Document:

Exhibit 10.14

 

AMENDED
AND RESTATED

FACILITIES
USE AGREEMENT

 

This AMENDED AND RESTATED
FACILITIES USE AGREEMENT (the “Agreement”) is made and entered into as
of this      day of
                ,
2003 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 entered into an Airline Services Agreement dated as of
January 14, 2003, as amended by that certain Amendment No. 1 dated as of
September 11, 2003 and by that certain Amendment No. 2 dated as of the
date hereof (such Airline Services Agreement, as amended or modified from time
to time, the “Airline Services Agreement”);

 

WHEREAS, Northwest leases
certain premises and facilities at the Memphis International Airport (the
“Airport”) under that certain Airport Use and Lease Agreement dated as of
July 1, 1999 by and between the Memphis-Shelby County Airport Authority
(the “Lessor”) and Northwest (as amended and supplemented from time to time,
the “Northwest Lease”);

 

WHEREAS, in connection
with the performance by Pinnacle of its obligations under the Airline Services
Agreement, Northwest and Pinnacle entered into that certain Facilities Use Agreement
dated as of January 14, 2003 (the “Original Facilities Use Agreement”)
pursuant to which Northwest 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 the Original Facilities
Use Agreement; and

 

WHEREAS, Northwest and
Pinnacle desire to amend and restate the Original Facilities Use Agreement in
its entirety.

 

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 

 

1

 

“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 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.  The Original Facilities Use Agreement became effective as of the
Effective Date and is superceded by this Agreement as of the date of this
Agreement.  This Agreement shall
continue in effect until December 31, 2017 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.

 

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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 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 (11⁄2%) per month, but not to exceed the maximum
interest rate legally permissible in the State of Tennessee, 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. The Premises may not be sublet, subdivided or used to provide
services to other air transportation companies whether or not such companies
are affiliates of Pinnacle unless approved in advance by Northwest. 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 

 

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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 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, or resulting from Pinnacle’s use of the
Premises and 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.  Northwest may, from time to
time, evaluate Pinnacle’s compliance with the Airport’s security program.  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 

 

4

 

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,
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, 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; however, the foregoing indemnification shall not apply to
any claim or liability resulting from the gross negligence or willful
misconduct of Northwest, its 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;

 

5

 

(ii)                                  Northwest
and the Lessor are named as additional insureds on such insurance to the extent
of the contractual liability assumed by Sublessee 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 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, 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.

  
	
   

  	
   

  	
  2700 Lone Oak Parkway
  (Dept. A1135)

  
	
   

  	
   

  	
  Eagan, MN 55121-1534

  
	
   

  	
   

  	
  Fax No. (612) 727-6041

  
	
   

  	
   

  	
  Attention:  Vice President - Facilities & Airport
  Affairs

  

 

6

 

	
  To Pinnacle:

  	
   

  	
  Pinnacle Airlines, Inc.

  
	
   

  	
   

  	
  1689 Nonconnah Blvd.,
  Suite 111

  
	
   

  	
   

  	
  Memphis, TN 38132

  
	
   

  	
   

  	
  Fax No. 901-348-4130

  
	
   

  	
   

  	
  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 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
Tennessee.

 

7

 

(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.

 

(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.

 

8

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:

  	
   

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
										

 

 

 

ACKNOWLEDGMENT AND CONSENT

 

The Memphis-Shelby County
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.

 

MEMPHIS-SHELBY COUNTY
AIRPORT AUTHORITY

 

	
  By: 

  	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date: 

  	
   

  	
   

  
						

 

9

EXHIBIT A

 

USE FEES

 

Use Fees are $275,000 per
month during the term of the Agreement.

 

10Exhibit 10.15

 

AMENDED
AND RESTATED

FACILITIES
USE AGREEMENT

 

This AMENDED AND RESTATED
FACILITIES USE AGREEMENT (the “Agreement”) is made and entered into as
of this      day of
               ,
2003 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 entered into an Airline Services Agreement dated as of
January 14, 2003, as amended by that certain Amendment No. 1 dated as of
September 11, 2003 and by that certain Amendment No. 2 dated as of the
date hereof (such Airline Services Agreement, as amended or modified from time
to time, the “Airline Services Agreement”);

 

WHEREAS, Northwest leases
certain premises and facilities at the Minneapolis – St. Paul International
Airport (the “Airport”) under that certain Airline Operating Agreement and
Terminal Building Lease dated as of January 1, 1999 by and between
Metropolitan Airports Commission (the “Lessor”) and Northwest  (as amended and supplemented from time to
time, the “Northwest Lease”);

 

WHEREAS, in connection
with the performance by Pinnacle of its obligations under the Airline Services
Agreement, Northwest and Pinnacle entered into that certain Facilities Use
Agreement dated as of January 14, 2003 (the “Original Facilities Use
Agreement”) pursuant to which Northwest 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 the Original Facilities
Use Agreement; and

 

WHEREAS, Northwest and
Pinnacle desire to amend and restate the Original Facilities Use Agreement in
its entirety.

 

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 

 

1

 

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 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.  The Original Facilities Use Agreement became effective as of the
Effective Date and shall is superceded by this Agreement as of the date of this
Agreement.  This Agreement shall
continue in effect until December 31, 2017 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.

 

2

 

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 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 (11⁄2%) per month, but not to exceed the maximum interest rate
legally permissible in the State of Minnesota, 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. The Premises may not be sublet, subdivided or used to provide
services to other air transportation companies whether or not such companies
are affiliates of Pinnacle unless approved in advance by Northwest. 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 

 

3

 

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 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, or resulting from Pinnacle’s use of the
Premises and 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.  Northwest may, from time to
time, evaluate Pinnacle’s compliance with the Airport’s security program.  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, 

 

4

 

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, 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, 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; however, the foregoing
indemnification shall not apply to any claim or liability resulting from the
gross negligence or willful misconduct of Northwest, its 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;

 

5

 

(ii)                                  Northwest
and the Lessor are named as additional insureds on such insurance to the extent
of the contractual liability assumed by Sublessee 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 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, 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.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2700 Lone Oak Parkway (Dept.
  A1135)

  
	
   

  	
   

  	
  Eagan, MN 55121-1534

  
	
   

  	
   

  	
  Fax No. (612) 727-6041

  
	
   

  	
   

  	
  Attention:  Vice President - Facilities & Airport
  Affairs

  

 

6

 

	
  To Pinnacle:

  	
   

  	
  Pinnacle Airlines, Inc.

  
	
   

  	
   

  	
  1689 Nonconnah Blvd.,
  Suite 111

  
	
   

  	
   

  	
  Memphis, TN 38132

  
	
   

  	
   

  	
  Fax No. 901-348-4130

  
	
   

  	
   

  	
  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 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
Minnesota.

 

7

 

(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.

 

(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.

 

8

 

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:

  	
   

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
							

 

 

ACKNOWLEDGMENT AND CONSENT

 

The Metropolitan Airports
Commission, 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.

 

 

METROPOLITAN AIRPORTS
COMMISSION

 

 

	
  By: 

  	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date: 

  	
   

  	
   

  
						

 

9

EXHIBIT A

 

USE FEES

 

Use Fees are $300,000 per
month during the term of the Agreement.

 

10

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