CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED. AMENDMENT...
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Exhibit
10.42
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CERTAIN PORTIONS OF THIS EXHIBIT HAVE
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL “[***]” HAS BEEN
INSERTED IN PLACE OF THE PORTIONS SO OMITTED.
AMENDMENT
NO. 1
to
the
By and
Among
Pinnacle
Airlines Corp., Pinnacle Airlines, Inc. and
Northwest
Airlines, Inc.
This
Amendment No. 1 (the "Amendment") to the Amended and Restated Airline Services
Agreement by and among Pinnacle Airlines Corp., Pinnacle Airlines, Inc. and
Northwest Airlines, Inc., dated December 15, 2006 and made effective as of
January 1, 2007 (the "ASA") is made and entered into as of November 21,
2007.
WITNESSETH:
WHEREAS,
Pinnacle Airlines Corp., Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
desire to amend certain provisions of the ASA in the manner set forth in this
Amendment.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, Pinnacle Airlines Corp., Pinnacle Airlines, Inc. and Northwest Airlines,
Inc. enter into this Amendment and agree, effective as of the date of this
Amendment, as follows:
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1.
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Section
1.01 of the ASA is amended as
follows:
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a. The definition of
“Equipment” is amended in its entirety to read as follows:
“Equipment”
means the Aircraft, Spare Engines and QECs.
b. The
definition of “Equipment Rental Expense” is amended in its entirety to read as
follows:
“Equipment Rental
Expense”
means the Aircraft Rental Expense, the Spare Engine Rental Expense and the QEC
Rental Expense.
c. The
definition of “QEC Rental Expense” is inserted in alphabetical order as
follows:
“QEC Rental
Expense”
means the Basic Rent charged in the leases between Northwest and Pinnacle for
the QECs Northwest will provide Pinnacle pursuant to Amendment No. 1 to the ASA,
dated November 21, 2007, which shall be $[***] per month.
d. The
definition of “Spare Engine Rental Expense” is amended in its entirety to read
as follows:
“Spare Engine Rental
Expense”
means the Basic Rent charged in the Leases between Northwest and Pinnacle for
the Spare Engines, including the Spare Engine Temporary Rental
Expense.
e. The
definition of “Spare Engine Temporary Rental Expense” is inserted in
alphabetical order as follows:
“Spare Engine Temporary
Rental Expense” means the Basic Rent charged
in the leases (or subleases) between Northwest and Pinnacle for the Spare Engine
Northwest may return to Pinnacle from time to time pursuant to Section
3.02(a)(ii)(H) of the ASA, as amended by Amendment No. 1, which shall be $[****]
per month.
f. The
definition of “Standard Aero Agreement” is inserted in alphabetical order as
follows:
“Standard Aero
Agreement”
means the CF34-3B1 Engine Hourly Rate Program Repair and Services Agreement,
between Northwest Airlines, Inc. and Standard Aero, Ltd., dated as of September
1, 2007, as amended or extended by Northwest, provided that any material
expansion of the scope of services to be performed under the Standard Aero
Agreement shall be subject to the reasonable approval of Pinnacle.
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2.
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Section
3.02(a)(i) of the ASA is amended by inserting the following sentence at
the end thereof:
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Northwest
shall also provide Pinnacle with the use of four additional QECs (comprised of
either left or right side plus neutral) in accordance with the following
schedule: on or before April 1, 2008, Northwest shall place orders
with Bombardier for such four additional QECs; on or before January 31, 2009,
Northwest shall provide Pinnacle with the use of two QECs (one left side with
neutral/one right side with neutral); and on or before April 1, 2011, Northwest
shall provide Pinnacle with the use of two QECs (one left side with neutral/one
right side with neutral), and in the event Northwest fails to provide Pinnacle
with the use of such QECs at the agreed dates, Northwest shall reimburse
Pinnacle for the actual costs Pinnacle incurs to procure such QECs utilizable by
Pinnacle on the same schedule, in an amount not to exceed Bombardier’s catalog
price (at the time of each such procurement) for QECs of the same configuration,
and Northwest shall not hold Pinnacle responsible for any flight delays or
cancellations associated with Pinnacle’s inability to perform due to the
unavailability of the aforementioned QECs at the January 31, 2009 and April 1,
2011 dates, it being specifically agreed that any such delays or cancellations
will be excluded from all calculations under Section 2.10 and Section
5.14.
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3.
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Section
3.02(a)(ii) of the ASA is amended by inserting the following as new
sub-sections (H) and (I):
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(H) On
or before December 17, 2007, Northwest shall have the right to remove one (1)
Spare Engine selected by Northwest from Pinnacle. Pinnacle shall
re-deliver such Spare Engine to Northwest in compliance with the applicable
Return Conditions (as defined in the Lease for the Spare Engine), provided that
such Spare Engine shall have a minimum of 1000 cycles remaining until the next
scheduled maintenance visit with Standard Aero and shall have all line
replaceable units installed and in serviceable condition, as when the Spare
Engine was originally delivered to Pinnacle. Thereafter, Northwest
shall manage the allocation of such Spare Engine between Mesaba and Pinnacle
based on the operational needs of each carrier and without bias as to the
carrier that receives the Spare Engine. Subject to the preceding
sentence, Northwest further agrees that in the event such Spare Engine is
returned to Pinnacle, Northwest shall re-deliver such Spare Engine to Pinnacle
in compliance with the applicable Return Conditions (as defined in the Lease for
the Spare Engine), provided that such Spare Engine shall have a minimum of 1000
cycles remaining until the next scheduled maintenance visit with Standard Aero
and shall have all line replaceable units installed, and in serviceable
condition, as when the Spare Engine was originally removed from Pinnacle’s
fleet. The rental expense for such Spare Engine, if and when returned to
Pinnacle, shall be the Spare Engine Temporary Rental Expense. The
same requirements as to compliance with the applicable Return Conditions (as
defined in the Lease for the Xxxxx Engine), with all line replaceable units
installed and in serviceable condition, and 1000 cycles remaining before the
next scheduled maintenance visit with Standard Aero shall apply with respect to
any subsequent transfers of such Spare Engine to or from Pinnacle pursuant to
this Section 3.02(a)(ii)(H).
(I) With
respect to the additional QECs the use of which Northwest will provide to
Pinnacle pursuant to the last sentence of Section 3.02(a)(i), Northwest may
request the removal of up to two (2) such QECs (left side plus neutral/right
side plus neutral) from Pinnacle to support other CRJ-200 fleet requirements,
and Pinnacle shall not unreasonably delay its response or deny such request;
provided, however, that if the removal of any such QECs from Pinnacle would
adversely affect Pinnacle’s ability to satisfy maintenance and operational
requirements for its fleet, taking into account Pinnacle's fleet size at the
time such request is made, Pinnacle may deny such request to remove
and re-position the QECs. After the removal of one or more QECs
from Pinnacle pursuant to the preceding sentence, if Pinnacle, due to its
operational or maintenance requirements, requires the use of any QECs that have
been removed and re-positioned at Northwest’s request, Pinnacle shall notify
Northwest of the need to return such QECs and provide reasonable justification
for such need. Upon receipt of such request, Northwest shall either
return the requested quantity of QECs to Pinnacle within 30 calendar days, or
provide a matching quantity of QECs to Pinnacle in like configuration to those
previously removed from Pinnacle’s fleet within 30 calendar
days. Northwest agrees that the QECs it provides to Pinnacle to
use shall be in serviceable condition at the time of such provision, and
Pinnacle agrees that any QECs removed from its fleet by Northwest shall be in
serviceable condition at the time of such removal. Northwest agrees
to pay for all costs associated with the transportation of QECs to and from
Pinnacle.
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4.
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Section
3.03 of the ASA is amended by inserting the following sentence at the end
thereof:
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Pinnacle
and Northwest agree to enter into leases with respect to the QECs Northwest will
provide to Pinnacle pursuant to Section 3.02(a)(i) of the ASA (as amended by
Amendment No. 1), and such leases shall remain in effect for the term of the
ASA, subject to termination rights and other terms and conditions consistent
with Section 3.02(a)(ii)(I) above.
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5.
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The
first sentence of Section 3.06 of the ASA is amended in its entirety to
read as follows:
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“Pinnacle
shall be responsible for all aspects of the maintenance in accordance with the
Maintenance Program (including any maintenance or modifications required by FAA
airworthiness directives and all routine and non-routine maintenance), servicing
and cleaning (including painting of aircraft exteriors and replacement of worn
interior items) of the Equipment (except for ground handling as specified in
Section 4.02);
provided, however, that with respect to the Canadair Regional Jet Aircraft and
Spare Engines, Pinnacle shall utilize Standard Aero for all major shop-level
engine maintenance and shall utilize Bombardier for heavy airframe maintenance
in accordance with (a) the Standard Aero Agreement (and in this regard Pinnacle
shall execute the Assignment Agreement set forth as Exhibit D to the Standard
Aero Agreement), and (b) the Bombardier Agreement.
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6.
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Section
5.06(c) of the ASA is amended as
follows:
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“GE
Agreements” is deleted and “Standard Aero Agreement” is inserted in lieu
thereof, and “GE” is deleted and “Standard Aero” is inserted in lieu
thereof.
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7.
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A
new Section 11.17 is inserted after Section 11.16, to read in its entirety
as follows:
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“Section
11.17 Customized
Engine Maintenance Program. Notwithstanding any
provision to the contrary contained herein, the parties agree that all
delays and cancellations, if any, resulting from any disputes regarding
Section 2.12 of the Standard Aero Agreement shall be excluded from all
calculations under Section 2.10 and Section 5.14, and any incremental
costs to the XXXX incurred by Pinnacle pursuant to the last sentence of
Section 2.12 of the Standard Aero Agreement shall not be reimbursed by
Northwest pursuant to Section 5.06(c) unless Pinnacle requests
reimbursement and Northwest consents to reimburse such
costs.”
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8.
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Miscellaneous. Contemporaneously
with this Amendment, the parties hereto are amending the Spare Engine
Leases to provide that the Basic Rent is equal to $[****] per
engine. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. This Amendment and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed
by the internal laws of the State of Minnesota, notwithstanding the choice
of law provisions thereof. Except as specifically amended, the
ASA remains in full force and effect and is reaffirmed by each of the
parties hereto. From and after the date hereof all references
in the ASA to the “Agreement” shall be deemed to be references to the
Agreement as amended by this
Amendment.
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IN
WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the date
and year first set forth above.
PINNACLE
AIRLINES,
INC. NORTHWEST
AIRLINES, INC.
By: _________________________ By:________________________
Name: Name:
Title: Title:
By: _________________________
Name:
Title:
