EXHIBIT 10.14
FORM OF MANUFACTURER BENEFITS AGREEMENT
THIS MANUFACTURER BENEFITS AGREEMENT (this "Agreement") is made
effective as of the March 1, 2002, by and between PINNACLE AIRLINES, INC., a
Georgia corporation formerly known as Express Airlines I, Inc. ("Pinnacle
Airlines"), and NORTHWEST AIRLINES, INC., a Minnesota corporation ("Northwest");
WITNESSETH:
WHEREAS, Pinnacle Airlines and Northwest have entered into an Airline
Services Agreement, dated as of the date hereof (the "Airline Services
Agreement"); and
WHEREAS, in connection with the performance by Pinnacle Airlines of its
obligations under the Airline Services Agreement, Northwest has agreed to make
certain benefits under the Manufacturer Agreements (as hereinafter defined)
available to Pinnacle Airlines on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Northwest and Pinnacle Airlines do hereby agree as follows:
ARTICLE I
DEFINITIONS
Terms for which meanings are provided in the Airline Services Agreement
are used in this Agreement with such meanings. In addition, for purposes of this
Agreement, the following terms shall have the meanings set forth below:
BOMBARDIER means Bombardier Inc., a Canadian corporation.
GE means General Electric Company, a New York corporation.
MANUFACTURER AGREEMENTS means the 1999 Purchase Agreement, the 2001
Purchase Agreement, the 1999 GTA and the 2001 GTA.
MANUFACTURER BENEFITS is defined in Section 2.01 hereof.
1999 GTA means that certain General Terms Agreement (Contract No.
CF34-0798-057), dated as of February 19, 1999, between GE and Northwest,
together with all amendments and other modifications thereafter from time to
time made thereto.
1999 PURCHASE AGREEMENT means that certain Purchase Agreement PA-0427,
dated February 12, 1999, between Bombardier and Northwest (including all letter
agreements executed in connection therewith), together with all amendments and
other modifications thereafter from time to time made thereto.
2001 GTA means that certain General Terms Agreement (Contract No.
CF34-0798-057-A), dated as of July 6, 2001, between GE and Northwest, together
with all amendments and other modifications thereafter from time to time made
thereto.
2001 PURCHASE AGREEMENT means that certain Purchase Agreement PA-0498,
dated July 6, 2001, between Bombardier and Northwest (including all letter
agreements executed in connection therewith), together with all amendments and
other modifications thereafter from time to time made thereto.
ARTICLE II
MANUFACTURER BENEFITS
Section 2.01. MANUFACTURER BENEFITS. In order to permit Pinnacle
Airlines to perform its obligations under the Airline Services Agreement,
Northwest agrees to make available to Pinnacle Airlines certain benefits
provided to Northwest under the Manufacturer Agreements and described below (the
"Manufacturer Benefits"):
(a) Article 1.0 of Letter Agreement No. 08A to the 1999
Purchase Agreement and Article 1.0 of Letter Agreement No. 15 to the
2001 Purchase Agreement (in each case solely to the extent applicable
to the Aircraft);
(b) all aircraft warranty and service life policy benefits
under (i) Annex B to Schedule III to the 1999 Purchase Agreement as
modified by Letter Agreement No. 12 to the 1999 Purchase Agreement and
(ii) Annex B to Schedule III to the 2001 Purchase Agreement as modified
by Letter Agreement No. 11 and Letter Agreement No. 17 to the 2001
Letter Agreement (in each case solely to the extent applicable to the
Aircraft);
(c) Letter Agreement No. 6 to the 1999 Purchase Agreement and
Letter Agreement No. 22 to the 2001 Purchase Agreement (in each case
solely to the extent applicable to the Aircraft);
(d) all Bombardier vendor warranties and price caps (in each
case solely to the extent applicable to the Aircraft);
(e) Letter Agreement No. 10 and Letter Agreement No. 20 to the
2001 Purchase Agreement (in each case solely to the extent applicable
to the Aircraft);
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(f) Letter Agreement No. 8 and Letter Agreement No. 9 to the
2001 Purchase Agreement (in each case solely to the extent applicable
to the Aircraft);
(g) Letter Agreement No. 13 to the 1999 Purchase Agreement and
Letter Agreement Nos. 18, 21 and 25 to the 2001 Purchase Agreement (in
each case solely to the extent applicable to the Aircraft);
(h) such proportion of the (i) technical documents, (ii)
man-months of on-site manufacturer representatives and (iii) training
services made available to Northwest under the Manufacturer Agreements
as Northwest may from time to time determine taking into account the
experience level of Pinnacle Airlines as well as the requirements of
actual or potential additional operators of aircraft purchased by
Northwest under the 1999 Purchase Agreement and the 2001 Purchase
Agreement;
(i) Articles 10.1 and 10.2 of Letter Agreement No. 8A to the
1999 Purchase Agreement and Articles 4.1 and 4.2 of Letter Agreement
No. 15 to the 2001 Purchase Agreement (in each case solely to the
extent of spare parts purchased by Pinnacle Airlines which are subject
to such Letter Agreements);
(j) Article 10.4 of Letter Agreement No. 8A to the 1999
Purchase Agreement and Article 4.4 of Letter Agreement No. 15 to the
2001 Purchase Agreement (in each case solely to the extent of insurance
parts leased to Pinnacle Airlines pursuant to such Letter Agreements);
(k) such number of initial provisioning shipments free of
customs and shipping charges pursuant to Article 3.0 of Letter
Agreement No. 8A to the 1999 Purchase Agreement and Article 2.0 of
Letter Agreement No. 15 to the 2001 Purchase Agreement as Northwest may
determine in its sole discretion;
(l) Article 2 of Annex A to Schedule III to the 1999 Purchase
Agreement, as modified by Articles 6.0, 7.0 and 8.0 of Letter Agreement
No. 8A to the 1999 Purchase Agreement and Article 2 of Annex A to
Schedule III to the 2001 Purchase Agreement as modified by Articles
5.0, 6.0 and 7.0 of Letter Agreement No. 15 to the 2001 Purchase
Agreement (in each case solely to the extent applicable to spare parts
for the Aircraft purchased by Pinnacle Airlines pursuant to such
provisions);
(m) Letter Agreement No. 16 to the 2001 Agreement (subject to
Section 2.03);
(n) Article 1.3 of Annex A to Schedule III to the 1999
Purchase Agreement and Article 1.3 of Annex A to Schedule III to the
2001 Purchase Agreement;
(o) the 15% discount set forth in Paragraph III.B of Exhibit G
to each of the 1999 GTA and the 2001 GTA (in each case solely to the
extent applicable to spare parts purchased by Pinnacle Airlines for the
Aircraft);
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(p) Paragraph III.C of Exhibit G to each of the 1999 GTA and
the 2001 GTA (in each case solely to the extent applicable to spare
parts purchased by Pinnacle Airlines for the Aircraft);
(q) Paragraph III.E of Exhibit G to each of the 1999 GTA and
the 2001 GTA, provided that Northwest may allocate the use of lease
engines provided by GE pursuant to such provisions among Pinnacle
Airlines and one or more other operators of aircraft purchased by
Northwest pursuant to the 1999 Purchase Agreement and the 2001 Purchase
Agreement in such manner as Northwest may determine in its sole
discretion;
(r) Paragraphs III.F, III.G, III.I and (subject to Section
2.03) III.J of Exhibit G to the 1999 GTA and Paragraphs III.F, III.G,
III.H (subject to Section 2.03) and III.I of, and Attachment 2 to, the
2001 GTA (in each case solely to the extent applicable to engines (or
parts installed on engines) leased or subleased by Northwest to
Pinnacle Airlines for use in connection with the Aircraft);
(s) Paragraph I of Exhibit E to each of the 1999 GTA and the
2001 GTA;
(t) Exhibit B to the 1999 GTA as modified by Paragraph III.D
of Exhibit G to the 1999 GTA and Exhibit B to the 2001 GTA as modified
by Paragraph III.D of Exhibit G to the 2001 GTA (in each case solely to
the extent applicable to engines (or parts installed on engines) leased
or subleased by Northwest to Pinnacle Airlines for use in connection
with the Aircraft);
(u) the 1.0% discount in Exhibit C to the 2001 GTA (subject to
Section 2.03 and in any event solely to the extent applicable to
engines (or parts installed on engines) leased or subleased by
Northwest to Pinnacle Airlines for use in connection with the
Aircraft); and
(v) Exhibit D to each of the 1999 GTA and the 2001 GTA (in
each case solely to the extent applicable to engines leased or
subleased by Northwest to Pinnacle Airlines for use in connection with
the Aircraft).
Section 2.02. PINNACLE AIRLINES CO-OPERATION. Pinnacle Airlines agrees
that it will (i) except as otherwise agreed by Northwest, perform all
record-keeping and data gathering and maintenance functions required under the
Manufacturer Agreements in connection with the Manufacturer Benefits, (ii)
perform all Aircraft maintenance and other tasks required under the Manufacturer
Agreements with respect to the Manufacturer Benefits and (iii) subject to
Aircraft scheduling requirements imposed by Northwest, operate the Aircraft in a
manner consistent with the operating assumptions set forth in the Manufacturer
Agreements with respect to the Manufacturer Benefits, in each case so as to
maximize the availability and amount of the Manufacturer Benefits.
Section 2.03. NORTHWEST ALLOCATION. Notwithstanding anything to the
contrary set forth in Sections 2.01 and 2.02, in the event Northwest is entitled
to receive any cash payment
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and/or credit against the purchase of goods and services under the Manufacturer
Agreements attributable in whole or in part to any of the Manufacturer Benefits
(excluding replacement parts furnished under warranty), Northwest may (i) retain
such cash payment and/or credit for its own account, (ii) provide such cash
payment and/or credit to Pinnacle Airlines or (iii) allocate such cash payment
and/or credit among itself, Pinnacle Airlines and one or more other operators of
aircraft purchased by Northwest under the 1999 Purchase Agreement or the 2001
Purchase Agreement, all in such manner as Northwest may from time to time
determine in its sole discretion.
ARTICLE III
TERM AND TERMINATION
Section 3.01 TERM. This Agreement shall commence on and shall be
effective as of March 1, 2002 (the "Effective Date") and, unless earlier
terminated as provided herein, shall continue in effect until February 29, 2012
and shall thereafter automatically be extended for successive five (5) year
renewal periods (each a "Renewal Term") unless (i) Northwest gives not less than
two years' advance notice of non-renewal prior to February 29, 2012 or the
commencement of any Renewal Term, in which case the Agreement will terminate on
February 29, 2012 or the last day of the then applicable Renewal Term, as the
case may be.
Section 3.02 TERMINATION BY EITHER PARTY UPON BREACH. (a) In the event
of a breach of a nonmonetary provision of this Agreement by either party
remaining uncured for more than thirty (30) days after receipt of written
notification of such default by the nondefaulting party (or, in the case of a
breach requiring more than thirty (30) days notice to cure, in the event the
defaulting party does not begin and pursue with due diligence a method of cure
within thirty (30) days after receipt of written notification specifying in
reasonable detail the nature of such default from the nondefaulting party), then
the nondefaulting party may terminate this Agreement at its sole option.
(b) In the event of a breach of a monetary provision of this
Agreement by either party and such default remaining uncured for more than
thirty (30) days after receipt of written notification specifying in reasonable
detail the nature of such default from the nondefaulting party, then the
nondefaulting party may terminate this Agreement at its sole option.
Section 3.03 TERMINATION BY NORTHWEST. Notwithstanding the provisions
of SECTION 3.02, Northwest shall have the right to terminate this Agreement
immediately and at its sole option if:
(a) a Pinnacle Change of Control (as defined in the Airline
Services Agreement) shall occur; or
(b) the Airline Services Agreement is terminated.
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ARTICLE IV
MISCELLANEOUS
Section 4.01 LIMITATION ON PERFORMANCE. The obligation of either
Northwest or Pinnacle Airlines to perform under the terms of this Agreement
shall be limited or modified by, and neither party shall be deemed to be in
default hereunder as a result of any of the following causes:
(a) acts of God or the public enemy, civil war, insurrections
or riots; fires, floods, explosions, embargoes, earthquakes or serious
accidents, epidemics, or quarantine restrictions; any act of
government, governmental priorities, allocations, orders or
Governmental Regulations affecting materials or facilities, inability
after due and timely diligence to procure materials, accessories,
equipment or parts; or any other cause to the extent it is beyond that
party's practical control and not occasioned by that party's fault or
negligence; or
(b) cessation, slow-down or interruption of work, or any other
labor disturbance involving Northwest.
Section 4.02 MUTUAL COOPERATION. Northwest and Pinnacle Airlines shall
use their reasonable best efforts to cooperate with each other in performing
their respective obligations under this Agreement.
Section 4.03 REPRESENTATIONS AND WARRANTIES. Except as expressly set
forth herein, neither Northwest nor Pinnacle Airlines shall make any
representations or warranties, expressed or implied, under or in connection with
this Agreement.
Section 4.04 ASSIGNMENT. This Agreement may not be assigned by any
party without the prior written consent of the other parties.
Section 4.05 GOVERNING LAW. This Agreement shall be governed in
accordance with the laws of the State of Minnesota, notwithstanding the choice
of law provisions thereof.
Section 4.06 NOTICES. All notices given hereunder shall be given in
writing and shall be delivered in person or deposited in the United States mail,
certified or registered mail, return receipt requested, with adequate postage
prepaid, or given by express courier, telex, facsimile, or other expedient
written means, addressed as follows:
If to Northwest: Northwest Airlines, Inc.
Department A6100
0000 Xxxx Xxx Xxxxxxx
Xxxxx, Xxxxxxxxx 00000
Attn: Vice President - Market Planning
Facsimile No: (000) 000-0000
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With copies to: Northwest Airlines, Inc.
Department A1180
0000 Xxxx Xxx Xxxxxxx
Xxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Facsimile No: (000) 000-0000
Northwest Airlines, Inc.
Department A6030
0000 Xxxx Xxx Xxxxxxx
Xxxxx, XX 00000
Attn: Director of Airlink Planning
Facsimile No: (000) 000-0000
If to Pinnacle Airlines: Pinnacle Airlines, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Attn: Vice President and Chief
Financial Officer
Facsimile No: (000) 000-0000
or to such other address as either party hereto shall designate by notice in
writing to the other party. Notices shall be deemed received and given on the
date of delivery or the date of refusal of delivery as shown by the return
receipt.
Section 4.07 PARTIES. Subject to Section 4.04, this Agreement, and the
rights and obligations created hereunder, shall be binding upon and inure to the
benefit of the respective parties hereto and their respective successors and
permitted assigns.
Section 4.08 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one agreement.
Section 4.09 SEVERABILITY. If any term of this Agreement shall be
judicially determined to be illegal, invalid or unenforceable at law or in
equity, it shall be deemed to be void and of no force and effect to the extent
necessary to bring such term within the provisions of any such applicable law or
laws, and such terms as so modified and the balance of the terms of this
Agreement shall remain enforceable.
Section 4.10 CAPTIONS AND SECTION HEADINGS. Captions and section
headings used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
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Section 4.11 AVAILABILITY OF EQUITABLE REMEDIES; PROCEDURES.
(a) In the event of a breach by either party of any provision
of this Agreement, the nonbreaching party may give notice thereof to the
breaching party, which notice shall specify in reasonable detail the nature of
the breach and shall demand that the breaching party either cure the breach or
refrain from conduct constituting the breach (herein the "conduct"), as may be
applicable. If (i) the breaching party has not cured the breach or refrained
from the conduct, as may be applicable, within ten (10) days following receipt
of the notice from the nonbreaching party, or (ii) the breaching party does not
begin within ten (10) days following receipt of the notice to pursue with
reasonable diligence a method of cure or begin to take steps toward ceasing the
conduct where the breach or conduct is such that it requires more than ten (10)
days to cure or to cease, as may be applicable, then the nonbreaching party may
seek to compel performance by the breaching party in accordance with the
provisions of Section 4.11(b). If, upon receiving a notice contemplated by this
paragraph (a), a breaching party believes that a breach has not occurred or that
the conduct specified in the notice does not constitute a breach of the
provisions of this Agreement, but the breaching party nonetheless cures the
alleged breach or refrains from the conduct within ten (10) days following
receipt of such notice, such party may thereafter proceed in accordance with the
provisions of Section 4.11(b) below to seek a determination of whether a breach
occurred or whether the specified conduct constituted a breach of the provisions
of this Agreement.
(b) Because a breach of the provisions of this Agreement could
not adequately be compensated by money damages, any party shall be entitled,
following notification in accordance with the provisions of Section 4.11(a), to
an injunction restraining such breach or threatened breach and to specific
performance of any provision of this Agreement and, in either case, no bond or
other security shall be required in connection therewith, and the parties hereby
consent to the issuance of such injunction and to the ordering of specific
performance. Further, in the event any party refrains from the conduct of any
activity alleged in a notice received pursuant to Section 4.11(a) above to
constitute a breach of the provisions of this Agreement, such party may
thereafter proceed promptly to bring an action in the District Court, County of
Hennepin, State of Minnesota, for an expedited judicial determination as to
whether the conduct specified constitutes a breach of the provisions of this
Agreement and, upon a determination that the conduct does not constitute a
breach, such party may promptly thereafter recommence such conduct.
Section 4.12 INTEGRATION AND ENTIRE AGREEMENT. This Agreement is
intended by the parties as a complete statement of the entire agreement and
understanding of the parties with respect to the subject matter hereof and all
matters between the parties related to the subject matter herein set forth. This
Agreement may only be amended or modified by a written agreement between
Pinnacle Airlines, on the one hand, and Northwest, on the other, which
specifically references this Agreement and expressly provides for such
amendment.
Section 4.13 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall
be interpreted or construed as establishing between the parties a partnership,
joint venture or other similar arrangement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
PINNACLE AIRLINES, INC. NORTHWEST AIRLINES, INC.
By: By:
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Name: Name:
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Title: Title:
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