EXHIBIT 10.7
FORM OF
FACILITIES USE AGREEMENT
This FACILITIES USE 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.), a Georgia corporation
("PINNACLE").
WITNESSETH:
WHEREAS, Northwest and Pinnacle 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") 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 Pinnacle of its
obligations under the Airline Services Agreement, Northwest has agreed to
provide Pinnacle with access, on a non-exclusive, non-preferential, shared-use
basis, to certain 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 Pinnacle, each in consideration of the
agreements of the other and intending to be legally bound, agree as follows:
Section 1. USE OF PREMISES. During the term of this Agreement,
Northwest hereby agrees to provide Pinnacle and its officers, employees,
representatives, contractors and agents, on and subject to the terms, conditions
and covenants hereinafter set forth, with access to a portion of the premises
and facilities leased by Northwest pursuant to the Northwest Lease. Northwest,
in its sole discretion, shall designate from time to time the portion of such
premises and facilities to be used by Pinnacle hereunder (said premises and
facilities so designated by Northwest are hereinafter referred to as the
"Premises"). Pinnacle's use of the Premises shall be on a non-exclusive,
non-preferential, shared-use basis, said use to be coordinated with Northwest's
Manager at the Airport. Nothing in this Agreement shall be deemed to confer upon
Pinnacle any interest in the Premises, right to possess or control the use of
the Premises, or any other rights with respect to the Premises other than those
expressly provided herein. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, USE OF THE PREMISES IS PROVIDED ON AN "AS IS, WHERE IS" BASIS AND
WITH ALL DEFICIENCIES AND FAULTS BOTH KNOWN AND UNKNOWN. PINNACLE ACKNOWLEDGES
THAT IT HAS MADE A THOROUGH INSPECTION OF THE PREMISES AND ACCEPTS THE USE OF
SUCH PREMISES "AS IS, WHERE IS" AND THAT, EXCEPT AS OTHERWISE
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SPECIFICALLY PROVIDED HEREIN, NORTHWEST MAKES NO REPRESENTATIONS OR WARRANTIES,
AND PINNACLE 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.
Section 2. INCORPORATION OF THE NORTHWEST LEASE. Pinnacle 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. Pinnacle 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 its use of the Premises at the time and in
the manner provided therein as if Pinnacle 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 Pinnacle all rights and remedies
conferred upon the Lessor therein, PROVIDED, HOWEVER, that Pinnacle agrees to
look solely to the Lessor for performance of the Lessor's obligations under the
Northwest Lease. Northwest shall not be liable to Pinnacle 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 Pinnacle that
Lessor has failed to so perform, Northwest 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 Pinnacle's use of the Premises. Pinnacle
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 February
29, 2012 and thereafter for so long as the Airline Services Agreement remains in
effect, subject to earlier termination upon the occurrence of any of the
following: (i) if the Northwest Lease expires or is terminated for any reason
whatsoever, in which event this Agreement shall terminate immediately upon the
expiration or termination of the Northwest Lease; (ii) if Northwest terminates
this Agreement pursuant to Section 12 hereof; (iii) if the Airline Services
Agreement is terminated for any reason; (iv) in the event Pinnacle no longer
operates flights pursuant to the Airline Services Agreement to or from the
Airport; (v) upon mutual agreement of the parties hereto; or (vi) a Pinnacle
Change of Control (as defined herein). For purposes of this Agreement, a
"Pinnacle Change of Control" shall have the same meaning as such term is given
in the Airline Services Agreement.
Section 4. USE FEES. During the term of this Agreement, Pinnacle shall
pay to Northwest for use of the Premises the amounts set forth in EXHIBIT A
attached hereto and incorporated herein by reference (the "Fee"). Fees shall be
paid by Pinnacle monthly in advance on the first day of each month during the
term hereof, without setoff or deduction, at Northwest's address as
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herein set forth. The Fee for any fractional month following the commencement or
preceding the end of this Agreement shall be prorated by days. If any payment
due hereunder is not received by Northwest on or before the date on which said
payment is due, Pinnacle 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. Pinnacle 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
Pinnacle with respect to this Agreement or Pinnacle's use of the Premises or on
any tangible personal property owned by Pinnacle, plus all interest and
penalties attributable to such taxes, fees or other charges. At all times during
the term of this Agreement, Pinnacle shall keep the Premises free and clear of
all liens, levies and encumbrances arising from or related to any act or
omission of Pinnacle or any party acting by or through Pinnacle.
Section 6. USE OF PREMISES; COMPLIANCE WITH LAWS AND REGULATIONS.
Pinnacle 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. Pinnacle 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. Pinnacle acknowledges that Northwest
reserves the right to establish from time to time reasonable rules, regulations
and procedures for the use of the Premises and Pinnacle 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, Pinnacle'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. Pinnacle 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. Pinnacle 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 Pinnacle. In the event any construction,
improvement, alteration, modification or addition is made without such
approvals, Northwest may require Pinnacle to remove the same and restore the
Premises to their condition prior to such construction, improvement, alteration,
modification or addition, and if Pinnacle fails to do the same, Northwest may
effect the removal and restoration and Pinnacle shall pay the cost thereof to
Northwest plus an administrative charge of fifteen percent (15%) of such costs.
Pinnacle shall not remove any improvements made or fixtures installed on the
Premises during the term of this Agreement (unless Northwest requires their
removal pursuant to this Section 7) and title to such
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improvements and fixtures shall automatically vest in Northwest at the
expiration or earlier termination of this Agreement.
Section 8. MAINTENANCE AND REPAIR. Pinnacle shall promptly repair any
and all damage to the Premises caused by its employees, agents, guests and
invitees (excluding Northwest passengers), or resulting from Pinnacle's use of
the Premises and, unless otherwise agreed by Northwest and Pinnacle, Pinnacle
shall provide, at its sole expense, janitorial and trash removal services
necessary to maintain a sanitary condition and neat appearance within the
Premises. In the event Pinnacle fails to perform such obligations and such
failure continues for at least ten (10) days following Pinnacle'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 Pinnacle's failure to perform and in such event Pinnacle 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 Pinnacle's default in
failing to perform the same. Northwest shall not be liable for inconvenience,
annoyance, disturbance, loss of business or other damage to Pinnacle as a result
of any interference with Pinnacle's use of the Premises by Northwest.
Section 9. SECURITY PROCEDURES. Pinnacle agrees to fully implement all
procedures and comply with all regulations of the Airport's security program.
Pinnacle will instruct its employees and any other representatives of Pinnacle
including those under contract, as to the security procedures to be followed and
responsibilities required to be performed by Pinnacle with respect to its use of
the Premises. In the event Pinnacle 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, including but not limited
to termination of this Agreement in accordance with Section 12 hereof. Pinnacle
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 Pinnacle's use 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 Pinnacle, or any of Pinnacle'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 Pinnacle, with
respect to Pinnacle and Pinnacle'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. Pinnacle agrees to 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,
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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 Pinnacle or
any of Pinnacle's agents, representatives, employees, contractors or invitees,
except to the extent caused by the sole negligence of Northwest or any officer,
director, employee or agent of Northwest.
Section 11. INSURANCE.
(a) Pinnacle 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 Pinnacle 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 Pinnacle'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 Pinnacle hereunder;
(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 Pinnacle;
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(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, Pinnacle
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 Pinnacle 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, 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. 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:
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 Pinnacle: 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 13.
Section 14. FORCE MAJEURE. Neither party shall be liable for any
failure to perform its obligations under this Agreement, except for Pinnacle'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
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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 15. NONDISCRIMINATION. Pinnacle 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. Pinnacle 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 16. MISCELLANEOUS.
(a) LITIGATION EXPENSES. In the event of any legal action
between Northwest and Pinnacle 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 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. Pinnacle shall not assign its rights or
obligations pursuant to this Agreement 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 Northwest consents to any such assignment, Pinnacle 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 the assignee 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 Pinnacle contained in
Sections 5, 7, 9, 10 and 11 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.
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(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 Pinnacle 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 Facilities Use Agreement and consents to the terms thereof.
_____________________________________
By: _______________________
Name: _____________________
Title: ____________________
Date: _____________________
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