EXHIBIT 10.6
FORM OF
SUBLEASE AGREEMENT
This Sublease Agreement (the "AGREEMENT"), dated as of ____________,
2002 (the "Effective Date"), is entered into by and between Northwest Airlines,
Inc., a Minnesota corporation ("NORTHWEST") and Pinnacle Airlines, Inc.
(formerly Express Airlines I, Inc.), ("SUBLESSEE").
WITNESSETH:
WHEREAS, Northwest and Sublessee have entered into an Airline Services
Agreement dated as of __________, 2002 (the "Airline Services Agreement");
WHEREAS, Northwest leases certain premises and facilities at the
_________________ Airport (the "Airport") for use as aircraft maintenance
facilities under that certain ____________________ Agreement dated as of
__________, ____ by and between _____________________ (the "Lessor") and
Northwest (as amended and supplemented from time to time, the "Northwest
Lease"); and
WHEREAS, in connection with the performance by Sublessee of its
obligations under the Airline Services Agreement, Northwest has agreed to
sublease to Sublessee a portion of the premises and facilities leased by
Northwest from Lessor pursuant to the Northwest Lease on the terms and subject
to the conditions set forth in this Agreement.
NOW, THEREFORE, Northwest and Sublessee, each in consideration of the
agreements of the other and intending to be legally bound, agree as follows:
Section 1. SUBLEASE OF PREMISES. Northwest hereby subleases to
Sublessee and Sublessee hereby subleases from Northwest, on and subject to the
terms, conditions and covenants hereinafter set forth, those premises and
facilities at the Airport more fully described on EXHIBIT A attached hereto
(together with all improvements located thereon, the "Premises").
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SUBLEASE, THE PREMISES ARE
SUBLEASED "AS IS, WHERE IS" AND WITH ALL DEFICIENCIES AND FAULTS BOTH KNOWN AND
UNKNOWN. SUBLESSEE ACKNOWLEDGES THAT IT HAS MADE A THOROUGH INSPECTION OF THE
PREMISES AND ACCEPTS SUCH PREMISES "AS IS, WHERE IS" AND THAT, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED HEREIN, NORTHWEST MAKES NO REPRESENTATIONS OR
WARRANTIES, AND SUBLESSEE EXPRESSLY WAIVES ALL WARRANTIES, EXPRESSED OR IMPLIED,
RELATING TO THE SUITABILITY, FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN OR CONDITION OF THE PREMISES.
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Section 2. INCORPORATION OF THE NORTHWEST LEASE. Sublessee expressly
acknowledges and agrees that this Agreement is subject to and conditioned upon
all of the terms, covenants and conditions of the Northwest Lease, which terms,
covenants and conditions, except as modified or deleted herein, are expressly
incorporated into this Agreement by reference as if set forth in full herein to
the extent the same apply to the Premises. Sublessee agrees to assume,
faithfully perform, carry out and be bound by all of the terms, covenants and
conditions of the Northwest Lease with respect to the Premises at the time and
in the manner provided therein as if Sublessee was expressly named as the Lessee
under the Northwest Lease. Unless otherwise provided herein, all references to
the "Lessor" in the Northwest Lease shall be deemed to include both the Lessor
and Northwest, and Northwest shall have against Sublessee all rights and
remedies conferred upon the Lessor therein, PROVIDED, HOWEVER, that Sublessee
agrees to look solely to the Lessor for performance of the Lessor's obligations
under the Northwest Lease. Sublessor shall not be liable to Sublessee for the
failure of the Lessor to perform its obligations under the Northwest Lease,
provided that within a reasonable period of time after receipt of notice from
Sublessee that Lessor has failed to so perform, Sublessor shall use its
reasonable efforts to cause the Lessor to perform such obligations to the extent
that the failure of Lessor to do so could adversely affect Sublessee's use of
the Premises. Sublessee agrees that it will not do or fail to do anything with
respect to the Premises which would cause a default to occur under the terms of
the Northwest Lease. If approval of this Agreement by the Lessor is required
pursuant to the provisions of the Northwest Lease, this Agreement is conditioned
upon receipt of such approval. In the event the Lessor does not approve this
Agreement, this Agreement shall be canceled immediately and all rights and
obligations of the parties hereunder shall terminate immediately.
Section 3. TERM. This Agreement shall commence on and shall become
effective as of the Effective Date and shall continue in effect until the
earlier of (i) the expiration or earlier termination of the Northwest Lease or
(ii) the expiration or earlier termination of the Airline Services Agreement,
provided that in the event Sublessee exercises its fleet continuation option set
forth in Section 3.02(a)(iv) of the Airline Services Agreement, then, to the
extent the Premises are reasonably required to support the aircraft and spare
engines retained by Sublessee as a result of Sublessee's exercise of such fleet
continuation option, then Sublessee may elect to extend the term of this
Agreement until the earlier of the expiration or earlier termination of the
Northwest Lease and February 28, 2017. Notwithstanding the foregoing, the term
of this Agreement is subject to earlier termination (A) if Northwest terminates
this Agreement pursuant to Section 12 hereof, or (B) upon a Sublessee Change of
Control (as defined herein) to which Northwest has not consented. For purposes
of this Agreement, a "Sublessee Change of Control" shall have the same meaning
as the term "Pinnacle Change of Control" is given in the Airline Services
Agreement.
Section 4. RENT AND OTHER CHARGES. For and during the term of this
Agreement, Sublessee shall pay to Northwest as rent for the Premises the amounts
set forth in EXHIBIT B attached hereto and incorporated herein by reference,
which amount shall be adjusted from time to time as set forth in EXHIBIT B. Rent
shall be paid by Sublessee monthly in advance on the first day of each month
during the term hereof, without setoff or deduction, at Northwest's address as
herein set forth. The rent for any fractional month following the commencement
or preceding the end of this Agreement shall be prorated by days. In addition,
Sublessee shall be responsible for the payment of any other fees, costs and
charges payable from time to time by Northwest to the
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Lessor pursuant to the Northwest Lease to the extent attributable to the
Premises or to Sublessee's activities at the Airport. Sublessee shall pay to
Northwest any and all invoices for such fees, costs and charges within thirty
(30) days following the date of such invoice. If any payment due hereunder is
not received by Northwest on or before the date on which said payment is due,
Sublessee agrees to pay interest on any overdue amounts at the rate of one and
one-half percent (1 1/2%) per month, but not to exceed the maximum interest rate
legally permissible in the State of __________, in addition to the amounts due.
Section 5. TAXES, FEES AND OTHER CHARGES; LIENS. In addition to rent
payable pursuant to Section 4 hereof, Sublessee shall be responsible for the
payment of all taxes (other than taxes based on or measured by Northwest's net
income), fees and other charges, including without limitation port or percentage
fees assessed against this Agreement, which are imposed by the Airport or any
governmental authority against the Lessor, Northwest or Sublessee with respect
to this Agreement, the Premises or improvements, fixtures, furnishings,
equipment or other personal property located thereon, plus all interest and
penalties attributable to such taxes, fees or other charges. At all times during
the term of this Agreement, Sublessee shall keep the Premises free and clear of
all liens, levies and encumbrances arising from or related to any act or
omission of Sublessee or any party acting by or through Sublessee.
Section 6. USE OF PREMISES; COMPLIANCE WITH LAWS AND REGULATIONS.
Sublessee shall use the Premises solely for its Northwest Airlink operations in
accordance with the Airline Services Agreement and for no other purpose without
Northwest's prior written consent. Sublessee shall conduct its operations on the
Premises in a reasonable manner and shall not commit or suffer to be committed
any nuisance or act or thing which may disturb the quiet enjoyment of Northwest
or any other tenant at the Airport. Sublessee acknowledges that Northwest
reserves the right to establish from time to time reasonable rules, regulations
and procedures for the use of the Premises and Sublessee agrees to and shall
cause its employees, agents and all persons using the Premises under it to
comply with all such rules, regulations and procedures. At all times during the
term of this Agreement, Sublessee's operations and activities on the Premises
shall be in strict compliance with all laws, rules and regulations of any
federal, state, county, city or other governmental authority having jurisdiction
over the operation of the Airport. Sublessee shall pay when due all costs,
fines, fees and assessments that may be levied against it with respect to its
operations and activities on the Premises.
Section 7. IMPROVEMENTS. Sublessee shall not erect any structures, make
any improvements to or do any other construction work on the Premises or alter,
modify, make additions or improvements to or install any fixtures in any
building or structure now existing on the Premises at any time during the term
hereof, without the prior written consent of both Northwest and the Lessor. The
costs of any such construction, improvements, alterations, additions or
modifications shall be borne solely by Sublessee. In the event any construction,
improvement, alteration, modification or addition is made without such
approvals, Northwest may require Sublessee to remove the same and restore the
Premises to their condition prior to such construction, improvement, alteration,
modification or addition, and if Sublessee fails to do the same, Northwest may
effect the removal and restoration and Sublessee shall pay the cost thereof to
Northwest plus an administrative charge of fifteen percent (15%) of such costs.
Sublessee shall not remove any improvements made or fixtures installed on the
Premises during
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the term of this Agreement (unless Northwest requires their removal pursuant to
this Section 7) and title to such improvements and fixtures shall automatically
vest in Northwest at the expiration or earlier termination of this Agreement.
Section 8. MAINTENANCE AND REPAIR. To the extent not provided by Lessor
pursuant to the Northwest Lease, Sublessee shall be responsible for the
maintenance and repair of the Premises and shall arrange and pay for all
services necessary for such maintenance and repair, including but not limited to
trash disposal and janitorial services. Sublessee shall promptly repair any and
all damage to the Premises caused by its employees, agents, guests and invitees,
or resulting from Sublessee's failure to observe or perform any of its
obligations hereunder. In the event Sublessee fails to perform such maintenance
and repair of the Premises and such failure continues for at least ten (10) days
following Sublessee's receipt of written notice of such failure from Northwest,
Northwest may elect, but shall have no obligation, to perform any work on the
Premises that may be necessary by reason of Sublessee's failure to perform and
in such event Sublessee shall pay to Northwest immediately upon demand therefor
the full cost associated with such work plus an administrative fee of fifteen
percent (15%). Nothing herein shall imply any duty upon the part of Northwest to
do any such work and performance thereof by Northwest shall not constitute a
waiver of Sublessee's default in failing to perform the same. Northwest shall
not be liable for inconvenience, annoyance, disturbance, loss of business or
other damage to Sublessee by reason of making such repairs or the performance of
any work, or on account of bringing materials, tools, supplies or equipment into
or through the Premises during the course thereof and the obligations of
Sublessee under this Agreement shall not be affected thereby.
Section 9. SECURITY PROCEDURES. Sublessee agrees to fully implement all
procedures and comply with all regulations of the Airport's security program.
Sublessee will instruct its employees and any other representatives of Sublessee
including those under contract, as to the security procedures to be followed and
responsibilities required to be performed by Sublessee with respect to the
Premises. Northwest may, from time to time, evaluate Sublessee's compliance with
the Airport's security program. In the event Sublessee shall fail to implement,
perform or observe any of the security procedures on its part to be performed,
observed and kept with respect to the Premises, Northwest shall have the right
to immediately take any corrective measures deemed necessary by Northwest.
Sublessee shall indemnify and hold harmless Northwest, its directors, officers,
agents and employees, from and against any and all costs, claims, judgments and
expenses (including attorneys' fees) incurred by Northwest due to any
investigation commenced, or penalties or fines imposed, by the Federal Aviation
Administration, Transportation Security Administration, the Airport or any other
governmental agency having jurisdiction with respect to the Airport's security
program arising out of or in connection with Sublessee's use or occupancy of the
Premises.
Section 10. LIMITATION OF LIABILITY AND INDEMNITY. Notwithstanding any
provision of the Northwest Lease to the contrary, Northwest shall not be liable
to Sublessee, or any of Sublessee's agents, employees, servants or invitees, for
any damage to persons or property due to the condition or design or any defect
in the Premises which may exist or subsequently occur, and Sublessee, with
respect to Sublessee and Sublessee's agents, employees, servants and invitees,
hereby expressly assumes all risks and damage to persons and property, either
proximate or remote, by reason of the present or future condition or use of the
Premises. Sublessee agrees to
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release, indemnify, hold harmless and defend Northwest, the Lessor, and their
respective officers, directors, employees, agents, successors and assigns, from
and against any and all suits, claims, actions, damages, liabilities and
expenses (including, without limitation, attorneys' fees, costs and related
expenses) for bodily or personal injury or death to any persons and for any loss
of, damage to, or destruction of any property, including loss of use, incidental
and consequential damage thereof, arising out of or in any manner connected with
the breach, violation, performance or nonperformance of any provision of this
Agreement or of the Northwest Lease or the use of the Premises by Sublessee or
any of Sublessee's agents, employees, contractors or invitees, whether or not
occurring or arising out of the negligence, whether sole, joint, concurrent,
comparative, active, passive, imputed or any other type, of Northwest, the
Lessor or their respective officers, directors, employees or agents.
Section 11. INSURANCE.
(a) Sublessee shall at all times during the term of this
Agreement maintain in full force and effect the following insurance
coverages:
(i) Workers' compensation and occupational disease
coverage in the form of and in the minimum amounts required by
the laws of the states in which Sublessee operates. Such
coverage shall include employer's liability coverage with
limits of not less than $1,000,000 per incident.
(ii) Commercial general liability coverage with
limits no less than $25,000,000 combined single limit per
occurrence. Such coverage shall include endorsements for
personal injury and contractual liability.
(iii) Comprehensive aviation bodily injury and
property damage liability coverage with limits of not less
than $300,000,000 combined single limit per occurrence,
including but not limited to aircraft liability, passenger
legal liability, premises and property damage liability,
hangar keepers liability and baggage and cargo liability. Such
coverage shall include personal injury and contractual
liability, and shall also include war risk and allied perils,
hijack and confiscation coverage with a limit of not less than
$1 billion per incident.
(b) Commercial general liability and comprehensive airline
liability insurance coverages shall provide coverage for events which
occur during the policy period, are continuing in nature and not on a
claims made basis, and shall include endorsements that:
(i) Underwriters acknowledge that the indemnification
and hold harmless provisions of this Agreement are insured
under Sublessee's blanket contractual liability coverage;
(ii) Northwest and the Lessor are named as additional
insureds on such insurance to the extent of the contractual
liability assumed by Sublessee hereunder;
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(iii) Said insurance is primary with respect to the
matters within such coverage, irrespective of any insurance
carried by Northwest;
(iv) Provide that, as respects the interests of
Northwest and the Lessor, this insurance shall not be
invalidated by any breach of warranty by Sublessee;
(v) Provide a severability of interests/cross
liability endorsement; and
(vi) Provide that the insurer shall waive its
subrogation rights against Northwest and the Lessor.
(c) Prior to the commencement of this Agreement, Sublessee
shall cause to be delivered to Northwest certificates of insurance
evidencing compliance with the provisions of this Section 11. All of
the insurance coverages referenced in this Section 11 shall be written
through a company or companies satisfactory to Northwest, and the
certificates of insurance shall unconditionally obligate the insurer to
notify Northwest in writing at least thirty (30) days in advance of the
effective date of any material change in or cancellation of such
insurance.
Section 12. DEFAULT AND REMEDIES. Northwest may terminate this
Agreement or pursue any other remedy provided to the Lessor under the Northwest
Lease if Sublessee fails to cure any default of this Agreement within ten (10)
days following receipt of written notice of default from Northwest, or under any
circumstances in which the Northwest Lease permits the Lessor to pursue any such
remedies. Termination of this Agreement by Northwest pursuant to this Section 12
shall not be construed as a waiver by Northwest of any other rights or remedies
it may have at law or in equity. Notwithstanding any other provision of this
Agreement, Northwest, in addition to the remedies provided herein and in the
Northwest Lease, Northwest shall have all other rights and remedies available at
law or in equity.
Section 13. SURRENDER OF SUBLEASED PREMISES; REMOVAL OF PERSONAL
PROPERTY. Upon expiration or other termination of this Agreement, Sublessee
shall remove from the Premises all of its signs, trade fixtures and other
personal property, repair all damage caused by such removal, and surrender the
Premises to Northwest in good order and condition, reasonable wear and tear
excepted. In the event Sublessee fails to remove the same on or before said
date, Northwest may remove or cause to be removed such personal property from
the Premises and Sublessee shall reimburse Northwest for the costs associated
with such removal plus an administrative charge of fifteen percent (15%).
Section 14. NOTICES. All notices and other communications under this
Agreement shall be effective two (2) business days after deposit with the United
States Postal Service, first class, postage prepaid, or when hand delivered or
transmitted by facsimile, and shall be in writing and addressed to the parties
at the following addresses:
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To Northwest: Northwest Airlines, Inc.
0000 Xxxx Xxx Xxxxxxx (Xxxx. X0000)
Xxxxx, XX 00000-0000
Fax No. (000) 000-0000
Attention: Vice President -
Facilities & Airport Affairs
To Sublessee: Pinnacle Airlines, Inc.
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Fax No. 000-000-0000
Attention: Chief Financial Officer
Either party may change the address at which notice is to be made by providing
notice of the change to the other party, in writing, in the manner provided for
in this Section 14.
Section 15. FORCE MAJEURE. Neither party shall be liable for any
failure to perform its obligations under this Agreement, except for Sublessee's
payment obligations set forth herein, if such failure is due to causes beyond
its control and not the result of its fault or neglect, including without
limitation, acts of God, war, the public enemy, epidemics, quarantine
restrictions, fire, fog, flood or other abnormally severe weather condition,
epidemics, riots or civil commotion, strikes, lockouts or labor disputes,
actions of governments or agencies thereof.
Section 16. NONDISCRIMINATION. Sublessee agrees that it shall not
discriminate against any worker, employee or applicant or any member of the
public because of race, color, creed, religion, national origin, ancestry, age
or sex. Sublessee agrees to undertake an affirmative action program as required
by 14 CFR Part 152, Subpart E, to ensure that no persons shall on the grounds of
race, color, creed, national origin or sex be excluded from participating in any
employment activities covered in 14 CFR Part 152, Subpart E.
Section 17. RIGHT OF ENTRY. Northwest reserves the right to enter upon
the Premises at any time during an emergency to take such action therein as may
be required for the protection of persons or property and at other reasonable
times, upon reasonable prior notice, for the purpose of inspection, maintenance,
repairs, replacements, alterations or improvements (to the Premises or to other
areas), showing of the Premises to prospective tenants and for other purposes
permitted elsewhere in this Agreement or in the Northwest Lease.
Section 18. CONVENANT OF QUIET ENJOYMENT. Subject to Sublessee's full
and timely performance of its obligations hereunder, Northwest shall not
unreasonably interfere with Sublessee's use and enjoyment of the Premises.
Section 19. MISCELLANEOUS.
(a) LITIGATION EXPENSES. In the event of any legal action
between Northwest and Sublessee to enforce any of the provisions and/or
rights hereunder, the unsuccessful party in such action agrees to pay
to the other party all costs and expenses incurred by the
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successful party in connection therewith, including, without
limitation, court costs and reasonable attorneys' fees.
(b) INTEGRATION; AMENDMENT AND MODIFICATION. This Agreement
embodies the entire agreement between the parties hereto relative to
the subject matter hereof and shall not be modified, changed or altered
in any respect except in writing.
(c) ASSIGNMENT AND SUBLEASING. Sublessee shall not assign its
rights or obligations pursuant to this Agreement or sublease or permit
any third party to use any portion of the Premises without the prior
written consent of Northwest and the Lessor (if required under the
Northwest Lease). In the event any third party is permitted to use any
portion of the Premises during the term of this Agreement, Sublessee
shall be fully responsible to Northwest and the Lessor for and shall
indemnify and hold Northwest and the Lessor harmless with respect to
compliance by such third party with all of the provisions of this
Agreement and the Northwest Lease.
(d) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of ___________.
(e) SUCCESSORS AND ASSIGNS. The covenants, agreements and
obligations herein contained shall extend to, bind and inure to the
benefit not only of the parties hereto but their successors and
permitted assigns.
(f) SURVIVAL. The obligations of Sublessee contained in
Sections 5, 7, 9, 10, 11 and 13 hereof shall remain in effect and
survive the expiration or termination of this Agreement.
(g) 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.
(h) 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.
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IN WITNESS WHEREOF, Northwest and Sublessee have executed this
Agreement as of the day and year first above written.
NORTHWEST AIRLINES, INC. PINNACLE AIRLINES, INC.
By: ____________________ By: _______________________
Xxxxx X. Xxxxxxxxx
Vice President - Facilities & Name: _____________________
Airport Affairs
Title: ____________________
ACKNOWLEDGMENT AND CONSENT
The ______________________ Airport Authority, which is the Lessor under the
Northwest Lease, hereby acknowledges receipt of an executed copy of the
foregoing Sublease Agreement and consents to the terms thereof.
_____________________________________
By: _______________________
Name: _____________________
Title: ____________________
Date: _____________________
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EXHIBITS
Exhibit A - Description of the Premises
Exhibit B - Rent
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