall have any
outstanding commitment to the Borrower under the Letter Agreement, the
Guarantor will not engage in any business activity other than owning and
holding, directly and free and clear of all liens and security interests, all
of the outstanding shares of capital stock of the Borrower.

 

C-5

 

ARTICLE V

 

MISCELLANEOUS
PROVISIONS

 

SECTION 5.1.  Binding
on Successors, Transferees and Assigns; Assignment of Guaranty.  In addition to, and not in limitation of, Section
2.7, this Guaranty shall be binding upon the Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
the Lender and each holder of the Note and their respective successors,
transferees and assigns (to the full extent provided pursuant to Section 2.7);
provided, however, that the Guarantor may not assign any of its
obligations hereunder without the prior written consent of the Lender and the
holder of the Note.

 

SECTION 5.2.  Amendments,
etc.  No amendment to or waiver of
any provision of this Guaranty, nor consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

SECTION 5.3.  Addresses
for Notices to the Guarantor.  All
notices and other communications hereunder to the Guarantor shall be in writing
(including facsimile communication) and mailed or facsimiled or delivered to
it, addressed to it at the address set forth below its signature hereto or at
such other address as shall be designated by the Guarantor in a written notice
to the Lender at the address specified in the Letter Agreement complying as to
delivery with the terms of this Section. 
All such notices and other communications shall, when mailed or
telegraphed, respectively, be effective when deposited in the mails or
facsimiled (receipt confirmed) respectively, addressed as aforesaid.

 

SECTION 5.4  No
Waiver; Remedies.  In addition to,
and not in limitation of, Section 2.3 and Section 2.5, no failure
on the part of the Lender or any holder of the Note to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 5.5.  Section
Captions.  Section captions used in
this Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.

 

SECTION 5.6.  Setoff.  In addition to, and not in limitation of,
any rights of the Lender or any holder of the Note under applicable law, the
Lender and each such holder shall, upon the occurrence of any Event of Default,
have the right to appropriate and apply to the payment of the obligations of
the Guarantor owing to it hereunder, whether or not then due, and the Guarantor
hereby grants to the Lender and each such holder a continuing security interest
in, any and all balances, credits, deposits, accounts or moneys of the
Guarantor then or thereafter maintained with the Lender or such holder and any
and all property of every kind or description of or in the name of the
guarantor now or hereafter, for any reason or purpose whatsoever, in the possession

 

C-6

 

or control of, or in transit to, the Lender, such holder or any agent
or bailee for the Lender or such holder.

 

SECTION 5.7.  Severability.  Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

 

SECTION 5.8.  Governing
Law, Entire Agreement, etc.  THIS
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF
THE STATE OF MINNESOTA.  THIS GUARANTY,
THE LETTER AGREEMENT AND THE NOTE CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

 

SECTION 5.9.  Forum
Selection and Consent to Jurisdiction. 
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE GUARANTOR SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF MINNESOTA OR
IN THE UNTED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE
BROUGHT, AT THE LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
PROPERTY MAY BE FOUND.  THE GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF MINNESOTA AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
OF MINNESOTA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  THE GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
MINNESOTA.  THE GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

SECTION 5.10.  Waiver
of Jury Trial.  THE GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER 

 

C-7

 

OR THE
GUARANTOR.  THE GUARANTOR ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
ENTERING INTO THE LETTER AGREEMENT.

 

IN WITNESS THEREOF, the Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

 

	
   

  	
  PINNACLE AIRLINES CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1689 Nonconnah Blvd.

  
	
   

  	
   

  	
  Suite 111

  
	
   

  	
   

  	
  Memphis, Tennessee
  38132

  
	
   

  	
  Attention:

  	
  Chief Financial Officer

  
	
   

  	
  Facsimile: 

  	
  (901) 348-4103

  
						

 

C-8

 

Schedule I

 

 

	
  Defined Terms

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Airline Services Agreement

  	
   

  	
  Section 18

  
	
  Borrowing Notice

  	
   

  	
  Section 2

  
	
  Business Day

  	
   

  	
  Section 2

  
	
  Chase

  	
   

  	
  Section 3

  
	
  Commitment Amount

  	
   

  	
  Section 1

  
	
  Debt

  	
   

  	
  Section 18

  
	
  Default Rate

  	
   

  	
  Section 3

  
	
  ERISA

  	
   

  	
  Section 11

  
	
  Events of Default

  	
   

  	
  Section 14

  
	
  Guarantor

  	
   

  	
  Section 9

  
	
  Guaranty

  	
   

  	
  Section 9

  
	
  Indemnified Liabilities

  	
   

  	
  Section 21

  
	
  Indemnified Parties

  	
   

  	
  Section 21

  
	
  Loans

  	
   

  	
  Section 1

  
	
  Note

  	
   

  	
  Section 8

  
	
  Person

  	
   

  	
  Section 18

  
	
  Pinnacle Change in Control

  	
   

  	
  Section 18

  
	
  Reference Rate

  	
   

  	
  Section 3

  
	
  Replacement Credit Facility

  	
   

  	
  Section 12

  
	
  Termination Date

  	
   

  	
  Section 1Exhibit
10.6.1

 

FIRST AMENDMENT

 

 

THIS FIRST AMENDMENT, dated as of February 5, 2003
(this “Amendment”), to the REVOLVING CREDIT FACILITY LETTER AGREEMENT,
dated January 14, 2003 (the “Letter Agreement”), between Pinnacle
Airlines, Inc. a Georgia corporation (“Pinnacle”), and Northwest
Airlines, Inc. a Minnesota corporation (“Northwest”);

 

W I T N E S S E T H:

 

WHEREAS, Pinnacle and Northwest are parties to the
Letter Agreement; and

 

WHEREAS, Pinnacle has requested that the Letter
Agreement be amended as set forth herein;

 

NOW THEREFORE, in consideration of the premises and
the mutual covenants hereinafter set forth, the parties hereto hereby agree as
follows:

 

SECTION 1.  Defined
Terms.  Terms defined in the Letter
Agreement and used herein shall have the meanings given to them in the Letter
Agreement.

 

SECTION 2.  Amendment
to Section 13.  Clause (a) of
Section 13 of the Letter Agreement is hereby amended to read in its
entirety as set forth below:

 

(a)  Debt.  Create or suffer to exist any Debt, except
(i) that certain promissory note, dated January 14, 2003 and payable to the
order to NWA Inc. in the original principle amount of $200,000,000, and (ii) a
cash collateralized line of credit with Union Planters Bank in an amount not in
excess of $1,000,000 at any time and used solely for the purpose of obtaining
letters of credit from Union Planters Bank.

 

SECTION 3.  Conditions
to Effectiveness of this Amendment. 
This Amendment shall become effective on the date on which Northwest
shall have received a counterpart of this Amendment duly executed and delivered
by Pinnacle.

 

SECTION 4.  Miscellaneous.  Except as expressly amended hereby, all of
the representations, warranties, terms, covenants and conditions of the Letter
Agreement shall remain unamended and unwaived and shall continue to be in full
force and effect.  Any provision of this
Amendment which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.  This Amendment represents the agreement of
Pinnacle and Northwest with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by Northwest relative
to the subject matter hereof not expressly set forth or referred to
herein.  THIS AMENDMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE 

 

 

GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF MINNESOTA.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.

 

	
   

  	
  PINNACLE AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Curtis E. Sawyer

  	
   

  
	
   

  	
  Name:

  	
  Curtis E. Sawyer

  
	
   

  	
  Title:

  	
  Vice President & CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHWEST AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Daniel B. Matthews

  	
   

  
	
   

  	
  Name:

  	
  Daniel B. Matthews

  
	
   

  	
  Title:

  	
  Senior Vice President & Treasurer

  

 

2

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