Common use of Rate Setting Clause in Contracts

Rate Setting. Promptly upon receiving pro forma operating statistics from Delta for the next year, Operator shall provide Delta an estimate of the next year’s projected operating costs by no later than September 30th of each year during the Term. Such projected operating costs shall include an off-set of any guaranty, incentive payments or rebates from any airport, local or municipal authorities Operator anticipates receiving related to the Delta Connection Flights during such year. Delta will have the right to review and provide comments and suggestions to such estimate, and such suggestions will be duly considered by Operator. With respect to aircraft acquisition costs for any aircraft added to the scope of this Agreement after the Effective Date for which Operator acquires without any leasing or financing arrangement (i.e. Operator pays purchase price completely in cash at the time of acquisition), an imputed rent may be applied to Operator’s operating costs with respect to any such aircraft at a rate as mutually agreed by the parties. Operator and Delta hereby agree to meet promptly after Delta’s receipt of Operator’s projected operating costs in order to review and revise the Direct Costs and corresponding Base Compensation, as well as Exhibit B hereto, as appropriate, for the subsequent year (the “Annual Operating Plan”). In the event that the parties are unable to agree on any Annual Operating Plan [*] the parties further agree that (i) at the request of either party, and at the expense of the requesting party, the parties shall engage a mutually agreed independent consultant to determine the applicable Annual Operating Plan [*] and (ii) if no new Annual Operating Plan has been adopted by the beginning of the next calendar year, the existing Annual Operating Plan shall be used on an interim basis to determine the Direct Costs and Base Compensation, subject to reconciliation and retroactive adjustment upon adoption of the new Annual Operating Plan. Any such determination by the independent consultant shall be binding on and implemented by the parties. The Annual Rate Plan will apply for all Delta Connection Flights during the year applicable to such plan, and Operator will bear any risks of additional expenses not reflected therein. Operator will use its best efforts to minimize its costs to operate the Aircraft in accordance with this Agreement, and Operator and Delta each agree to notify the other as soon as reasonably practicable of any anticipated or potentially substantial change of cost or operational performance. If during a current year and after an Annual Operating Plan is established, Operator’s projected Direct Costs materially changes due to some action by Delta, then the parties shall meet and, to the extent applicable, revise the Annual Operating Plan then in effect for the remainder of such year to take into account such change to Operator’s Direct Costs-based rates (a “Modified Annual Operating Plan”).

Rate Setting. Promptly upon receiving pro forma operating statistics from Delta The parties agree that on or after [***] 2010, but in no event later than [***] 2010 (and each 5 years thereafter on the same applicable dates), the parties shall reset the Base Rate Costs to reflect Operator’s actual Base Rate Costs for 2010 (and each 5th year thereafter) and amend Exhibit B, and review, and revise, if appropriate, Schedule 3. Notwithstanding the previous sentence, the parties agree that on the second anniversary of the Effective Date, the parties shall review and revise, if applicable, Operator’s direct maintenance expense within the Base Rate Costs attributable to Airworthiness Directives to reflect Operator’s actual direct maintenance expense within the Base Rate Costs attributable to Airworthiness Directives for the next year, Operator shall provide Delta an estimate of the next year’s projected operating costs by no later than September 30th of each year during the Term. Such projected operating costs shall include an off-set of any guaranty, incentive payments or rebates from any airport, local or municipal authorities Operator anticipates receiving related to the Delta Connection Flights during such year. Delta will have the right to review and provide comments and suggestions to such estimate, and such suggestions will be duly considered by Operator. With respect to aircraft acquisition costs for any aircraft added to the scope of this Agreement after the Effective Date for which Operator acquires without any leasing or financing arrangement (i.e. Operator pays purchase price completely in cash at the time of acquisition), an imputed rent may be applied to Operator’s operating costs with respect to any such aircraft at a rate as mutually agreed by the parties. Operator and Delta hereby agree to meet promptly after Delta’s receipt of Operator’s projected operating costs in order to review and revise the Direct Costs and corresponding Base Compensation, as well as Exhibit B hereto, as appropriate, for the subsequent year (the “Annual Operating Plan”)remaining [***]. In the event that the parties are unable to agree on any Annual Operating Plan [*] the reset Base Rate Costs, the parties further agree that (i) at the request of either party, and at the expense of the requesting party, the parties shall engage a mutually agreed independent consultant consultant, to determine the applicable Annual Operating Plan [*] and (ii) if no new Annual Operating Plan has been adopted by the beginning of the next calendar year, the existing Annual Operating Plan shall be used on an interim basis to determine the Direct Costs and reset Base Compensation, subject to reconciliation and retroactive adjustment upon adoption of the new Annual Operating PlanRate Costs. Any such determination by the independent consultant shall be binding on and implemented by the parties. Until the parties are able to agree upon the reset Base Rate Costs to be set forth in Exhibit B (or such are determined by the independent consultant), the Base Rate Costs of the year immediately prior to the reset year shall govern until such time as the parties agree upon the reset Base Rate Costs. Upon agreement, the reset Base Rate Costs and the provisions of Exhibit B as so amended shall be applied retroactively to the beginning of the reset period for which the amendment applies. The Annual Base Rate Plan Costs will apply for all Delta Connection Flights during the year applicable to such planBase Rate Costs, and Operator will bear any risks of additional expenses not reflected therein. Operator will use its best efforts to minimize its costs to operate the Aircraft in accordance with this Agreement, and Operator and Delta each agree to notify the other as soon as reasonably practicable of any anticipated or potentially substantial change of cost or operational performance. If during a current year With respect to the review and after an Annual Operating Plan is establishedrevision, Operator’s projected Direct Costs materially changes due to some action by Deltaif applicable, then of Schedule 3, the parties shall meet andagree to (i) mutually and reasonably review and discuss, in good faith, the applicable data relating to the extent applicableASA’s actual completion rates and A-15 rates of its Delta Connection Flights and (ii) reasonably adjust, revise the Annual Operating Plan then amend or modify Schedule 3 in effect for the remainder of accordance with such year to take into account such change to Operator’s Direct Costs-based rates (a “Modified Annual Operating Plan”)review and discussion.

Rate Setting. Promptly upon receiving pro forma operating statistics from Delta for the next yearThe parties agree that on or after [***], Operator shall provide Delta an estimate of the next year’s projected operating costs by 2010, but in no event later than September 30th of [***] 2010, (and each year during 5 years thereafter on the Term. Such projected operating costs shall include an off-set of any guaranty, incentive payments or rebates from any airport, local or municipal authorities Operator anticipates receiving related to the Delta Connection Flights during such year. Delta will have the right to review and provide comments and suggestions to such estimate, and such suggestions will be duly considered by Operator. With respect to aircraft acquisition costs for any aircraft added to the scope of this Agreement after the Effective Date for which Operator acquires without any leasing or financing arrangement (i.e. Operator pays purchase price completely in cash at the time of acquisitionsame applicable dates), an imputed rent may be applied the parties shall reset the Base Rate Costs to reflect Operator’s operating costs with respect to any such aircraft at a rate as mutually agreed by the parties. Operator actual Base Rate Costs for 2010 (and Delta hereby agree to meet promptly after Delta’s receipt of Operator’s projected operating costs in order to review each 5th year thereafter) and revise the Direct Costs and corresponding Base Compensation, as well as amend Exhibit B hereto, as appropriate, for the subsequent year (the “Annual Operating Plan”). B. In the event that the parties are unable to agree on any Annual Operating Plan [*] the reset Base Rate Costs, the parties further agree that (i) at the request of either party, and at the expense of the requesting party, the parties shall engage a mutually agreed independent consultant consultant, to determine the applicable Annual Operating Plan [*] and (ii) if no new Annual Operating Plan has been adopted by the beginning of the next calendar year, the existing Annual Operating Plan shall be used on an interim basis to determine the Direct Costs and reset Base Compensation, subject to reconciliation and retroactive adjustment upon adoption of the new Annual Operating PlanRate Costs. Any such determination by the independent consultant shall be binding on and implemented by the parties. Until the parties are able to agree upon the reset Base Rate Costs to be set forth in Exhibit B (or such are determined by the independent consultant), the Base Rate Costs of the year immediately prior to the reset year shall govern until such time as the parties agree upon the reset Base Rate Costs. Upon agreement, the reset Base Rate Costs and the provisions of Exhibit B as so amended shall be applied retroactively to the beginning of the reset period for which the amendment applies. The Annual Base Rate Plan Costs will apply for all Delta Connection Flights during the year applicable to such planBase Rate Costs, and Operator will bear any risks of additional expenses not reflected therein. Operator will use its best efforts to minimize its costs to operate the Aircraft in accordance with this Agreement, and Operator and Delta each agree to notify the other as soon as reasonably practicable of any anticipated or potentially substantial change of cost or operational performance. If during a current year and after an Annual Operating Plan is established, Operator’s projected Direct Costs materially changes due to some action by Delta, then the parties shall meet and, to the extent applicable, revise the Annual Operating Plan then in effect for the remainder of such year to take into account such change to Operator’s Direct Costs-based rates (a “Modified Annual Operating Plan”).

Rate Setting. Promptly upon receiving pro forma operating statistics from Delta The parties agree that on or after [***], 2010, but in no event later than [***], 2010 (and each 5 years thereafter on the same applicable dates), the parties shall reset the Base Rate Costs to reflect Operator’s actual Base Rate Costs for 2010 (and each 5th year thereafter) and amend Exhibit B, and review, and revise, if appropriate, Schedule 3. Notwithstanding the previous sentence, the parties agree that on the second anniversary of the Effective Date, the parties shall review and revise, if applicable, Operator’s direct maintenance expense within the Base Rate Costs attributable to Airworthiness Directives to reflect Operator’s actual direct maintenance expense within the Base Rate Costs attributable to Airworthiness Directives for the next year, Operator shall provide Delta an estimate of the next year’s projected operating costs by no later than September 30th of each year during the Term. Such projected operating costs shall include an off-set of any guaranty, incentive payments or rebates from any airport, local or municipal authorities Operator anticipates receiving related to the Delta Connection Flights during such year. Delta will have the right to review and provide comments and suggestions to such estimate, and such suggestions will be duly considered by Operator. With respect to aircraft acquisition costs for any aircraft added to the scope of this Agreement after the Effective Date for which Operator acquires without any leasing or financing arrangement (i.e. Operator pays purchase price completely in cash at the time of acquisition), an imputed rent may be applied to Operator’s operating costs with respect to any such aircraft at a rate as mutually agreed by the parties. Operator and Delta hereby agree to meet promptly after Delta’s receipt of Operator’s projected operating costs in order to review and revise the Direct Costs and corresponding Base Compensation, as well as Exhibit B hereto, as appropriate, for the subsequent year (the “Annual Operating Plan”)remaining [***]. In the event that the parties are unable to agree on any Annual Operating Plan [*] the reset Base Rate Costs, the parties further agree that (i) at the request of either party, and at the expense of the requesting party, the parties shall engage a mutually agreed independent consultant consultant, to determine the applicable Annual Operating Plan [*] and (ii) if no new Annual Operating Plan has been adopted by the beginning of the next calendar year, the existing Annual Operating Plan shall be used on an interim basis to determine the Direct Costs and reset Base Compensation, subject to reconciliation and retroactive adjustment upon adoption of the new Annual Operating PlanRate Costs. Any such determination by the independent consultant shall be binding on and implemented by the parties. Until the parties are able to agree upon the reset Base Rate Costs to be set forth in Exhibit B (or such are determined by the independent consultant), the Base Rate Costs of the year immediately prior to the reset year shall govern until such time as the parties agree upon the reset Base Rate Costs. Upon agreement, the reset Base Rate Costs and the provisions of Exhibit B as so amended shall be applied retroactively to the beginning of the reset period for which the amendment applies. The Annual Base Rate Plan Costs will apply for all Delta Connection Flights during the year applicable to such planBase Rate Costs, and Operator will bear any risks of additional expenses not reflected therein. Operator will use its best efforts to minimize its costs to operate the Aircraft in accordance with this Agreement, and Operator and Delta each agree to notify the other as soon as reasonably practicable of any anticipated or potentially substantial change of cost or operational performance. If during a current year With respect to the review and after an Annual Operating Plan is establishedrevision, Operator’s projected Direct Costs materially changes due to some action by Deltaif applicable, then of Schedule 3, the parties shall meet andagree to (i) mutually and reasonably review and discuss, in good faith, the applicable data relating to the extent applicableASA’s actual completion rates and A-15 rates of its Delta Connection Flights and (ii) reasonably adjust, revise the Annual Operating Plan then amend or modify Schedule 3 in effect for the remainder of accordance with such year to take into account such change to Operator’s Direct Costs-based rates (a “Modified Annual Operating Plan”)review and discussion.